Tax Credits Overpayment & repayments on UC query

Mickpeasoup

Hi guys,

Yet more problems!

Had a letter this morning (TC1131) stating that my partner has been overpaid tax credits to the tune of £9000.

The summary of overpayments dates way back to 2012 to 2020.

I've heard a good bunch of people who've recently claimed UC have received these letters.

Anyway, I'm not going to argue the overpayments with my partner as I've only been with her for a few years, so I don't know the real history of finances here.

In a nutshell - what's the minimum we can get away with paying per week/month while in receipt of UC?

Also, can tax credits take a substantial chunk per month at their free will?

This letter has really annoyed me and frankly I can't cope with debt as I avoid it all costs.

calcotti

Is the letter from HMRC advising of the overpayment in which case you negotiate with them or is it from DWP Debt Recovery saying they will be taking the money?

Mickpeasoup

calcotti said:

Is the letter from HMRC advising of the overpayment in which case you negotiate with them or is it from DWP Debt Recovery saying they will be taking the money?

The letter is directly from HMRC. It's the TC1131(UC) that I believe many are getting now they're in receipt of UC.

calcotti

Here's the general guidance
Tax credits overpayments: How to repay your tax credits - GOV.UK (www.gov.uk)
Tax credits overpayments: If you cannot afford your repayments - GOV.UK (www.gov.uk)
If you want a repayment plan you will have to give them some details of your finances.

Mickpeasoup

I went to the links provided, but it mentions nothing about what the minimum they'd accept would be.

We'd be alright paying around £50 per month as it wouldn't be a big hit on our finances, but something like £100+ per month would be a noticeable loss.

Anyone out there dealt with an overpayment repayment plan?

poppy12345

Mickpeasoup said:

Anyone out there dealt with an overpayment repayment plan?

That would depends on your circumstances. Each individual payment plan is different because we all have different circumstances. Your partner will need to ring them to give them details of your finances and then you will need to agree to that payment plan. If they ask for too much and it will cause hardship then your partner needs to tell them.

Icequeen1

Mickpeasoup said:

calcotti said:

Is the letter from HMRC advising of the overpayment in which case you negotiate with them or is it from DWP Debt Recovery saying they will be taking the money?

The letter is directly from HMRC. It's the TC1131(UC) that I believe many are getting now they're in receipt of UC.

If the TC1131 has been issued because a claim for UC has been made then it isn't a case of negotiating the repayment - it will be automatically recovered from UC at the set rates. If that set amount causes you difficulty, then you will need to speak to DWP debt recovery. It is usually 25% of the standard allowance in UC that can be taken see https://www.gov.uk/guidance/find-out-about-money-taken-off-your-universal-credit-payment

Calcotti - the TC1131 is issued by HMRC, but to claimants who have moved to UC https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/517232/annex-a-debt-technical-guide.pdf is a sample. It basically says you don't have to do anything, DWP will start to recover the debt from UC. 

calcotti

Icequeen1 said: Calcotti - the TC1131 is issued by HMRC, but to claimants who have moved to UC https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/517232/annex-a-debt-technical-guide.pdf is a sample. It basically says you don't have to do anything, DWP will start to recover the debt from UC. 

Thanks icequeen, that's very helpful. I wasn't aware of the significance of it being a TC1131. It's effectively notification of the debt and transfer to DWP Debt recovery. Based on that sample it's a very clear document.

This whole collection of historic debt is a complete mess in my opinion and claimants are caught between DWP who nothing about how the debt arose and HMRC who are very unresponsive to enquiries about the origin of the debt - and seem very reluctant to put anything in writing. (Recently got a debt rescinded because the origin predated a bankruptcy even though collection started much later but it's taken over a year since asking them to desist to get to that point - DWP have now repaid all of the money previously deducted).

OP, as icequeen says current policy is to take 25% of the standard allowance (although the law still says 40% can be taken).

Mickpeasoup

Many thanks for the replies, especially @Icequeen99 for the info' and links.

I phoned the debt repayment line, and they said they've not received the letter we've received yet - however, when asked, he said repayments are usually in the ballpark of £70 to £130 per month in his experience.

We mentioned that those figures would cause hardship, so £50 would be more appropriate.

As he hadn't received the correspondence we have he couldn't do anything, so said to call back next week.

Word is, the first deduction will automatically be around £125 from UC, but I can then phone and negotiate a lower amount and regular payment plan for the following months.

Only time will tell, but I'll report back "if" they actually do accept negotiation as opposed to a "like it or lump it" attitude.

Clouds88

I rang them and said I cant afford to pay back any overpayments what's the lowest they will go and they said £15 each (theres 2 but ones not valid and in dispute)

They didnt ask for financial info or anything just accepted what I said so try and ring them. 

Mickpeasoup

Clouds88 said:

I rang them and said I cant afford to pay back any overpayments what's the lowest they will go and they said £15 each (theres 2 but ones not valid and in dispute)

They didnt ask for financial info or anything just accepted what I said so try and ring them. 

How much did you owe in tax credit overpayments if you don't mind me asking?

A quick Google says there's 1000s of us receiving these overpayment letters.

How tax credits have only just discovered these overpayments on our specific example is beyond me! These date way back to 2010, 2011, etc'...

Makes we wonder if it's some kind of Government underhand con to swindle money back, because my partner has difficulty recalling what she did last week, let alone 10 years ago. Same with me.