No idea of tax credit over payment till signed on.

TurnipsMammy · 13 October 2019 at 4:10AM

Almost 6 months ago now my husband was made redundant. I do not work as I suffer from a chronic illness (Myalgic Encephalomyelitis which I have had for around 24 years).
After 6 weeks of being unemployed (that is what the DWP used to require from someone that wasn't "sacked" before they were able to "sign on" so we had waited till then to approach the job centre) I helped my husband apply online for benefits. We were automatically directed to Universal Credit, and it was made apparent that we BOTH had to fill in forms and make a claim.

I haven't been able to work for around 6 or 7 years, after being sacked from my previous job for being ill for a prolonged period of time. And we haven't claimed any benefits since I started working for the company around a year prior to this (roughly 7-8 years ago). Before that I was claiming Incapacity Benefit while attending regular medicals.

We filled all the forms in and went in for our respective interview's. I made it very clear that I was unable to look for a job and that we only wanted to claim for my husband, but that the application process did not allow for this. I was told that I could provide the new version of the fit note from my doctor for 3 months and apply for ESA or whatever the equivalent is now.

Obviously you now get your Universal tax credit payments a month later. We were advised not to take the pre payment option that we'd then have to pay back each month.

£450 a month, between 2 people. That's what we were awarded. I have friends whose partner works full time and they get £450 in universal credit on top of their wages!

This week (5-6 months in to signing on) we received a letter from a debt collection agency. Apparently we owe £350 in Working Tax Credit overpayments from 2016. Yet we haven't been claiming benefits since quite a few years before that!

We've checked it all out and it isn't a scam. But no one can give us any reason as to why its been left so long after closing our previous claim (probably around 2013/14 at most). And why on earth have they not chased us for the money whilst we were earning, leaving it instead to hound us and threaten us with bailiffs as soon as we have claimed benefits.

Is this legal? Is this common practice? They are saying that we owe money from 2016 but we weren't claiming benefits then, and hadn't for a few years before. I have paid many a sum back in "overpayment" for tax credits already (almost £10000 plus fines for not filing tax returns when I have NEVER been self employed).

Why have they not chased us for this money till we are desperate? I honestly wish we had never signed on, and had just borrowed money off friends and family (which were having to anyway!).

Please help, we're going to pay the fines anyway, we just need some help in understanding as it feels like no matter how much we pay back they will always find more that we owe.

calcotti · 13 October 2019 at 9:18AM

You raise a lot of points.

If you want to challenge the Tax Credit debt you need to contact HMRC and seek an explanation. It is legal for them to chase it if it is owed. Now you are on UC rather than go through a debt agency they could simply deduct the money from your UC payments. There is a lot of Tax Credit debt in the system and they have become more determined to collect it.

If you have been fined for not filing a tax return you can challenge that too but if HMRC ever asked you to file a return and you did not they can fine you. If you think it’s a mistake challenge it. Being self employed is not the only reason you might be asked to complete a return.

People get different amounts of money on UC because their circumstances differ (whether or not they have children, whether or not they pay rent, whether or not they are able to work, whether they care for somebody being key factors as well as what other income and savings there are).

Means tested benefits are always based on your joint circumstances and under UC you both have to apply rather than having you attached to your husbands claim as would have happened on old benefits.

If you provide Fit Notes to DWP you will be referred for a Work Capability Assessment. If you are found to have Limited Capability for Work and Work Related Activity your UC will increase by £336/month from the fourth month. This is all within UC - you will not be applying for ESA.

If your health limits your ability to do specific tasks you may qualify for Personal Independence Payment. This would be extra money on top of UC. See https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/
https://www.actionforme.org.uk/uploads/pip-an-overview-factsheet.pdf

Having claimed UC you may also qualify for Council Tax Reduction from your local authority. The rules vary between councils so you will need to check with them.