Select Committee on Treasury Written Evidence

Memorandum submitted by Citizens Advice, Northern Ireland


  1.  Problems with tax credits administration continue to be a frustrating and time consuming issue for both claimants and CAB advisers and remain the biggest single policy issue for Citizens Advice in Northern Ireland. While there have been some improvements since the last time we gave evidence before the Treasury Sub-Committee in January 2006, the following issues outlined in this submission show the high level of intervention required by advisers in some tax credit claims making the process labour intensive over lengthy timescales.

  1.1  While the advice sector in Northern Ireland is now represented on the Tax Credits Consultation Group, this meeting is not a forum to resolve the many more operational and technical issues which have been highlighted in our submissions to the Treasury Sub-Committee. We have strongly advocated for the return of some local contacts within HMRC through which we can resolve the many issues highlighted to us by clients. A caseworker type approach which is more client-focused and allows responsibility to be taken to progress a case from start to finish is urgently required particularly for complex cases.

  1.2  Problems with overpayments continue to be the biggest issue with tax credits administration, which can leave claimants in considerable financial hardship. While we acknowledge the steps taken by HMRC to reduce the number of overpayments, namely the introduction of the £25,000 income disregard since April 2006, we have yet to see the effect of this on the number of overpayments. We wait to see exactly how this disregard will affect the number of overpayments, or claimants' abilities to budget, given the likely fluctuations in their tax credits awards. Regardless of the effect of the income disregard the process of disputing overpayments needs be simplified and shortened and we again call for the introduction of an independent right of appeal on tax credit overpayment decisions.

  1.3  A range of operational problems with tax credits administration including problems with paperwork, delays in receiving responses, ongoing technical problems, inaccurate information from the various tax credits helpline/local enquiry centres and a lack of internal communication between HMRC departments, as well as externally with the public, all impact negatively on how the system operates and must be addressed in order that claimants are not affected.


  2.  Citizens Advice Northern Ireland is grateful for the opportunity to provide evidence to the Treasury sub-committee's follow-up enquiry into the administration of tax credits, as problems with the tax credits system affect a large number of CAB clients in the province.

  2.1  Citizens Advice NI is the largest advice charity in Northern Ireland working against poverty and meeting the information and advice needs of some 250,000 people per year.

  2.2  In the year 2005-06 Citizens Advice Northern Ireland dealt with over 14,400 tax credit queries, issues that now account for one of the biggest areas of enquiry received by Citizens Advice Bureaux in the province. During this period tax credit enquiries showed a significant increase of 14% on the previous year, and indeed tax credit enquires have been increasing year on year making it a growing area of concern.

  2.3  In 2006 tax credit problems were the biggest single social policy issue identified by Citizens Advice Bureaux advisers in Northern Ireland. The social policy forms sent in by CAB advisers provide clear and powerful evidence of the problems and difficulties faced by both clients and advisers with the administration of tax credits (a sample of social policy returns in relation to tax credit problems is provided in the Appendix).

  2.4  While Citizens Advice Northern Ireland acknowledges that HMRC is taking steps to improve the administration of the tax credits system we believe that the points highlighted in this document, and the subsequent recommendations, need to be urgently addressed in order that the tax credits system meets its stated objectives of "tackling poverty and making work pay."


Northern Ireland

  3.  Prior to April 2005 customers and advisers in Northern Ireland had access to a dedicated customer services facility within HMRC in the province. Cases could be referred to this team where they were particularly complex or could not be resolved through the tax credits helpline. This allowed for the development of close working relationships with key contacts within customer services in Belfast and meant that in almost all cases problems were resolved more quickly. This caseworker type system worked well as lines of communication were clear and open to advisers.

  3.1  In April 2005 the duties of the Customer Services Team in Belfast were transferred to England and integrated with the services for intermediaries in Great Britain. Removal of local Northern Ireland contacts has impacted on our work considerably and we have seen a reduction in the level of service provided by HMRC. Since this time advisers in Northern Ireland have continued to report greater dissatisfaction with the service and find it much more difficult to resolve complex and emergency queries. This adds to the time taken to resolve tax credit queries and in some cases can leave clients in very severe financial hardship.


  3.2  Local Northern Ireland customer service contacts should be reinstated to provide a caseworker type approach to solving problems where named contacts are given, ownership of issues is taken and the caseworkers within HMRC have the knowledge and technical capabilities to sort out complex and urgent cases in a timely and efficient manner. This reinforces the recommendation made by the Treasury Sub-Committee that a more client-focused approach is essential particularly if their cases are complex.

