"This will be a valuable boost for many low earnings families whose children travel between 2 and 15 miles to reach their selective school."

Free school transport welcome, but watch the cliff edges

LITRG welcomes the move to expand the current arrangements for free school transport to those children aged 11-16 attending selective secondary schools who receive free school meals or whose parents receive maximum working tax credit. This will be a valuable boost for many low earnings families whose children travel between 2 and 15 miles to reach their selective school.

Anthony Thomas said

“This is good news for low income families whose children attend selective schools. But it is not a perfect arrangement. Families whose income takes them just over the earnings threshold to get either free school meals or maximum working tax credit are going to miss out on this new benefit. And the link between the new free  transport benefit – known for this reason as a ‘passported benefit’ – and receipt of either free school meals or of maximum rate working tax credit – the ‘underlying benefits’ on which the passport is based – can create a catastrophic cliff-edge to entitlement should the parent lose entitlement to the underlying benefit. Sometimes in this type of situation there is a rule preserving the passported benefit for a period after entitlement to the underlying benefit is lost (an ‘inbuilt run-on provision’).

“This type of support – a passported benefit – is tremendously helpful as a supplement and should simplify the process of claiming entitlement to the new benefit. But it cannot be overstated that once this approach is adopted, any change in the rules to the underlying benefit needs to consider the effect on the passported benefit as well. The more support is linked to receipt of an underlying benefit, the greater the impact if that underlying benefit is lost.”

Note to editors

1.       Low Incomes Tax Reform Group

The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk  (Out of hours contact: George Crozier, 07740 477 374)