Epping Forest District CAB - Citizens Advice Case Studies

Epping Forest District CAB

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Mr & Mrs T - Tax Credit Overpayment

Figures published on 1 June 2005 by the Inland Revenue showed that nearly 2 million families claiming Tax Credits were overpaid last year - revealing for the first time not only the number of people who have been overpaid but also those on low incomes who have been underpaid and are missing out on their entitlements.

Over the last 18 months Citizens Advice Bureaux across England and Wales have seen thousands of clients who have been overpaid Tax Credits. Some people are not clear why they've been overpaid. Others have received letters from the Inland Revenue telling them that there has been a mistake in calculating their award, whilst some have received lump cash sums into their accounts in error. People have seen their payments suddenly drop or stop altogether and are often totally confused about what's gone on and are struggling to handle the drop in income.

Both the Parliamentary Ombudsman and Citizens Advice have reported chronic failures in the administration of the tax credit system. This amalgam of taxes and benefits relies on painstaking assessments of what families are entitled to are make a year after they get the money, many have found themselves under taxed by thousands of pounds which have been clawed back by reductions in future payments. The consequence has been hardship for thousands, as the Prime Minister acknowledged in the commons on June 22nd 2005.

Loughton clients, Mr & Mrs T were in this distressing situation, having received Inland Revenue demands for repayment of tax credits overpaid for a couple of years amounting to over £4,000. Our clients had always kept the revenue fully informed of their circumstances and even though the Inland Revenue admitted they had made a mistake, continued to insist on recovering the overpayment from our clients. Over the course of several months we helped Mr & Mrs T appeal against the decision and eventually the Inland Revenue advised our clients in June that they would not pursue the request for repayment further.

Roger Puts His Life Back Together

Roger has a limited ability to read and write and suffers from memory lapses. He suffered two heart attacks in 2004 and became very depressed. Subsequently he got into financial difficulties with council tax, rent and bank loans. He was unable to cope and was in danger of losing his home. Roger came to the CAB for help. Barry and other advisers at Loughton branch helped Roger put his life back together again. With their help Roger got over £4,000 in backdated housing benefit and £1,100 in backdated council tax benefit. The court hearing for possession of his home was adjourned indefinitely following our help and the pending bailiff action was withdrawn.