Tax Credits Consultation Group

  4.  Following evidence given before the Treasury Sub-Committee, advice agencies in Northern Ireland have been invited onto the Tax Credits Consultation Group. This is now the only route Citizens Advice Bureaux advisers have through which to progress tax credit issues which are not or cannot be resolved through the various Tax Credits Helplines.

  4.1  This group is intended as a forum to discuss policy issues, however, representatives from Northern Ireland have been forced to use this group as a means through which to pass any complex or urgent issues/cases in order to get some resolution in the absence of any other suitable alternative.

  4.2  While we welcome the opportunity to contribute to this group it is not a suitable forum through which to resolve more complex operational issues with individual cases. The Consultation Group does not provide the same level of detailed information that advisers need to be able to deal with clients effectively. Requests for detailed technical information about tax credit procedures are often met with general policy responses. In addition, the time taken to resolve issues through this group can be lengthy and the current format of a bi-monthly meeting is inappropriate to address urgent cases. It has also been pointed out that the volume of issues raised by the Northern Ireland representative is beyond the capacity of the group to adequately resolve. Advisers do not have direct access to staff within HMRC who can answer their queries and all issues must be e-mailed to the Secretary of the Group.

  4.3  A high level technical workshop for Tax Credits Consultation Group members has been arranged for late March 2007 (in London) to focus on particular areas of tax credits delivery which can cause uncertainty or difficulty for tax credit claimants. While we welcome this development it has taken some time for this to be offered to the voluntary sector and it is costly for Northern Ireland representatives to attend these centralised meetings held in England. Even where the costs of attendance can be met we have received no confirmation that this event will be repeated let alone repeated frequently enough to solve issues in a timely fashion.


  4.3  A faster and more and efficient way of addressing urgent or complex matters, that currently cause unnecessary delay in dealing with client's cases and create huge workloads for CAB advisers, is urgently needed, such as the caseworker approach detailed in paragraph 3.2.

Resource implications for CAB

  5.  HMRC has provided some funding to Citizens Advice in Northern Ireland for various initiatives to help with the administration of tax credits. Money has been made available to fund essential and necessary training for CAB advisers on the tax credits system. Some funding has also been made available to operate a consultancy type service on tax credits to allow the sharing of specialist knowledge within the Citizens Advice Bureaux network. Both have proved to be in great demand.

  5.1  The problems with the administration of the system continue to have an impact on frontline advice services. The increase in number and the length of time taken to deal with tax credit enquiries has had an impact on limited resources and the ability to cope with demand for our services. Therefore, the main resource requirement for CAB is a need to fund more frontline advisers to provide the necessary advice and assistance with tax credits claims and disputes. While the existing funding received from HMRC towards training costs and consultancy is welcomed, there is a wider need to link this into actual service provision through the funding of additional frontline advice work generated by the tax credits system.


  5.2  HMRC should issue and award service delivery contracts to the voluntary advice sector for face-to-face advice to the public on tax credits, especially given the value and complexity of the work undertaken. This should be seen in the context of a growing cross party view that the voluntary sector has an important role to play in the delivery of public services.

Time taken to resolve complaints

  6.  A complaint can be made on any aspect of the tax credits system, basically on anything which cannot be appealed, including disputing an overpayment. HMRC have a stated aim to acknowledge all complaints within 48 hours of receipt, and where complaints take longer to resolve they would keep the customer informed. This has not been the experience of CAB advisers.

  6.1  Resolving complaints on tax credit issues can take a long time. It is the experience of our advisers that this is an endemic problem within the tax credits system and something which needs urgent attention. In some cases responses to complaint letters submitted by clients or advisers are not received for many months, thus leaving some clients suffering real hardship. In some cases, even when a reply is received, it often fails to address all the points raised in the original complaint.

  6.2  A number of case examples have been provided to the Tax Credits Consultation Group for examination on this issue to illustrate how long replies to complaints are taking, but we believe this issue needs to be addressed at a strategic level by senior management at HMRC. Clients who contact the advice sector will benefit from representation at the Tax Credits Consultation Group, however, individuals who do not seek assistance will be subject to long delays in getting their complaints dealt with.


  6.3  The issues around delays in responding to and resolving tax credits complaints, particularly in overpayment cases where the client is not at fault, needs to be dealt with urgently at a strategic level by senior management within HMRC.


