Furious with Tax Credits keep people in debt

[StarUtopia]

Oh I am SO ANGRY. Not been paid our child tax credits since May so just phoned up to ask why. We don't get much..just £10 a week but it all helps to pay our nursery bills and I am very grateful (we both work)

Rang just now. Apparently we now earn just over the threshold (P60 from Dh showed a £4k increase in pay this year vs last year) so that's why they've stopped. Ok, that's fine, totally understand.

However, we now owe them £1600 apparently. Because they base payments on last years incomes etc, they have overpaid us by that much.

I have so many transcripts where I have repeatedly asked, are you sure you have the right information from us, are you sure you are not paying us too much , are you sure that's what we are entitled to etc etc etc.

About 8 years ago they overpaid us by £6k and we've spent the last 6 years receiving a lot less than entitled to in order to pay off that debt.

To now find that again we have been overpaid has just devastated me. We are in debt still from last time ( live in our overdraft) I have no chance of finding that kind of money. The nice man (felt for him) said we won't be 'billed' until April next year and then can request it gets paid over a few years if necessary.

But what is the point of a system that says you're entitled to something and then turns round at the end (when you now do earn too much) And says, actually, you need to repay us now.

Any tips for sorting this out?

Call Citizens’ Advice. They may help manage repayment or even write it off.

I'm in the same situation. Really makes me angry. I would rather not have the money in the first place!!!

And child benefit we have to pay back £500 a year. Why not just not give it to us in the first place? I don't understand why they think that clawing back the money is a good system.

Foo Fighter, housing benefit calculations are the easiest of all benefits! When I worked as a benefit adviser, I used to do them in my head.

Basically, you lose 65p of benefit for every £1 extra you take home, providing that nothing else has changed.

Is there anybody in the entire country who has ever got exactly the right amount?!! We were apparently overpaid by £5000. I appealed and had to go to a really humiliating tribunal which upset me more than I had expected. It was ruled that they were wrong though - the amount at least, it was 'only' £1000 - so it was worth it.

It used to be (going back 20 years so forgive me if it’s a bit out of date) that if you were overpaid any benefit by an ‘official error’ i.e. you were on JSA, got a new job, told them and provided evidence and signed off but they still continued to pay you, they could ask for it back but couldn’t force it as it’s their fault. They may have tightened the rules though.

Recovery of overpayments caused by official error can be challenged and challenges can succeed. With TC's the award is provisional based on estimated income, so it's all a bit of a guess. There's not an official error unless the overpayment notice itself contains incorrect information, and I have challenged overpayments and succeeded in the past.

I also got someone a massive backpayment recently, they'd decided that her oldest had left school when he hadn't. Over a year's worth of £60 or so pw. I've also had big arrears payments made when the hadn't actioned a change following a child being awarded DLA, which went back nearly 3 years.

This has happened to me so many times I paid it all back each time it was thousands even though I constantly kept them up to date and checked it was correct. As a result I would never ever claim tax credits again, it's just NOT worth it (and I say that as a soon to be single mother of 3 young children)

Same here, our payments have dropped from 427 a month to 78... due to DH earning 3k extra last year (overtime so didn't know what his final salary would be until we got p60) and me going back from maternity so this coming year 18-19 I'll be earning an extra 2k.
So my entire salary now goes on childcare and we're really struggling.

@purplepotatoes have you checked if you'd be better off not claiming tax credits and using tax free childcare instead? (You can't do both at once)

Child benefit here. Dh repeatedly told them that we were no longer entitled to it but they kept paying it. He had emails, letters and he’d even recorded phone calls. They still wrote and said we owed them about two grand and that they were going to take it back over three months. It was bloody hard for a while, randomly having £800/£900 taken out of your bank account. I wouldn’t trust them to organise a piss up in a brewery. They are the most incompetent organisation I’ve ever had the misfortune to deal with and how they haven’t been the subject of an enquiry yet I do not know.

