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Motion 100 - TAX CREDIT OVERPAYMENT - UNFAIR CLAWBACK OF PAYMENTS Motion 100 - National Executive Committee Amendment 100.01 Motion 100 - As it would appear following incorporation of Amendment 100.01
100. TAX CREDIT OVERPAYMENT - UNFAIR CLAWBACK OF PAYMENTS
For the low-waged, Tax Credits are a welcome ‘top-up’ and Ministers claim they have helped alleviate financial hardship for 6 million claimants. Unfortunately, the Tax Credit system, intended to boost the income of millions of low-waged families, has plunged millions of low paid families into further financial hardship through overpayments which are subsequently recovered. Every year of the scheme’s operation, approximately two million claimants receive about two billion pounds in overpayments and unlike DWP benefits, claimants must repay overpayments even when they have been fully compliant and honest and the error is not their own. HM Revenue and Customs (HMRC) are aggressively seeking repayment with no regard for the claimants financial situation and personal circumstances. The Parliamentary and Health Service Ombudsmen has reported that “the manner in which recovery of excess payments have been handled has alienated many people and caused considerable financial disruption and real hardship …. from the evidence we have seen, in a large proportion of cases the revenue itself has been at fault in causing an excess payment to occur, yet has insisted on repayment”. The Revenue’s Code of Practice (COP 26) for the recovery of overpayment states, “We will not ask you to pay back an overpayment if it arose because we made a mistake and you could reasonably have thought your award was right”. Yet in practice, as reported by the Parliamentary and Health Service Ombudsmen “...in contradiction of the Code, excess payments during the tax year (and at the end of the tax year) are recovered by the Revenue as a matter of course, without prior investigation of either of these two key questions”. There can be no underestimating the distress and grave problems that thousands of families are dealing with as a result of HMRC clawing back overpayments, or issuing shock demands for immediate repayment reinforced by a Court summons, ahead of any possible investigations to ascertain where responsibility lies. Measures the Revenue are taking to recoup their losses include stopping all Tax Credits, Child Benefits, and taking money from people’s wage packets, all too frequently leaving individuals with an income which does not even cover their basic living costs. Claimants have taken out loans, had orders put on their property, and received County Court Judgments. The Child Poverty Action Group and One Parent Families have repeatedly sought an Amnesty on non-fault overpayments, particularly those made in the earlier ears of the scheme when the computer system regularly created errors and claimant responsibilities were even more vaguely outlined than they are now. It is clear that children’s welfare is at stake when overpayments are clawed back. A number of UNISON members in the South East, appalled at HMRC’s inefficient handling of the Tax Credit system and subsequent ‘bullying’ approach to recovering overpayments, have joined forces with other victims nationally, to offer support and advice to others. Starting in 2006 with a website, they now have a user lobby group called “Tax Credit Casualties” and are now launching a campaign seeking an Amnesty for all cases of official error. Enquiries have come from thousands of low-paid workers across the country who find themselves in desperate situations as a result of action taken by HMRC. Although legal action can theoretically be taken to override doubtful HMRC decisions, few claimants will have the ability to access resources or fund an expensive Judicial Review. Conference recognises that this is a trade union issue as it adversely affects low paid members. Conference therefore instructs the National Executive Council to adopt this as a major campaigning issue to: 1) campaign to raise awareness amongst members and branches of the unfair claw- hack of Tax Credit overpayments commonly caused by the system itself. 2) urge regional committees and branches to include the issue on their agenda and disseminate information to members about the “Tax Credit Casualties” website and support their campaign seeking a repayment Amnesty; 3) encourage branch donations in support of the “Tax Credit Casualties” work, as appropriate; 4) bring this matter once again to the urgent attention of the Financial Secretary overseeing the Tax Credit system, to expedite further urgent system reform in the interests of a safer, fairer Tax Credit system; 5) ensure regional welfare committees have the training and resources to continue to support members faced with Tax Credit related financial difficulties; 6) use the positive working relationships UNISON has established with the Government, through Labour Link, to encourage dialogue and consultations between Treasury ministers and Tax Credit Casualties as to how the system can be made more accurate, accountable and equitable for all. West Sussex County Motion 100 - TAX CREDIT OVERPAYMENT - UNFAIR CLAWBACK OF PAYMENTS
