The government has introduced a "streamlined procedure" for deciding whether overpayments should be recovered, in order to clear the current backlog of disputed overpayment cases.

Getting Revenue and Customs (HMRC) to accept that official error exists at all was a significant step forward; and their next defence was to say that, even if official error was shown, the claimant should have "reasonably known" that they were being overpaid. In other words, claimants had to have a better grasp of tax credit law than the people applying it! If, for example, someone got tax credits of £2,000 a year but then notified HMRC that their pay had gone up by £50 a week, they should have reasonably known that their tax credits should have gone down even if HMRC didn't act on the information supplied to them.

The new overpayments procedure is to be applied to cases which HMRC find, after applying certain risk assessment tests, to be "low risk". It involves a brief investigation of how the overpayment arose and a shortened calculation of the amount that should be written off. What we don't know as yet is how cases will be classed as "low risk".

Claimants then have the choice of accepting the amount offered, or asking for a full calculation. As a full calculation and investigation might show that there was no official error after all or the actual official error was less than that arrived at by the shortened calculation, it should usually be in the claimant's interests to accept the shortened calculation.

The streamlined procedure is being used to decide outstanding disputes from 2003-4 and 2004-5. It will continue to operate until the backlog is cleared. But cases that have already been decided on the normal basis will not be reopened, which could be unfair on the many claimants who are already repaying contentious overpayments.

New cases which do not meet the "low risk" criteria are being decided on the same normal basis that applied before the streamlined procedure was introduced, that is they will be subjected to a full examination. Claimants in this category will have one of three decisions applied to them and will be told:

• The overpayment arose from official error which the claimant cannot reasonably be expected to have spotted and the whole overpayment will be written off; or
• The claimant should reasonably have known that their awards were wrong and the full overpayment will be recovered; or
• Only part of the overpayment arose from official error and that part only will be written off.

As said, claimants who had already challenged their overpayments and received an adverse decision cannot ask for their case to be re-examined. So the decision as to whether an overpayment is recovered is governed more by the date on which it is challenged than by the facts of the case.

None of the above prevents the claimant exercising their right to use the disputes and complaints procedures that HMRC has established. First, claimants can contact the Overpayments Disputes Team, TCO, Preston PR1 0SB. It's also worth checking the Code of Guidance on Overpayments on www.hmrc.gov.uk.  Complaints can be directed to the director's complaints team on 0151 966 1151.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.