£10,000 tax credit overpayment - please help!!!

Hec_3

Hi all, I am new to this site so hope I am posting in the right section!

Basically I renewed my tax credits two weeks ago and our payments stopped. Then on Saturday received a letter saying I had been overpaid by £9500 - it transpires that they had entered my partners income as £0 despite having him down as working over 42 hours a week. I work 12 hours for the period as was a full time student and have a 3 year old. At no stage did we state a change in income or expected income. It is also worth explaining that the previous year I worked 16 hours and our payments did not change significantly due to them wiping out his income (by their error). On reviewing our correspondence from them I have three letters all dated the same - two of these have my partners income however the third does not. I know they will say it's my fault for not noticing this at the time however surely it is also their fault?? I have requested transcripts or audio recordings of all calls made for the period as I can not remember for certain if I noticed and called them. However - we also received NHS exemption cards that we called about on three ocassions to say we were not entitled to. I have requested the dispute forms and have a meeting with our MP tomorrow - is there anyone who has had a similar situation or anyone who can offer advice at all? Also, if I have to pay this money back (or part of it) it is clearly going to take years - will this show / affect my credit rating or ability to renew my mortgage?? This is like a bolt from the blue and any help or information will be greatly appreciated
!! Thankyou x

Icequeen99

It really depends on the exact facts of your case.

Have a look at the HMRC guide COP 26. It sets out when they will write off an overpayment.

Basically, it isn't enough to show that HMRC made a mistake. You have to show they made a mistake, and that you noticed it and told them about it. In COP 26 these are called your responsibilities, so you have to show HMRC failed to meet their responsibilities and that you met yours.

So you do need to get the recordings of the calls to see whether you told them about the error. And the ones where you talked about teh health form, again you need to listen to that.

If you can show you told HMRC of the mistake, then they will write it off. If you can show that HMRC made a mistake by putting Nil income, but that you didn't notice (and there is a no exceptional circumstances as to why you didn't notice) then unlikely it will be written off under COP 26.

In terms of repayment, they will reduce your tax credits going forward. If your entitlement is Nil, or your claim ends, they will want it back directly. However you can arrange a time to pay up to 10 years, longer if necessary or if severe financial hardship it can be written off.

IQ

nonnatus

But you would've realised, surely, that you were being given a LOT of tax credits whilst earning a fairly healthy wage (presumed on 42 hrs a week!). £10k overpayment equates to just under £200 a week!!!!!
Did it not occur at any time to check it was correct?

The forms we are sent make it very clear, I'm afraid, that we must check the information carefully to ensure it's correct and report any problems...

You mention you were sent three forms on the same day. The front page of those forms would have been different - The two with your partners correct income would have shown a small award figure. The one with income as NIL would have shown a much LARGER award figure - you must have noticed that bit, even if you failed to check the inside pages?

I wish you luck, but I'd be surprised if Tax Credits didn't stick to their guns and chase you for the large overpayment. Sorry.

Hec_3

Thankyou icequeen for your comments - I know that when we called regarding the NHS exemption we said we were not entitled due to the fact our income was significantly higher than the £15000 threshold for free childcare. However , I shall await the recorded calls. As for the comments regarding noticing a significant change per week - as I explained in my first post - there was only a difference of twenty pounds a week (a FALL of £20 a week that is) from the previous year award when really this was expected due to my partners slight increase in wages.

Hec_3

Also - although our combined wage was as you say "healthy" we still have a lot of commitments - not least being the £550 childcare bill that obviously we lost any help towards when I cut hours to 12 in my final year at uni - so actually that after essentials and no mobiles or sky or anything like that - having £300 pm to spend on food and petrol to get to work Really is not a healthy wage - indeed it is the case that I would be better off on the dole.

cte1111

I've had this happen twice with tax credits, e.g. one partner's income being recorded as 0 despite having their hours correctly as 35 hours per week.

The first time it happened (8 years ago) I suddenly received 3 giros totalling £1,000. I rang them and said that I didn't think this was correct. The lady on the phone told me that it was correct. Eventually they decided they had overpaid us but had to write it off as it was entirely their error and moreover they had reiterated that it was definitely correct when I queried it.

The second time about 2 years ago, we suddenly received an NHS exemption certificate and our tax credits increased. This was after a change in circumstance, which we had told them about. As soon as I actually received any paperwork, I realised that they had done the same thing again - reduced my husband's income to zero but recorded his hours correctly. I rang them and told them, it took them a few weeks to sort out, then they were trying to reclaim the overpayment. I went through their appeals procedure as the overpayment was 100% their fault. It was written off, as their own guidelines state that if any overpayment is due to their own error, it shouldn't be reclaimed.

