Just had a conversation with TC helpine re a lump sum paid into client's bank account. This was described as an 'unexplained overpayment' - called this as they have no idea why it has been paid. I think I have seen another one but as not mandated at time had to write and await explanation. Both payments are for over £2000.

The advice from TC was 'put it in a high interest account'. They have had to pass it to R & D team as appears to result of glitch in computer system and has apparantly happened to quite a lot of claimants.

When they try to recover this what will be best appeal tactic? Client in both cases knew it could not be correct. Today's knew there had been an underpayment last year from figures on letter but this only £700. How do we get round the reasonably believe payment to be correct argument?

To be honest, there is no such thing as an 'unexplained overpayment' what is more likely, the advisor who you spoke to could not explain it. It could happen for plenty of reasons, maybe when the final year declration was made, the incorrect figures are used? giving a huge underpayment for last year, and then simply making the one off payment this year (this would be the first thing the R&D people would look at) or maybe the award had Child Care, and say for example, 2000 per week was added, instead of 20 or 200? again giving a large payment. Appealing, in my experience is a long drawn out procedure, the best course of action, is to find out exactly how much the overpayment is, then simply pay it back.

mmmm .... 'the best course of action, is to find out exactly how much the overpayment is, then simply pay it back' ...

this completely ignores the point raised by derek about the 'reasonably believe payment to be correct argument'

as the IR's TC overpayment guide (http://www.inlandrevenue.gov.uk/leaflets/cop26.pdf) says -

'We will not ask you to pay back an overpayment if it arose because we made a mistake and you could reasonably have thought your award was right ...

In deciding whether it was reasonable to think your award was correct, we will consider all the circumstances of your case ...

After considering the facts in individual cases, we may decide not to collect all or part of an overpayment of tax credit ...'

And how exactly do they do that David. You say that the overpayment could have occurred for a variety of reasons. Is it the clients reponsibility to work out which electrical impulse has gone skeww-whiff in the Inland Revenue's Sinclair Spectrum or which detail has been incorrectly inputted by the operative concerned. Claimants for Tax Credits shouldn't be placed in the position of having to second guess what has gone wrong and nor should there have to be accountants. The Inland Revenue should be getting it right in the first place or is that too much to ask.

Like most advisors I have had to phone the Inland Revenue on behalf of many clients with goobledook awards. The majority of the responses given have ranged from ludicrous to imcomprehensible. The most maddening response is the "tell him/her to put it in a deposit account until we ask for it back". Tell that to a single parent who needs certain basics for the kids.

One IR contact I spoke to actually said and I quote " you obviously know more about this than I do". It doesn't fill you with any confidence that the Inland Revenue are fully on the ball.

But, and I have to say this, the thing I take exception to is the dismissive nature of your comments regarding appeals and I think this demonstrates the gulf that lies between advice and the IR. Appealing may be long and drawn out but why should that right be curtailed to spare the inadequacies and blushes of a system that can't get it right and passes it on to the claimant. And why should claimants have to act as caretakers of public funds incorrectly paid until such time as the Inland Revenue can bother to ask for it back.

If anyone should get their act together its the IR.

I would agree with everything said by Semitone and Shawn.

The suggestion that the overpayment is due to incorrect figures is patronising and wrong. The figures are correct as we are capable of copying from P60s, the advisor I spoke to also confirmed the earnings figure in the system. There is no child care and even if there were -if the IR are incapable of differentiating between £20, £200 and £2000 is that the fault of the claimant.

The other case I dealt with saw different award letters to each partner, different payments to each partner - one of which paid virtually entire year in one go whilst the other gave normal monthly payments. Despite the fact that there is an overpayment from last year which we can't get clarified.

The appeal process may be the only way in which we can get any sensible decisions reached regarding these matters particularly given the time it takes to get any form of response form IR to letters. I reckon it takes on average 3 letters to get any response whatsoever and that this is usually a bland sorry with customer charter.

I also wonder about an Inland Revenue Tax Advisor using this forum, although to be fair it's the quickest response I've ever had.

Tue 08-Jun-04 11:34 AM by shawn

re DWP/IR staff using this forum ...

