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tax credit overpayment

(4 Posts)
surprisenumber3 Tue 30-Jun-09 12:10:23

2008/2009 tax year we received the basic family element (£48ish per four weeks), plus an extra £100 due to DS1 receiving disability living allowance. When I was working 21 hours a week weren't entitled to the disabled child element because with DH's salary too we were over the amount allowed but we have received it the last couple of years since I left my job.

Anyway, the only thing that changed from 2007/2008 to 2008/2009 was that DH's salary went up £1k because of cost of living rise. I called to give tax credits the final figures received from P60's (just £1k more than last year) and they say we have to pay back everything apart from the family element and even though we now have a 9 week old baby they have reduced our payments so we can pay back what we owe (almost a thousand).

Surely this isn't right? Just because DH has the standard cost of living rise (£1k), they take the same back off us in tax credits? If we didn't have a new baby we wouldn't be getting anything for years as it would take that long to pay it off with the £48 a month we would be entitled to.

Is this right? When I phoned up to renew they asked me what DH would be earning this year! I told them we don't have his cost of living rise agreed yet and they estimated it and then said that wouldn't make any difference anyway but it has from last year - a BIG difference!

Sorry if this is confusing, I am very confused myself!!

Anyone else in a similar situation?

DaisymooSteiner Tue 30-Jun-09 12:34:44

They don't normally take the full amount of any pay rise off your award, usually 39% of your increase in income is taken off. Plus there's normally a £25,000 disregard so that your income can increase up to £25,000 in any one year without it affecting your tax credits until the following year.

bumpybecky Tue 30-Jun-09 12:37:48

that doesn't sound right to me, but I'm no expert. I thought if you were above the first threshold and they reduced payments, it was by 39%, not all of it. But then I don't have the disability bit.

Have you tried putting your details into the Tax Credit calcualtor on their website? there's another one here..

otherwise I'd try calling again and hoping you get someone nicer! ask them to explain it again

Lilyloo Tue 30-Jun-09 12:39:29

We have had an overpayment too but dp actually earnt less than we said.
We got two random payments for a couple of hundred pound after we gave his p60 details confirming lower salary.
We presumed this was the difference but now recieved a letter saying we have been overpaid virtually the amount of these two one off payments ??
I have no idea how it's worked out so my sympathys!

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