tax credit overpayment

tammyj

I claim child tax credits and last September (09) my husband had to take a drop in wages. I informed tax credit office at the time and they ammended my tax award notice. In april 2010 i renewed my claim when it came back i noticed that they had took my husbands new wage as the wage for the whole year (09 - 10) and not from september when it changed. As a result i have an overpayment and now have to pay it back.
I was under the impression that if you inform of a change and they over pay you, you do not have to pay it back!

Can anyone advise on this situation. Thanks.

System

Tax credits are always based on yearly income. Your claim up to September 09 was based on your 08/09 income. That was the most up to date information they had and they got that when you renewed your claim prior to July 09.

When you informed TCO in September that your husbands wages were reducing you would have been asked to estimate a revised yearly income for the 09/10 year and they would have based your amended claim on that. If you declared an income higher than that in your recent annual declaration then yes you would have an overpayment which would have to be repaid.

It's always best in those circumstances to overestimate rather than underestimate your income.