Repayment of tax credits from yr end 2008

pmg19680

Hi everyone- HELP!
Got a notice of legal proceedings today out of the blue for a supposed overpayment of working tax creds in 2008.
At the time i do remember getting the bill but then when I rang the helpline, they said that it would just be taken a little at a time from the continuing weekly payments.
We assumed that this was all sorted until we received this letter today saying that they want it immediately! (over £500) :eek:
What do we do about this because obviously we cannot afford it unless they take at the most £5 a week :rolleyes:
Thanks

MicheH

I'm amazed at that. We were over paid last year but they've just taken the amount off monthly off our award now. At least that was my understanding of it.

damoandclaire

because of payrises and job changes, my tax credits has been quite erattic of late and all the over payments they have stated to us, have always been claimed back at a week at a time. been getting tax credits for over 3 years and they've always taking overpayments back via the existing/new awards.

would be worth going to CAB regarding this. They maybe able to point you in the right direction.

Only thing I can think of, is that they havent been taking the overpayments on a weekly basis as they first stated. Dig out your latest award letter, usually about 8 pages. If i'm right in thinking, overpayments is on page 4 or 5 (could be different for everyone who gets this pack) but it should explain what has been paid, what is owed and how its going to be taken (amounts per week). If theres nothing there about it, to be safe, check your previous award letter to that to see if theres anything in.

If not, chances are they haven't taken any overpayments back and I'm not sure where you would stand because, they've obviously had plenty of opportunity to take it but have failed to do so, could use that argument to get them to now starting on a weekly basis rather than lump sum.

debtinfo

hi pmg, are you in bankruptcy yet, if so what date

also when did they FIRST ask for this money to be repaid

if you can answer these questions then can maybe give you an answer

pmg19680

debtinfo wrote: »

hi pmg, are you in bankruptcy yet, if so what date

also when did they FIRST ask for this money to be repaid

if you can answer these questions then can maybe give you an answer

Hi DI,
Yes me and hubby went BR on 11th May. They originally asked for the repayment in January 2007. However with the new claim following a couple of months later, we just assumed it was being paid back as it always had in previous years.
Thanks
pmg

debtinfo

hi, if the ovepayment relates to 2008/2009 then this is a new debt that you are being charged for and this is the first time that you have been asked for the money. Therfore this will not be included in the bankruptcy

pmg19680

debtinfo wrote: »

hi, if the ovepayment relates to 2008/2009 then this is a new debt that you are being charged for and this is the first time that you have been asked for the money. Therfore this will not be included in the bankruptcy

Hi,
This is not the first time we have been asked for the money as when we originally got the letter 2 years ago it had an invoice attached for payment.
I am going to go into the loft in the morning :rolleyes: to find the original bill so I know exact dates etc. I didn't think that any tax credits overpayments could be included in BR anyway??

pleasegivekarenadvice

You should have notification of your overpayment on your most recent Tax award. This will state wha you have repaid over the last year and what you have left to pay.It should tell you when they will start to make these deductions.Check all your award letters if you can.It depends on how you incurred the overpayments ie forgetting to update the information they need(not a good enough reason).They cannot take the full amount if this leaves you with less than needed to live on so they will ask you for an income/expenditure.Be ready to tell them you need time to do this as they will want to do it there and then.May be best to ask cab to help or use your SOA and update it if necessary. Hope this helps.Be strong and dont back down when they ask for the full amount.

debt_doctor

pmg19680 wrote: »

Hi,
This is not the first time we have been asked for the money as when we originally got the letter 2 years ago it had an invoice attached for payment.
I am going to go into the loft in the morning :rolleyes: to find the original bill so I know exact dates etc. I didn't think that any tax credits overpayments could be included in BR anyway??

Hi, if you can prove that the overpayment was discovered and repayment demanded BEFORE your BR date then the o/p is included in your BR.

DD

debtinfo

hi

If you have been asked for this money prior to the bankruptcy then it will be a provable debt. The only way that they can get there money back is to make deductions from future benefits which they are only allowed to do until your discharge. at this point any amount outstanding will be written off.

