Just finished a complaint letter to the MP for a client couple. Income last year 0ver 38K, tax award CTC 547.5, Correct. Reconciliation (or whatever they now call it) asked for details of income earned and client had to give estimated income figure. This was lower than the 38K used in the first award.

Notified new award for 2004-2005 is £3,660 both WTC and CTC. £3000 more than last award for a lower income!!

Phoned WTC and told that because one of the couple only supplied an estimated income figure, income figure of zero is entered in computor assessment for tax credits, presumably until actual income figures supplied. (This wasn't presented as a clerical mistake or error but "the way its been done")

The newest googly in a queue of googly's. (or is that googlies)
Anyone else come across this

To be honest, it happens a lot, however, when an applicant recieves their new award, they should notice the income is zero, and that the award is high, and report the change before the payments start.

Point taken, if the award says income is nil. But, in this case it didn't. The award letter actually states income taken into account was 37K. The MP office has been back on to say that the Inland revenue now say that it wasn't a nil figure entered on to the computor but her income of 11K only. This would give the £3660 award but the point of all this is the award letter still shows 37K income figure used and an award of £3660 tax credit which is plainly very wrong. So how would the punter know it was wrong.

I think without actually seeing the award in question, I wouldnt like to comment on this particular case, however, the guidline does state that an award of £545 is applicable to someone with such an income as 37k, surely the fact they are earning 37k and recieving over £70 a week in benefits would raise an alarm?, as I can tell you from experience, people earning 11k a year who recieve an award of £545 would certainly notice, and just as the Revenue would pay the difference to these people, if after a whole year they had not noticed, they could expect people who are clearly above the threshold to pay back the difference.

The content of any tax credit award letter is so meagre and bereft of detail David I doubt that sight of it would tell you anything more. Suffice to say that for this couple all personal circs are recorded correctly, hours worked, no childcare,and it states clearly the income used for the assessment is £37K. The tax credit awarded is £3660. My experience of working with tax credits told me this was wrong, your experience told you the same. However not everyone enjoys the dubious pleasure of being an advice worker or working for the Inland Revenue. There's a broad spectrum of people out there with different circs,different incomes who receiving an award letter should be able to expect the award to be correct because all the details indicate that's so. Thats clearly not the case and that situation could be improved if someone up top would get their finger out and put a calculation breakdown on the award letter for the clients and those who have to advise them. It would also highlight to clients exactly how their award is calculated and make clearer to them any mistakes on the form. Not such a hard thing to do,the DWP and Housing Benefits have been doing it for decades.

To support what Semitome states, isn't it extremely worrying that a TC adviser from the IR can post a response to a query about a seemingly incorrect award being made with the viewpoint that claimants should be aware when they are being overpaid and quite obviously expect to pay back any excess payment, when the mistake causing that excess payment is quite clearly the responsibility of the IR themselves i.e. an official error?

The report from adviceni (see http://www.rightsnet.org.uk/cgi-bin/forwardsql/search.cgi?template2=user_details2.htm&output_number=1&sort=news.submission_date+desc&news.ID=&start=1) notes, with regard to the complexity of the TC system, that:

"One participant commented that, “In general I have found it to be a confused and confusing system where the client appears to be actually taking a risk by applying for a benefit.” Another participant noted that clients have, “difficulty understanding the system, unsure how much they will actually get.”"

Further, the report notes that:

"Another participant raised the point that, “There appears to be no guarantee that your benefit will be calculated accurately”"

and makes a recommendation that the Inland Revenue send tax credit claimants a complete calculation regarding how any tax credit award was calculated.

So Mr Wolves, is there any chance that the IR will consider providing TC claimants with adequate award notices that at least give claimants and advisers a chance of understanding how their awards are calculated so that they also have a chance of knowing if, and when, they are being over/underpaid?

Yes, they can request a breakdown of how the award is calculated from the helpline. I have to be honest, I try to help everyone who I speak to while I am at work, and it is frustrating to see such mistakes happen on peoples awards, I honestly understand that the Tax Credit system is there to help people, (being a lowly advisor, I am classed as low income aswell)

How can it be reasonable to expect claimants to understand when they have been overpaid, when the TC system itself seems virtually incomprehensible to many people who have to rely on it? It is ironic that TC claimants should now be regarded as the last line of defence.

