What Can They Legally Take?

Penny-Pincher!! · 24 May 2005 at 12:40PM

Hi

This is quite confusing, so please bare with me!

My sister has rang in a panic this morning about her Tax credits :eek:

She has been over paid by about £900 for her son. Her son is disabled and receives DLA for him at middle rate. On her forms they had put down he was receiving high rate DLA and apparently they award an allowance for this

She never noticed this on her forms, but she has checked this morning and it does state this.

Anyway, she went onto Income Support 4 months ago and is still receiving this. She obviously cant afford to pay this back in one go, and she understands that it is her fault for not noticing this, so she knows she has too pay this debt.

How much are they allowed to take from her Income Support or Child Tax Credits?

She is so worried as she doesnt owe a penny to anyone else and is so good with her money etc.

Hope someone can help her.

Thanks

Penny-Pincher!!
XXX

Fran · 24 May 2005 at 1:29PM

The best thing would be for her to take her info to her Citizens Advice Bureau (or ring them) and they can tell her how much is the maximum that can be taken off IS (there is a limit but I don't know what it is - about 20% I think, maybe 23%). Also she should ask them what the least offer of payment in installments she can make to Inland Revenue. CAB can negotiate on her behalf which could be easier for her. If she phones though she would need to send in a signed form of Authority first to allow them to act on her behalf.

Ted_Hutchinson · 24 May 2005 at 1:36PM

COP26 COP 26 What happens if we have paid you too much tax credit?
A code of practice setting out how it will deal with overpayments of tax credit. A Form TC846 "A request to reconsider recovery of tax credits " is also available

Penny-Pincher!! · 25 May 2005 at 9:39AM

Hi

Thanks for the replies!

I still can not make any sense from this info

It says something about 10%, would this be suitable in her case?

Thanks so much

Penny-Pincher!!
XXX

jockettuk · 25 May 2005 at 10:01AM

i was overpaid housing benefit 15 yrs ago yes that long and they contacted me 5 yrs ago to say i had been overpaid after a lot of meetings and arguments yes i did owe it and as i had just separated from hubby i was on income support at the time . the maximum they could take then was around £8. offer what you can afford and if they think this is unreasonable they will come back with a counter offer. They wont take it all in one go as its not beneficial to anyone that way but they will take it back out of her benifits and eventually she wont notice it going out and it will be getting paid..

margaretclare · 25 May 2005 at 10:26AM

Fran wrote:

The best thing would be for her to take her info to her Citizens Advice Bureau (or ring them) and they can tell her how much is the maximum that can be taken off IS (there is a limit but I don't know what it is - about 20% I think, maybe 23%). Also she should ask them what the least offer of payment in installments she can make to Inland Revenue. CAB can negotiate on her behalf which could be easier for her.

I would suggest that your sister actually goes in to her local CAB, takes all the relevant papers, letters, statements etc and sees someone face-to-face.

This is the kind of thing which is extremely difficult to deal with on a phone enquiry. And it really will be best if she deals with it herself. When I was still doing face-to-face advising (rather than telephone, now) I had to phone on someone's behalf just like this. But it took time and I first had to find out which office I had to deal with - not the local tax office, it was a regional one. I couldn't possibly have done it over the phone.

If she phones though she would need to send in a signed form of Authority first to allow them to act on her behalf.

As above.

Aunty Margaret

Fran · 25 May 2005 at 10:56AM

margaretclare wrote:

This is the kind of thing which is extremely difficult to deal with on a phone enquiry. And it really will be best if she deals with it herself. When I was still doing face-to-face advising (rather than telephone, now) I had to phone on someone's behalf just like this. But it took time and I first had to find out which office I had to deal with - not the local tax office, it was a regional one. I couldn't possibly have done it over the phone.

While seeing someone is obviously the best option, the sister might find it difficult to get to CAB depending on why child has DLA, at least by phoning she would get some answers so would not be in such a panic. Phoning is better than doing nothing even if she is advised to call in to the bureau.