The only exception to this is if the overpayment has been proven to have been incured by fraud on your part, which i presume that it hasn't

this link is to the relevent section of the IS website that explains about overpayments

http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/part6.htm

debt_doctor

40.102 Overpayment of state benefits

Overpayment of state benefit may be made as a result of mistakes, change of circumstances or fraud. Where overpayments are made, the authority which made the overpayment has the right to recover the overpayment, for example:

• Housing benefit - Overpayments of housing benefit may be recovered URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#7"]Note 7[/URL and the overpayment can be recovered by deductions from ongoing housing benefit entitlement URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#8"]Note 8[/URL although there is a limit on the amount that may be so recovered.
• Jobseekers allowance - Overpayment of income based jobseeker's allowance may be recovered URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#9"]Note 9[/URL by deduction from prescribed benefits including incapacity benefit URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#10"]Note 10[/URL. There is a limit on how much can be recovered by this method.
• Tax credits - Overpayment of tax credit may be recovered from any award of tax credits payable to the person upon whom the notice of overpayment was served URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#11"]Note 11[/URL or by direct collection where there is no ongoing award of tax credits or where the ongoing award has ceased.

40.102A Categorisation of overpayments of state benefits
In the case of R. (on the application of Steele) v Birmingham City Council URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#12"]Note 12[/URL the court categorised the steps leading to recovery of overpayments in relation to the bankruptcy order date, in to three steps; when the award was made; when it was paid; and when the determination on recovery of the overpayment was made.


This resulted in the court further categorising overpayments in to 4 types as follows:

• Category 1 - The benefits are awarded and paid to the claimant before the date of the bankruptcy order. The decision that the overpayments are recoverable is also issued before the bankruptcy order date.
• Category 2 - The benefits are awarded and paid to the claimant before the date of the bankruptcy order. The decision that the overpayments are recoverable is issued after the bankruptcy order date.
• Category 3 - The benefits are awarded to the claimant before the date of the bankruptcy order. The benefits are paid to the claimant after the date of the bankruptcy order. The decision that the overpayments are recoverable is issued after the bankruptcy order date.
• Category 4 - The benefits are awarded and paid to the claimant after the date of the bankruptcy order. The decision that the overpayments are recoverable is also issued after the bankruptcy order date.

40.102B Recovery of overpayments of state benefits
There has been significant recent case law regarding the extent to which benefit overpayments can be recovered by the relevant benefit authorities following the making of a bankruptcy order.
In the case of R. (on the application of Steele) v Birmingham City Council URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#12"]Note 12[/URL which was subject to an appeal by the Secretary of State URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#13"]Note 13[/URL it was concluded that category 2, and category 3 overpayments, are not contingent liabilities for the purposes of the Insolvency Act and Mr Steele was under no obligation or liability to repay the overpaid benefit until the Secretary of State had made his/her determination to recover the overpayment. Category 2, 3 and 4 overpayments of benefit are not therefore bankruptcy debts and the benefit provider should not be included on the list of creditors. Consequently, these debts are not released on discharge and the benefit provider may decide to take any appropriate recovery actions available to them.
The position with regard to category 1 overpayments was clarified in the case of R. (Balding) v Secretary of StateURL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#14"]Note 14[/URL wherein the court found that the overpaid benefit was recoverable by virtue of the determination made before the making of the bankruptcy order and thus there was a liability to pay money under an enactment for the purposes of section 382(4) of the Insolvency Act 1986 and it was in all respects a bankruptcy debt. Category 1 debts are bankruptcy debts and should be included in the list of creditors. Category 1 debts are released upon discharge, unless incurred by fraud URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#15"]Note 15[/URL. The benefit provider may, however, continue to make deductions from ongoing benefits until the date of discharge URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#16"]Note 16[/URL.

40.102C Summary of the treatment of overpayments of state benefits
The following table provides a quick reference table for dealing with overpayments of state benefits in relation to the making of the bankruptcy order (“BO”):

Category
Award made
Award paid
Recovery decision
Treatment by official receiver
1

Before BO
Before BO
Before BO
Provable debt, recovery can continue until debt released upon discharge*

2

Before BO
Before BO
After BO
Not provable, recovery action to be decided by benefit authority

3

Before BO
After BO
After BO
Not provable, recovery action to be decided by benefit authority

4

After BO
After BO
After BO
Not provable, recovery action to be decided by benefit authority


Yours appears to be a catagory one, so the debt will not be recoverable after discharge, but can be taken at a rate that would not cause you hardship from an ongoing award till then.

Maybe, if nothing is being collected, to remain quiet until discharge.:rolleyes:;)

DD