tax credits ‘overlapping benefit’
A thought came to me yesterday as I was explaining to someone why UC can deduct tax credits payments received for a period during their assessment period (overpayment of existing benefit for example due to delay in tax credits claim ending) - otherwise they’d be paid twice for that period.
When tax credits do an in-year finalisation - eligible award vs amounts actually paid = under/over payment
If UC deduct for example £100 for tax credits received after UC claim do HMRC deduct this amount from amounts paid to the claimant?
eg eligible award for 06/04/19 - 01/10/19 - (payments made - £100) = under/overpayment
I haven’t seen an award letter from someone who has had this type of £ for £ deduction (opposed to overpayment recovery). If not it would be deducted twice by UC - once as an overlapping benefit and once as a debt
Tax credits are specifically excluded from the rule that legacy benefits can be counted as unearned income. See Reg 10 of the UC(TP) Regs.
It has come under ‘other benefits you were receiving when your claim started’
I’ll see if I can find a screenshot of it
Interesting. I would like to see that. They definitely only have a power to recover from UC as an overpayment, and it can only be done after finalisation of the tax credit award.