DRO + Tax Credits Underpayment

derbyco1

Hi all

My wife is currently 2 months into her DRO and we have just received our Tax Credits Annual Review.

We ended up earning a lot less than the figure our tax credit entitlement was calculated on which leads me to believe that we may receive some kind of payment from them.

So my questions are:

1. How will any payments received effect my wife's DRO?
2. Because the tax credits were joint, would any payment received be split down the middle in the eyes of the DRO team?

Many thanks
Andy.

derbyco1

*Bumping* incase anyone that can help me missed the post

fermi

I'll ask a few people if they can look in and hopefully answer.

debt_doctor

Hi,

In DROs any benefit lump sum payment is apportioned over the time it was meant to be paid. So if the underpayment was from Apr 2012 to March 2013 then the money is apportioned over the same period of time.
If the time the money was meant to be paid was before your DRO began then it will have no effect upon your DRO and does not cause an issue with the asset limit either.
If some of the months when the money was due to be paid were within your DRO period then that monthly amount may affect the £50 pm surplus rule.
I agree that tax credits should be apportioned 50 - 50.

DD

fermi

Thanks DD.

derbyco1

Thanks Fermi and DD,

That's a big weight of our minds now, would of hated something out of our control to of voided the DRO.

Is it worth telling them about it when/if we receive a payment?

wba31

derbyco1 wrote: »

Thanks Fermi and DD,

That's a big weight of our minds now, would of hated something out of our control to of voided the DRO.

Is it worth telling them about it when/if we receive a payment?

I would advise letting your intermediary know and see what they say. The more conversations i have with intermediaries from different places, the more i learn about how differently we all seem to work on various issues...