Tax credit to be paid back

Lizzielou_2

Hi

Please can anyone tell me whether they have successfully challenged Tax Credits when they have been told they were overpaid and have to pay it back??
This has happened to me and my husband and we are now left with a bill of approx. £2000.00 to be paid back because they said we had been overpaid previously.
They take their repayment out of our tax credit award which reduces us to "NIL due to us".
We feel in a bit of a panic.

AnxiousMum

What is the reason for the overpayment?

Lizzielou_2

I think it was just the yearly update calculation.
I left work to have twins and all seemed fine with tax credits....then after approx. one year or poss the 2nd year when the yearly update was done they told us we had been overpaid previously and that we owed X amount of money back.....then this seemed to snowball each year. I didn't feel this was our fault as our declarations were accurate and true, but not knowing any better I just acce[pted (at the time) what they said.

denton6

hi we had same kind of problem , gave all correct info to them and ended up with overpayment, got local mp invoved but we still had to pay it back. if it causes hardship to you you can pay so much back to them per month. sorry that prob doesnt help but hopefully you will get it sorted .

mitchaa

The majority of the time it's the inability to fill in the form properly.

If you've been overpaid and benefitted from it, then pay it back and see it as an interest free 'loan'.

System

Before you do anything write to them and asked for a detailed explanation of how the overpayments arose and what years they arose in. Then when you have the answer you can decide if the information is wrong and then dispute it or if it is right you can ask them to reduce the amount they are recovering from your current award.

delboysmith

You don't need to write in to get explanation of your overpayment. If you look at your award notice for the year you were overpayment and compare them to your finalized award notice then you should see the difference. From what you say guarantee its because you underestimate your current year income and your income ended up being higher. Think you could have forgotten to take off up to 100 per week for smp when doing your renewal

If you want to avoid being overpaid do not give a lower estimate of income unless your 100% sure if is going to be correct. If not 100% sure then leave it on higher or vastly overestimate it. You wouldget the money back at the end of year when do your renewal.

Fair enough if your require the money straight away but you are always risking getting overpaid

System

delboysmith wrote: »

You don't need to write in to get explanation of your overpayment. If you look at your award notice for the year you were overpayment and compare them to your finalized award notice then you should see the difference. From what you say guarantee its because you underestimate your current year income and your income ended up being higher. Think you could have forgotten to take off up to 100 per week for smp when doing your renewal

If you want to avoid being overpaid do not give a lower estimate of income unless your 100% sure if is going to be correct. If not 100% sure then leave it on higher or vastly overestimate it. You wouldget the money back at the end of year when do your renewal.

Fair enough if your require the money straight away but you are always risking getting overpaid

The OP didn't mention anything about providing estimated income which would have affected their entitlement to the £25000 disregard plus you are assuming claimants keep all their award notices and can understand what each and every one says.

You obviously work in Tax Credits and understand what is relevant amongst the gobbledegook on award notices, as do I, but when a claimant is faced with a series of award notices which can run to 8 pages then it is entirely understandable why they cannot figure out how an overpayment occurred and got bigger. Also what if there are several changes of circumstances during a tax year which has the entitlement going up and down like a yo-yo.? It would be nigh on impossible for a claimant to reconcile how an overpayment occurred in that year.

If the OP can't deduce how their overpayments arose then I think getting the Disputed Overpayments Teams to supply a written explanation is not unreasonable. It is their job and it gives the claimant the information required to decide if they want to dispute the overpayment.
Given that the target for processing disputes or explanations was only about 4 per day when I worked for tax credits you can gauge how complicated some overpayments are.

delboysmith

Well people should keep their award notices as with any document given by HMRC.(That was meant as handy hint to anyone else looking at this to make sure in future they keep them) I was only saying that you could do it yourself instead of writing in. It costs taxpayers money to give written explanation and in times of austerity people can do some of the work themselves. Obviously if you cannot do that then fair enough write in. The target was 4 a day? That would not necessarily mean its complicated just mean they go through all the previous communications

Yes was making assumptions about overpayment but vast majority of overpayments where people keep up-to-date with changes is because of giving too low an estimate of income and this should be fairly easy to check om previous awards.

bestpud

People have had overpayments written off but it is usually only when the system has made an error.

I think it entirely reasonable to ask for a breakdown of the overpayment as it sounds complicated and is over a number of years.

You could also take along all your award notices to a CAB and ask them to go through it with you and they will also help you get a longer repayment rate if the current one is causing you hardship.

There is an explanation of the £25k disregard at the top of the board which you may find useful to read as it's likely the cause. Unfortunately a lot of people have been caught out by it.

ErisBadb

Hi - found this that may help:

'There are maximum amounts by which an award can be reduced in order to recover an overpayment from a previous year. The limits are applied after payments for the current year have been calculated. The maximum amounts are:-
10 per cent for a claimant receiving the maximum tax credit award to which s/he is entitled
100 per cent for a claimant receiving only the family element (including the higher family element if applicable) of child tax credit
25 per cent for all other claimants, for example, those receiving less than the maximum but more than just the family element of child tax credit.'