Overpayment Child Tax Credit

Louloub

Hi I wonder if anyone can please offer any advice before I call HMRC tomorrow? I have received tax credit award doc today and am a little confused. For the period 2011-12 my husband and I were awarded £1916.65 for child tax credit based on our joint income from 2010-11 of £38,965 We made the claim roughly in 2011 and received the first payment of £153.04 in July and the awards notice detailed that we would receive £150.50 every 4 wks until April 2012 when payments would increase slightly to £157.57 then following on every 4 wks at £156.38. I left work in Jan 2011 as was pregnant with my little boy due in April and have not returned to work since therefore when reapplying this year (and well before the deadline) I stated that the details of our income had significantly changed and our earnings for the period 2011-12 were £24,000. Today I received the awards documents which details for the period 2012-13 our entitlement is £662.44 and are due to receive £42.61 in Aug and then every 4 wks at 39.30. It also details that the payments have been reduced to reclaim overpayment of £974.15 from period 2011-12 and £321.28 for this award period so £1295.43 to repay in total. I have revisited the awards doc that was sent to me for period 2011-12 and all information such as submitted joint income is correct and on todays documentation it also reiterates this information? Everything I have supplied has been 100 % correct, can anyone please advise what would be best to do in the situation and am I missing something? I have visited HMRC website and read their documents but not found anything all that helpful other than to call them. Any advice would be really helpful especially if someone has found themselves in a similar situation. Apologies to go on a bit just really cross. Many thanks in advance.

zagfles

This sounds like you gave them an estimate at some stage which was too low. Were you claiming childcare? How many children? Disabilities? On the award notice in July 2011 what income does it state it's based on?

Louloub

Thanks! No estimates were given?? Only final figures as submitted initial claim after April 2011 and had my final income and hubbys p60. No childcare or disabilities? The income on the awards notice in July 2011 was £38965?

Icequeen99

How many children have you got?

IQ

Louloub

Just 1 Child?

Icequeen99

Something is clearly wrong here, so you need to get some advice maybe from CAB, TaxAID, LITRG etc...

Firstly, the award of £1916.65 is wrong. On an income of £38965 for 11/12 with one child, no childcare, no disabilities there is entitlement only of £545.

However, if your actual income for 11/12 was 24,000 you would have been entitled to around £553. So if they paid you more than that, it would explain why there is an overpayment.

For 12/13, your £662 is about right based on income of 24,000 .

The overpayment of £300+ for 12/13 is because that first award of 1916.65 in 11/12 was wrong, and it wasn't corrected until renewal time, so April until whenever you did your renewal was still based on a wrong piece of information.

You say that the July 2011 notice had income of 38,965. I would advise you check this again. You cannot get entitlement of 1916 with income of that amount. Are you sure it doesn't show two income figures - one an estimate? Or have they missed one income off.

IQ

Louloub

The final credits decision i received yesterday for 2011/12 does say our award was £545. The paperwork for the 11/12 awards states the £1916 with amounts of £1358 still to be paid for this period. Just looked again at the figures, apologies my mistake i assumed that the income for period 2010-11 had been used (38K) but because I knew our circumstances would be different i.e. I wouldnt be earning and informed them they would have used an estimate of 20K for my partners income for period 2011-12? Sorry i find the paperwork confusing.

In that case as they have used an estimated figure for hubbys earnings in 2011-12 period (£20688) as he actually earnt 4k more by April 12 is it still ok for them to overpay us and will I have to pay back? Every year hubby can earn more or less so we can never give them the same figure as year previous? Also based on his estimated earnings of £20688 does that mean that their award of £1916 for 11-12 was correct?

Also with regards to the awards for 2012-13 of 662.44 (42.61 in aug and every 4 wks at 39.30) it says that the 4 wkly payments have been reduced in order to repay the £1200 overpayment. I am v confused with regards to this as does this mean that my correct entitlement to receive for this period is 662 + 1200??? I am also not in a position where I could comfortably pay this back, hubby farms so as you can imagine due to weather we are having a pretty poor year financially and I use this money for bills.

Icequeen99

Louloub wrote: »

The final credits decision i received yesterday for 2011/12 does say our award was £545. The paperwork for the 11/12 awards states the £1916 with amounts of £1358 still to be paid for this period. Just looked again at the figures, apologies my mistake i assumed that the income for period 2010-11 had been used (38K) but because I knew our circumstances would be different i.e. I wouldnt be earning and informed them they would have used an estimate of 20K for my partners income for period 2011-12? Sorry i find the paperwork confusing.

In that case as they have used an estimated figure for hubbys earnings in 2011-12 period (£20688) as he actually earnt 4k more by April 12 is it still ok for them to overpay us and will I have to pay back? Every year hubby can earn more or less so we can never give them the same figure as year previous? Also based on his estimated earnings of £20688 does that mean that their award of £1916 for 11-12 was correct?

Also with regards to the awards for 2012-13 of 662.44 (42.61 in aug and every 4 wks at 39.30) it says that the 4 wkly payments have been reduced in order to repay the £1200 overpayment. I am v confused with regards to this as does this mean that my correct entitlement to receive for this period is 662 + 1200??? I am also not in a position where I could comfortably pay this back, hubby farms so as you can imagine due to weather we are having a pretty poor year financially and I use this money for bills.

Yes, with income of £20688, £1916 was about right for 11-12. With income of 24,000, 545 is about right. So yes the overpayment is justified.

Unfortunately you will have to pay it back, because you gave an estimate that was too low. If you aren't sure what his income is going to be, the best thing to do if you can manage is to leave your award based on previous year income and then confirm the final figures when you have them.

They will reduce your award by 25%. Your correct entitlement for 12/13 is just the £662. That will then be reduced to take back the overpayment.

If your tax credits end or reduce to Nil at any point in the future, they will ask for the any balance of the overpayment back via direct recovery. At that point, you would need to speak to them to arrange monthly direct payments at a rate you can afford.

IQ

Louloub

Many thanks for all your help!