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Forum Home  →  Discussion  →  Income support, JSA and tax credits  →  Thread

Tax Credit Overpayment

Shell Dent
forum member

Karbon Homes

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Total Posts: 34

Joined: 10 February 2014

Hi I am hoping that someone can help. I am resigned to advising my client that they need to pay back half of an overpayment which occurred due to their ex partner not informing Tax Credits Office of the split.
I have had a couple of these and feel that this is slightly unjust that a ex partner can continue to receive Tax Credits and fail to notify Tax Credits of the change. The Overpayment is then raised and recovered from BOTH parties.

I have requested that the overpayment be recovered from the party that received the income and have asked for “Common Sense to prevail” however, they have stated that the overpayment needs to be recovered from both parties.

I understand that the change needs to be reported but it seems that this process penalises the parent without care who has trusted the ex partner to report the change in order to change the claim from a joint claim to a single claim.

Mark Willis
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Welfare rights worker - CPAG in Scotland

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Total Posts: 142

Joined: 17 June 2010

Hi Shell

There are usually a few steps to go through with any overpayment (CPAG handbook p.1461):

1. Has there been an overpayment? If the date of separation held by HMRC is correct, and the joint claim continued after this date, then it would seem there has, so no point in requesting an MR of the decision to end entitlement from that date.
2. Did claimants meet their joint responsibilities under COP26? It seems there was a failure on both claimants’ part - if HMRC failed to act on the information within 30 days then part of the overpayment should not be recovered.
3. Were there exceptional circumstances why your client was unable to report the change? COP26 mentions serious illness, but adjudicator has mentioned more general vulnerable claimants.
4. Was your client an ‘innocent partner’ ? (handbook p.1465 & https://www.gov.uk/hmrc-internal-manuals/claimant-compliance-manual/ccm8290) If your client did not know about the change, then this could apply, but it might be stretching it to cover where they did not know the other partner had failed to report the change as agreed.
5. Can the overpayment be reduced by offsetting notional entitlement? If your client has made a new claim, backdated 31 days, but there is a gap between the joint claim ending and new claim starting, the share of the overpayment should be reduced by the amount your client would have been entitled to as a single person in that period.
6. Is/would your client experiencing hardship as a result of recovery? Can request that recovery is suspended or waived - exceptional circumstances such as mental health issues
7. Complaint if all the above refused and still feels aggrieved.

Good luck
Mark