Advising by phone would be a matter of negotiating the payments to Inland Revenue (authority could be faxed through). Finding the local office would take the same time whether the person was there or not and as the person can be phoned back I don't know why you say this would be impossible.

Penny-Pincher!! · 25 May 2005 at 11:41AM

Hi There

Thanks for the further replies :T

She has done the following. Wrote a letter to the lady dealing with this explaining that a mistake has been made as son on middle rate not high rate, but she had not noticed this on the forms. Also explained how bad situation is at home and how she has had to go onto Income Support and be her sons full time carer etc. Included that she was worried that she is going to get into trouble about not noticing this mistake, and also offered a payment of £40 per month until this debt has been paid.

It sounded like a nice, polite and apologetic letter.

Does this seem OK? She is holding off sending till I get the go ahead from you guys

She is unable to attend CAB, so thought a letter would be best in this case, with copies made to keep filed.

Thanks

Penny-Pincher!!
XXXX

margaretclare · 25 May 2005 at 11:56AM

Fran wrote:

While seeing someone is obviously the best option, the sister might find it difficult to get to CAB depending on why child has DLA, at least by phoning she would get some answers so would not be in such a panic. Phoning is better than doing nothing even if she is advised to call in to the bureau.

Advising by phone would be a matter of negotiating the payments to Inland Revenue (authority could be faxed through). Finding the local office would take the same time whether the person was there or not and as the person can be phoned back I don't know why you say this would be impossible.

I didn't say it would be impossible. I said it would be very difficult. If you had the person there in front of you with the relevant papers, THEN you could try phoning the relevant IR office. From memory, it took phone calls to 2 different offices before I found the right person to speak to. I was also able to quote the figures because I had them in front of me, and in fact they were very helpful and were able to put the client's mind at rest.

When someone comes on the phone you don't have any of that, especially as in this case a sister is speaking for another sister. On the phone we often do advise people to come in and bring papers etc because it is too complex to deal with over the phone. Then we quite often find that they're phoning from another area because we have someone manning the phones and many of the other offices don't!

When we're on telephone duty we very rarely phone people back. We don't have time to! Once one call is finished there is another one coming through. We have to put the phone on 'do not disturb' so that we can type up a report in between calls, and the phone is just ringing all the time.

Aunty Margaret

margaretclare · 25 May 2005 at 11:59AM

I think that writing a letter setting out all the facts, quoting a reference number, all the details etc, is absolutely the right thing to do. Do it without delay, and remember always when writing this kind of letter, keep a copy.

Aunty Margaret

irs101 · 25 May 2005 at 12:03PM

Penny-pincher

This sounds like a good way to go to me.

As I understand the situation your sister has received more than she is eligible to due to a mistake, rather than because of the finalisation procedures.

First thing, is it definitely your sister's mistake? It sounds like it is. If so, your sister should hold her hands up and explain how the mistake happened. It's an understandable mistake, and it's not as if your sister claimed the disabled elements when no disability existed all. They will be more sympathetic if they are sure it's not a fraudulent claim.

Second thing, because it is question of non-eligibility, rather than a change in income, the 10/25/100% rules aren't relevant. In theory HMRC could ask for the whole lot back at once. But in the link Ted has give, HMRC say that they will allow payment in installments over 12 months. So I would say that this is the worst that could happen to your sister. Would you sister be able to make these repayments?

HMRC will also consider cases of hardship and make additional payments in some situations. However this is only a temporary solution and your sister will have to pay these back eventually.

Finally, I know very little about income support, but presumably your sister is now getting both IS and CTC. The overpayment is on CTC so, as I understand it, they can't directly touch the IS (that is administered by DWP). However, as mentioned above, they can insist on full repayment over 12 months, so the IS situation is almost irrelevant. If they insist on repayment your sister will have to use her IS money or any other money she has available to her.

I think the letter along the lines you are suggesting is an excellent idea. But I would still try and get advice from the CAB. The situation is quite unusual and there isn't a lot of experience around as to how HMRC will treat people like this.

Good luck

irs

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