  7.  Overpayments remain one of the biggest issues with the administration of the tax credits system, leaving many clients in severe financial hardship. Advisers and clients report delays in receiving replies to correspondence, technical problems with no apparent resolution and insufficient replies to disputed overpayments which do not answer all the points raised, and do not fully explain the reason for the overpayment. These problems, coupled with a lengthy and complex process for disputing overpayments, which in turn does not provide for an independent right of appeal, do little to help simplify this process.

  7.1  Where a claimant alleges that an overpayment has arisen through an HMRC error, the claimant must prove that it was "reasonable" for them to believe that their award was correct. This test of reasonableness is undefined and does not appear to be applied consistently by HMRC staff, which in turn leads to many problems for claimants.

  7.2  There is inconsistency in decision making regarding disputed overpayments. We believe that decisions are often made without taking into account all the facts of the case as overpayments that occurred in almost identical circumstances have been decided upon differently.

  7.3  Recovery of an overpayment is only suspended during the first stage of the lengthy overpayment dispute process. This means that once an initial negative decision is received by a claimant HMRC continue to recover an overpayment even though the claimant may further dispute the overpayment in question.

  7.4  In relation to recovery of overpayments there has been a worrying development. Clients have been receiving letters in relation to overpayment recoveries warning of possible court action if the amount is not repaid. Overpayment disputes on these cases have been ongoing, with initial negative decisions, followed by further letters of complaint which in turn have not been replied to. The letters give clients seven days to pay otherwise court proceedings will begin. We have asked HMRC for their debt recovery procedure where there is an ongoing dispute, as there appears to be no standard procedure for dealing with this. In the meantime claimants are being threatened with court action.


  7.4  Claimants need to be provided with clear information regarding the reason for an overpayment and their rights to dispute it.

  7.5  Challenging overpayments should be easier and an independent right of appeal should be introduced. This supports the findings of the Treasury Sub-Committee who "strongly support... the introduction of a right of appeal to an independent tribunal against a decision by HMRC on a disputed overpayment" and the further recommendation that legislation to allow this right of appeal is introduced as a matter of priority.

  7.6  We recommend that HMRC provide detailed guidance on their definition of what is reasonable in "it was reasonable for you to think your payments were right" test contained in COP26.

  7.7  We recommend that HMRC monitor the decision-making standards for tax credit overpayments and other decisions to ensure consistency and accuracy.

  7.8  We also recommend that the suspension of recovery of overpayments is extended beyond the first stage of the overpayments dispute process to the entire overpayment dispute period no matter how long this may take.

  7.9  The procedure for debt recovery in cases where a dispute is ongoing, following an initial negative decision, needs to be clarified as claimants are receiving letters threatening court action even though they are disputing the overpayment.

Operational issues

  8.  There remain a range of operational problems with the administration of tax credits which can also have negative impacts on clients.

  8.1  Problems with paperwork. Clients are often inundated with computer generated award letters and other correspondence from HMRC which can be difficult to understand or contradictory in content, and clients are often confused about what action they need to take. However correspondence from claimants/advisers which is sent to HMRC is often ignored and goes unanswered. Citizens Advice continues to receive evidence from clients that payments just stop or are reduced without any documentation being received to explain what is happening with the award.


  8.2  Award notices should detail clearly how an award has been calculated, should be sent out before there are any changes to an award to explain the date and reason for the change and detail the amount and reason for any overpayment. The action a claimant is required to take should also be clearly explained.

  8.3  We recommend that HMRC acknowledge and action all correspondence received from tax credit claimants/advisers within set deadlines.

  8.4  Computer problems. There seems to be a range of technical problems with the computer system employed by HRMC which appear to have no immediate resolution. Automatic payments cannot be made and claimants either do not receive any payments at all, receive incorrect payments or have to have their payments processed manually (which often leads to an overpayment situation when a particular technical problem is resolved).


  8.5  We recommend that HMRC conduct a review into the range of technical errors which are still occurring on the computer system used for tax credits, and ensure that all necessary resources are directed to permanently fix these problems in order that claimants are not adversely affected by these internal technical problems.

  8.6  The issue of overpayments occurring as a result of manual transactions being made on a case with technical issues which is then resolved, and automatic payments reinstated, needs to be addressed as claimants are being penalised for something which is beyond their control.

