overpayment

tides

Long story short... became single mum in August last year, called and filled a claim for tax credits in September. Got the form, reported my income for 2011/2012 which was £16.6K, I only worked part of the year. Also put down the childcare expenses.There was no question on that form about my current year income, however in October I got an additional form from them to fill out asking to state all current income and expenses for the household, which I did. My current basic salary is £35k/year, which I listed on that form as monthly salary (I also have a 10% bonus but that is not guaranteed so didn't write it down).

Award notice came in December and took me by surprise, they were giving me £165/week and all the info on the award notice seemed correct - except that I didn't realize it was solely based on the 2011/2012 income, not taking into consideration my current 2012/2013 income.

Now, the company I work for made their profits so I made my 3.5K bonus. Knowing roughly what the 2012/13 income would be I called today the tax benefits office to tell them the expected income of 38.5K before the renewal pack came in.

The lady on the phone said - you might have been overpaid significantly, wait until you get the new award. I'm now very concerned what this means, I know it's no excuse that I don't know how the system works (first time ever claimed) and didn't realize this was going to be adjusted at the end of the year.

But what I don't understand is this -- when I first called I told them what the current monthly income is. I also reported it on the additional form they sent. However it looks like they processed the initial award ignoring that information altogether? Or am I missing something?

Any advice is highly appreciated. Thanks!

Icequeen99

tides wrote: »

Long story short... became single mum in August last year, called and filled a claim for tax credits in September. Got the form, reported my income for 2011/2012 which was £16.6K, I only worked part of the year. Also put down the childcare expenses.There was no question on that form about my current year income, however in October I got an additional form from them to fill out asking to state all current income and expenses for the household, which I did. My current basic salary is £35k/year, which I listed on that form as monthly salary (I also have a 10% bonus but that is not guaranteed so didn't write it down).

Award notice came in December and took me by surprise, they were giving me £165/week and all the info on the award notice seemed correct - except that I didn't realize it was solely based on the 2011/2012 income, not taking into consideration my current 2012/2013 income.

Now, the company I work for made their profits so I made my 3.5K bonus. Knowing roughly what the 2012/13 income would be I called today the tax benefits office to tell them the expected income of 38.5K before the renewal pack came in.

The lady on the phone said - you might have been overpaid significantly, wait until you get the new award. I'm now very concerned what this means, I know it's no excuse that I don't know how the system works (first time ever claimed) and didn't realize this was going to be adjusted at the end of the year.

But what I don't understand is this -- when I first called I told them what the current monthly income is. I also reported it on the additional form they sent. However it looks like they processed the initial award ignoring that information altogether? Or am I missing something?

Any advice is highly appreciated. Thanks!

Sounds like the form you received was a compliance investigation which wouldn't necessarily pick up on your current income.

Your latest award notice should say something like 'If your estimated income goes above XXX for 2012/2013 contact us'. It is based on previous year, but not if the rise is more than 10,000. So you will be overpaid if you have income of 38.5k and last year only 16k. The first 10,000 rise will be disregarded, only the remaining increase will count.

The award notices do tell you to let them know if your income goes above a certain figure. You might want to check that before you do anything else.

IQ

tides

Icequeen99 wrote: »

Your latest award notice should say something like 'If your estimated income goes above XXX for 2012/2013 contact us'. It is based on previous year, but not if the rise is more than 10,000. So you will be overpaid if you have income of 38.5k and last year only 16k. The first 10,000 rise will be disregarded, only the remaining increase will count.

The award notices do tell you to let them know if your income goes above a certain figure. You might want to check that before you do anything else.

IQ

Well, the only award notice I have to date is the initial one, which says this:

"Income Gone up?
This does not usually affect your tax credits payments for this year. They will stay the same until April 5, 2013 as long as there are no other changes in your income or circumstances.

From April 6 2013 your payments will be based on income of £17105. If your income is more and you do not tell us until you complete your renewal pack you may be paid too much from 6 April onwwards."

Based on this last paragraph I called to tell them the expected income for the current fiscal so that I made sure that I'm not paid more starting April 2013. However the lady on the phone suggested that there might be an overpayment for 2012/2103, the current year.

