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Closing a WTC claim following new claim for UC.
Cl claimed UC on 17th July 2018. On 23rd she received a WTC payment, which we took to be her final payment. However, on 1st August a further WTC payment was received.
On enquiring with TCO, they advised that they cannot stop payment/close claim until authorised by DWP (DWP have not done so as yet). Should the clamant close the claim, it will be declared invalid and an overpayment raised from the beginning of the financial year. Should DWP close the claim, an overpayment will be raised from the date if the UC claim, which will be recovered under UC (more punitive) rules.
Can anyone advise whether this is correct, or whether there are any options to challenge it? At present it looks as if TCO and DWP are actually colluding to create overpayments.
Hi – I don’t know how much help this will be and I’m happy to be corrected, but:
Looking at UC Transitional Provisions Regs 12 and 12A, the TC award is finalised in-year if a UC claim is made and it’s decided by DWP that the claimant meets the basic criteria for UC.
This does indicate that DWP has to notify HMRC.
Sweet & Maxwell says - ‘This amendment (12A) is intended to smooth the transition…’ (!!!)
‘This is intended to reduce administrative complexity…providing a clean break from tax credits… a single interaction with HMRC so that HMRC only have to deal with the case once as both the stopping of the tax credit award and the finalising of the award are dealt with [together]’’
Reg 12 makes the TC overpayment a UC overpayment and, as you say, the rules are harsher and there’s now no Code of Practice, this having been scrapped in October.
Apparently we are to refer to the Benefits Overpayment and Recovery Guidance (BORG, for all you Star Trek fans)
I don’t understand HMRC’s threat that they would impose an overpayment from the beginning of the financial year – what overpayment? I don’t understand how the TC claim would be ‘invalid’ except once affected by UC Transitional Regs.
In practical terms, couldn’t HMRC use the claimant’s contact as a good reason to approach DWP and ask them to confirm that a UC claim has been made and that they think the claimant meets the basic financial conditions, rather than – as I infer – being satisfied to sit back and wait – and overpay?
If both departments faff around, do nothing and overpay the claimant in spite of being told about it, they can just carry on, and then recover the lot from the claimant, with no come-back for official error.
I’ve got just that with an IRESA-UC case; DWP delay caused the overpayment but they just aren’t interested in who did what wrongly, all they care about is that the law says ‘pay up’.
Grounds for a complaint?
[ Edited: 2 Aug 2018 at 09:04 am by Andrew Dutton ]Revenue benefits say: “we would advise that claimants report the situation to HMRC in case the process breaks down”
... I’m not quite clear on what HMRC are then meant to do about it. But it surely can’t be the case that if someone wants to relinquish their tax credits, say, that it necessarily means that HMRC become unable to finalise the award properly and so must recoup the whole lot. With any other benefit, a request to end the award would be a relevant change of circs and a superseding decision can be made with effect from that date.
(That said, I can’t see that relinquishment is covered in the technical guidance).
Revenue benefits say: “we would advise that claimants report the situation to HMRC in case the process breaks down”
... I’m not quite clear on what HMRC are then meant to do about it. But it surely can’t be the case that if someone wants to relinquish their tax credits, say, that it necessarily means that HMRC become unable to finalise the award properly and so must recoup the whole lot. With any other benefit, a request to end the award would be a relevant change of circs and a superseding decision can be made with effect from that date.
(That said, I can’t see that relinquishment is covered in the technical guidance).
When I wrote that page on Rev Ben, I had in my mind that the person would be claiming UC because of a change of circumstances and therefore reporting that change to HMRC would end the tax credit award even if notification had not been received by HMRC from DWP.
I assume though that in this case there isn’t a change that would trigger the end of the tax credit award? I am currently thinking through that section of the website so will try and include something about this scenario. I am finding that every time we think an issue has been covered some other point or question crops up that makes us re-think everything we thought we knew!
Victoria