Tuesday, April 06, 2010

Labour takes 50,000 of the poorest families to Court over Tax Credit Errors

Whenever Nick Clegg has taken on Gordon Brown about how the gap between rich and poor has widened, Gordon Brown praises the tax credits system he introduced as Chancellor.

This system is so fantastic that it gets a third of its payments wrong, causing real misery for the poorest families.

Parliamentary answers have revealed that in the first 5 years of the system, almost 2 million families have been repeatedly overpaid. The system is incredibly complicated - even people who are used to dealing with complex official forms find the tax credit forms confusing and difficult to understand. They have improved since the early days, but they are still far from easy to make head or tail of. It is also not unusual for people to receive 8 or 9 similar but just slightly different forms from the TCO in the same week. Sometimes people miss an error on this complex form and end up being overpaid.

When the error is discovered, then the Tax Credit Office mercilessly pursues these families, who are living on the breadline as it is, for repayment. In the last three years, they have taken 50,000 families to Court. Those will predominantly be people who are no longer entitled to tax credits because, for example their children have grown up. They will often be asked and expected to pay back thousands of pounds that they don't have. For those who are still claiming tax credits, their payments are reduced so that they don't get the help they need when they need it.

That, you might think, is bad enough. To add to it, there's a million families who have been underpaid, not getting all that they are entitled to in the same period. that means that their day to day struggles to feed, clothe, house and heat themselves are so much more difficult than they need to be.

The thing is, once the Tax Credit Office has made an error, they will often simply not accept the fact, no matter how many times they are told - and they continue to repeat the mistake year on year on year.

Liberal Democrat Shadow Work and Pensions Secretary Steve Webb had this to say:

“These figures should shame ministers into making changes to the tax credit system.

“Families are put on a financial rollercoaster when they are forced to repay tax credits after continual mistakes. This is not the kind of help they need when times are hard.

“Families need to know exactly what cash is coming in and when. They should not have to face sleepless nights wondering when the Revenue will come knocking asking for money back.

“Ministers should fix tax credits payments for six months at a time so overpayments could be avoided, but they refuse to admit the system is anything but perfect.”

It's typical of Labour's "we know what's best for people" attitude, refusing to listen to the people who have been through misery, and the agencies and experts who try to help them, who all think that returning to the days of fixed 6 month payments would be better.

1 comment:

dazmando said...

I think we should actually get rid of the Tax credit system. It should be replaced with simple lower taxation for families or simple payments.


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