Dro and large working tax credit.

lisa1980uk

Hi I was awarded a DRO on 28th October 2016, on September 13th 2016 I was awarded PIP and it was backdated to 13th June I let tax credits know at the end of September and they sent me a form with some questions about my disability. Today I've noticed a large payment of working tax credit if £1063 to go in on 8th November this is obviously to cover the amount I should of got between 13th June and 13th September. Am I likely to get my DRO revoked because of this?

National_Debtline

Hi Lisa

With a lump sum back payment under £1,000 it wouldn’t be an issue, and between £1,000 and £1,850 it’s at the discretion of the Insolvency Service.

It’s a good idea to contact the Insolvency Service within 14 days of receiving the lump sum to show you’re being open, as that could help your case. It would look worse if you withheld the information and they found out at a later date. There’s a possibility your DRO won’t be revoked but I can’t say for certain.

James
@natdebtline

lisa1980uk

Thanks James should I call the official recIver today? Or wait until the 8th when I get it? I didn't know I was going such a big payment as it's been over a month since I informed of receiving Pip.

wba31

I'd call them straight away, as National Debtline said it shows that you are keen to be open and co-operate with the OR. I'd also let your intermediary know so they can be ready to give you new advice if there is any problem

sourcrates

Hang on a minute before you go ringing anyone.

If this is backdated benefit, then it is not a windfall.

It's four months worth of benefit, that I assume is included in your budget.

A lump sum from benefits back-dating may sound large but is often not a problem because its treated as “income” over the period the back-dating relates to not “capital”. So the question is would you have exceeded the “spare income of £50” limit. If the benefit is a claim for disability (PIP, DLA, AA) then an extra cost line for the disability would also be included in this re-calculation.

National_Debtline

I agree with wba31 that being prompt in informing them is best.

James
@natdebtline

fatbelly

From the DRO toolkit

A client may receive a lump sum payment of income during the moratorium period, for example a payment due to:-
•benefit backdating or following a successful appeal
•arrears of maintenance
•arrears of child support.
•an income tax rebate

The DRO Team treats these lump sums as property

and

The property limit of £1,000 applies but provided the DRO Team is notified within 14 days of the client receiving the payment and the lump sum is less than 50% of the client's total indebtedness:
•if the lump sum is between £1,000 and £1,850, the particular facts of the client's case will be taken into account when considering whether to revoke the DRO. This will include the total amount of debt, health, personal circumstance and age of the client

Only recently noticed the DRO Unit are calling themselves the DRO team. Is this to avoid confusion with the (MAS) DRO Unit in Durham? Would have been easier if MAS had chosen a better name.

wba31

sourcrates wrote: »

Hang on a minute before you go ringing anyone.

If this is backdated benefit, then it is not a windfall.

It's four months worth of benefit, that I assume is included in your budget.

A lump sum from benefits back-dating may sound large but is often not a problem because its treated as “income” over the period the back-dating relates to not “capital”. So the question is would you have exceeded the “spare income of £50” limit. If the benefit is a claim for disability (PIP, DLA, AA) then an extra cost line for the disability would also be included in this re-calculation.

To the DRO Unit backdated benefit pay is a lump sum asset