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‘Can you explain tax credits to me?’
> ‘I want to know what to do if I have problems with overpayments of tax credits’
>> 'There has been a change of circumstance that has reduced my entitlement'

This means that you agree with the Tax Credit Office that you have been overpaid. However this does not necessarily mean that you have to pay the overpayment back. You need to ask yourself the question: whose fault is the overpayment?

icon-key1.jpgAn important special case involves people who were a couple but separate, or were separate but become a couple. Often this happens when a woman is responsible for children, and so entitled to Child Tax Credit, and a partner either leaves or joins her. The law says that as soon as her partner leaves, for example, the couple award should end and she should make a new claim for Child Tax Credit as a single person. If she doesn’t the Tax Credit Office will end her couple claim when they do find out, and ask for the money paid in the meantime.

The crucial thing here is that very often she would have been entitled to just the same amount of Child Tax Credit as a single person as she was a couple (and sometimes more). The government hasn’t therefore actually lost out: there isn’t in any real sense an overpayment at all. The Tax Credit Office’s code of practice says that in these circumstances, they frequently have to reduce the overpayment by the most of the amount of tax credits she should have got as a single person.

The same applies if a single person is joined by a partner (although in those circumstances it is more likely that the amounts don’t balance (the partner may be working, for instance).

The Tax Credit Office will not normally consider doing this unless you ask them.

If you think any of these things apply there is no point in appealing, as none of their decisions are actually wrong.

However, if you think the overpayment is the fault of the Tax Credit Office, not you, you have the right to complain. The procedure should be as follows:

In practice this process can be incredibly slow and frustrating. The Tax Credit Office may not always acknowledge your letters so you may have to write additional letters chasing them. If they persist in not progressing your complaint write to the Adjudicator anyway, as (in my experience) this often prompts them into action.

In the meantime the Tax Credit Office’s debt collecting office may well ask you to pay the money back: you should write to them saying the overpayment is in dispute and ask for the matter to be put on hold until this is resolved.