Hi there, You may know that we have only a few days left of the eCon on tax credit overpayments (ends on Friday 4th March) on www.adviceni.net . Please see message below, and I would urge some posts on our last thread – “What should be done?”

You may have views on the deductions from awards, challenging the recovery process, the service provided by the Revenue staff, an amnesty for overpayments which are the fault of the Revenue, the length of time taken to process complaints, the fact that award notices are confusing and ineffective, the fact that complaints and correspondence with the Revenue are not acknowledged by the Revenue etc etc.

Please take a moment to post up some views and possible remedies re the overpayment nightmare being experienced by so many people,

Many thanks,

Kevin.

where to start?

here's one - i really think there needs to be a legislative change around the rigidity of the requirement to claim as a single claimant or joint claimant - see earlier threads. there are no offset provisions, and a retrospective inland revenue decision that a person was a member of a couple when they claimed as a single person has the effect of nullifying their entitlement in the period of the claim. this can result in a very large overpayment decision, especially if there were childcare costs. These overpayments may be technical ie created through the decision and the framing of the legislation, and not necessarily by reference to a LOSS FROM PUBLIC FUNDS. eg if a single person had instead made a joint claim with her unemployed ex-partner (who the Inland Revenue now determines on flimsy and circumstancial evidence was living with her), she would still have been entitled to TC. She has not received more money than she would have done if she had claimed as a joint claimant.

it's worth noting that L/T of itself is not a bar to income support entitlement. the bar to entitlement is that a member of the couple is working over 16 hours, or has income exceeding the app. amount, etc. it is L/T + something else, which removes entitlement.

the 'offence' in the context of this legislation is merely claiming on what is judged the wrong basis, and the creation of a £12,000 or so overpayment when there has been no overall loss to public funds amounts to a hugely heavy fine. it's a heavy penalty for not filling in a form correctly! unjust and disproportionate are just two words which spring to mind. particularly when you consider the purpose of this 'benefit', with the fact that there is no right of appeal against overpayment decisions, and the inland revenue's practice on overpayment recovery, despite its stated policy.

entitlement decisions may be disputed - small comfort against seriously unfair legislation - there's many a slip, as they say, and even when the inland revenue's decision is ridiculous and weak, an appellant may already have been severely intimidated by the shock of receiving a huge bill from such a scary organisation, and then months of stress going over the rights and wrongs of it with first the inland revenue and then an adviser, maybe. i'm not surprised that another poster's disabled client didn't want to claim his legal entitlement again.

it's not just retrospective LT decisions that are a problem. relationships get into difficulty, people walk out, go back, go through periods of not knowing where they stand or where they're going. is it right that period need to give the inland revenue a blow by blow account ( maybe i should re-phrase that? ) of their relationship problems if they want to ensure they don't fall foul of the IR?

many thanks for this, have taken this and posted, also other potential issues which have been highlighted would ease the situation include:
"an amnesty on existing overpayments, improve efficiency of advice line staff (training!!), ensure IT system is up to date, act on change of circumstances information provided by t.c. recipients, operate a principle the same as that used by beenfits system which is that no overpayment is recoverable until the appeals process has been exhausted, capability of putting accurate / understandable / checkable information on award notices in the first place, the Revenue should produce an action plan for addressing the situation, deductions set too high and causing hardship, acknowledging correspondence - basically review everything and improve.

I think all the above are good ideas. I also think that adherence to the legislation by the IR would be a good idea. In my post below from an earlier thread (sorry do not know how to print links) I have got the legislation that confirms that client should be getting full CTC. The client has entered a new relevant period and the deductions they are making are putting the client on an income below that of income support. What is the point of the legislative process if they simply override it?
I also think that the DWP should be given responsibility for this benefit and that it should be assessed on a weekly basis rather than a yearly one.
There. I have got it off my chest now. Thankyou!

Rate of recovery of overpaymnet
Tue 26-Oct-04 06:13 PM

I have a client who was recieving WTC and CTC up until the end of September this year. He informed the IR January 2004 that he had stopped working in November 2003. The IR said, "You dont need to tell us about this now, wait until the yearly review in April." My client failed to return his final notice because he knew he would not get any due to the fact that he was not working. The IR assume that 1) The details for last year's award is correct and 2) That the client is still working. This results in the client recieving WTC (with childcare element for three children) plus CTC up until the end of September. The client admits that he has some liability pay the overpayment.
I have called the IR. They say that the client has recieved more than his entiltlement for the current year and have therefore stopped his CTC completely leaving him with just his IS personal allowance of £56.65 plus the relevant child benefit. I feel two very important issues come out of this.
1)The client is well below the income support level, a statutory provision. It is true that deductions can be made in lieu of social fund debts, overpayment etc but this would be from his personal allowance at a specified paercentage, usually approx £2.80, which brings me on to the second point.
2)These deductions are being made from the element of provision in respect of the children, as such it is the children that are being penalised.
Does any one else think that this action could be illegal as it contravenes legislation stating the minimum finacial provsion i.e income support level. Also could any action be forced via The Children Act 1989, maybe even via section 17 payments. Perhaps the government would be more likely to listen to local authority ministers instead of a few whinging welfare rights workers
Finally.
I feel these new developments are not in the best interest of any one least of all those who most need it. Bring back WFTC down with WTC!

Totally with you on this, on the eCon we had a thread along the same lines 'tax credits failing children' on this issue. One post as follows: (lone parent, moved from work on to benefit, hit with overpayment)

"I could find another p/t job but am worried about doing this until April as I'm sure this will cause further problems. So I am left with 3 children on less than IS income. I cant wait for the day I dont have to rely on this income."

This t.c. overpayment situation really putting people in a desperate position and producing feelings of hopelessness and panic.

i know what you mean.

i have gone from part time to full time to get away from tax credits. i have had three overpayments eventhough i have contacted them everytime something changed often before the change. as i work in housing benefit i am well aware of needing to inform but this doesn't stop the overpayments.

i am struggling to see where they have been created.

there needs to be something out there to stop this as its going to make a huge dent in my income next fin year and as a single parent i can't afford this.
why are they reactive and not proactive!!!

Interestingly had a meeting with senior staff in the TCO in Northern Ireland and they say that it's their policy to acknowledge any dispute against an overpayment indicating the approximate length of time it should take to look into the matter, and that all change of circumstance notification is carried out there and then - ordinarily shouldn't be a problem.

I suppose this is the thing, in theory the Revenue feel that tax credits should be working smoothly for all, in practice this is not the case, and they are too slow to react.

So taking your point - it would even be a start if they could react effectively.