Tax credits help

Bubbles35

Hi there,

I am posting on behalf of a friend I work with. She spoke to me yesterday regarding the financial problems she has been having recently (I already knew she had problems as she has borrowed money from myself and family in the past, but did not know how much).

She told me that in Oct/Nov last year her WTC/CTC stopped as she had not returned her declaration in the Sept. She was moving home at this point and did not receive this (must have went to her old address). She called them up when she had settled in to be told it was too late and that she would have to pay back £5500 :eek: . She has tried to appeal this but hasn't been successful.

What I would like to know is if she puts a new claim in for WTC/CTC now would she not receive any money till this is paid back? I thought that I had read on this site somewhere that if it is a new claim, they cannot take the overpayments from this. She has not been receiving these benefits since last year, instead been relying on friend, family and CC's to get by.

Sorry this is so long.

Any advice would be greatly appreciated as I don't want to give her false information.

TIA

Bubbles35

teacup_2

Hi we were overpayed tax credits by 2 thousand, when all new information updated we were allowed £40. a month , but we dont get a coin of it as they are taking it of our debt by taking the £40 quid a month. But now hubbys earnings have changed and we are entitled to more , so I guess whatever we are due we will get but taking in to consideration what we still owe them, which wont be the same as what some people get if they dont owe them anything at all. Perhaps they will work out an amicable pay back but ours wasnt as they decided to not give us what we were entitled to to pay back debt, in our case new claim claimed it back.
But it would be best to talk to someone maybe each case is different ?
hope this is a little help, but best get it staright from them:o

cheepskate_2

Bubbles35 wrote: »

Hi there,

I am posting on behalf of a friend I work with. She spoke to me yesterday regarding the financial problems she has been having recently (I already knew she had problems as she has borrowed money from myself and family in the past, but did not know how much).

She told me that in Oct/Nov last year her WTC/CTC stopped as she had not returned her declaration in the Sept. She was moving home at this point and did not receive this (must have went to her old address). She called them up when she had settled in to be told it was too late and that she would have to pay back £5500 :eek: . She has tried to appeal this but hasn't been successful.

What I would like to know is if she puts a new claim in for WTC/CTC now would she not receive any money till this is paid back? I thought that I had read on this site somewhere that if it is a new claim, they cannot take the overpayments from this. She has not been receiving these benefits since last year, instead been relying on friend, family and CC's to get by.

Sorry this is so long.

Any advice would be greatly appreciated as I don't want to give her false information.

TIA

She should at the moment be applying for tax credits and they will be paid. the overpayment will be for the previous year 05/06 and she should be restarting a claim straight away. mabye an idea to go to advice shop on the appeal to take it even further.

System

Bubbles35 wrote: »

Hi there,
She told me that in Oct/Nov last year her WTC/CTC stopped as she had not returned her declaration in the Sept. She was moving home at this point and did not receive this (must have went to her old address). She called them up when she had settled in to be told it was too late and that she would have to pay back £5500 :eek: . She has tried to appeal this but hasn't been successful.
Bubbles35

Your friend should have made a new claim immediately rather than wait this long, tell her to ring TCO for a new claim pack. If they give her something she can at least use that towards the overpayment and so reduce it.

If she decides to dispute the overpayment she will be unsuccessful as renewal forms are sent out in April and May so she had plenty of time to get it in. Also HMRC spend a fortune putting ads on the TV telling the public that they have to complete their annual declaration. Added to this TCO send out letters to claimants when they don't recieve a completed declaration giving the claimant 30 days and a 2nd chance to get the declaration completed. If the papers went to her old address because she didn't tell them she moved then TCO can hardly be held at fault for that.

However in saying this your friend can't pay if she doesn't have much income so she can contact TCO regarding the overpayment and ask for "time to pay". I have seen arrangements set up whereby the claimant has been given several years to pay back an overpayment. She does have to talk to TCO though to negotiate this. If she can't face doing this herself then perhaps the Citizens advice bureau could help her.

diddlydum

If she didn't return the declaration for the previous tax year then £5500 sounds right, as the whole entitlement for the year will be lost.