  8.7  Information from HMRC Staff. There continues to be evidence of incorrect and inadequate advice from Tax Credits Helpline staff and from staff in the local Enquiry Centres. In some cases claimants have reported changes of circumstances to HMRC staff and these have not been actioned or there has been a delay in getting this information added to the system which can lead to incorrect awards and resulting overpayments.


  8.8  We recommend that the training provided for all HMRC staff who deal with tax credit queries is widened to include all aspects of tax credits, for example, claims, overpayments and interactions with other social security benefits, so that claimants are provided with full and accurate information regarding their claim.

  8.9  We recommend that HMRC ensure that all changes of circumstances reported by tax credits claimants are actioned quickly and efficiently.

  8.10  Communication between HMRC departments. The lack of communication between different tax credit departments involved in a claim often results in a lack of continuity in following up problems with cases leaving claimants completely uninformed about the progress of their case. In some cases HMRC staff deal with letters received by claimants or CAB advisers without checking the history of the case and any previous actions taken on the case by other staff members. In a recent example which has been highlighted to the Tax Credits Consultation Group problems arose as the Debt Recovery Team in Cumbernauld did not appear to know about the existence of or the procedures for referring to the Debt Management Team in London to which all jointly and severally liable disputes are referred.


  8.11  There needs to be more joined-up working between the different departments involved in tax credits so that ownership is taken of a case and it can be progressed efficiently even if several different departments need to become involved to resolve the case.

  8.12  External communication issues. HMRC have acknowledged that there is room for improvement on this issue and we welcome this. In order to advocate on behalf of our clients we need to have access to timely information about changes to policy and procedure before they are introduced. It has often been the case that advisers find out about changes to policy and practice after the changes have been introduced which adds to their workload and frustration with the system. It would also be useful to get Northern Ireland specific information where the situation differs in Northern Ireland. For example, when the new rules regarding young people on training schemes following the extension of Child Benefit was introduced Northern Ireland specific information was very difficult to access and in many cases the wrong information was given out on the helpline.


  8.13  We recommend that HMRC notifies the advice sector in advance of any changes in policy or procedure that are likely to have an impact on tax credit claimants so that we can be properly equipped to help claimants.


  A client of North Down CAB is being "hounded" by HMRC regarding a tax credits overpayment even though the client had reported all changes in circumstances throughout her claim. When the bureau initially contacted the Helpline the adviser was told that nothing would have to be paid because any change in circumstances had been reported by the client. Now HMRC are saying that they have no record of changes being reported and are demanding a payment of over £300. The adviser bureau wished to highlight this as a continuing issue with tax credits where overpayments are being claimed from clients despite proof of clients reporting changes of circumstances. The bureau feels that this is very unfair.

  A client contacted Down District CAB about a tax credit overpayment. The client is a single parent with 3 children. Her eldest daughter stayed in full-time education until she was 16 years old. The client informed HMRC of the change in circumstances when the circumstances changed and the award was reduced. Her second daughter stayed in full time education until she was 17 and then went to University. The client again got in contact with HMRC and the award was reduced. The client's youngest daughter left school at 16 and then returned to college for two years and left in June 2004. The client reported this to HMRC and was informed that as he daughter had left full time education she would no longer be able to claim CTC and her payments were reduced to approximately £8 per week. The client continued to receive this payment until early 2005 when payments were stopped. The client then received a letter saying that she had been overpaid CTC of approximately £1,200. The client queried this with HMRC and was then informed that she actually owed £4,000 in overpayments. The client disputed the overpayment through the complaints process in 2005. She heard nothing more about this until January 2007. The client returned home from work and found a hand delivered letter had been posted through her letterbox. The letter said that someone had called at her house that day regarding her overpayment of CTC and gave a contact number for the client to get in touch. The client contacted the number and informed HMRC that she had formally disputed this overpayment in 2005 and that she had not been contacted again since. The client was informed that there was a record of the complaint being lodged but that all the other information about the claim had been lost. The client was sent out new complaint forms to complete and return which she did in January 2007. The client received a letter in February 2007 saying that because the complaint had not been received she could no longer pursue this matter and that her overpayment case has been forwarded to the Magistrates Court. The client is extremely concerned about the way this case has been dealt with by HMRC and the subsequent threat of Court action.

