Help - Tax Credits Overpayment

Holeypockets

Hello,

Can anyone advise on this please?

We have been receiving tax credits for a few years - only ever the child element because we earn too much for the working tax element (both working). We are husband, wife and 2 kids.

When I (the husband) filled out the tax credits form it asked 'do you have a disability' which I put yes because I am registered profoundly deaf. I noticed that when we received our tax credits it added an allowance for the disability on the working tax element but because we were always earning too much this was always reduced to zero in the section that says reduction due to your income.

I reiterate that point - we receive zero for the working tax element and just what we are entitled to for the child element.

Tax credits have now decided that we have been overpaid nearly £3000 because I should not be getting this disability allowance. I have tried writing to them explaining that I don't actually get it because we get no working tax credit - just child tax credits but they don't seem to understand (either that or I don't).

I have only ever been honest with them - never tried to deceive and cannot understand what they are saying I am overpaid. Perhaps I should have lied and said I wasn't disabled.

Can someone please advise as this is very stressful.

pupsicola

It sounds to me like you are in the right. Your annual forms, that they send to confirm what you have recieved and what you have been awarded for the following year, will clarify all this.

They have been known to make many errors. Have they asked you to appeal and send in any paperwork? Keep the originals and send anything recorded delivery (dont mean to point out obvious )

Try not to panic. Its not like you have been claiming or receiving anything you are not entitled too and you can prove it.

pupsicola

Im sure you have done this already but you can check exactly what level of child element of the tax credit you are entitled to by going to www.entitledto.co.uk. Fill in your details as they are inc that you are registered deaf and then leave that info out and see if it makes any difference. Print it off and send it with your other paperwork to them.

Holeypockets

According to entitled to I have been overpaid, but surely this is tax credits fault?

Nick_B_3

You have a nil entitlement to Working Tax Credit - not a no entitlement. Nil is where the underlying elements are there but are tapered to nil so awarded at a nil rate - no is where there is no underlying entitlement. Because the underlying is there and the WTC is tapered to nil it has paid the balance with the Child Tax Credit. The recovery is with the CTC- if you have the no entitlement there would be no overpayment.
It appears correct - although cannot see how it is their fault as you have ticked the box but presumably you have not read the notes - I am guessing you have not received / or are not receiving the disability related benefit.

Icequeen99

They are correct. Although the disability element is part of working tax credit, and you get nil WTC because of your income, you will be getting more Child Tax Credit than you would have done had the disability not been included in the calculation.

If you think of it like a building block tower, you have:

WTC basic element
WTC couple element
WTC disability element
WTC 30 hr element
WTC childcare
CTC child element
CTC family element (not reduced until income reaches at least 50,000)

Now, they add up all of these elements to get your maximum amount possible. They then reduce that maximum amount by 39p for each £1 of income you have over £6420. The maximum amount is reduced in the order of WTC first, so from the top of the tower.

In your case, your income has meant that the top 5 levels of the tower have been wiped out so your WTC entitlement is Nil.

But, as you can see, by including the disability element in the calculation it takes more income before your CTC is touched (because there is another layer to get rid of). If you take that element out, your income will start removing your CTC entitlement quicker.

Basically, you are probably getting more CTC than you should have been.

Don't worry it is extremely complicated, but they are right and it can impact on CTC.

With regards to ticking the box on the form 'Do you have a disability' the form says that you should read the notes before ticking the box. The criteria for that part is that:

1. you work at least 16hrs
2. you are at a disadvantage in getting a job
3. you receive, or recently received, a qualifying disability benefit.

Only if you meet all 3 should you have ticked the box.

if you think you did meet those criteria, then you should appeal the decision.

If you have in fact been overpaid, your only option really is to dispute the overpayment but it is unlikely they will write it off if you didn't read the criteria or didn't understand it and check it with them.

IQ