It's a nightmare they've overpaid me by £400 odds despite me telling them as soon as my circumstances changed. I told them I'm going off on maternity leave and will be entitled to tax credits again and could they take it off that but they've made me set up a payment plan until then

If I could turn back time I wouldn't claim tax credits again! They are currently claiming that I owe them £3,000 - it's so hard to make any sense of their calculations. Partly it was due to a mistake that I notified them of straight away - they had my childcare costs (for one child) as £450 per week rather than per month!

Gosh really does sound like it's everyone. Not an isolated incident for me at all. I feel for all of you.

I've calmed down a little now but I'm still confused. Genuinely confused. If your earning go up (even a little, year on year), at the point that you are not entitled to TC's, you automatically have to pay them back what they paid you for the previous tax year.

The only way to not have an overpayment is to always be on a low income and the same income.

Even if my earnings goes down this year (which they may well do), we are entitled to zilch because they're basing it on last year for which we are about £400 over apparently. So that's zero for this year, but then theoretically the following year we would then be entitled to a small amount - but hey, you still owe us £1600 so we're going to pay you nothing, you're going to pay us. Even though technically you need it because we overpaid you two years previously, you now get nothing.

How do you actually come off tax credits without facing an overpayment? Is it even possible?

good question.
I owe too, can't understand it, apart from about 14 years ago they paid me too much and have been reclaiming.

It's because they want as many people as possible to stop claiming any and all benefits. Make the system so terrible that people would rather be poor. So it's a choice between being poor or being poor and in debt.

Very often, the WORST thing you can do is keep TC constantly updated of every income change through a year.

As soon as you manually update TC with expected income for the current tax year, the income disregard doesn't apply.

If your income this year is due to be up to £2.5k (the current disregard amount) more than last year, say nothing. Or if it's not too far off that, you'll likely still be better off saying nothing and repaying an overpayment as the first £2.5k of over-earned income isn't counted.

WaterOff, or being incentivised to get promotions and increase income that way perhaps surely?

I have challenged overpayments and been successful. My understanding is that if all the information you have provided is correct and they have overpaid you it’s their error and you are not responsible for any overpayment.
I did give them exact figures for everything and had evidence (dates, times of calls and what was said, so along the lines of what you said OP ‘are you sure this is correct?’ etc).
I put the challenge in writing (it was a couple of years ago but I got advice on how to word it to have the best chance of success-may have been Martin Lewis but I’m not certain).

They dismissed it at first, kept sending me standard letters saying I had to pay it back but I kept disputing and then they cancelled all of what I ‘owed’. Definitely worth doing, the more people who do this, the more likely they are to fix the current system.

I've had mine cut I reported a change in that I lost my job got another within two weeks my wages went down childcare went up and they cut my tax credits by £100 then cut them again so they won't overpay me ffs I'm earning LESS and paying MORE for childcare how exactly will they over pay me?

It could be worse... your could be on universal credit!

www.advicenow.org.uk/guides/survival-guide-dealing-tax-credit-overpayments?anchor=howToDisputeTheOverpayment

This is good info.

It’s saying
‘If you have done everything you were supposed to and HMRC have not, you will not have to pay back the money.
If you have not done everything you were supposed to, but HMRC have, then you will have to pay back the money’

There is a check list of what you are supposed to do which is;
Providing them with the correct information and checking everything is correct in the letters they sent.

So if you’ve told them you earn X amount, Work X number of hours, childcare is X amount, etc and they write to you and everything is correct then they overpay you, you don’t have to pay back.
If you give them incorrect information or fail to spot mistakes on the letter then you may have to pay them back.

Xenia that isn't possible for some people though. Some people aren't very bright. Some have disabilities. Some have people to care for etc. I'm extremely lucky to have had the opportunity to work my way up. Not everyone is as fortunate.

Thing is they know our earnings, they find out through paye so how can there be any discrepancy

I've just had a good google at some of the advice sites.

The bit that is now really annoying me is this. We only qualified anyway for the 'childcare' element of tax credits. So why the hell would you base your payments on our income the previous year?! I didn't need childcare the 'previous year'...I needed it the year I was in.

Again. How are you supposed to terminate tax credits without an overpayment every time?

You can actually get them to recalculate based on this year's earnings then if you are entitled it can go towards repayment?