Rachel called in some distress. I was handed the call – and was quickly made aware of the cause of her concern. She had, that morning, received a letter from the tax credit people that in error they had overpaid her these past 2 years, and could she return £4650 by Friday week.


Rachel is a single parent with a part time job but dependent on benefits to raise her 2 young children. The letter came out of the blue and needless to say, she couldn’t afford to repay any of that amount let alone all of it. “They might as well as me to fly to the moon – I’ve just as much chance “she said.


In Rachel’s case, we were able to draw her attention to the various debt solutions that may provide a solution for her – but the tax credit overpayment issue recurs all too often. Of course there must be many times that such overpayments do need to be recovered – especially where a fraudulent claim has been made. The system is open to abuse and it’s only right that such claimants are brought to task. TV’s fascination with benefit claimants seems to know no bounds at present. But then the whole benefits system is under the spotlight and it’s easy to see the appeal of the Universal Credit model with its attempt at a fairer and simpler system.


One young mother in financial difficulty told me that her payday loan problems began when her tax credit payment was delayed. It would just be 2 weeks and she could repay the loan. The 2 weeks became 4 and the debt problem began to gather pace. Emma, another casualty of a tax credit overpayment in the past, refused to claim tax credits anymore for fear they would be demanded back in the future sometime. She couldn’t live with that uncertainty. It’s a stark reminder of the huge amount of benefits that go unclaimed each year.


No easy answers unfortunately. No doubt HMRC do a fine job with limited resources. But there are too many stories of tax credits being either the start of a debtors problems or the final straw. The recipient of tax credits has a duty to inform any change of circumstances immediately. But the authorities have a responsibility too, to minimise the errors and prove sufficient resources to ensure the benefits system is fit for purpose.



Keith White


(Rachel is a fictitious name to protect the anonymity of the subject of this article).