Hi
my client has been overpaid WTC as she was incorrectly awarded the severe disability element in her award for 2004-05. This error was not picked up until June 2006. She ticked she was disabled and sent her DLA award letter as proof. She gets care (middle rate) but this had been input as high rate. She has appealed against the decision to recover but she lost.
I don't have much experience of tax credit overpayments regarding appeals etc - is it reasonable that someone should know they are not entitled to the severe disability element but only the disability element. I note the IR state the claimant is expected to have read their award letters and inform of any errors e.g. DLA high rate instead of middle.
I know if this was a HB o/p due to an incorrect premium it would be written off as a LA error but the IR don't seem to be so reasonable.

Does anyone have any thoughts how best to approach this appeal -the client has cerebal palsy but I don't think there is much agrument in mental capacity.

Thanks

There are two questions on the form. The first asks whether you are disabled. The second asks whether you are getting DLA at the high rate. Did the client tick both, or only the first (you may have to ask for a copy of the form to check)? If both, then I don't think they have any hope. If only the first, then they did not claim severe element at all but TCO gave it to them quite erroneously. It then seems very unfair for TCO to turn round & say they should have realised that they weren't entitled and want the money back, but this is the way they work.

I think you could try to mount an argument on the lines that the award notices are so confusing and complex that it is not reasonable for someone who is not knowledgeable about all the ins and outs of tax credits to be able to understand every thing about them - particularly as the client is disabled and could not reasonably be expected to know the detail of what effect this would have on the credit amount.

Its not as if TCO own staff find this easy. I've just had a case where both of a couple are disabled and for some unexplained reason TCO removed the disability element from one of them for 54 days then reinstated it. When this was queried the answer came back that only one disability element was payable to a couple both of whom were disabled. This was plain wrong, and if it had been right they should have removed the second such element from all the claim (which of course they had not done!).

Hi

If you haven't already done so you might find it useful to have a look at COP 26 http://www.hmrc.gov.uk/leaflets/cop26.htm which is the guidance from HMRC on overpayments.

Unfortunately, unlike SS benefits, HMRC have the power to recover all overpayments (including those caused by their own mistake) if they decide to do so under Section 28 TCA 2002.

In addition there is no formal appeal route against HMRC's decision to recover an overpayment, the only route is to dispute.

According to HMRC the wont recover an overpayment if a claimant can show that (a) overpayment was caused by HMRC's mistake and (b) it was reasonable for them (the claimant) to think their award was right.

It sounds as if you shouldn't have a problem with the first of these, it was clearly HMRC's mistake.

Based on the couple of cases we have seen like this I think it will be the second part of this 'reasonableness test' that will be the biggest hurdle.

As you say HMRC expect the claimant to check the award notices. The award notice should state that they are in receipt of Higher Rate Care if the SDE has been awarded. It is worth checking this on the original award notices and making sure it is there and is clear.

They may also argue that it should have been picked up when claimant completed renewal papers. Again if the originals are available check to see if it does clearly say the claimant is in receipt of Higher Rate Care (DLA). I have seen some award notices where information that HMRC say should be there is clearly omitted.

The other argument we used relied on a claimants ability to understand the award notice (in this case she had severe dyslexia). However the claimant did consult the local tax office with her DLA award letters and they didnt pick up on the error either. It is probably worth double checking to see if the claimant noticed anything at all or called HMRC at any point to check entitlement. Or is there anything related to the claimants condition that makes checking and understanding her notices difficult?

Finally if none of the above work you could try disputing it again just on the grounds that the award notices are complex and difficult to understand...even for their own staff!

I have taken 3 similar cases to the tax credit consultation group as it clearly highlights the need for HMRC systems to check information with DWP systems. If there had been a computer link this would have been avoided. Hopefully we will have an update on this at our next sub group meeting.

Victoria

Thanks for the advice - I will check with the client as to what information she was asked for at the time of her claim /her previous award letters etc.
It is interesting to note that she qualifies for the 'severe disability premium' in her Housing benefit based on middle rate care -perhaps that is why she was confused.

Thanks agaain

I work in Housing Benefits and have just had a lengthy phone call from someone who has been overpaid a substantial Working Tax Credit for this very reason.

I'd previously incorrectly assumed that the qualifying conditions for a Severe Disability Premium in Tax Credits would be the same as conditions for Housing Benefit. Not so...

No wonder customers find this confusing - 'The Local Authority consider me severely disabled but Tax Credits don't...'