Pay back COL payments with Tax credits overpayment ?

may333

Have received the two cost of living payments this year with current tax credits payments but now with probable increase in income for the year i will have to repay all the tax credits received next tax year.. Will this mean i repay the COL too as i wouldn't have been entitled to them under the criteria set at the time .

calcotti

https://www.gov.uk/guidance/cost-of-living-payment 

If you have received a Cost of Living Payment, but we later find that you were not eligible for it, you may have to pay it back.

But it also says

You were eligible … if you received, or later receive, 

My reading of that is that if you you received a Tax Credits payment you are entitled to the CoL payment even if you later have to pay back the TC payment.

Will your income for 2022-23 have increased by more than £2500 compared to 2021-2022?

HillStreetBlues

calcotti said:

https://www.gov.uk/guidance/cost-of-living-payment 

If you have received a Cost of Living Payment, but we later find that you were not eligible for it, you may have to pay it back.

But it also says

You were eligible … if you received, or later receive, 

My reading of that is that if you you received a Tax Credits payment you are entitled to the CoL payment even if you later have to pay back the TC payment.

My first thought is the same as yours, but

If the OP does have to repay TC how is classed?
If it classed as though the payments never occurred in the first place? Would that then remove the entitlement on those dates?

strawb_shortcake

I'm in a similar position, I'm working on the assumption as long as I've had a payment of at least £26 this FY after any overpayments then I'll be able to keep the COL payments. If not I think I'd have to pay it back.

calcotti

I’m interpreting ‘received’ to mean exactly that, if they meant ‘entitled’ they could have said that.

https://www.legislation.gov.uk/ukpga/2022/38/section/2/enacted

may333

In response to the first reply ,yes,my income increase will be more than £2500 

calcotti

may333 said:

In response to the first reply ,yes,my income increase will be more than £2500 

Just wanted to check that you weren’t concerned unnecessarily. Your TC award for this year will be recalculated based on this year’s income so you could, as you say, have no nil entitlement and have to pay back the UC. My sense is that you understand that.

I think the situation is logical re CoL. TC is calculated retrospectively based on annual income. CoL payments were made based on the situation at a moment in time and at the relevant time you were receiving TC. The CoL was intended to help with cash flow so it would be illogical to claw the payment back because you later had an increase in income.

may333

Thanks for your help