Tax Credits and O/P HB

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  • #19722

    If all working families tax credit incomes are removed from claims wef 6.4.03 isnt the potential for overpayments quite high. As we have only recieved about 20% of the proformas we sent to CBC there are going to be a large number of claims that the WFTC has been removed and the claim for HB will be assessed on earned income only. When the LA eventually finds out that they have been in receipt of a new tax credit and the claim is reassessed there will potentially be an overpayment.
    This will create more work to recover these overpayments and potentially have a considerable impact on BVPI79b.
    Has anyone got any thoughts on this issue?

    Julian Hobson

    Have a look at Paul Howarths reply to the first letter in HB Direct 14 (out yesterday). Looks as though they might be looking at official error (full subsidy) ?

    chris harvey

    There’s more to this than meets the eye. If the NTC claim is processed and awarded before 7th April should not the claimant notify us so we can amend the claim before an overpayment situation arises. The proformas are a bit like the IS/JSA notifications we get via the RAT, they are a back up in case the claimant forgets to notify us themselves. Overpayments where the claimant has come off IS/JSA and not notified us are always classed as claimant error. Why should tax credits be any different?
    However where the IR are buried in NTC claims and do not process them by 7th April a different situation arises. There is no overpayment in these cases because we only include the NTC payment from when it is paid, treating the arrears as capital.
    The potential for confusion and misunderstanding that these new credits are creating is huge and I think things will get worse before they get better.

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