Tax Credit Overpayments Help & Discuss

indigogirl_3

Its an all too familiar tale. Working Family tax credits werent perfect but they were a whole lot better than this system since you coud at least work out how they were calculated.
I have a file full of award notices from this year. The terrifying thing is the lack of clarity. Everyone you ever speak to on the helpline gives different advice. Quite often that is just to ignore the Award Notice if it is wrong!
I'm sure I am not the only person on a low income who relies heavily on Tax Credits to survive and lives in fear and dread of a "mis-calculation".

There's a strange anomily about the child care element in that you have to tell them if costs go down by £10 pw but they refuse to accept an increase of up to £10 pw. Leaving me unable to claim for the 2 after school club sessions for my second child.

Laughably, I tried to make a complaint as per the complaints procedure which states you can speak to a Complaints Manager. I hardly need to tell you there was no-one available to speak to me and the callback i was promised never happened either.

Your MP is the ONLY way to go!

Fran

Kevin wrote:

You may know that we have only a few days left of the eCon on tax credit overpayments (ends on Friday 4th March) on www.adviceni.net . Please see message below, and I would urge some posts on our last thread – “What should be done?”

You may have views on the deductions from awards, challenging the recovery process, the service provided by the Revenue staff, an amnesty for overpayments which are the fault of the Revenue, the length of time taken to process complaints, the fact that award notices are confusing and ineffective, the fact that complaints and correspondence with the Revenue are not acknowledged by the Revenue etc etc.

Please take a moment to post up some views and possible remedies re the overpayment nightmare being experienced by so many people,

Many thanks,

Kevin.

Last day for adding to this eConsultation.......

worleyone

Inland revenue have recently stoppped our child tax credit. inland revenue wasnt as kind to tell us , i found out via to a letter from my bank telling me I was overdrawn and would be given an overdraft fee of £30. I normally have direct debits taken from the account which are covered by the child tax credit, while the other tax credit is paid with my partners wages. I rang Inland Revenue about the non-payments who said that as my partner was near the cut off point we were no longer entitled to it. The cut off point being £16k but my partners wages for the year are £12k, where they get their info from I dont know.

So now we are having to conjure up the money to pay the direct debits and the unauthorised overdraft fee and have to wait until april when they say they will pay us again.

Inlan Revenue have only just got round to sending us a letter telling us they are stopping the payments although they were pretty quick to actually stop the funds going in , which they did in January.

hulltrucker

Thanks for this Martin - I recieved Working Tax Credit for a short time while I did a low paid job between November last year and January this. I have had a letter from the TCO stating that I have been overpaid by about £50, even though the Jobcentre worked out all the figures for me. I have not heard how they intend to recover the money yet, but will save the document to my computer for when they contact me!

TheWheelMan

Hi all

A very useful thread, I'm sorry to hear so many people are in the same situation but relieved to know I have some company! What I'd like to know (if anyone can help) is what is the formula for working out WTC and CTCs.

It seems you're totally in the hands of the Revenue to tell you what you are (or are not) entitled to. They're telling me I've been overpaid, but I don't know how I can check their calculations. I can't find it anywhere in any of the leaflets, or on the IR website.

Anyone got any ideas??

Cheers

Bob

1949camper

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There was an error opening this document. file cannot be found.

Can you help if there is a problem anyone else is experiencing


Regards
Trev

Tim_L

TheWheelMan wrote:

Hi all

A very useful thread, I'm sorry to hear so many people are in the same situation but relieved to know I have some company! What I'd like to know (if anyone can help) is what is the formula for working out WTC and CTCs.

Bob

Absolutely - this is one of my main criticisms (I have many, not least that you end up having to send and resend the same information many times in self assessment forms, WTC application and verifications) of the system. It is so unutterably complex that there is no simple statement anywhere of the rules, and the sole arbiter is the Inland Revenue.

Knowing this would be useful in other areas to overpayment too: it should be possible to trade off pension contributions against WTC payments, and I would love to be able to work through the maths of this.

fairenoughclough

indigogirl wrote:

Laughably, I tried to make a complaint as per the complaints procedure which states you can speak to a Complaints Manager. I hardly need to tell you there was no-one available to speak to me and the callback i was promised never happened either.

Your MP is the ONLY way to go!

I've been promised callbacks on at least five separate occasions.

You do know that if you go out and miss the call, they are not allowed to leave a message on an answerphone to say they've called, apparently they don't know who's got access to your answerphone ! The same people who've got access to your mail I'd suggest, bureaucracy gone mad.


Your MP, I got onto mine quite early one and the case worker told me, "We've got a special MP's hotline" and when I chased her up, she had to admit that she couldn't get through; just like the rest of us.

PM, don't bother, I got a letter in reply to my fax from The Prime Ministers office stating "we've passed your communication onto the relevant department" i.e. The Treasury.

Have I heard from the Treasury ?


Now, if they can't be bothered to respond to mail from the Prime Minister.

