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Tax Credits Overpayment Letter

We have just received a letter from tax credits stating we owe them over £1,000 in overpayments.

The situation is that I lost my job and claimed tax credits from April this year. I got a new job in July and informed them straight away.

They state that I am not entitled to tax credit as I am over the threshold for getting it so we have to pay it back.

I think this is odd, I am sure I was entitled to the benefit as I was not working for 3 months, so I keep that money and I fully understand that after July I would get nothing.

So if that is correct, it appears that tax credits gave me a loan (which I did not ask for) and now they want it back because I have a job...forgetting the fact I was out of work for 3 months..

Is this correct?
If the world is a stage... I want better lighting!

Comments

  • princessdon
    princessdon Posts: 6,902 Forumite
    No it is an annual award -so they are correct.

    Ie your earnings between July and April 2013. If they are over the award you need to pay back when you claimed between April and July.

    It is the annual they look at not £0 for 3 months and £XXX for 9 months.
  • nannytone_2
    nannytone_2 Posts: 12,973 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    tax credits did not give you a loan. they awarded tax credits based on an estimate of yearly income ... april 2012 - april 2013,

    now you have a job and you have told then your new estimated income for the tax year, and it takes you over the threshold.

    it is based on the whole years income, not just the income you have while the tax credits are being paid
  • I do not like the way they work it out, in the same situation then I should have to pay back my job seekers allowance as well....

    This is £1,000 I do not have spare. During my unemployment I got behind with other bills I am trying to pay back, including a mortgage and a secured loan, now I have to find another £1,000.

    I can now understand why some people never bother to get a job (only the unsavoury people who are lazy, not those who cannot work for health/caring). If i had stayed unemployed I would be getting the extra cash from them and not have to worry about earning a living.

    During my short time of unemployment, it seems some of the money I paid into the system goes to help people who cannot be bothered to work and decent honest people who want to get back on their feet get shafted....

    Sorry about the ranting, but I am not used to getting asked to pay £1,000 back that I don't have..
    If the world is a stage... I want better lighting!
  • princessdon
    princessdon Posts: 6,902 Forumite
    edited 13 August 2012 pm31 3:03PM
    You knew this when you applied

    Tax credits are always based on last year. So I assume you told them you lost your job and had zero income (they didn't guess it) and you did so because you NEEDED it.

    It was always a risk - many chose not to say anything to TC and ask for a change in circumstances and take an chunk extra. You in effect asked for an "advance"

    You can however, ask them for a repayment plan - they shouldn't expect it back it full.

    I'm not having a go - I was in the same situation 2 years ago - OH lost his job and mine was only part time at the time. I had to decide if we claimed TC and faced an overpayment or do without.

    I couldn't be bothered with the hassle - and like yourself he was only out of work a very very short time, bascially I knew if he got a job before say January I would have to pay it back.

    Tax Credits are not an (at this time) benefit - they are based on annual wages. JSA was your at the time benefit.

    Oh and I know how much this sucks too - they TAX your JSA you claimed.

    It's wrong - there should be more help to families who are out of work a short time - but I can't change the answer that you have to pay it back even if I agree with your rant.
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