So my message would be, appeal against the overpayment on the grounds that you have given them correct information about your circumstances and can't be expected to know that they have input the wrong number. They really need to sort their systems out as it is evidently far too easy for one of their data inputters to do this specific error, e.g. change the income to zero when inputting a change in circumstance.

NB I have had several other overpayments as our circumstances have changed lots of times and I have had no issues with genuine overpayments being taken off future awards, but when you've done your utmost to ensure that they have the correct details and they wilfully overpay you, then it's fair game to ask them to write if off I think.

Hec_3

Thankyou cte1111 - similar to yourself, I have had an overpayment previously that they collected from my awards - this was £400 or there about due to the fact my partners income had increased slightly. This I do not mind. However - I don't know if it makes a difference at all (prob not) but it is his projected income they had as 0 not the actual figures from p60's - those figures where correct. The issue comes from the part where it says "estimated income for coming year based on information provided by you" - just have to wait I guess for the transcripts because I
know I called them about that award notice but cannot recall the details
of the call - so stressful!!!

Icequeen99

cte1111 wrote: »

I've had this happen twice with tax credits, e.g. one partner's income being recorded as 0 despite having their hours correctly as 35 hours per week.

The first time it happened (8 years ago) I suddenly received 3 giros totalling £1,000. I rang them and said that I didn't think this was correct. The lady on the phone told me that it was correct. Eventually they decided they had overpaid us but had to write it off as it was entirely their error and moreover they had reiterated that it was definitely correct when I queried it.

The second time about 2 years ago, we suddenly received an NHS exemption certificate and our tax credits increased. This was after a change in circumstance, which we had told them about. As soon as I actually received any paperwork, I realised that they had done the same thing again - reduced my husband's income to zero but recorded his hours correctly. I rang them and told them, it took them a few weeks to sort out, then they were trying to reclaim the overpayment. I went through their appeals procedure as the overpayment was 100% their fault. It was written off, as their own guidelines state that if any overpayment is due to their own error, it shouldn't be reclaimed.

So my message would be, appeal against the overpayment on the grounds that you have given them correct information about your circumstances and can't be expected to know that they have input the wrong number. They really need to sort their systems out as it is evidently far too easy for one of their data inputters to do this specific error, e.g. change the income to zero when inputting a change in circumstance.

NB I have had several other overpayments as our circumstances have changed lots of times and I have had no issues with genuine overpayments being taken off future awards, but when you've done your utmost to ensure that they have the correct details and they wilfully overpay you, then it's fair game to ask them to write if off I think.

You are correct, but the most important part of your case was that both times you told HMRC the award was wrong. If you do that, then their policy is to write off the overpayment.

The problem is when HMRC make the mistake and the claimant doesn't tell HMRC that there is an error or query it on that award notice. In that case, unless there are exceptional circumstances, HMRC policy is not to write it off.

That is why the most important thing for the OP is to get the phone call recordings.

OP -You say that your payments only fell £20 per week, so it wasn't a large change to notice, but at the same time you stopped claiming £550 per month of childcare is that correct? So you would have expected to see a fall when your childcare stopped?

IQ

princessdon

Are you saying the overpayment came from them paying you childcare element that you were not entitled to due to income?

I guess you are also saying you used TC to fund your childcare whilst at Uni too hence the reason the bill is so high?

Dunroamin

Hec wrote: »

Also - although our combined wage was as you say "healthy" we still have a lot of commitments - not least being the £550 childcare bill that obviously we lost any help towards when I cut hours to 12 in my final year at uni - so actually that after essentials and no mobiles or sky or anything like that - having £300 pm to spend on food and petrol to get to work Really is not a healthy wage - indeed it is the case that I would be better off on the dole.

Why didn't you claim help with childcare through the SLC?

Hec_3

The drop of £20 seemed proportionate to the increase in
Income - my hours changed at the end of the previous year and the amount of credits received are apparently correct and have his income correct on the letters. Therefore when the only change to report when renewing was a slight increase in partners income the £20 pw decrease did not ring alarm bells.

The childcare is / was paid per month in advance so always came out of wages although then the tax credits did obviously pay other things - and yes the childcare was for when I was in class and at work however as I had previously done a degree SAAS don't fund a second (quite rightly) and so I took a student loan to pay tuition fees.