division_name: Tax Credits Bill - Payment Of Tax Credit By Employers Etc
motion: <p>
   I beg to move amendment No. 7, in page 3, line 35, at end insert
  <p> 
   
    'except that an employee shall be entitled to make an election to receive payment of the tax credit to which he is entitled directly from the Board.'.
    <p>credit. That is not true. In many cases, an employee can provide sufficient documentary evidence of pay and hours worked without approaching the employer. In any case, a "once and for all" approach is different from a week in, week out--or month in, month out--notification from the Inland Revenue that an employee is receiving working families tax credit. That is what will happen under the new payment system.
   
  If the Government insist upon claiming that employers must be contacted, I simply refer them to the CBI's brief for this debate:
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  "At present a significant number of employers may never know that their employees are receiving Family Credit. Up to a third of employees claiming credit do so without their employer's knowledge--either because they provide enough information and their employer does not need to be contacted or because employers provide information without realising that their employees are claiming Family Credit."
   
  
  This amendment gives the recipient the option of having the benefit paid directly. It is thus for him or her to decide whether having it paid through the payroll will increase the stigma. After all, it is recipients, not Ministers, who will suffer the embarrassment if the Government are wrong and the benefit increases stigma.
   
  That view is shared by the TUC:
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  "The TUC . . . strongly recommends that choice of payment system should apply to all households, including those headed by lone parents."
   
  
  The TUC has other concerns that could be alleviated by the amendment. In its Budget representations, the TUC says that family credit has
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  "by and large, enhanced job security for many people in low paid jobs by delivering financial assistance to them in a direct and timely fashion."
   
  
  It continues:
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  "There is a real danger that the working families tax credit will fail to replicate this if the wage packet is to be the primary means of delivering the tax credit."
   
  The concern is that payment may be interrupted if the benefit is paid through the payroll. That is the view of the Low Pay Unit, which says:
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  "The low paid are least able to afford interruptions or delays in payment of benefits."
   
  
  When an employee envisages the possibility that his employer may interrupt benefit payment, he should be given the option of having the payments made to him directly by the Inland Revenue. That is a key concern of the TUC, which believes that working families tax credit is
  <p> 
   
  "much more liable to disruption."
   
  
  It is also the main concern of the National Council for One Parent Families:
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  "a default option is needed so lone parents can be paid direct rather than through the wage packet if there is a short-term contract, more than one employer, very low wages or the firm is too small to deal with the claim."
   
  
  The problem of interrupted payments is particularly acute if there is a trade dispute. The glossy document from the Inland Revenue that explains the way the working families tax credit operates explains that if a trade dispute lasts for longer than one pay period, the employer will not be expected to continue to pay the working families tax credit. Instead, the employer should issue a certificate of payment to the employee who must then take it to the Inland Revenue, which will pay the working families tax credit directly.
  <p>
  That is the theory; the reality will be delays. There will be delays when the employer issues the certificate--assuming that he gets round to doing that, as he is in the middle of a trade dispute--delays at the Inland Revenue when the employee hands in the certificate, and delays in payment. Those on very low incomes cannot sustain such delays. That is another reason why we believe people should be given the option of having the working families tax credit paid directly.
   
  
    <p>Question put,  That the amendment be made:--
  <p>The House divided:  Ayes 164, Noes 296.
  