... the issue does come up from time to time and what we agreed with rightsnet users is that there may be a role for benefit administrators to play in the forum ....

the site exists however to provide support to advice workers .... in consequence, whilst we do accept registrations from DWP/IR staff, we do so on the understanding that their contributions should ultimately further the aims of the site .... again to support the work of advice workers, and ultimately their clients

I find the attitude of David unacceptable but not surprising. The whole raison d'etre and history of appeal tribunals from the rise of national insurance local tribunals at the turn of the twentieth century through unemployment appeal tribunals in the 1930's (founded by the way to stave off riots arising over the household means test) to the modern appeals system is precisely to give claimants a forum to argue that the advice and decisions of public officials are legally incorrect, unlawful or unjust.

If that were not so, in many instances we would not have a whole raft of case law. A lot of case law develops were the state thinks it has the law tilted in its favour and the claimant has few or no rights. The appellate tribunals/courts then intervene and say 'hold on a minute the decision is either legally incorrect (by providing a whole new interpretation on the relevant legislation) or the decision maker is acting ultra vires'. For example, where the judiciary have thrown out ouster clauses in legislation or proposed legislation.

Advancements in democracy and civil and human rights have largely come about through the actions of individuals and groups who have not been prepared to accept the status quo but have fought, what were thought to be lost causes, and succeeded. The instinct to challenge is a part of every advice worker and only by holding on to that can we ultimately do the best for our clients. Anything less is not good enough.

Paul

Could I ask you Paul why you find my answer unacceptable but not surprising? what I am saying is that what could have happened is that whoever took the original call was unsure of why the overpayment happened, so to them it was an 'unexplained overpayment' in the sense that they could not explain it. This is hardly a human rights issue, more likely a mistake by a department that up until a few years ago had no experience at all in giving money out, but plenty in collecting. Do you think that all errors should stand? everyone who has had an overpayment should be allowed to keep the said money? and everyone who has had an underpayment should just take it as a bit of bad luck this time? it is after all taxpayers money that is being distributed, and all I was saying is that mistakes do happen.

Dave, if a claimant has given a full account of their circumstances and the department dealing with the benefit had made an error in the decison, then generally the overpayment is not recoverable. I think the policy intention behind this was to avoid burdening people, already living in poverty, with having to repay money that they had accepted in good faith.
I can't see why the same principle should not apply to Tax Credits. It can be very difficult for a layperson to understand how a calculation has been made and how their benefit/tax credit has been worked out. If a mistake has been made after the claimant has given all their details and they have acepted the money as due to them then it seems iniquitous to ask them to repay it later on.
of course where it is a very obvious error the situation is rather different (and the law takes this into account when considering whether a repayment is recoverable). However, many cases we see are where the claimant could not reasonabley have known that an overpayment of Tax Credits has been made.
It seems to me that there are lots of issues around staffing and resources that are not helping the system to work. There are also worries about the way the law has been framed - need for some policy work with MPs?
Personally, I don't think the IR employees should have to take the flak for the shortcomings of the legislation.
Carol

Thankyou Derek, please feel free to e-mail me direct if you wish.

To reply to David - what is unacceptable is the suggestion that it is better to just pay back the money as the appeals process is long and drawn out.

The appeal process exists to allow claimants to challenge decisions which they believe to be wrong. The number of successful Tribunals and the decisions which get changed long before Tribunal indicate that decisions are regularly issued on all benefits which are wrong in law.

Should all overpayments be non-recoverable? The answer is yes if they are caused by failure to follow correct procedure or to apply the law correctly. Yes it's the public purse but all the more reason for decision makers to ensure they get the decision right in the first place. In many cases with TC it is impossible to know what is right and wrong, claimants can receive 8 letters on same day all giving different figures. How are they supposed to know what is the right figure?

Yes mistakes happen but that is not claimant's fault. It is for IR to ensure staff are all adequately trained and able to process claims correctly. If claimant provides all details requested they are entitled to think that the claim will be processed in an efficient and correct manner. They have fulfilled their obligation why should they have to then point out blatant errors.

These problems cause a lot of stress and worry to our clients. They like to know what income they will have and to get it on a regular basis to allow them to budget. They don't want to have to worry about income being reduced because of a mistake earlier.

A claimant can recieve 8 letters on one day yes, but they can also call up a few times a day and each time they generate a new award letter for themselves and their partners, this is the reason why this happens.