Families are being left in financial difficulty because of the government’s attitude towards the overpayment of tax credits, a report warns.
The review of tax credits, a year after they were introduced, states that the “stringent approach” of the Inland Revenue towards overpayments, and the way that money is recovered by reducing tax credit payments, have led to hardship.
The report suggests that immediate changes should be made to the system, with clearer notices letting people know the amount they are entitled to and the circumstances in which this may change.
It advises that any notification about an overpayment should be made separately, along with information about how the overpayment came about and how the sum will be recovered.
Overpayments should be collected more slowly and any overpayments resulting from an official error should not be pursued, the report suggests.
Kate Green, chief executive of the Child Poverty Action Group highlighted the problems that overpayments are causing.
“Claimants are being paid incorrect amounts through no fault of their own and are then having money taken off them leaving them and their children with very little to live on,” she said.
The report reveals that many people still do not understand the tax credit system. Leaflets, and a face to face and telephone service, would help make sure people are not missing out.
However, the report concludes that the government’s agenda has reduced child poverty and that tax credits have played a part in helping to do this.
Tax Credits: One year on from http://www.cpag.org.uk/