Big conversation. MA! :eek:

He's got big ears, his wife has a big mouth, seems the wrong way round to me! :rolleyes:

taylorst4

Hi Marigold
Sorry to disappoint you but paying through your tax code doesn't work, especially if you are low paid. For instance, if you pay £5 a week tax, but you get a tax credit of £20 a week, by using your tax code, you would only get the £5 a week you had been paying, as your code can only be used to tell your employer how much tax to deduct from your salary, and once they reach the level of your salary, that's it they can't give you any more. That was the problem with the previous Working Family Tax Credit, the government said it was giving the family £10 a week or whatever the amount was, but you could only get that much if you were already paying at least that amount in tax, meaning that the lowest paid and most needy wre getting either none at all, or less than people who were earning more, at least enough to pay that much in tax.
Steve

Marigold123 wrote:

I hate the Tax Credits system! Quite apart from all the incompetence, I think it's dreadful that you have to claim to get it. People who are entitled to tax back because they have children shouldn't have to go through the whole complicated process of making a claim - it should be paid automatically through their tax code. There will always be people who don't claim, either because they aren't aware they can claim, are intimidated by the system, or who simply don't get round to it. This is obviously the reason the Government changed the system in the first place, because they knew it would save them money in unclaimed credits. What a surprise! :rolleyes:

I didn't have trouble with overpayment, but it DID take about 9 months to get the proper Tax Credits Award Notice sent out to me, despite repeated phone calls, letters, etc. I needed it for proof of entitlement to free school meals, and the fact they sent me out the wrong notice 5 TIMES caused me a lot of inconvenience with my children's school.

Actually, the worse thing about Tax Credits was the pressure put on you to apply. "Don't miss out!" the advertisements urged. So, like a good girl, I applied, because I didn't want to miss out, did I?

It wasn't until I was actually receiving Child Tax Credit, that I discovered what a trap I'd fallen into. I have a son with a Learning Disability, for whom I receive Carer's Allowance, and this used to mean I was entitled to Income Support, as I am a single parent and don't work because I need to look after my son. However, once I was receiving Child Tax Credit, I was told by the Benefits Office that I could no longer get Income Support as I was earning too much money, (£19 a week more than before, apparently).

This doesn't sound too bad at first, until you realise that once you are off IS you no longer automatically qualify to have most (or all) of your rent paid in the form of Housing Benefit. I'm sorry, said the lady from the Council, we have to assess your income as though you are working now. Because I get Invalid Care Allowance for my son, which now counted as income, I couldn't get as much Housing Benefit, and I was also presented with a whopping Council Tax bill as well, which I ended up paying a court charge on because none of the various Council departments knowing what any of the others were doing.

Fine, I said, I'm obviously worse off now overall than before I applied for Tax Credits, so at the end of the tax year, I'll ask them to take me off and go back on Income Support, then at least I'll get proper Housing Benefit again.

WRONG! Once you are receiving Tax Credits you cannot stop receiving them. Apparently, this is AGAINST THE LAW! It would have been nice to have been told this at the same time as all the 'don't miss out' hype. :mad:

As a consequence, we struggled rather more than usual for about 9-12 months, and then suddenly, out of the blue, my Housing Benefit went back up and I had a rebate on my Council Tax, cancelling out the extra amount I'd been obliged to pay. I never did find out exactly what happened, and frankly I was more than a little worried about them taking it away again, so I didn't investigate too closely. So I did get the money back eventually, in the form of a big cheque from HB and a credit on the Council Tax, but it was a lot of grief I felt I shouldn't have had to go through.

There are obviously a lot of circumstances where you ARE definitely better off claiming than not claiming Tax Credits, but I would urge everybody to really go into it as much as they can, and assess all knock-on effects BEFORE applying, as once you are receiving the Tax Credits, you cannot de-register.

There is also a rather complicated tier system of payments, depending on how much money you and your partner earn, and oddly enough, the highest level of credits are paid to those who are somewhere in the middle. If your income is below a certain level and you work in a job where your hours are negotiable, pay close attention to the figures for this middle band of earnings. It would be silly to work half an hour more a week and be financially worse off!

irs101

I've said this before but, in my view, the motives for the Govt setting up a new system are good. They wanted a single system of child support - rather than a combination of IS, WFTC and Children's Tax Credit.

You also can't accuse them of doing it to save money. When TCs were launched they were expected to cost £16bn - which was a £2.5bn increase on the systems they were replacing. Since then they have made the child elements much more generous and the claim rate has been so good they've actually overspent. I haven't seen the figures lately, but we must be up to £18bn+.

However they have unashamedly refocussed the money on their priority groups. In their view, childless couple did not need the £10pw available through the MCA.

You're probably right that they wanted to make it look like fewer people are on benefits, but there's really no way of hiding it. And in fact the OECD figures split up the cost of TCs into "negative tax" and "benefits" to try and get a handle on this issue. And it's recognised in DWP's figures as well.

What we should be focussing on completely is the way in which the system has been administered. Everything else is a distraction from the real difficulties it has caused people. Because if the system worked, a lot of low and middle income families would be receiving a lot of money without a hitch, rather than owing a lot.

Bob

The basic calculation for TCs is reasonably easy. You add together all the elements of WTC and CTC you are eligible for. Then you subtract from this total 37p for every £1 of income you have over £5,060.

The problems arise when you report a change in circumstance or income. It is extremely complicated, because you basically need to calculate your entitlement on a daily basis. Big spreadsheet needed.

irs