Revised Tax Credit award

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    Can anyone advise if there has been any guidance yet on how to treat a revised award (due to IR error)?

    I have a customer whose original award of WTC, notified 26.5.03, was £3649.02. The wages used in the IR calc were too low and the hours worked too high.

    The revised notification dated 3.7.03 has WTC at £3018.55, with £929.55 already paid.


    Don’t think that is specifically covered in the guidance.

    How about…..

    [b:96f82d3d09]If you have already paid HB on the basis of the original award notice:[/b:96f82d3d09]
    * Calculate it again using most recent award.
    * Treat the “already paid” as per Kieron Erikson case study in Sect 14
    * Work out the difference between the new and previous HB figures and treat the excess as a non-recoverable overpayment due to departmental error.
    (i.e. daily rate for HB1 minus daily rate for HB2 X no. days between award notices)

    That way the customer doesn’t suffer due to an IR error and you still get maximum subsidy.

    Any other thoughts?


    I have taken this question to DWP with a couple of cases. Their answer is:

    New annual award minus amount already paid divided by number of days from date on award notice to the end date of the award. Affects HB/CTB from Monday after the date on the award notice.

    I think this means the same thing as what Peter is suggesting although I don’t see where Peter’s overpayment comes from.

    This is also a method I have some serious problems with – not least because the ongoing HB/CTB can be adversly affected by the date on which the IR process the change to the Tax Credit award.

    This sort of scenario is even more interesting when the IR increase the Tax Credit award because it raises all sorts of questions about arrears.

    Are there no takers for my earlier tax credit poser?


    How should I deal with this one?
    Customer goes onto JSA 4/03/03

    1st award letter dated 27/03/03 gives her WTC 2179.52
    paid direct till 18/05/03 ( 85.12 on 7/04/03 then 83.30 every two weeks till 5/05/03), from 18/05/03 pyt by employer, who no longer employs her.

    She starts work again 7/04/03 ( different employer)
    JSA is paid to 13/04/03 (don’t ask me why)

    2nd letter dated 4/06/03 gives her WTC of 8.27
    page 3 has PAID amount of 493.74
    OVERPAID 485.47

    3rd letter dated 13/06/03 WTC 3026.82
    page 3 has PAID as 603.84
    2422.98 balance
    any replies welcome


    The example at 1510 on amendment 10 seems to contradict the DWP advice given to Mark (as above). This says that the change of circs for a revised award takes effect from the day after the last payment at the old amount not from the date of the notification letter.
    Have any authorities out there got a definitve procedure in place for revised awards? I dont want to rewrite the guidance to our assessors until I feel more confident about amendment 10… 😳


    I did have some procedure notes for assessors based upon Amendment 9 which appeared to make life easy by allowing us to use the IR notification letter date. I had advised the assessors to use this method for revised awards as well as new awards (in the absence of any concrete advice from DWP) which is what the DWP have told Mark (above).

    However, Amendment 10 is saying we should not be using the date of the IR notification letter and therefore appears to re-introduce the concept of structural overpayments (Amd 9 would have done away with these). What I cannot understand is why this is the way to do it for revised awards but for new awards that have had an amount already paid the method is different.

    Any thoughts? :21:


    I just been looking at the last part of the example in 1510 – I make it 175 days from 14 Oct 03 to 5 April 04 (inclusive) which means the result would be £73.27 not £72.85.

    Also I notice that the corrections to Section 14 Case studies B & C both seem to round down regardless of the remainder i.e. CS B CTC £112.05 instead of £112.06 and CS C CTC £115.68 instead as £115.69.

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