Tax credits overpayment and universal credit

[Bubblegum89]

We applied for universal credit as we are in a bit of a financial hardship at the moment as my partner’s overtime has been stopped and his normal hours plus my two jobs still has us living on the bare minimum. Our child tax credits (a huge £4 a week) were stopped as a result. We then received a letter from HMRC saying that we owed them £1800 from an overpayment. We called and queried it. The guy on the phone said we owed £1500 then when queried further, said we only owed £780 and that we’d been having repayments taken from our weekly tax credits which I was never informed about.

We asked them to send us a letter explaining when the overpayment was made and why. In the meantime we received another letter saying we owed £2600. We then got the “detailed” letter which just said that in 2014-2015 we were overpaid by £1400 and another £300 in 2016-2017. We were never told about any of this. I checked my weekly payments from way back in 2014 and they weren’t exactly huge, £63 to be exact. I’m not sure how or why they think we were overpaid and why it’s never been mentioned until now. I also don’t understand why the amount has fluctuated from as little as £780 to as much as £2600 and why nobody can seem to tell us why this overpayment was made or when specifically.

I checked my UC account this morning and after a deduction from a small advance payment we needed to use for rent last month, we are entitled to £9. For the entire month. That’s because they are going to start taking £115 a month for the tax credit repayment and £33 for a budgeting loan I had in 2009 that I thought I’d paid off. And I’m still waiting for any kind of evidence that we were overpaid in the first place or even just given a proper figure instead of having 4 or 5 thrown about.

Now, no reasonable person going through some unexpected financial hardship could live on £9 a month. I want to get both the budgeting loan and tax credit repayment lowered to a more affordable amount until we are able to start repaying more. How do I go about that? And also, why can nobody at HMRC tell us what the overpayment was, when it was specifically from and why they classed it as an overpayment?

Why didn't you just update your tax credits claim?
Why make a new claim for UC?

Because UC is rolling out in our area

You really need to understand the reasons for overpayment first. You do occasionally see cases where the overpayment is entirely HMRC's fault in which case they shouldn't be able to recover it. Or very occasionally other situations something can be done (I once helped a guy who was told he had to repay the entire year's tax credits because he forgot to fill out a declaration at the end of the year - we fortunately got that sorted!). If you're really getting nowhere with this, maybe try and see if you can get an appointment with the CAB where they can ring HMRC and try and get to the bottom of it.

The rules in the maximum deduction under UC are a bit complicated. You say that £9 a month isn't enough to live on but presumably your DP is still getting some basic wage without the overtime payments. Is that correct?

There's a detailed guide here but it's quite difficult to check their calculation without knowing the full details:
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/683470/benefit-overpayment-recovery-guide.pdf
Again maybe the CAB can help?

Good luck

Thank you Ally we are both still getting a wage thankfully but are short on rent every month which is why we applied for UC to begin with. The company my partner works for us currently undergoing a contract change and so there’s no overtime available for the foreseeable future. When he was getting overtime, it was over double what he earns on a basic salary which was a godsend when his hourly rate isn’t that good to begin with. I think I was just a bit confused as to why they have said that after deductions from earnings, we were entitled to claim £200 which we would have received had we not had this tax credit overpayment. So they’re kind of saying, yes you need this money to top up your wages but actually we’re now going to take all of it back to pay off your tax credit debt. I wish we could just go back to having enough money to not have to mess about with all of it!

I feel like we’re getting no actual answers from tax credits about the overpayment and why/how we were overpaid. I’m more than happy to pay back anything if we do genuinely owe it (at a lower repayment for the time being if we can) but before I start handing money over, I would like to see the evidence and as you said, the reasoning behind the supposed overpayment. I’ll maybe give CAB a ring this afternoon and see if they’re able to help get to the bottom of it. As it stands, not only do I not know why we were overpaid or when but I also have no idea how much we apparently owe because we’ve been given so many different figures, very annoying.

This is happening to so so many people who move over to UC. They are being told they have these 'overpayments' from years ago. Some people who have never claimed tax credits in their lives are getting hit with you have a tax credit overpayment letter.

Something seriously stinks here. There is no way that thousands and thousands of people suddenly have overpayments that tax credits (finalised on a year by year basis) somehow never noticed!!

You can do a SAR request (subject access request) which will force them to give the details of why they think you have been overpaid. You can also go to your MP and ask your MP to write to them.

And they just take huge chunks of your UC for these 'overpayments' before you even see any money. I am a working single mother and I have been forced into the sex industry (despite being fine and managing before uc) just to survive. Because I am £30 a week worse off under uc than tax credits anyway to start, and they are taking nearly £200 off a month for overpayments, and another £60 a month off for repaying the advance payment they give you when you are waiting 5 weeks for the first payment.

Something needs done about this. It's a disaster for women. I am sorry you are in this situation too.

You can call and negotiate the amount they are deducting. They were very accommodating when I have had to deal with them in the past. Good luck.

Ring UC Debt management tel number and say you can’t afford to repay that amount each week.

They should have a process in place to change it.

What did overpayment letters say the actual reason for each overpayment was?

I work for HMRC and honestly, overpayments are correct 99% of the time. Biggest reason is usually increased income from one year to the next.