My client is about to go bankrupt. She is currently having a CTC and WTC overpayment recovered from her current entitlement, which is made up of CTC only. I want to know whether the WTC can go into the bankruptcy with no option to recover any overpayment, as she is no longer in receipt of this element of the benefit. I presume the IR would say no, and try to recover from CTC as is normally the case for an overpayment of WTC where there is no longer any eligibility. Is there an argument that the WTC should not be recoverable up until discharge on the basis that there is no longer any liability for the WTC overpayment once the BO is made?

Or am I clutching at straws? Comments/thoughts welcome.

Alexa Walker
Debt Adviser

recent case in 'balding' may be of interest ...

see forum posting @ http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=108&topic_id=2610&mesg_id=2610

and rightsnet news @ Overpayment recovery following discharge from bankruptcy: New High Court judgment

I think you are clutching at straws! As I understand it a claim is regarded as one claim covering WTC and CTC, or either of these alone if the other does not apply. For your argument to work it would have to be possible to argue successfully that a WTC overpayment could not be recovered from the claimant's CTC even if the claimant was not bankrupt. In other words, the fact of the bankruptcy does not affect this aspect of recovery.

Of course, recovery of all the overpayment should stop on discharge providing all the conditions are met - see the thread referred to above.