Tax Credit Overpayments – guidance received from DWP

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    I would be interested in any comments about this query we sent to the DWP and the reply we received.

    “I have a case where the IR have identified that a claimant has been overpaid WTC. Using the calculation methods in the guidance there is no ongoing entitlement to WTC so we will remove it from thr HB/CTB claim.

    However, the IR have informed us that as the WTC is being paid through the claimant’s wages, they will be continuing to make payments. This is because of the arrangement that they will pay the full award next year without deducting any overpayments until they carry out the reconcilliation and the new assessment. They state that there is no point stopping the payments as the employer would not have time to implement it before April.

    Are we right to remove the WTC from our claim and do we continue to ignore it from April? ”

    The reply was –

    “Provided the claimant is still receiving a payment of tax credit you have to take it into account as income, irrespective of whether it is correctly paid or overpaid. We will be issuing a circular with additional information on recovery of overpayments, top-up payments and renewals very soon.”

    So now we are a bit confused about deciding when we should follow the guidance and when we should follow the legislation. Any ideas anyone ?


    This has come up in previous posts, I fear it will regularly from now on, as the full impact of this scheme takes hold!
    I still do not know for sure how I am supposed to treat this “income” .
    I await this imminent circular!
    As a plus point I doubt you will get many enquiries as to why you are using an income that the claimant should not be getting that they obviously are, but, as the actual amount of Wtc in payment seldom matches the amount to be used for Hb/Ctb assessment you could get queries on the exact figures used.
    Looking forward to answers or suggestions.

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