Working Tax Credit - confused about overpayment!

Icequeen1

sparky0138 said:

Another 8 weeks have now passed and still she hasn't heard anything so she phoned them again this morning. Not sure what happened to the specialist team because the guy on the phone seemed to do everything there and then. Now it turns out the overpayment was due to her not completing a renewal form. As she didn't receive one and left her job in early April, she had no idea she had to fill one in. The man on the phone was very helpful but didn't seem very impressed that she hadn't filled a form in, until he saw on the system that she was telling the truth and hadn't been issued with one for some reason.

So now they're going to send her one out and hopefully once that's been filled in, everything will get resolved.

I don't understand though, why they said there was an overpayment back in May when she had until the end of July to fill in the renewal form.

ETA: Just found this about an error with this year's renewal notices, although it's more to do with the information on them rather than them not being sent at all. However, maybe that had something to do with it...?

Failure to complete a renewal form would not result in an overpayment as you describe. Only the current year payments would be overpaid. But in your post you said they wanted the previous year back as well. That doesn't make sense. You will need to fill in the renewal and then see what happens after that

sparky0138

And still it drags on. She was told she would receive the renewal form by 19th October. It hasn't arrived so she contacted them today only to be told it hasn't been issued and they'll send one out ASAP which should arrive within 4 weeks. This is getting ridiculous now. Every time she contacts them she's basically told that the previous action was never taken.

sparky0138

Another 4 weeks and all that's arrived are more statements of account. I talked to them on my mum's behalf and spoke to a lovely lady who, despite not being able to perform the renewal over the phone, was able to get it sorted. If only we'd spoken to her at the start! Anyway, I'm pleased to finally be able to say that my mum's received the "overpayment" back, minus a potential payment but hopefully we'll be able to get that sorted out next tax year.

sparky0138

I never imagined I'd be re-visiting this thread after all this time but here we are.

Here's a brief summary:

My mum informed HMRC that she'd left her job in April 2020.

In May 2020 she was told she needed to pay back the £1040.90 she'd been awarded for 2019-2020.

She paid the money back straight away but disputed it because there was no reason for them to say it was an overpayment. After a LOT of phone calls and webchats, they paid her back £1024.55 in November 2020, which is the amount she was originally awarded minus a potential payment.

Fast forward to today and she receives a tax credit review letter totally out of the blue saying that they owe her £1040.90 and that if the income information they hold for her is correct (it is) they will decide on 2nd November to award her the money. They also say: "We will not ask you to pay back any overpayment from the award period."

Firstly, I can't believe that last sentence has come from HMRC! 😁

Secondly, is it normal to get a letter like this after 4 years when she considered the matter closed and hasn't asked them to investigate anything? What's going on?

peteuk

Firstly, yes it is normal for a delay in such matters.  She would have been told of the overpayment at the end of the tax year, but would have had no means of paying it.  It’s usually only once it goes to the collections department that a request for payment is made.  There is a massive back log so it takes time to work through.

Secondly WTC is calculated on a yearly basis, decided into 13 payments and then recalculated at the end of the financial year.   Any change noted at that point affects the 13 payments made, or in this case payments between Apr 20 and when the OP relative stopped receiving WTC.  This would have been recalculated April 21 (but is a simple calculation) 

2019-2020 would have been recalculated sometime in May/June 2020, normally any overpayments would be calculated and taken from the ongoing award.  Again in this case as there was no ongoing award, there was nothing to take the payment from. 

It’s also worth noting, that if an overpayment is on a joint claim, HMRC/DWP will half the overpayment and apportion it to each claimant.  I was notified of an overpayment due and then 6 months later my wife was notified of her overdue amount.  

sparky0138

peteuk said:

Firstly, yes it is normal for a delay in such matters.  She would have been told of the overpayment at the end of the tax year, but would have had no means of paying it.  It’s usually only once it goes to the collections department that a request for payment is made.  There is a massive back log so it takes time to work through.

Secondly WTC is calculated on a yearly basis, decided into 13 payments and then recalculated at the end of the financial year.   Any change noted at that point affects the 13 payments made, or in this case payments between Apr 19 and when the OP relative stopped receiving WTC.  

I'm not sure I understand your point. She paid the "overpayment" back straight away. They then paid it back to her when it was worked out she was entitled to the money.

As far as she was concerned it was all done and dusted by November 2020 (not including the potential payment which, as it turns out, she didn't end up chasing after all).

peteuk

sparky0138 said:

peteuk said:

Firstly, yes it is normal for a delay in such matters.  She would have been told of the overpayment at the end of the tax year, but would have had no means of paying it.  It’s usually only once it goes to the collections department that a request for payment is made.  There is a massive back log so it takes time to work through.

Secondly WTC is calculated on a yearly basis, decided into 13 payments and then recalculated at the end of the financial year.   Any change noted at that point affects the 13 payments made, or in this case payments between Apr 19 and when the OP relative stopped receiving WTC.  

I'm not sure I understand your point. She paid the "overpayment" back straight away. They then paid it back to her when it was worked out she was entitled to the money.

As far as she was concerned it was all done and dusted by November 2020 (not including the potential payment which, as it turns out, she didn't end up chasing after all).

In my experience and any others, overpayments of TC are either taken from the next award period or left to linger.  Im not sure how she paid, and via what mechanism, my understanding was there was no mechanism of payment until it was sent to collections.

As this is an open forum, I had added general advice for others who may be in a similar situation.  Eg four years down the line and being advised of an overpayment.  Overpayments being split in two. Etc etc.

sparky0138

peteuk said:

sparky0138 said:

peteuk said:

Firstly, yes it is normal for a delay in such matters.  She would have been told of the overpayment at the end of the tax year, but would have had no means of paying it.  It’s usually only once it goes to the collections department that a request for payment is made.  There is a massive back log so it takes time to work through.

Secondly WTC is calculated on a yearly basis, decided into 13 payments and then recalculated at the end of the financial year.   Any change noted at that point affects the 13 payments made, or in this case payments between Apr 19 and when the OP relative stopped receiving WTC.  

I'm not sure I understand your point. She paid the "overpayment" back straight away. They then paid it back to her when it was worked out she was entitled to the money.

As far as she was concerned it was all done and dusted by November 2020 (not including the potential payment which, as it turns out, she didn't end up chasing after all).

In my experience and any others, overpayments of TC are either taken from the next award period or left to linger.  Im not sure how she paid, and via what mechanism, my understanding was there was no mechanism of payment until it was sent to collections.

She received a Notice To Pay letter which gave her 30 days to pay as she was no longer receiving benefits. She then sent a faster payment through her bank.

https://www.gov.uk/tax-credits-overpayments/repay-your-tax-credits