To think this is DISGRACEFUL! Massive tax credits overpayment!

[CrumblingKnees]

Just furious that common sense is not prevailing and I am essentially being robbed of money by HMRC!

So, twin DC finished education in summer 2021. Both have a disability, DH works but we were entitled to tax credits as wage not massive and we got the higher rate due to disability. I remember getting a letter saying tax credits would stop from August 31st due to this. Was aware and knew I’d have to find a job to cover the shortfall.

Payments stopped and I then started working in November 2021. I do remember getting some letters from them but ignored as as far as I was concerned claim had ended (stupid I know). Youngest was diagnosed with a serious illness last summer and I’ve been a bit of a mess, not keeping on top of things like I normally am.

Anyway got a letter from them a few weeks ago saying we’d been overpaid almost £2,000! Shocked, rang and basically they’d added on my work income from November onwards to my tax credit claim for that year (it was not closed). I assumed claim had ended in August and if it had been there would be no overpayment!

I’ve explained this and filed a dispute. They’ve come back today and said that as I didn’t dispute before the end of Jan the overpayment stands and we need to pay it!

AIBU to think this is a pisstake and totally wrong for a government agency to take money from families like this?

Not really, unfortunately you ignored the letters they sent to you. Did you not realise that since November you have received more money than you expected? .

I don't know but I had to repay a lot or actually still am. I recalled questioning it on the phone when they increased my payments a lot. I was repeatedly assured it was right until it wasn't. I asked for a breakdown but that didn't explain how they work out what to pay you so it meant nothing just a list of 3 over payments over 3 years. I don't know why they kept paying me after when I already had over payments. Stupid system 😒

Tell you you can only pay it back at£25 a month or whatever. They're utterly incompetent

We didn’t get any payments after August @Ilikewinter . We were paid correctly until then. They added on my work income from November to the annual total despite not making payments then.

How is fair that we get a massive bill due to missing a deadline by a month!

You shouldn't have ignored the letters. You should also should have told them that the claim is apparently ending but you are still getting money. Surely you realised this? They aren't taking money from you. You got more than you were entitled.

Well its not really their fault if you ignored letters and you have had £2,000 more than you should have done.

I'm not completely unsympathetic they did some miscalculations on my tax credits and overpaid me £4,000. I have only just finished paying it back. The key thing to do if you can't afford it is call them and use the phrase "repaying this will cause me financial hardship". I was paying mine back by a deduction from my tax credit payments but when I was no longer eligible I repaid the rest at £10 per month by using the above phrase and stating that is all I could afford.

Ignoring letters is never the way to go but I feel your pain. I was encouraged to claim tax credits, told all about how I was entitled to it etc etc then got told I was paid in error and have to pay it all back. When I mentioned to the call centre that it was the jobcentre who kept telling me to apply and I wished I'd never bothered, they said it wasn't the first time they'd heard that. I'm still paying it back 6 years later in instalments.

You ignored letters. This is 100% on you.

We didn’t receive any payments from August that year @Ilikewinter . As far as I was aware claim had stopped as we were not entitled. I started work in November 3 months after payments ended.

Have I not explained it clearly enough?

Just go through the dispute and then appeal process. I had similar and was really worried (start a repayment plan with them however if asked, can be £10 per month) and just follow through on appeal.

If you were definitely not over paid then they will scrap the charge but not until they put you through the wringer!

I WAS NOT PAID MORE THAN WE WERE ENTITLED TO.

Payments were correct up to August. They added on my work income FROM NOVEMBER AFTER payments ended and we were no longer entitled to tax credits.

Seriously!

You have been clear, Crumbling.
My understanding is the claim is based on earnings across a tax year. So if in the first three months your household income was, say 25k as just DH was working, they calculate entitlement based on that as the full year's income.
By getting a job you will have significantly increased your annual household income for the tax year, hence the overpayment now calculated, as your household income in now, say, 40k.

I'm sorry, the system isn't for for purpose. Can you suggest a payment plan that is affordable to you?

Tax credit entitlement is based on the entire tax years income, so it is quite possible you have been overpaid. It doesn't matter if you got no payments after August, as they work on a yearly total basis.

