CH 1450/2005 makes passing reference to the situation when a person does not have an ongoing tax credit award... as you say, and it is not an a very sactisfactory situation at all !!
the addition of reg 33A seems to have muddied the water a lot, looking at that decision. The Commissioner looks at the question of whether the fact that the (tax credit) monies were overpaid deprives them of the characteristics of "income" for the period for which they were paid. Something about that question is bothering me, but i'm not clear what it is at this stage... except i've been considering the other question about the impact on IS...perhaps it is that an overpayment decision entails a retrospective decision on entitlement to income which alters the facts on entitlement or payability, after the event... or, regulation 40 (IS) regs isn't a lot of help in terms of wording...it just says the income other than earnings to be taken into account shall be his gross income - no light on 'entitlement' 'receipt of ' etc...actually, it may be that the question is answered by reference to the arrangements for recoupment...
my initial thoughts were what is to stop an IS revision request on the basis of the Revenue's revised decision, which alters the amount of income to which the person was entitled in the relevant period? (the fact that there was an overpayment has been dealt with with the Revenue, the excess payment is recoverable, and the effect is that the person had nil entitlement, whereas £XXX was taken into account). i've made the mistake of reading the DMA regs and am now completely confused, and am not sure there are grounds, or could it come under error?
what bothers me about this is that going back in time, i am pretty certain that in the analogous situation of say, an IS claimant receiving topped -up IB, a revised IB decision eg it was discovered that a mistake has been made over NI conts, and he had no IB entitlement, would provide grounds for a revised IS decision.
these kinds of overpayments were classed as technical overpayments - where a revised decision was made reducing or removing benefit entitlement to a benefit which was topped up by IS, the effect would be to increase IS entitlement (unless it was based on on a circumstance which affect IS entilement of course.) the decisions were corrected in the normal way, but no recovery was made of the CB overpayment, or arrears of IS paid...there was no overall loss to public funds. these procedures were administrative, as far as i recall...they made administrative sense and were reasonable.
it seems to me that any incorrect payment of an income would not stop the it from having the characteristics of income at the time it was received, but if that is a valid question, (i don't have commissioner's brain, or any kind of a brain at the mo...: ( ) it represents a worrying shift which would have prevented the above approach...
tax credits impact on IS and HB, and the systems aren't well integrated... this is a major problem, and patching it is likely to make things worse, and get further and further away from objectives of fairness...
looks like a choice between revision or arguing that only overall loss to public funds (don't fancy your chances) is reasonable...
what do others think...? : )
is the choice between
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