tax credits overpayments

[Danthe4th]

Just watching the news and a lady has been overpaid by £2000 she now says she is going to sell her house to pay it back. Its her fault she was overpaid as she under estimated her earnings.
AIBU to think that if people over estimated there earnings every year then there wouldn't be any over payments and any money under paid would be paid in a lump sum at the end of the year based on correct earnings.
I really believe people think they can get away with it and want as much money up front and don't think about what happens if they get the estimates wrong.
Because of this the system will be changed. It works well for me, I've never been over paid, my earnings change as i'm self employed and we over estimate what I earn and then at the end of the year put in the correct amounts.
Anyway i'm rambling.
AIBU to think selling your house for a £2000 over payment is rubbish.

i saw that and thought the same!

My SIL works for the dss or whatever they are called now and she has been overpaid in the past even though she queried several times the amount they were sending her , she had the sense to put what she thought was the overpayment into a savings account so that when they did send her a bill for over paymnet she could give it back . But if you have queried an amount several times and each time they have said it is correct ,most people would assume they are right and therefore spend the money . Fwiw i think that handing any type of benefit over to the inland revenue was a huge mistake .

Surely they would just arrange for her to have her payments reduced each month for so long? We were overpaid by about £1500 in the first year and they just sent a letter saying they would reduce payments by £50 a month for 2 years or whatever.

Exactly peppa, i shall be paying it back at £10 per week for the rest of my life no doubt but selling anything nevermind the house didn't cross my mind, not like they charge interest is it.

Yes they told her she had to pay back £40 per month and she said she was scared. She complained that the letter was 'cold'.
I understand that some people have been put through hell by hmrc but couldn't the bbc have found someone that would would have shown more genuine hardship.

I was massively overpaid recently (by £600 in one month!) but as I keep an eye on our money, I noticed it, queried it, found out they had only taken my pittance of a pay packet into account and have therefore put it into a high interest account for a year until they want it back....in a year apparently!

Sometimes though, you give what you think will be an accurate estimate of income, then during the year your circumstances change. My DH became self employed for a while, then got a job with a different salary, which also had a car allowance. I believe this is counted as income. Anyway, this messes up the estimate figures and even though you tell the tax credits people info repeatedly, they still manage to send out letters which make absolutely bugger all sense. So,, I can see how an overpayment can happen

It's a really stupid system which allows this though.

Why use estimates of future earnings in the calculation, which are by definition nebulous, in the formulae?

Why not use current earnings instead? That way you cut out all the administration and waste and writing-off of overpayments that goes with a projected income system.

It was £40/week, not per month.

I probably ring tax credits every few weeks because there is always something wrong.

Despite this, we've just got a big back payment from being underpaid last year! The system is very buggy, and if your income varies at all it's really easy for them to get it wrong.

Selling your house is just stupid though.

i was overpaid by a similar amount over about 3 years, they demanded it all be paid back within a year of them discovering their mistake (even though I spent 3 years telling them it was wrong). That annoyed me, they spent 3 years overpaying, then want it all back in a year!

assumiong they ahve told her the same thing then she will be looking at payments of £166 a month, which could be hard for a lot of people.

Saying you have to sell your house sounds extreme though.

Also, in addition to the £40/week they want back, they usually cut off both CTC and WTC until it's paid back.

Meaning she could be down a lot of money.

Actually...once she has paid solictor costs, estate agent fees, removal costs (plus presumably she will then have to rent which she will need a down payment for) then that will come to more than £2000...

and their letters about owing them money are very cold - yes

me and dh call them "dear Mrs scum of the earth letters"

they contain all types of "when you miss a payment we wil ..., when you default we wil ...." type of statements. I felt they were accusing me of trying to con them out of the money - but then apparently I m sensitive!

Their letters are written in a tone that presumes someone who has been overpaid is a thief, a criminal, and are worded accordingly.

precisely expat, i found them quite offensive and accusatory.

also they have debt department or something in bold print on the envelope

i am very very pleased that i made my ast payment last month and now am not entitled to any tax credits so hopefully wont need to have anymore contact from them.

we were over paid, this year, to the sum of around £700, dispite us ringing them twice to tell them that they were over paying us.
So when we sent in our p60's they told us we were over paid, anyway we rang them to say can we give them a lump sum of £700 to pay the debt, and they said that they didn't want the payment until 2011 due to the country's hardship. they then informed us that we were likely to be overpaid for next year at an estimated £500 but they would keep paying us the tax credit

And the letter is worded that way even if the overpayment is their fault.

It took us 7 months to appeal an overpayment that was their fault.

They gave us £100 compensation.

Meanwhile, we racked up credit card debt whilst they cut us off until my DH could find an evening and weekend job to fit round my day job because we could not afford childcare fees.

We have yet to pay that off, years later.

we were overpaid for two years straight (2004-5 and 2005-6) This is when the threshold for actual earnings was only 2500 above expected earnings. This is also despite us informing them promptly whenever there was a change of circumstance/wage etc. I queried the overpayment and sent of official complaints twice and was basically told that despite their error, we needed to repay. We lost most of our payment within a month of me leaving work to stay at home with our two young children. We haven't actually received any payments for approx 3 years now as everything goes back for repayment. An advisor told us that the system was designed with the overpayment structure factored in and that it is only at their discretion (whether they made the error or not) to write off overpayments.

I am glad I don't rely on them - we struggled at first, but now I know that we can choose to earn more/work longer hours without worrying how it will affect our payments.

As a side note, the threshold was bumped up to £25000 in 2006 and is now going to be lowered to £10000 and then ultimately £5000. The whole system reminds me of the story of the wild pigs

christ, they are idiots arent they! Well the system is idiotic anyway.

makes you feel like just asking them to close your account and not bothering.

Can you do that?

I tried that when I first complained - the lady admitted to me that we would continue to be overpaid if we worked overtime or got pay rises. I told her that I would rather not have the money than be dictated to by it. She said that I might as well take it as I was entitled to it. I told them to keep it and use it all for repayment instead. We have never since factored that money into our budget.

I always over estimate too to avoid this.

I've been ok up to now because my circumstances rarely change. Though I can see how easy it is for things to go wrong if you do have a change in circumstances.

For example I only pay child care costs for the school holidays. I have to estimate the cost for the entire year and average it out per week. Obviously the bulk of those costs are in the summer holidays. So if my circumstances changed in the year and I couldn't claim any more it would mean my child care average cost per week would alter wildly.

It's such a mine field. It should be based on circumstances to that date your circumstancs change, not for the entire year.

They overpaid me one year too. Made a double payment, I phoned and they said it was a computer adjustment and would balance out by the end of the year. I was wise enough to put the money into a savings account and not spend it. The next month they double paid again! This time the said it was a computer error and all my payments for the rest of the year would be amended to pay back the overpayment. But they only reduced by one of the over payments so I was still overpaid at the end of the year. Luckily I still had that overpayment in the savings account to pay it back!

IT's a crazy crazy system, If they would just make it clearer what the actual calculations should be then it would be easier to work out if and when you are being overpaid.

Also, in addition to the £40/week they want back, they usually cut off both CTC and WTC until it's paid back.

No they don't, it always makes me laugh that I'm paying them back out of basically their own money, most strange.

Yes, they do, mama, hence the term usually. Especially if you appeal.

And please, in the future, when you are quoting someone, please use marks or some indication you have done so. Otherwise, it can be very confusing for some posters.

I made that many complaints over them messing up my claim that I didn't have to pay the full amount back.