Document deferred Housing Benefit child-allowance rules

changelog.d/2232.changed.md

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+- Documented historical Housing Benefit child personal allowance rules and their deferred implementation.

docs/book/assumptions/housing-benefit-child-allowances.md

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+# Housing Benefit child personal allowances
+
+PolicyEngine does not currently calculate ordinary child personal allowances in
+the Housing Benefit applicable amount. This omission applies before, during and
+after the historical two-child restriction. The model calculates an adult
+personal allowance from the benefit unit's composition and age, then adds the
+premiums selected by `benefits_premiums`. It does not calculate an ordinary
+allowance for either the first two children or additional children. See
+`housing_benefit_applicable_amount` in
+[`policyengine_uk/variables/gov/dwp/housing_benefit/`](https://github.com/PolicyEngine/policyengine-uk/blob/main/policyengine_uk/variables/gov/dwp/housing_benefit/housing_benefit_applicable_amount.py).
+
+The historical rules below explain the omitted component and the information a
+future implementation would need. They do not describe a calculation currently
+supported by the model. Historical cash rates and household or population
+impacts are outside this page's scope.
+
+## The historical restriction
+
+Before the restriction, each qualifying child or young person could contribute
+a personal allowance to the applicable amount, the income threshold used in the
+Housing Benefit means test. The later default restriction limited these
+allowances to two, subject to transitional protection and the Child Tax Credit
+assessment described below. It applied to ordinary child personal allowances;
+bedroom entitlement and child disability premiums remained separate. See
+[DWP Circular A5/2017, paragraphs 2–13](https://assets.publishing.service.gov.uk/media/5a820708ed915d74e6235650/a5-2017.pdf).
+
+The legal dates differ by jurisdiction and age regime:
+
+| Change | Great Britain | Northern Ireland |
+| --- | --- | --- |
+| Default restriction began | 6 April 2017 | 11 May 2017 |
+| Restriction ended for pension-age Housing Benefit | 8 June 2024 | 8 June 2024 |
+| Restriction ended for working-age Housing Benefit | 6 April 2026 | 6 April 2026 |
+
+The commencement provisions are [SI 2017/376, regulation 1](https://www.legislation.gov.uk/uksi/2017/376/regulation/1/made)
+and [SR 2017/79, regulation 1(2)](https://www.legislation.gov.uk/nisr/2017/79/regulation/1/made).
+The pension-age amendments are [SI 2024/611, regulations 1 and 6](https://www.legislation.gov.uk/uksi/2024/611/made)
+and [SR 2024/119, regulations 1 and 5](https://www.legislation.gov.uk/nisr/2024/119/made).
+The working-age amendments are [SI 2026/316, regulations 1, 2 and 4](https://www.legislation.gov.uk/uksi/2026/316/made)
+and [SR 2026/68, regulations 1, 2 and 4](https://www.legislation.gov.uk/nisr/2026/68/made).
+These are legal commencement dates. An annual model period or annual parameter
+sampling convention does not change them. Removing the count restriction did
+not remove the other conditions for Housing Benefit or a child allowance.
+
+## Protection attached to individual children
+
+Transitional protection applied where the claimant was entitled to Housing
+Benefit and the claimant or partner was responsible for more than two children
+or young people in the household on 5 April 2017 in Great Britain, or 10 May
+2017 in Northern Ireland. The protection attached to those individuals. Making
+a new Housing Benefit claim ended that protection.
+
+Becoming responsible for a new child brought the amended rules into play, while
+allowances for the original protected individuals continued under the
+transitional provisions. Those individuals also occupied spaces under the
+default two-child rule when considering an allowance for a new child. For
+example, three protected children remaining in the household plus a new baby
+could retain three allowances, assuming no new claim and no more favourable
+Child Tax Credit assessment. The new baby did not automatically reduce the
+count to two or increase it to four. See [SI 2017/376, regulation 9](https://www.legislation.gov.uk/uksi/2017/376/regulation/9/made),
+[SR 2017/79, regulation 8](https://www.legislation.gov.uk/nisr/2017/79/regulation/8/made)