Ah I think what had happened is similar to what happened to me a few years ago.

Me and then H (divorced now) had a joint claim. We separated in September 2018. Joint claim finished and I started a new single claim. He then did loads of overtime over the next 7 months so his annual wage for that tax year shot up much higher than any previous year, say his general earnings were around £29,000 and then shot up to £39,000. So then a year or so later when after the annual review was done they took all the extra he’d done after we’d split into account as it was still in that tax year, 2018/2019, so then they worked out how much we should’ve received for the 5 months of the joint claim based on the higher yearly earnings of £39k rather than the £29k it had been previously and based on that we were over paid so had to pay it back half each. Totally unfair as he’d earned all the extra after we’d split but as it’s based on annual income there’s nothing I could do about it.

Is the 2k actually an overpayment though or a mistake? Assuming they worked out your entitlement for the full year based on you not working, even if you didn't receive payments from August the income from November to april would have changed your entitlement for that year and therefore the overpayment is correct? Apologies if I have misunderstood, I've not had tax credits for about 5 years so cant remember exactly how it works

It's based on how much you make annually, they work this out by using your household income from the previous year and making adjustments as necessary. When you started work your annual income increased, this means that although your entitlement ended in August, the amount you were given before that was too much. Your appeal would not have made a difference from the look of it, you would still owe the money.

When me and my ex split up in the Oct the claim changed our to being just me, he then changed jobs in the new year, started earning more and I got a bill for the excess in the April

It's a shit system

Tax credits are calculated on your earnings within a tax year though. When your claim is awarded at the start of the year, they estimate your earnings for the upcoming year based on last year's earnings. However much you are awarded based on that is then paid to you monthly. If, at the end of the year you earned less than the original estimate, you may have an underpayment and they will owe you money. If you earn more than the estimate then depending on how much you were paid whilst you were receiving payments, you may been overpaid and will owe them. It doesn't matter that you didn't receive any payments after August because the calculation is for the full tax year. It is one of the reasons why tax credits was a poor system. Universal Credit which has replaced tax credits, is calculated on a month by month basis to hopefully reduce the chance of claimants being either over or underpaid.

Tax credits are annual award. An increase later in the tax year can result in you needing to repay your credits from earlier. Uc has ironed out this anomaly. It was one of the reasons for needing to reform tax credits but those on historic awards were reluctant to switch across.

We had to pay back an overpayment that wasn't our fault.
For some reason at the end of a tax year, tax credits had the wrong info about my wage for the previous year. Despite me chasing over and iver, and then confirming what HMRC had was my correct income and they had it wrong, they dragged it out for so long that I had to pay it back because it had gone on so long. It was around £4000, just as I was made redundant due to covid.
Tc do not make it easy.

The way I understand it even though you received no payments after August the payments you received up to August were based on you not working for that entire year. Once you started working in that year those payments were then judged to have been too much by £2,000. There must be some basis to them wanting £2,000 from you as incompetent as they are they will have got that figure from somewhere.

You're not reading the replies.

Tax credits are a whole year award. Your circumstances changed mid-year which changed your entitlement. You ignored their attempts to contact you.

I understand you're frustrated but you created this problem by ignoring the letters.

Also you can't really shout at everyone for assuming you have received an overpayment when you have called it an overpayment in the title of your thread.

Similar happened to me. I was a single parent and earned a wage where I got tax credits.

In the September of that year I got a job that paid 40% more. I started the new job and stopped my claim and received no further payments.

I was then told I owed them money due to over payment. Because I earned more than expected in that financial year, due to the new job. What I earned in that financial year, meant I wasn’t entitled to anything. At the time I was claiming the money I was entitled. But they look at the whole financial year. It happens all the time and you will need to pay it back if in that financial year you (and partner if a joint claim) earned more than expected.

I offered to pay it back at £20 per month. Which they accepted.

You WERE paid more than you were entitled to, 2k more, by the looks of things - regardless that you didn't get any more payments after August.

As PP's have stated, it's the entire year income that they're looking at.

If anything 'the system' they use has screwed you, but you definitely got 2k more than your entitlement.