Tax credits still causing chaos

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/