Tax Credits- claimant paying back arrears

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  • #19952
    arenton
    Participant

    Hello folks,

    I wonder if anyone could help me on the following-

    We have a case where a new HB/CTB claim was received – but they did not qualify due to the level of income received. WTC and CTC were in payment. The claimant has received her notification and has contacted us to say that although the amounts of WTC and CTC we have taken into account are the correct amounts she is being [b:e726bba792]paid[/b:e726bba792], she is paying back a set amount each week direct to the Inland Revenue by Standing Order. She thinks we should adjust her HB/CTB claim to take account of this.

    We have not come accross this situation before (usually the overpaid Tax Credit is recovered from their ongoingTax Credit award). Can we reduce her Tax credits by the amount she is paying back?

    eg. she gets £60.00 pw from IR, but pays back £20 pw. Can we only assess her HB/CTB based on £40 pw (even though her letter of award shows she gets £60pw)???

    Can anyone confirm the correct course of action??

    #1623
    Anonymous
    Guest

    Is there any evidence of the standing order is for TC’s? It may be that she is paying arrears of TAX not TAX CREDITS.

    Does she have any letters from TC’s confirming the repayments?

    #1624
    arenton
    Participant

    Hello Martin,

    Thanks for your input. Yes- she has a letter confirming the payments are definately her repaying overpaid Tax Credits.

    #1625
    Anonymous
    Guest

    I’d go with the £40 then.

    My reasoning is that if she was paying back via the normal way (i.e reduced TC’s) then you would take the amount she is actually receiving.

    As she gets, essentially, £40 net I’d assess on that.

    Deeply weird way of repayment though 😯

    #1626
    Anonymous
    Guest

    Agree with Martin on both counts
    i.e.
    1. it [b:076ca5950b]is [/b:076ca5950b]weird
    2. taking £40 makes sense

    #1627
    Mark
    Participant

    It might make sense – but is it legal? I don’t think so. You don’t even know whether the repayment level of £20 is voluntary (not that this really matters). I’ve come across the same scenario when the tax credit overpayment was being repayed after relationship breakdown and reshackingup with someone else (i.e. the claimant is now a member of a different couple).

    HB Reg 40(6) says we must take into account the amount of Tax Credits after a ‘deduction’ for overpayment recovery – but this isn’t happening in this case. As far as I am concerned this provision was rendered rather redundant by the newer HB Reg 32 which says we take the instalment amount into account anyway. But neither of these rules helps your claimant.

    So it ain’t fair but I reckon you should be taking the full £60 in account.

    #1628
    Anonymous
    Guest

    5.10pm Too late to get into a discussion on this one. You’re probably right anyway.

    Just wanted to say that “reshackingup” is an awesome word.

    😀

    #1629
    arenton
    Participant

    Thanks for all your contributions.

    I have also had a trawl through old posts, and have found the following-

    https://hbinfo.org/forum/viewtopic.php?t=6083

    (Not at all convinced i’ve done that correctly!)

    which seems to deal with the same kind of situation. So i think i am going to agree with Mark (and the above link) and assume we [b:6af1349ea5]cant[/b:6af1349ea5] take account of her repayments. She can always appeal!!!

    Cheers again for your help.

    #1630
    arenton
    Participant

    Thanks for all your contributions.

    I have also had a trawl through old posts, and have found the following-

    https://hbinfo.org/forum/viewtopic.php?t=6083

    (Not at all convinced i’ve done that correctly!)

    which seems to deal with the same kind of situation. So i think i am going to agree with Mark (and the above link) and assume we cant take account of her repayments. She can always appeal!!!

    Cheers again for your help.

    #1631
    markp
    Participant

    I’m inclined to agree with Mark on this.

    I had one case where tax credits had ceased and the final month or so was, in fact, an OP of TC. Still had to treat him as having TC until the payments had ended. Matter is to go to appeal and so I await a tribunal decision on treatment of TC as income when it isn’t (or something like that!)

    Do I know what I'm doing? The jury's out on that........................

    #1632
    APT
    Participant

    [quote:c4acda1c27=”mark p”]
    I had one case where tax credits had ceased and the final month or so was, in fact, an OP of TC. Still had to treat him as having TC until the payments had ended. Matter is to go to appeal and so I await a tribunal decision on treatment of TC as income when it isn’t (or something like that!)[/quote:c4acda1c27]

    I’ve been to tribunal with a claim where WTC continued to be paid from November to March as HMRC forgot to sent the end letter to the claimant’s employer. We used the payment for that period as the claimant was receiving that income. The tribunal backed our decision.

    The claimant’s rep was talking about taking it to the commissioners but I’ve not heard anything about it recently.

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