Tax Credit - repaying an overpayment

jenniepanda

We were overpaid 4 years ago when I first applied. We have since been paying back the overpayment directly out of our award, so in effect we have been getting no payments.

I misunderstood a letter they sent last August and did not renew our award. Subsequently I was sent a demand for payment for £1700 - the remaining overpayment.

After reapplying again, I was assured we could go back to the original arrangement, but they stared paying us again and when I rang I was told that the old arrangement and the new one are separate and the new one cannot be used to pay off the old overpayment!

So because I would not send them a cheque for the outstanding amount, our account has been referred to the 'Debt recovery' department. (don't get me started on the fact that this is not a 'debt' that we have run up!). Anyway, you can only deal with them over the phone and they have given me 2 options.

1) Pay back the full amount in 12 months. I am not willing to do this as firstly we cannot afford it, but secondly our award is only £500 per year, so that would mean paying them back at twice the rate that they are paying us.

2) Give them full details of our monthly financial commitments over the phone and then they will come up with a magic repayment amount. I am not willing to do this out of principle because this is not a 'debt' as such and I do not wish to discuss that level of personal info over the phone.

I have written to them offering a repayment plan at exactly the rate that they are paying us our award - but I have been told they will refuse this straight away because the repayment has to be a set amount.

I have requested a face to face meeting with my local office, but have been told they would only be able to ring up the 'debt recovery' department.

Sorry to have gone on, but what are my options? Do I just have to give in and provide them my monthly financial commitments, or can I fight it and make them come to another agreement? I am fed up with being treated like a criminal who has stolen money from them and only being able to do things on their terms.

Thanks in advance for any advice.

DaisyFlower

From what I understand what they are suggesting is correct, the agreement to deduct from payments due only works if you continuously renew. If you fail to renew and submit a new claim, they are unable to take deductions from the new one.

Therefore the money is owed and they do have some say as to how its repaid. You make no mention that the overpayment is disputed so I have assumed it is owed to the and therefore is a debt. They have given you the option to repay over 12 months or submit your expenditure if you wish a longer/lower repayment terms. Therefore if you cant settle within 12 months you'll need to provide them with the paperwork. If you dont and they pursue, a court would ask for these details anyway.

System

It is correct that meeting staff at your local office is futile. They do not have authority to negotiate repayments for tax credits in fact they only ever act as intermediaries where overpayments are concerned. It is also correct that once a claim is terminated it is not possible to recover any overpayment from that claim from any new claim. The multi million pound computer system can't cope with that scenario :mad:

If you prefer you can provide the information "Debt management" require in writing though that obviously slows the process and demands for repayment will continue to be sent to you.

Another alternative is to lodge a complaint siting the fact that you already had an arrangement in progress prior to the termination of your original claim last August and you feel it is unreasonable for TCO to refuse to allow you to pay the same amount as before. I don't know if that will work but it's worth a try.

HTH

slscarborough

This happened to me when I went from a single to a joint claim. As they could not take the overpayment made on the single claim from the joint claim i had no option other than to take the 12 months repayment schedule offered to me. So i was getting £40.00 a month and repaying £65.00 a month - it crippled me but I couldnt see any other choice!!

jenniepanda

Ok - thanks. So assuming that I HAVE to provide them with our monthly finances, what will they take into account? Is it just utilitites and mortgage? What about food, car costs, nursery fees, insurances, clothes etc?

And for example, if they work out that we have £100 per month left (I wish!), what percentage of that would they feel is reasonable to pay back?

Thanks.

sarahluv

they will take everything you mentioned into account. it's a very detailed process.

kelloggs36

State absolutely EVERYTHING you need to pay out - put it in writing and send it by recorded delivery.

sarahluv

they should be able to do it over the phone.