  A client of Down District CAB is married with one child. She is entitled to tax credits but her payments have recently stopped. The client contacted the Helpline and was told that this is due to an overpayment from the previous year. The client`s payments will not start again until the middle of April 2007. The Helpline have told her that they have sent out a form to dispute the decision. The client cannot afford to pay her childminder and does not know what to do. She tried to explain this to the Helpline but was just told to complete a complaint form. HMRC just stopped this client's award without prior notice leaving her in severe financial hardship.

  A client of Cookstown CAB has been off work sick for six years. He is aged over 50. He started work again in May 2006 and stopped claiming Income Support and claimed WTC. He is single with no children. He had to stop work again at the end of August 2006 due to his health. He reclaimed Income Support. He received a lump sum from HMRC of £2,500. He has been in contact with HMRC regarding this and they have advised him that when he made his claim for WTC it was payable for a period of one year and that it doesn't matter if you stop work. He has spoken to the Helpline about this and has been advised that he is entitled to £112 per week WTC even though he is claiming Income Support. The client wanted to check this was correct. The wrong advice was given to this client by the Helpline which will lead to the client having a large overpayment of WTC and may also lead to problems with his Income Support claim.

  A client of Newtownabbey CAB called into the bureau with a tax credit enquiry. The client's son was awarded high rate care and low rate mobility of DLA and the client notified HMRC of this change of circumstances. The client then received a letter in January 2007 stating that as a result of the change of circumstances she is no longer entitled to tax credits and that she owes HMRC over £5,600. The client was very stressed about this as she cannot afford to pay this back. The client is also being paid by manual payments due to a computer error. The bureau completed a benefits check for the client which actually showed an increased entitlement to tax credits. The bureau contacted the Helpline on the client's behalf and was told it was an error which is being fixed and her entitlement will continue. The bureau was also advised that the client will continue to be paid manually as the error in her computer claim cannot be resolved.

  A client of Lisburn CAB informed HMRC of a change of circumstances five months ago and they are still processing this change.

  A client of Ballymena CAB is in receipt of Income Support, DLA and CTC. The client has two daughters living with her. The oldest is 17 and studying and the youngest is 13. The client moved to a new house and applied for a Community Care Grant as there is only one bed in the property and she needed help with essential household items but this had been turned down. The client's CTC payments had stopped for over a month and the client did not know why. The client was also paying back an overpayment from a previous year. The bureau contacted HMRC on the client's behalf who confirmed the case was closed in error.

  A client of Ballymena CAB called into the bureau to say that he has never received the £85 he was due in compensation from HMRC, any refund of the money he is owed or any further correspondence regarding his case. In response to a complaint from the bureau HMRC eventually replied 12 months later in July 2006 saying they would fix the problem with the client's case and send him compensation. It is now three months later and the problem is still not fixed and compensation has not been received by the client.

  A client of Ballymena CAB has an ongoing tax credit overpayment. A letter was sent by the bureau to HMRC regarding the overpayment in April 2006. A call was received from HMRC in relation to this case six months later to say that they are still looking into the case. No written reply has yet been received following letter of complaint.

  A client of Carrickfergus CAB is married with two children and has been in receipt of CTC of £40 per month. She received a letter from HMRC stating they were advised of a change in her circumstances and that she now owes HMRC £464. The client contacted HMRC about this and advised that there has been no change in her circumstances. Following this call she received another letter from HMRC stating she had not responded to their last letter. The client contacted them again by telephone and confirmed that she had contacted them after the first letter and advised again that there has been no change in her circumstances. Another letter was then received stating she had not responded. The client's husband then contacted HMRC and confirmed with the staff member that his wife had made contact and that there was no outstanding amount. Since then the client has received other letters stating that she still owes £464 due to a change of circumstances. The client wants to know what else she can do. The client has called HMRC three times and it has been confirmed that she has responded by telephone yet she continues to receive letters about this.

  A client of Armagh CAB called into the bureau for help. She is single and has a two year old son in receipt of DLA. She does not know how much benefit/tax credits she receives. She has literacy problems and does not fully understand the letters she receives. Although this client would have received information from HMRC regarding changes of circumstances she has difficulties with this due to her literacy problems. The bureau feels the system is far too complex and bureaucratic and only serves to marginalise further those in greatest need. This client is owed £2,900 as a result of not knowing to inform HMRC of her son's DLA award.

  Derry CAB who was acting on behalf of a tax credit claimant received two identical letters from HMRC Customer Support Unit stating that they aim to send a full response by June 2006 to a complaint made in October 2005.

