I am very alarmed by the DWP advice quoted by Linda. Here is what the Regs say at Reg 33(2B):

[i:6fc988473f]”Subject to paragraph (2), where the claimant receives payment of a child tax credit or working tax credit in respect of a particular week, the amount to be taken into account under paragraph (1) shall be the actual amount of such payment received.”[/i:6fc988473f]

[The “subject to paragraph (2)” bit just means that you disregard anything in Schedule 4, like surplus earnings disregard in a 30-hour case]

The reason why the Regs are carefully drafted like this is precisely, totally and utterly so that you [b:6fc988473f]don’t[/b:6fc988473f] take into account the headline rate of TC entitlement in a case where the actual payment is reduced to claw back an overpayment. I would not suggest following the quoted DWP advice on this point.

There are two issues arising from Tax Credit overpayments:

– In HB & CTB, the council doesn’t care how or why the amount of TC actually paid was arrived at: you just take into account the cash received, and any adjustments at the IR end are irrelevant
– But lump sum clawbacks, equivalent in principle to stopping all HB payments until you have recovered an overpayment, obviously cause hardship by severely disrupting the claimant’s income stream. It seems to me that these hardship payments are equivalent in principle to reducing the rate of recovery in an HB case to £8.40 or whatever. But the IR won’t see it that way because they think in terms of whole tax years, rather than week-by-week entitlement. They will say: how can someone receive further payments of TC this year when they have already had their full whack? So the hardship payments are not described as TC payments. The DWP will have to decide how to deal with them in HB.