The obvious parallel is the HB/CTB overpayment criteria. To avoid recovery, the claimant needs to show the claimant could not have “reasonably realised” there was an OP. There the parallel ends. By comparison, HB/CTB is a rather nice and dandy system. Decisions are real time decisions, and not provisional. The income platform never shifts at some point in the future from now to the past, or vice versa. There are robust reporting requirements that are relatively easy to follow. Most importantly, it is in the LAs own interests to suppress the number of official error OPs, because there is a chance they may not be able to recover them, if it’s their own fault (and nil subsidy, to boot!). The IR can always recover, even if it’s all their fault, and no prospect of a tribunal. Where is the incentive to get it right? Where is the HRA when you need it?

David Wolves echoes the familiar position of “you should have known you were being overpaid”, which pre-supposes that IR officials are able to put themselves in the position of the bewildered claimant. You can just imagine it, the claimant opens their explanatory TC letter over breakfast, and says to their partner…

”Oh, will you look at this darling…. the 37% standard taper should have engaged our excess taxable income over threshold, up to but not including the core family element. Lucky our taxable income in respect of the appropriate relevant period has not reached the secondary taper of 6.67% , otherwise we could have problem…could you pass the marmalade please…

Somehow, this all seems a bit unlikely…

Yes, it is reasonable to expect tax credits of of £60.00 a week on an income of £37k.

I would be very interested in seeing your figures for that David. What kind of scenario are we talking about, how many kids, childcare costs?. The taper on WTC and CTC would be about 12k and that is a lot of Max TC before adding on the £3120 award you say is reasonable for 37k income, 15k in all, thats either a lot of kids, disability or childcare.

Just phoned IR for a client working in our office. Earns 13K. CTC is correct but WTC £1750.35 when it should be £803. 13K is income figure on award letter.

Response from helpful lady called Fiona is the computor assumed nil figure and this is a glitch in the computor at the moment. Sounds familiar!

I pointed out that if nil income had been used client would have had max TC of £3800 and not £1750.03 notified. She's said she will send a full breakdown.

You seem to have proved my point.

Quite a few points have been covered in this discussion David but I'll assume you are referring to supply of a breakdown. First of all she said she would send me one. I've still yet to receive it. In fact I have yet to see one despite numerous requests, for one client three pleas since February. The point being made earlier was that breakdowns should be an integral part of every award letter, not something that should have to be requested.

On a different tack you mentioned earlier that £60 per week award was reasonable for an income of 37K. Yet, in one of your earlier posts you stated that anyone receiving over £70 on that income should be alerted to there being something wrong. Is it possible your point of view is somewhat broader since logging on to Rightsnet.

In my last posting above the TC officer said this nil income glitch was a common occurence. Any comments?

A common problem yes, a glitch, no, the nill income occurs mainly due to an input error on the system, ie: if someone calls up and states that they have a nil income but their partner remains at 37k (for example) if only one income is updated, ie: the nil one, the whole award is calculated on this. Of course £60.00 per week is not reasonlable for a 37k a year income, I posted that to get the exact response that you delivered, ie that it isnt, and that a claimant would notice it. I deal with these problems all day, and each time I come accross them I can see where the problem happened, and why it happened, and I will refuse to admit to anyone that it is 'unexplained' because it simply isnt, it is 99% explainable most of the time. I honestly wish the sytem that I have to work with was as straightfoward as others, but it isnt. Each and every time I see these problem cases, I make a note of them and follow them up to resolve them and yes, I come out looking unpopular sometimes because I tell the truth when it is oh so easy for me to say it is an unexplained problem, and I have passed it to a team leader. If I see a claim heading that way ie: they have incorrect income etc, or even if it looks incorrect, I will check this with the claimant, as advisers, we dont have to do this, but I honestly want everyone to recieve what they are due. I make more than my fair share of call backs on these cases, again something we are not expected to, and sometimes get called up if we are spending to much time on a claim, but I do not make the rules. I try bloody hard to help people, as you do, and it hurts when I come on this site and read the comments made about the 'typical' and 'unsurprising' answers I give, and how 'its the quickest response I have had' etc, again I ask anyone on here to e-mail me direct if i can be of any assistance to them.

Reading your post further, check with the TC helpline how many days this award covers, another problem is often, when people call up, they give new information, ie: new job, child care etc, and the system will backdate for 90 days, the adviser should check if it has backdated for the full award, otherwise the claim will not be a maximum claim based on a nil award, but a part year based on nil, ie: not the full zero income for a whole year.