  A client of Antrim CAB is a single parent with three children in receipt of Income Support, CTC and Child Benefit. She receives Carer's Allowance for looking after her son who receives middle rate care of DLA and has done for the last three years. Her CTC stopped in April 2006 and when she contacted the Helpline to enquire about this she was told that there had been a computer error and that HMRC were trying to correct this. Meanwhile the client received no CTC which caused her financial hardship as she has financial commitments which she was struggling to meet. In June 2006 the client began to receive a four weekly payment of £189 but she did not know what this was or why it was such a small amount when her normal payment had been much more than this. The client came into the bureau for help with this. Despite numerous contacts by the client to the Helpline the mistake was not rectified until the bureau advocated on the client's behalf. The client was on the verge of having to leave her rented accommodation and was in considerable financial hardship. After the bureau's intervention she will now receive £3,655 of arrears and her correct level of CTC from November 2006.

  A client of Derry CAB has been informed by HMRC that her second application form for tax credits has been lost. The client contacted the Helpline about this and was told not to fill in another form as this would mix up the computer. However when the CAB adviser contacted the Helpline on the client's behalf they were advised to make another application. The client is living on approximately £140 per week and is in severe financial hardship. This conflicting information is not acceptable.

  A client of Newry CAB is a lone parent with two children. She receives CTC, Incapacity Benefit, DLA and an occupational pension. She receives free school meals due to her entitlement to CTC. Her local Education and Library Board have asked her to complete a renewal form for school meals and she has been asked to send in her new tax credit award notice. She has not received this and contacted HMRC who have said that due to a technical error it cannot be printed. HMRC have said they are unable to give her any documentation which states her yearly income. The local Education and Library Board have confirmed that without this confirmation her free school meals will stop.

  A client of Ballymena CAB is aged 36 and works 31 hours per week earning approximately £10,000 gross per annum and she has one child. The client received a large payment of over £1,700 of tax credits directly into her bank account in May 2006. The client queried this immediately with HMRC and was advised that due to an error her income was recorded as £1,020 instead of £10,020 which has led to an overpayment. The client was given contact details to send a cheque for the amount of the overpayment so that her ongoing CTC and WTC payments would not be affected. The cheque was cashed at the end of May but the client then noticed a reduction in her tax credits awards. The client made several calls to the Helpline and has been told on several occasions to contact the Payments Helpline. The client has been advised that her cheque was either never received or was credited to the wrong account but no-one has ever taken responsibility for resolving the issue. The client has received letters from the Payments Helpline "to confirm the arrangement agreed with you to pay the above amount of £1,766.40 monthly starting on 23 May 2006." The reduction to her existing awards is causing the client great difficulty with budgeting.

  A client of Ballymena CAB came into the bureau after checking her bank statements and confirming that her last tax credit payment was made in August 2006 for £105 and no further payments have been made since then. Her Child Benefit payments have also stopped around the same time. The client was in distress and expressed concern that she could not afford to pay her bills due to the irregularity of her tax credit payments.

  A client of Ballymena CAB came into the bureau for help with a number of overpayments. The client has an overpayment for 2003-04 of £1151, for 2004-05 of £2,942 and for 2005-06 of £1,477. The client has never received satisfactory explanations of how the overpayments came about. The client has disputed overpayments but does not feel that the response from HMRC provides any explanation or takes into account any of the facts. The response from HMRC states that the overpayment arose because the client's husband did not report his actual income for 2003-04 until February 2005. The client did not know what to do next. The bureau was able to establish that the overpayments for two of the tax years were due to HMRC error. The bureau wished to highlight that the explanations from HMRC do not fully explain how overpayments arise and in this case the arguments put forward by the client do not appear to have been considered and answered sufficiently.

  A client of Central Belfast CAB is married with 2 children. Her husband is employed and they are in receipt of CTC and WTC. They have been told by HMRC that they have been overpaid as they had been classed as being on Income Support. The client pointed out that they could not be in receipt of WTC and Income Support at the same time and the client has phoned and written to HMRC repeatedly to inform them of the error. They are now having an overpayment deducted from their tax credit payments for six months and are suffering hardship as a result. This was due to a HMRC error which the client tried to rectify and yet now they are having an overpayment deducted from their award. The bureau helped the client to register a formal complaint about this.

  A client of Armagh CAB is married with one child in receipt of CTC. In August 2006 she received 11 cheques amounting to £2,200. She checked her entitlement to this money on three occasions and was advised by HMRC that she was entitled to it. She has now received a form to complete regarding repayment of the overpayment.

