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DRO's & Tax Credits

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Hi there
Wondered if anyone else has come across this same situation.
I became subject to a DRO on 13th Aug this year. I included in this order an overpayment for Tax credit awarded a couple of years ago. As they have continued to make reduced payments to me i called them today and was infomed that because i have an on going award with them they can continue to make reduced payment to me to recover the balance, however if i was not claiming Tax Credits they would not persue me for the debt! I called to insolvency service to get clafification on this and they informed me that HM Revenue and Customs are treating these debts as they would be treat in bankruptcy and not as a DRO as the wording in the legislation is different therefore they should not continue the take the overpayment from my award. However the insolvency service say they cannot do anything about this my only option would be to persue this matter myself through the courts which to be honest i am very tempted to do not really for the money purely the principle!!!

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  • debt_doctor
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    Hi,

    Yes i'm well familiar with that ! - it's exactly as you say, HMRC and the DWP are challenging the insolvency service in that deductions should stop immediately the DRO is made.

    When I proccess DRO's that include benefit overpayments I tell the client payments should stop but they almost certainly wont !:rolleyes:

    They will stop after one year though, ie when the DRO debts are finally written off.

    I would leave any expensive court action to the insolvency service !:D

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
  • michelle984
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    Thankyou for your advice :)
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