Icequeen99

tides wrote: »

Well, the only award notice I have to date is the initial one, which says this:

"Income Gone up?
This does not usually affect your tax credits payments for this year. They will stay the same until April 5, 2013 as long as there are no other changes in your income or circumstances.

From April 6 2013 your payments will be based on income of £17105. If your income is more and you do not tell us until you complete your renewal pack you may be paid too much from 6 April onwwards."

Based on this last paragraph I called to tell them the expected income for the current fiscal so that I made sure that I'm not paid more starting April 2013. However the lady on the phone suggested that there might be an overpayment for 2012/2103, the current year.

Well the wording isn't as clear as it used to be but the bit I have highlighted in red is the issue. But that really isn't clear. It used to say - tell us if your estimated current year income is above XXXX

You could try and dispute the overpayment, you will need to fill in form TC846 and attach a copy of this notice to show that the wording isn't clear.

IQ

tides

Thank you. I know I should have done more research but the reason I didn't was that note that says it wont usually affect current year. They should haveentioned the income disregard rule!

The other thing that !!!!es me off is when I called to ask for the claim pack I told the guy that my income was going to be around 38k and he said not to worry, that your award will take that into account.

I don't understand why do they base new claims on previous yr income without looking at estimated current year income. Wouldn't that be logical?

shedboy94

tides wrote: »

"Income Gone up?
This does not usually affect your tax credits payments for this year. They will stay the same until April 5, 2013 as long as there are no other changes in your income or circumstances.

To be fair, the award notice will say your income is £16000. If you expected your income to change to at least £35000 then it is clearly a change in your income. I don't really see how it could be worded any differently.

tides

I do get it. However, again... I did state my current income when the compliance team sent me a request for details.

What I don't understand is why do they base this initial award solely on last year's income when they know they could be creating an overpayment in the cases of large increases. And wouldn't be better if the award notice mentioned the income disregard - they do have that rule about disregards buried on their website, shouldn't people be informed about it upfront? The award notice could have said something like:

"If you expect your current year income to be £10K higher than 2011/2012 please contact us right away."

Instead they chose to say this:

"Income Gone up?
This does not usually affect your tax credits payments for this year. They will stay the same until April 5, 2013 as long as there are no other changes in your income or circumstances."

I' m sure they had this problem before, it is mentioned on their website. To me the above wording creates confusionand it's missing vital information. Perhaps for people who get tax credits a lot this is well known, but I made the first tax credits claim ever. Anyway, looks like I will have to treat those money as a loan from HMRC now... hopefully I won't be charged interest on it.

I will try to appeal though - not only the above is a bit unclear, but I told them twice my expected income over the phone, and I also wrote it down on an additional form they requested me to fill out.

Last but not least even the initial claim form can be adjusted to a better one. A simple question about expected income would prevent these overpayments. Even if there are cases when people cannot estimate accurately, at least give them the option to do so..

:mad:

Icequeen99

shedboy94 wrote: »

To be fair, the award notice will say your income is £16000. If you expected your income to change to at least £35000 then it is clearly a change in your income. I don't really see how it could be worded any differently.

I think you're right and that there isn't much the OP can do because it was indeed a change in income.

But I maintain that the previous wording was better which said something like 'If you expect your income for the current year to be more than XXX (which was PY+disregard) contact us' or similar.

IQ

tides

Oh so there was something like that in the past in previous letters...

So does anyone have any idea roughly what this means? Will they base the revised figures on my final income for the current year minus 10K? So on 28K or something like that? I'll probably have to return more than half what they paid for the claim period?

I'm depressed.

shedboy94

tides wrote: »

Oh so there was something like that in the past in previous letters...

So does anyone have any idea roughly what this means? Will they base the revised figures on my final income for the current year minus 10K? So on 28K or something like that? I'll probably have to return more than half what they paid for the claim period?

I'm depressed.

How many children do you have and what are the childcare costs you were claiming?

sharp910sh

You only entitled to child benefit. I would just fess up and pay the money. I mean come on you are on £35k +3.5k bonus!