For an overpayment, if she's receiving the full child tax credit they should only recover an overpayment at 10%, but HMRC frequently ignore this.

hotblu

Hello Bubbles35,

I would advise your friend to do the following:

1) Ring Tax Credits Helpline on 0845 300 3900 & request an application pack.
2) Complete the application pack in full (for example include child benefit number etc) and return via Recorded Delivery (just so you know its got their).
3) Ring the Debt Management & Banking Team on 0845 302 1429 and ask to setup a repayment for the overpayment, they will initially offer your friend upto 12 months to repay, tell your friend to state she is financially streched and to ask to complete an income & expenbditure form (they will send out the paper work)
4) Complete the I&E paperwork (with the help of CAB possibly), this will establish how much she can repay. If it shows as a negative income (eg. incomings less than outgoings) then DMB will do one of the following: Suspend recovery until a more suitable time or spread out over a longer term (I have seen some spread out over 10/15 years).
5) After 2 weeks of sending in new application form get her to call TC helpline to progress chase new claim.

Your friends new claim will be a completely new claim and anything that's happend on the old claim will not be taken into account (so ignore post about 10% recovery- this does not apply). Also, advise your friend her new claim will be backdated 93 days (that is the maximum).

HTH

Hotblu

Ps, If you need any further help PM me.

cheepskate_2

diddlydum wrote: »

For an overpayment, if she's receiving the full child tax credit they should only recover an overpayment at 10%, but HMRC frequently ignore this.

Technically this type of thing is not classed as an overpayment as such i.e where they will take it off at a percentage.
Because the whole claim for that year was cancelled due to the renewal not being in , then it has to be paid back in full, or they will come to an agreement , which i think is only taken over the 12 months.

Even though she should have filled in the forms etc still say she should get advice from an agency that deals with this.

diddlydum

If it's causing hardship you could still argue along similar lines, but if she's on a low income (like she is if she's getting the max award) they should be able to come to some arrangement.

Bubbles35

Thank you everyone for the replies.

I think she has been burying her head in the sand for a while now and its got to the stage where she is really struggling to get by. I think she was worried that she would have to pay all of this back in a short space of time and cannot afford to do so.

She tried to call for a new claim pack last nite but could not get through. Is there anywhere else she could get a new claim pack from?

She is also on a low income, only working part time. She is also a single parent of 2 children.

Another problem she has is there is the opportunity at work for her to work some overtime which would help her greatly, but as she was not sure if she would receive any WTC/CTC she has not done any as yet. She would need help with childcare as she cannot get any family etc to look after her kids for more than they are. She is willing to get a childminder for the extra hours but would have to pay this herself at the moment (which I dont think she can afford to do).

hotblu, very good advice you have given. i will make sure she does all of the things you have suggested.

Thanks again everyone

Bubbles35

teacup_2

from reading lots on this forum I am 100 % sure your friend would not have to pay it back in a short space of time, I cannot remember which thread it was on about it. But my husband informed me he chose to pay it off £40. quid a month and they didnt make us pay £40 quid a month.
Hope this helpsx:o

System

Bubbles35 tell your friend to persevere with trying to get through to TCO for the claim pack. First thing in the morning is probably one of the better times to try. If she can't get through on her home phone tell her to go to her nearest HMRC Enquiry Centre (We don't bite ) to use their phones because they have priority lines. She could also try making an appointment with them and they could help her with her request for time to pay by taking an note of interview off her and sending it to TCO for her. There is no need for her to be making herself struggle and worry so much.

I know absolutely nothing about benefits so perhaps someone else can comment but if she is on a very low income perhaps the benefits agency could advise her on any benefits she would be entitled to along with tax credits and child benefit