How have Tax Credits been for you?

I think they should make the payments more relevant to what you actually earn. We have been receiving payments of £190 a month for the past year. My husband has just been given a payrise which will make us all of £45 a month better off and yet according to the entitledto website we will now only be entitled to £20 a month CTC which is going to leave us £120 a month worse off thanks to his pay rise.

moggins wrote:

I think they should make the payments more relevant to what you actually earn. We have been receiving payments of £190 a month for the past year. My husband has just been given a payrise which will make us all of £45 a month better off and yet according to the entitledto website we will now only be entitled to £20 a month CTC which is going to leave us £120 a month worse off thanks to his pay rise.

Entitled to doesnt deal with mid year changes.

You will lose 37p of your tax credits for every £1 extra you earn. However the cut doesnt take effect until the following tax year as you are given £2,500 grace on your initial income.

Thanks for that information, I must admit that last year when I used entitledto it came up with a completely different figure to what they awarded us in the end. The IR do have all our details, we've been claiming since they started CTC.

It looks very much like I will just have to wait and see what they decide to give us this year before I know whether I shall be forced to go out and get paid work

I think they are great! I applied when I first became a single Mum in 2002 and started my first job. I was just employed by them then.

When I first started getting tax credits, I thought they were great too.

Now, I think that the tax credit system should be abolished, and all outstanding overpayments should be written off. It was a nice idea while it lasted - but the government should be prepared to learn from its mistake.

I got my first award when I was self-employed. A change of circumstance or two later, and vast swathes of contradictory award notices started coming through my letterbox, like an avalanche.

I also noticed that I sometimes received letters for the same house number on a different street - and I discovered that there's a postman near me who has learning difficulties, and struggles to tell the different addresses apart. I figured that some of my award notices had therefore probably been delivered to other addresses, so there's no point in trying to keep track of them - it will all pan out in the end.

I've lost count of how many award notices I've received, but I think it's more than twenty, but less than a hundred. I've certainly had a lot more award notices than I've had changes of circumstances, and I can't tell which award notice goes with which change.

And now they've sent me two notices to pay - apparently I have to pay both of them. They seem to be unable to deduct the overpayments from my current tax credit award.

Now I wouldn't mind so much - but they deduct 65p from your housing benefit for every £1 of tax credit. You don't get your housing benefit back for tax credit overpayments - so, if you're one of the unlucky many, you could end up worse off than if you never claimed tax credit in the first place.

*update*

I've just phoned the repayment helpline, to spread my overpayment over 12 months - though I also said I'd prefer to have the overpayment deducted from my current tax credit award. They sounded surprised, and said that you shouldn't have had a notice to pay if you have a current award - so they suggested I phone the main helpline.

I phoned them and asked them to explain the overpayment. A slightly snotty bloke said I didn't return my annual declaration. This surprised me - I could have sworn I returned it. Maybe I was supposed to have returned more than one of them - but still, I've missed all the appeal deadlines, apparently. Still - I figure that they can't force me to pay a debt that I don't understand, so I asked how they calculated my tax credit in the first place. He said you have to look at your award notices for that.

He did say that statements of account look like award notices, but they're different. I asked how you're supposed to tell the difference, and he said you have to read them all the way through. I thought - aha!

So I asked that he send out duplicates of all of the award notices and statements of account for the year ending 2004.

I'm hoping that if the Inland Revenue can't prove that I've ever had a clear award notice or statement, then the overpayment debt will be legally unenforceable.

Is it affecting my health? A bit - because it's causing some anxiety. But maybe it's the time of year - there's lots of bugs going round. I think I'll find it much easier to fight the thing in the summer, when the weather is a bit warmer.

luckily we knew the money was a mistake so we didn't spend it, but people in changing circumstances must have a nightmare of a time trying to work out if their awards are correct or not

I agree with that too - but it's not just a case of not spending the money. High property prices and rent means that millions of people are dependent on housing benefit - which is reduced when you get working tax credit. Yes, even if it's an overpayment - and even if you know you're being overpaid. For such people, not spending their tax credit means not paying their rent - and could result in eviction.

the tax code system worked perfectly well for those people beforehand and i'm sure many of them would prefer to go back to it.

Agreed. Also, I don't know what was wrong with the old family credit system.

Here's how I see it. With income support, jobseeker's allowance, incapacity benefit and pension - once you've got the money, it's pretty much yours, and you can draw a line under it. You're very unlikely to be asked to pay it back at a later date.

To a lesser extent, this is also true of housing benefit, save for a few people with largely fluctuating incomes.

And this was the advantage of the old family credit system - once you applied for it, your award stood for six months, even if your income changed. There were some changes of circumstance that you had to report, which might result in a reduction in your award - but these never resulted in overpayment recovery - unless you reported them very late.

But that doesn't apply to tax credits. A change in circumstances near the end of the year could result in an overpayment for the whole year. So you can't assume that any tax credit you've been paid, is actually yours to keep, until you've sat on the cash at least two years.

And what sort of benefit system does that? Like I say, it wouldn't be so bad, if you didn't actually need the cash to pay your rent, thanks to the housing benefit deductions.

I think it would be much more sensible if they simply paid tax credits two years in arrears. Maybe that would make the system a bit pointless - but it's already a pointless system creating pointless anxiety for millions of people.

Why did the government change the family credit system in the first place? Was it really meant to reduce child poverty, and improve the lot of the low-paid? Or was it merely intended to appease the right-wing press, who accused alcoholic single mothers of "abusing" the system, by strategically choosing the right time to renew their claims and maximise their awards?

If it was the latter - then is it any wonder that the tax credit system is causing so much misery and suffering? I think not.