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12-01-2006
More families will suffer hardship in the coming months as tax credit payments continue to be stopped or slashed to claw back overpayments, Citizens Advice told a committee of MPs today.
The national charity predicted the problems would continue despite Government pledges to tackle them, because changes to limit the cuts that can be made to payments will not come into force until November 2006.
Citizens Advice witnesses told the Treasury Select Committee inquiry into the administration of tax credits that the tax credit office must respond by promoting the take-up of additional tax credit payments designed to relieve hardship.
It said that in many of the cases dealt with by Citizens Advice Bureaux, overpayments are the result of unacceptable levels of official error, or a failure to act on the information provided when people report a change of circumstances affecting their entitlement.
Citizens Advice Social Policy Officer Katie Lane said: “The changes announced for the end of this year are welcome, but challenging the recovery of overpayments must be made easier and a statutory right of appeal needs to be introduced. Recovery should be delayed at least until people have been notified of the reason for overpayment, and of their right to dispute and appeal it.”
She and fellow witness Jackie Fielding, an adviser from Selby Citizens Advice Bureau in Yorkshire, told the committee that Citizens Advice still has serious concerns about the administration of the system.
“Bureaux are still receiving poor or incomplete advice from the helpline. Responses to correspondence can take months, and often fail to address the issues. The quality of administration including all communications need to be significantly improved, so that people understand their entitlement, and understand the responsibilities the system places on them.”
Last year Citizens Advice Bureaux across the UK advised on around 150,000 tax credit problems. In the past two years Citizens Advice has received more than 12,000 reports and complaints from bureaux about tax credit problems.
In June 2005, a report from Citizens Advice concluded that although welcome additional money was available to lower income families through tax credits, the operation of the system and the way overpayments were recovered caused tremendous hardship and confusion to many families. It argued that significant improvements in the quality of administration and changes in the recovery of overpayments were vital if key government objectives were to be met, and confidence in the system restored.
Citizens Advice told the Treasury Select Committee that the measures to improve the tax credits system announced by the Chancellor in his pre-Budget report offered hope to families who have faced real difficulties with varying and unpredictable payments, and the higher earnings disregard of £25,000 would protect many families from overpayments, but the delay in introducing them meant there was a strong likelihood that families will suffer hardship over the next few months as payments continue to be stopped or heavily reduced.
Notes to editors on Citizens Advice
- The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales;
 www.citizensadvice.org.uk
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- Most Citizens Advice service staff are trained volunteers, working at over 3,300 locations across England and Wales.
- Advice and information www.adviceguide.org.uk
- Volunteer hotline 08451 264264 (local rate)
- Citizens Advice Guide to your rights, second edition: January 2008 - over 600 pages of practical, independent CAB advice. An invaluable resource for any bookshelf - available from all good bookshops; price £11.99; ISBN: 9780141034089
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