Dear Mr Brown

Published on 21 February 2005

The concept of your generous tax credits system is to lift people out of poverty. But from time to time, the reverse is true: HMRC systems are not yet sufficiently honed to react to real need when people are at their most vulnerable. When they are on income support, the last thing people need is for their child tax credit to be reduced by the Revenue trying to claw back an earlier overpayment. Single parents can be driven below the poverty threshold at the precise time of their greatest need.

This situation is recognised by the Revenue in that the individual can ask for 'top-up' payments. This is fine in theory, but too often, the individuals are not informed that they can claim such payments, or if they do, they can be refused by Revenue staff.

It is even more distressing for this to happen when the reason for the overpayment is a Revenue mistake. So the Revenue, having made the error in the first place, go into a long process, while they act as judge and jury, deciding whether the individual is entitled to have the overpayment waived. During this time they may not reply to letters; they may ask for further information; they may debate whether the individual should have known they were being overpaid; but they still collect regardless.

People can risk losing their homes, be forced into the hands of loan sharks and, literally, not be able to feed their children.

This cannot be right. It must change. Please Mr Brown, grasp the nettle and announce in the Budget tomorrow that you will prevent the Revenue clawing back in-year overpayments from people on income support.


Contact Name: John Andrews (Tel: 0844 579 6700, Fax: 0844 579 6701)