Blunder leaves Scots parents short of tens of millions in benefit
A bureaucratic blunder has prevented them from receiving child benefit for a year if a son or daughter under 19 has signed up for a Scottish HNC college course.
The problem is magnified because the denial of child benefit – worth 20 a week for the eldest child and 13.20 a week for all younger siblings – blocks parents from receiving other large benefits, such as child tax credit, working tax credit and widowed parents' allowance.
Labour MP Eric Joyce, who raised the matter in parliament, estimates that the unpaid benefits could "work out at tens of millions per annum".
He has won agreement from the Treasury for the payments to restart at the beginning of the new academic year in the autumn, but wants it to consider backdating. The benefits have gone unpaid for three years.
The problem was caused when the Scottish Government failed to make the Treasury aware that the Scottish HNC – in subjects including nursing, engineering and child care – was different to the HNC in England and should not be classified as an "advanced" education course. Child benefit is only paid for full-time, "non-advanced education".
The Scottish Qualifications Authority defines the Scottish HNC as equivalent to the English BTEC national diploma.
Courses last two years, with students taking an NQ (National Qualification) in the first year, then the HNC. Only the payments in relation to the HNC have been affected.
Mr Joyce, MP for Falkirk, said the matter was brought to his attention by a constituent whose daughter, 17, was taking a nursing course She had lost benefits worth about 8,000 a year.
Mr Joyce said: "The Scottish HNC is wrongly categorised in the Treasury rules, which means that parents of kids who do their fifth or sixth year (of secondary school] in the local tech college are losing benefit for the second year.
"There is a pretty strong argument, in my view, for something to compensate people who have lost out."
Speaking in Parliament, Mr Joyce described the situation as "remarkable" and blamed it on "an official's error in Scotland".
He believed "several hundred" people in his constituency could have lost benefits as a result.
Mr Joyce added: "The effect will be that several thousand people in Scotland – mainly women, but it is not necessarily women who take child benefit – will benefit to the tune of somewhere between 1,000 and 8,000... in one financial year."
A spokesman for HM Revenue and Customs said it merely paid benefits and relied on departments such as the Treasury to set the rules.
A Scottish Government spokesman called on the Treasury to pay back all benefits that Scottish parents had lost out on. He said: "We welcome the fact that moves are finally being made to remedy this situation.
"But questions must be asked how the previous Labour-Liberal Democrat administration at Holyrood and the Labour government at Westminster managed to remove the benefit entitlement for parents of students studying HNCs. Westminster could and should have acted much more swiftly."