tax credit overpayment

[kags]

does anyone have any experience of appealing against a decision to collect over paid tax credits? My friend failed to tell HMRC that she was separated for several years; if she had done she would have received around �60 a month MORE than she has been getting, however HMRC say the claims were invalid and are reclaiming all the money. New claims can only be backdated 3 months, so she may have to pay back over �1200. Obviously she should have told them, I realise that, and she now knows how stupid she has been. I wondered if HMRC are likely to take a pragmatic approach and say that as she is the one who has been underclaiming, they will wipe the slate?

[puddicat]

kags no they wont!!

[dot.hawkes]

was it working family tax credit and claimed cos her husband was the worker, or child tax credits claimed by him ? If he left her then she would have either claimed maintenance or benefit.

[kags]

working family tax credits - they both work, but obviously her income is less than the combined income so she could have been claiming more. I find it incredible that she could go all this time and not realise, but there you go, it has happened. I'd have no sympathy if she had been claiming too much, but this seems harsh.

[themas]

It is harsh - a lot of the rules the Tax Credits people impose are harsh. What they ought to do in this sort of case is to offset the actual entitlement against the amount actually paid, and charge a reasonably small penalty for the failure to abide by the rules.

But what they actually do is what your friend has found out - ignore the actual entitlement & demand back all the money paid on the incorrect claim.

Sometimes it is possible to get them to see sense, but it can involve a lot of work & is easier to do if there are some circumstances that can be quoted (such as ill health) to justify the failure to notify. It might be worth your friend seeing her MP. If he/she is sympathetic & takes the case up it could help - but there are no guarantees that it would result in an equitable and just result.

[kags]

If she had been overclaiming, would they they ask for the full amounts paid back from her, or would they just ask for the overpayment?

[sara3]

I don't know the answer but I would try telling them to off-set the overpayment against her notional entitlement.

it's a bit of Departmental jargon that may make them look at it more favourably.

[themas]

kags - it depends on the circumstances. Some overpayments arise from quite different situations than the one you describe (for example, failure to notify a child leaving school) & in those cases the amount they demand back is the amount overpaid, not the whole entitlement.

But if the case is one where a claim should have been ended and replaced by a new claim (which is what should have happened when they split up) then they say the whole of the payment made throughout the period the claim was invalid is an overpayment and has to be repaid.

So if - instead of your friend being paid too little - she had been paid too much they would have wanted it all back, not just the difference.

[kags]

thank you themas, that answers my questions exactly.