I have a couple of clients at the moment who have (several months ago, in both cases), ended their entitlement to WTC, and have informed the Tax Credit Office at the right time.

Their payments, however, have continued. They have both acted properly in making the Tax Credit Office aware that payments are continuing when the claimant believes that they are no longer entitled. They have then been informed that ,due to a problem , payments cannot currently be stopped. In both cases, officers on the helpline went on to inform them that they would still be able to claim their DWP benefits in the normal way (in both cases, this was IS by reason of incapacity for work).They have been told that their claims are in a "processing queue". In one case, they have been in this queue since June '06!

Their I.S. claims have been disallowed due to WTC continuing to be paid at a rate higher than the I.S. applicable amount. As these cases came to my attention at different stages, I have taken two different approaches.

In Case#1, I have lodged an appeal against the refusal of IS, as although the client is receiving the money, they have been advised by the Revenue that the overpayment will be recovered, and it should not therefore be treated as income. This individual is doing their utmost to spend as little of this money as possible.

In Case#2, a complaint has been pursued against the inaction of the Tax Credit Office,and a customer support officer has provided a letter in which she clearly states that the customer has acted properly and done everything that could reasonably be expected of them, accepting that the problem has arisen entirely within the TCO's own administration processes. She has told me that an overpayment recovery letter will automatically be issued when the payments are stopped, at which point they should again raise a complaint, and refer the officer responsible for the claim back to her letter, and thereby challenging the recovery of the overpayment.
This client has no option but to live off this money. In the meantime, they are falling into council tax arrears, and their mortgage interest will not be paid for several months to come.

Any ideas?

How widespread is this?

I have also written to our local MP

i have 2 similar cases at the moment. One was told of some technical problems with the computer preventing the termination of WTC payments. He stopped working on 12/8/06 and reported it promptly but payments were made to 15/12/06. Needless to say this caused problems with JSA which was reduced to £26 a week for himself and wife. he had little option but to use the money which he knew would be overpaid and recovered.

HMRC revised award on 20/12/06, and are recovering £1200 WTC o/p from CTC due to end of tax year - near enough halving weekly CTC entitlement. JC+ are now paying full rate JSA but have withheld arrears pending overpayment recovery!

This is montrous! A clear case for intervention of MP and injection of a dose of commonsense into TCO! - assuming they know the meaning of the word. Where on earth did Blair's "joined up Government" get to?

Arguably if you know you have no entitlement to a benefit or tax credit but continue to receive it because of mistake, sheer bloody incompetence or whatever, then you must be holding that money subject to a binding obligation on a bare/resulting trust to pay it back to the rightful owner when they finally get round to asking for it. That means that as you are not beneficially entitled to the money it is not yours, capital or income, and for you to keep and use it yourself would be misappropriation. It should therefore not be counted as your income and you should put it aside so you can repay it. This of course only applies where you know you aren't entitled. It doesn't get round the delays, but it ought to help with the mirror-image problems for IS/JSA and indeed HB/CTB.

Brigid

my thoughts too. the sticking point for the DWP seems to be having confirmation of the end of the WTC award, and it's looking as if the computer problem is an obstacle to the issue of the all important award notice (although nothing prevents a clerically produced letter!).

Does the TCO have a fax? You could fax a message to them telling them to stop paying your tax credits becasue you no longer qualify and produce the record of the fax log and the message sent... this might work anyway.

Brigid

Thanks for the replies. In both cases there is no issue of whether or not the claimants have passed on the required information at the right time. This is not in dispute.

Nor do I think that either are under any illusion about their lack of entitlement to the money, but the one who is living off that money have absolutely no other option as there is no other income available to them .

I'm still in the middle of a post xmas busy period ,and getting little or no time currently to do the required follow-up work, but I hope to be researching the law relating to I.S. to see if we have any potential challenge to the S.o.S. submission on the appeal.

This is very much ongoing,and I'll keep this updated as events unfold.

There has been a little progress. I have received a very prompt reply from the local MP (Michael Foster), assuring me that he is concerned by this,and intends to take the matter up with HM Revenue and the Minister. Here's hoping!

Further update: MP has taken action, and apparently it has been brought to the attention of the Minister. Clients are no longer receiving WTC,and have been given £120 in compensation thus far. They are now in receipt of Income Support, but have been told that their housing costs will only be payable from 39 weeks after they were eligible for payments.

The matter is progressing, and the MP is waiting for a response from the Minister.

Glad this has come to the top again, I had been searching for this thread but couldn't rememebr what is was called!

I have a client with a similar problem. Previosuly getting WTC, moved onto IB and got the 6 month WTC entitlment after that accordingly. However HMRC failed to stop payments, despite telling client that she was not entitled. Client in meantime continued to have HB and CTB reduced on basis of WTC income so had no choice but to use the WTC to live on and to top up rent and CT etc. Several months later HMRC finally stop payments and notify the LA who in turn amend HB/CTB claim but only from the date of the last payment. HMRC have not yet sought recovery of OP of WTC but no doubt that will follow, in the meantime they have not responded to at least three written enquiries.

So where to next? Is the best tactic just to wait for HMRC to start recovery and then put in the normal application for them not to recover on basis that it was HMRC error and client did all she could etc or should we put in a formal comlaint now? Assume there is no appeal or challenge to the LA?

A further update.

The client who took the case to an I.S. Tribunal. As expected we didn't win the case, but the chair was reasonable enough to state that in her view, the client was put in an impossible situation by HMRC, and her inability to claim I.S. was entirely down to the continued and erroneous payment of WTC. She noted this on the Decision, and suggested that my client use the document as part of a request for an ex gratia payment.

HMRC's complaints procedures enable someone who has lost money due to specific actions of HMRC are entitled to approach them and ask for a consolatory payment equivalent to that loss (for example, bank overdraft charges).

I would have thought this was applicable in this case.