Purpose: To inform IR of beneficiaries who have ceased or commenced paid employment so that IR can stop or start paying Working for Families Tax Credits (WfFTC).
MSD disclosure to IR: MSD selects clients with children in their care who have had a 'trigger event' relating to the cessation or commencement of employment (i.e. a benefit has been granted, resumed, cancelled or suspended).
MSD sends full name, date of birth, income and benefit payment information, and MSD and IRD client numbers for both the primary carer and his or her partner. In addition, MSD provides the primary carer's bank account number, address and contact details. Details of each child's full name and date of birth are also included.
Compliance: Not compliant - minor technical issues.
The letter that IR sends individuals about suspension of WfFTC payments does not fully meet the notice requirements of section 103(1B) of the Act as it does not advise individuals that they have 5 working days to challenge the suspension.
When we reported on this issue last year, we were satisfied with the measures that IR has in place to address instances of incorrectly ceased entitlements. We monitor this programme and continue to be satisfied with the safeguards in place.
|Information matching provision||Tax Administration Act 1994, s.85G|
|Programme type||Identifying unclaimed entitlement|
|Unique identifiers||Tax File Number, MSD client number|
Each week, MSD uses an encrypted Business to Business (B2B) communication channel to send IR details of clients with children in their care who have had their benefit granted, resumed, cancelled or suspended because of a cessation or commencement of employment.
MSD sends the full name, date of birth, income and benefit payment details for both the primary carer and their partner. MSD also provides the primary carer’s bank account number, address and other contact details. Each child’s full name and date of birth are also included.
IR matches the MSD client number, IRD number, family name, first name, and date of birth details received from MSD against its own records. Where a match is successful, IR updates the tax record and starts, stops, or changes the amount of family assistance paid to the individual. When key information or certain combinations of information do not match, IR investigates further.
To enable tax credits to be stopped or started without delay, the Privacy Act contains an exception (section 103(1B)) that allows IR to immediately suspend a tax credit payment based upon a successful match produced by the programme without first sending the individual a notice of adverse action. However, IR must give notice to the individual immediately after the suspension and give the individual an opportunity to challenge the action.
Transfer of FTC recipients from MSD to IR
|Tax Year||Number of recipients|
IR has been reporting on the operation of this programme using the process audit approach developed by this Office. The Inland Revenue Corporate Risk and Assurance division have concluded in each year that there were effective controls over the administration of this programme.