+and DWP Circular A5/2017, paragraphs 15–16 and example 3.
+
+## The Child Tax Credit assessment mattered
+
+Housing Benefit could use the children for whom the ordinary individual Child
+Tax Credit element was included in the maximum-rate assessment, where that
+produced a higher child-allowance amount. This comparison also preserved the
+transitional protected amount as the alternative. The rule applied whether or
+not Child Tax Credit was payable. A properly made, fully assessed nil-payment
+award could therefore establish that more than two children were included;
+an unexplained zero payment could not establish it. See [Housing Benefit
+regulation 22(3)–(5), as at 1 April 2025](https://www.legislation.gov.uk/uksi/2006/213/regulation/22/2025-04-01),
+[SR 2017/79, regulation 6](https://www.legislation.gov.uk/nisr/2017/79/regulation/6/made)
+and DWP Circular A5/2017, paragraphs 9–14 and Annex A.
+
+Historical Child Tax Credit rules retained ordinary child elements for children
+born before 6 April 2017 and allowed conditional exceptions for later children,
+including multiple births, adoption, non-parental care and non-consensual
+conception. The adoption and non-parental-care treatment changed on 28 November
+2018. These exceptions required their own conditions and assessment; generic
+household flags do not establish them. For example, two existing children plus
+twins could give three ordinary child elements where the actual assessment
+included one additional twin. Four elements did not follow automatically from
+the multiple birth. [HMRC's historical exceptions guidance](https://www.gov.uk/guidance/child-tax-credit-exceptions-to-the-2-child-limit)
+sets out the conditions and the 2018 change.
+
+A positive Child Tax Credit payment also cannot identify the ordinary-child
+count. The Child Tax Credit disability element could be included for a child
+without an ordinary individual child element. Childcare support alone likewise
+did not establish that an ordinary individual child element was included. The
+required information is which children the ordinary-element assessment included,
+rather than whether any Child Tax Credit cash was paid. These historical
+assessment rules do not imply that new Child Tax Credit claims remain available
+today.
+
+## Implementation remains deferred
+
+Current ages and family size do not establish which individual children were
+protected, whether a later new Housing Benefit claim ended protection, or what
+an ordinary-child-element assessment included. A payment amount alone cannot
+fill those gaps, and sensitive exception assessments must not be reconstructed
+from generic household characteristics.
+
+[Issue #2232](https://github.com/PolicyEngine/policyengine-uk/issues/2232)
+keeps implementation of this component, labelled C1 in the update plan,
+deferred. This includes the proposal to implement only unrestricted periods.
+A future design needs agreement on the required facts, their data sources,
+behaviour when facts are absent, and changes within a year. A pre-assessed
+included-child count is one possible interface for that discussion; it is not
+a supported model input. This documentation introduces no claim-history or
+exception inputs and changes no calculation.
+
+Child disability premiums and the protected family premium are separate work
+under [#2221](https://github.com/PolicyEngine/policyengine-uk/issues/2221) and
+[#2223](https://github.com/PolicyEngine/policyengine-uk/issues/2223). This page
+does not revive [closed PR #2198](https://github.com/PolicyEngine/policyengine-uk/pull/2198)
+or its associated issues.

policyengine_uk/parameters/gov/dwp/housing_benefit/README.md

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 # Housing Benefit
+
+The default `housing_benefit_applicable_amount` calculation includes an adult
+personal allowance and selected premiums. It omits ordinary child personal
+allowances, including in periods when no two-child restriction applied.
+
+See [historical child personal allowances and the deferred implementation](../../../../../docs/book/assumptions/housing-benefit-child-allowances.md)
+for the Great Britain and Northern Ireland rules, individual-child protection,
+Child Tax Credit assessment requirements and the missing historical facts.
+The documentation adds no model input or calculation. Child disability and
+protected family premiums remain separate work.