Payments to children entitled to Disability Living Allowance

Recognising that children with an illness or disability may need extra support to make the most of their potential on entering adult life, from April 2010 the Government is introducing new annual payments into the Child Trust Fund (CTF) accounts of children entitled to Disability Living Allowance (DLA). These payments will be in addition to existing government contributions to CTF accounts such as the additional payments made to children in lower income families and payments made at age 7.

Will my child receive a CTF disability payment?

Your child will automatically receive CTF disability payments from April 2010 if they:

• are eligible for a CTF
• have a CTF account open and
• are entitled to any rate of DLA

• Children entitled to DLA, whose award includes the highest rate care component will receive a CTF disability payment of £200 per tax year
• Children entitled to any other rate of DLA will receive a CTF disability payment of £100 per tax year.

If your child’s DLA award changes to include the highest rate of the care component, the government will top-up the CTF disability payment to £200 for that tax year. And they will automatically get a £200 payment in each following tax year if they remain on that DLA care rate.

What do I have to do?

Nothing. All CTF disability payments will be automatically paid directly into your child’s CTF account. Parents or guardians will receive a letter from us every time a payment is made into their child’s account. No claim is needed.

When will CTF disability payments be paid?

• The majority of payments due because a child was entitled to DLA in the tax year 2009/10 will be paid into their CTF account in April 2010
• Payments relating to DLA entitlement in the tax year 2010/11 will be made after October 2010
• Payments relating to DLA entitlement from the tax year 2011/12 onwards will be made in April 2011 and in the April of subsequent years.

There will be a small number of children in receipt of DLA in 2009/10 who will only receive the related CTF disability payment after October 2010. For example, those who only became entitled to DLA late in the tax year.

The first CTF disability payments to children who become entitled to DLA after October 2010 will be made shortly after the DLA award is finalised.     

Will this affect the amount I can invest in my child’s CTF account?

No. You, or anyone else, can still invest up to a total of £1,200 per year in your child’s account.  Like other government contributions these payments do not count towards the £1,200 limit that can be added to accounts by friends and family each year.

Are CTF disability payments different to other CTF government contributions?

The CTF disability payments are in many ways similar to other government contributions such as the additional payments made to children in lower income families and payments made at age 7. They do not have to be claimed, are paid directly into the account, are tax-free and will not affect the family’s benefits or tax credits. 

Does my child’s DLA award have to be paid for them to qualify for these payments?

No, as long as your child is entitled to DLA (and CTF) they will be entitled to CTF disability payments.  For example some children in hospital or care are entitled to DLA but it is not actually paid. In this case the CTF disability payment will be made. 

What about children receiving DLA under the Special Rules?

Children awarded DLA under the Special Rules because they are terminally ill automatically get the highest rate of the care component and so will receive the £200 CTF disability payment.

Will CTF disability payments be paid whilst Disability and Carers Service (part of the Department for Work and Pensions) decide whether my child is entitled to DLA?  What if the DLA award is backdated?

No, CTF disability payments will only be paid if your child’s DLA claim is awarded but if the DLA award is backdated to a previous tax year, the CTF disability payments will be paid for that tax year as well.

What if my child’s DLA claim is awarded before I have opened their CTF account? Will I have to make a claim then?

No, as long as you have claimed Child Benefit we will have a record of your child. If we are notified that your child is entitled to DLA we will keep a record of this so as soon as the account is opened we can automatically make the CTF disability payment.   

My child has only just started to receive DLA.  How will HMRC know to make these payments?

We will be told by the Disability and Carers Service (DCS) when DLA is awarded and we will automatically make the CTF disability payments into your child’s account. You do not have to contact DCS or us to make a claim.

More information