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Tax Credit case summary 6
Mr and Mrs F were overpaid in the 2003/04 and 2004/05 tax years. The overpayment arose from a TCO mistake / system fault when the 2003/04 award was finalised. Mr F’s income was omitted from the award calculation, so only Mrs F’s income was used to calculate the award. However, both incomes were correctly shown on the subsequent award notices. The mistake resulted in the 2003/04 award increasing significantly (by approx £2,700), the 2004/05 award increased as well and lump sum payments were issued. The TCO had decided to write off the smaller 2004/05 overpayment but had maintained that the 2003/04 overpayment was recoverable. Mr and Mrs F brought their complaint to our office as they disputed the recovery of the 2003/04 overpayment. They felt that they could not have known that their award was incorrect. The TCO stated in their report to our office that the overpayment was recoverable, as Mr and Mrs F had not questioned why their award had increased significantly or why they had received a large lump sum payment, when their household income had only reduced by a small amount (about £500).
After considering all of the circumstances of this case, we felt that there were grounds for writing off the 2003/04 overpayment. We noted that the TCO’s award notices ask claimants to check their details to see if they are correct and, if the award notice showed incorrect details, we would almost always say that it was not reasonable for the claimant to think that their award was correct. We thought that it was unfair to expect Mr and Mrs F to have realised that their award was wrong when, in this case, their award notice showed the correct information about their personal circumstances. The wording of the notice also stated that they had been paid too little in the 2003/04 tax year and would shortly receive a payment to cover the extra amount due. We further noted that award notices do not show claimants how to calculate their awards and claimants have no way of checking that their entitlement shown on the notice is correct. After discussion with the TCO, they agreed with us that the 2003/04 overpayment should be written off. They also agreed to pay £100 compensation in recognition of the worry and distress caused by their mistakes, £50 for poor complaints handling and £10 for the costs Mr and Mrs F had incurred while pursuing their complaint.
