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Child Trust Fund Boost for Children with Disability

Outline: Payments will start in April 2010 for children with a Child Trust Fund.

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Starting from April this year, disabled children will receive an annual Government contribution of £100, which is paid directly into their Child Trust Fund account.

The most severely disabled children will receive £200 per year.

Child Trust Funds strengthen the savings habit of future generations, promote financial education and ensure that, in future, every child will have access to a financial asset at the age of 18. Child Trust Funds are helping almost 5 million children across the UK to save for their future.

Exchequer Secretary to the Treasury, Sarah McCarthy-Fry said:

"Children with disabilities may face particular challenges as they become adults. These annual payments are an important investment for disabled children across the country and will help them to realize their aspirations in future."

Around 90,000 disabled children will benefit from these payments in 2010, of whom around 40,000 will receive the maximum £200 for the most severely disabled children.

These additional payments to disabled children will be made automatically by the Government directly into their Child Trust Fund accounts.

The U.K. Government introduced the Child Trust Fund in 2005. The Child Trust Fund provides every child with £250 at birth (£500 for children in lower-income families and looked-after children) and again at the age of 7.

The Government announced at Budget 2009 that it would also make additional contributions to the Child Trust Fund accounts of disabled children. These payments will begin in April 2010.

Payments will start in April 2010 for children with a Child Trust Fund (CTF) account who are entitled to Disability Living Allowance (DLA) at any point in tax year 2009/10. Children eligible for the highest rate of the care component of DLA will receive the higher payment of £200 for the most severely disabled children. This is consistent with the definition of 'severe disability' used in the tax credit system.

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