tax credit overpayment - is this their fault or mine?

shootme

Hi. I don't know whether or not to dispute my partner's tax credit overpayment. Here's what happened:-

Until July last year we were each claiming at single people. At the end of July we moved in together and I informed tax credits within a couple of days. My payments stopped so I just assumed that the new circumstances meant we weren't entitled to them any more.

My partner earned quite a lot more this year than last year - he is on a piece rate so doesn't have a set salary.

We each phoned them by the deadline this year to give them our final P60 figures at which point I learned that we have never been put together for a joint claim even though I informed them we were moving in together. We should have been getting about £10 a week but they would only backdate it for 3 months.

My partner then gets a letter informing him that he has been overpaid (this would have been from his single claim).

The money we should have been getting throughout the year would more than cover his overpayment. Do you think I could dispute on this basis?

AsknAnswer

No. It is made clear on your award notice that if you begin to live with a partner, the award will end and you will need to make a new claim with your partner, if appropriate. They cannot add a partner to a claim.

The fact that you may have had an underlying entitlement will not be considered.

shootme

Hi again. I just found out that you only need to to tell them if your income goes up by 25k otherwise it shouldn't affect your award until the following year. His earnings went up by about 10k so I can't understand where the overpayment has come from. I guess he will just have to ring and ask them.

alwaysonthego_2

You will still have the overpayment as you should have had a joint claim not a single one.

shootme

alwaysonthego wrote: »

You will still have the overpayment as you should have had a joint claim not a single one.

We didn't have a single claim once we moved in together. All our payments just stopped.

viktory

shootme wrote: »

We didn't have a single claim once we moved in together. All our payments just stopped.

So how did the overpayment occur? I thought that come from his single claim?

shootme wrote: »

My partner then gets a letter informing him that he has been overpaid (this would have been from his single claim).

shootme

I really don't know. It must have been from his single claim because only he has had a letter and we have only just started our joint claim.

Just to clarify - we each had single claims up to July when we moved in together (when the payments stopped).

AsknAnswer

The £25K disregard does not apply if you fail to report an increase in income at the time . This is how people are stung by overpayments.

shootme

I'm sorry but I still don't understand as this is what it says on the direct.gov website:-

If you expect your income for the current year to be no more than £25,000 higher than your income for the last year, it will make no difference to the amount of tax credits you will receive for the current year. However it’s still a good idea to let the Tax Credit Office know about the change as the increased income will be taken into account in the following year

sinstar

The £25k disregard only applies if you carry your previous year actual figure over into the current year, or give a current year estimate that is higher than you previous year actual figure - because this causes your award to be based on that previous year actual figure. If you at any point give a current year estimate that is lower than your previous year actual figure, they will start basing your award on your current year estimate, giving you the benefit of increased payments. But you lose the £25k disregard & now if you earn more than your estimate you can be overpaid.

shootme

Thanks for clearing that up sinstar. My OH never gave them an estimate lower than the previous year so he therefore should have had the 25k disregard. Will give them a ring. Cheers