  A client of Ballymena CAB had a joint claim for WTC and CTC with his wife in 2003-04 but they separated in February 2004. The client notified HMRC of the separation but payments did not stop until June 2004. The client received notices to pay for £1,857 and £4,245 but it is not clear which years they are for. The client wrote a letter of appeal to HMRC but was informed there was no right of appeal. The client has so far paid back approximately £900 of the overpayment. The client came into the bureau to find out if there is any way of challenging the overpayment. The bureau was able to confirm with HMRC that there is a note on the computer system to confirm the separation but that the change was not actioned and therefore the client has been overpaid. Also the letters received from the Debt Recovery Unit do not make it clear which year the overpayments refer to.

  A client of Ballymena CAB brought in her annual declaration to the bureau for help with completion. The client has been working 33 hours per week since April 2006, not 16 as stated on her annual review. All the other details were correct. The client had her P60 showing her earnings for 2005-06. During the course of the interview with the CAB adviser it became apparent that the client's employer is still paying WTC to the client through their wages. The client is also receiving WTC payments directly into her bank account. Due to poor literacy levels the client did not realise that the employer should no longer be paying WTC and so now the client has been overpaid by her employer by more than £3,000. The bureau feels that the tax credit system is so complicated that neither the client nor the employer realised the payments were being made in error.

  A client of Down District CAB was employed since October 2004. She works 19 hours a week and has been told she is being made redundant and the business is to close in September 2006. The client has just recently got married and has two children aged 12 and nine. The client informed HMRC of the change of circumstances and she was sent new forms to complete. The client did not get the forms sent back in time and her award stopped. She then returned the forms and was told by the Helpline that because they had been sent back within 30 days the claim would be OK. HMRC have paid back some of the money owed to the client but she is still waiting on the rest. In the meantime she has been told by a member of staff from HMRC that she has an overpayment of £7,000. A different member of staff has stated that the overpayment is £4,000 and she has also received a letter stating that the overpayment amounts to £2,000. No-one within HMRC is able to explain how the overpayment has occurred or why she has been given three different amounts. The client has no idea how an overpayment could have occurred in the first place as she is on a very low income which has not changed.

  A client of Antrim CAB called into the bureau with a number of amended award notices. The client and her husband had received a large number of these plus copies which she could not understand. This couple is Polish and speaks little English. They received up to six award notices plus copies as an amended award when the information could possibly have been put on two award notices at most. This was worrying for the client and took a long time for the bureau to check through and reassure the client.

  A client of Newtownabbey CAB has not received any tax credit payments for four weeks. The client contacted the Helpline and was told there were three payments on the system which would be sent out that week. The client called into her local Enquiry Centre about these payments and was also told that three payments had been sent out to her. The client still has not received any payments.

  A client of Ballymena CAB is married with one child aged 15. The client works full time earning approximately £23,000 per annum and his wife works part-time earning approximately £8,400 per annum. The client has a tax credit overpayment of £1,765 from 2003-04. The client has received an explanation from his local Enquiry Centre that the overpayment occurred due to an increase in income and his son was recorded as being in receipt of DLA when he is not. The client's most recent provisional award notice for 2006-07 also states his son is in receipt of DLA. The client has phoned the Helpline and told staff at his local Enquiry Centre that this is incorrect. HMRC failed to act on the information given by the client that his son was not in receipt of DLA despite the fact that the computer system clearly shows the client reported the mistake in June 2003. Due to this the client now faces a large overpayment.

  A client of Ballymena CAB has received a letter from HMRC stating an overpayment of £144. The client could not understand how the overpayment had arisen. The letters that advise clients they have been overpaid tax credits do not explain how the overpayment occurred and this causes worry and distress for clients. Clients then have to contact the Helpline or come to an advice agency to get an explanation for this. The bureau feels that if the original letter explained how the overpayment occurred then unnecessary work would be avoided.

  A client of Down District CAB is married with two children. Both clients work and receive tax credits. The client has been informed that she has an overpayment of £5,000 and she has no idea of how this could have arisen as she has always informed HMRC of all changes of circumstances. She has tried to contact the Tax Credits Helpline about this and has found the advisers to be very unhelpful. The client has a number of award notices and is completely confused and has filled in a form to dispute the decision. This client has made a point of contacting the Helpline each time her circumstances have changed in order to avoid an overpayment.

March 2007

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