100.01 In second paragraph, insert after first sentence: “Working Tax Credit and Child Tax Credit have already helped lift hundreds of thousands of children out of poverty. If the government is going to achieve its ambition of ending child poverty by 2020 and halving it by 2010, the tax credits will have to play a larger role, providing more support to more people.” Delete fourth paragraph and replace with new paragraph: “In the latest version of the Revenues Code of Practice on overpayment recovery published by the HMRC in February this year, HMRC replaces the ‘reasonableness test’. Conference welcomes this, but its replacement is still likely to create difficulties for claimants. Conference also welcomes the greater clarity on what is expected from claimants and more importantly what claimants can expect from HMRC, which we hope will result in fairer decisions. However, conference remains concerned about the processes which still seem to create an unfair balance in favour of HMRC. Conference strongly opposes the 30 days that HMRC have allowed themselves to implement changes of circumstances reported by claimants. However promptly claimants make their report, if HMRC do not process the changes until the end of the 30 day period, any overpayment accrued in the meantime will remain recoverable. Conference feels that there is no justification for this and that it will hit those on the lowest incomes. Conference is concerned that much of the new test revolves around whether or not a claimant has contacted HMRC by a specific date. Given last year’s revelations about missing recordings of phone calls to the helpline, conference questions whether HMRC is capable of maintaining adequate records of all contacts claimants have with the Tax Credit Office. In our view, claimants must be informed of those new responsibilities well before any dispute can arise, and preferably when they first receive an award notice. No claimant should have a dispute fail because they did not meet responsibilities that they did not and could not have known about.” Delete point 3) and replace with: “3) consider affiliation and donation to “Tax Credit Casualties” as part of the agreed UNISON affiliations process;” In point 4) insert at end “, including ensuring enough resources are provided to HMRC for an improved efficient delivery of the service;” National Executive Council Motion 100 - TAX CREDIT OVERPAYMENT - UNFAIR CLAWBACK OF PAYMENTS
For the low-waged, Tax Credits are a welcome ‘top-up’ and Ministers claim they have helped alleviate financial hardship for 6 million claimants. Working Tax Credit and Child Tax Credit have already helped lift hundreds of thousands of children out of poverty. If the government is going to achieve its ambition of ending child poverty by 2020 and halving it by 2010, the tax credits will have to play a larger role, providing more support to more people.Unfortunately, the Tax Credit system, intended to boost the income of millions of low-waged families, has plunged millions of low paid families into further financial hardship through overpayments which are subsequently recovered. Every year of the scheme’s operation, approximately two million claimants receive about two billion pounds in overpayments and unlike DWP benefits, claimants must repay overpayments even when they have been fully compliant and honest and the error is not their own. HM Revenue and Customs (HMRC) are aggressively seeking repayment with no regard for the claimants financial situation and personal circumstances. The Parliamentary and Health Service Ombudsmen has reported that “the manner in which recovery of excess payments have been handled has alienated many people and caused considerable financial disruption and real hardship …. from the evidence we have seen, in a large proportion of cases the revenue itself has been at fault in causing an excess payment to occur, yet has insisted on repayment”.
There can be no underestimating the distress and grave problems that thousands of families are dealing with as a result of HMRC clawing back overpayments, or issuing shock demands for immediate repayment reinforced by a Court summons, ahead of any possible investigations to ascertain where responsibility lies. Measures the Revenue are taking to recoup their losses include stopping all Tax Credits, Child Benefits, and taking money from people’s wage packets, all too frequently leaving individuals with an income which does not even cover their basic living costs. Claimants have taken out loans, had orders put on their property, and received County Court Judgments. The Child Poverty Action Group and One Parent Families have repeatedly sought an Amnesty on non-fault overpayments, particularly those made in the earlier ears of the scheme when the computer system regularly created errors and claimant responsibilities were even more vaguely outlined than they are now. It is clear that children’s welfare is at stake when overpayments are clawed back. A number of UNISON members in the South East, appalled at HMRC’s inefficient handling of the Tax Credit system and subsequent ‘bullying’ approach to recovering overpayments, have joined forces with other victims nationally, to offer support and advice to others. Starting in 2006 with a website, they now have a user lobby group called “Tax Credit Casualties” and are now launching a campaign seeking an Amnesty for all cases of official error. Enquiries have come from thousands of low-paid workers across the country who find themselves in desperate situations as a result of action taken by HMRC. Although legal action can theoretically be taken to override doubtful HMRC decisions, few claimants will have the ability to access resources or fund an expensive Judicial Review. Conference recognises that this is a trade union issue as it adversely affects low paid members. Conference therefore instructs the National Executive Council to adopt this as a major campaigning issue to: 1) campaign to raise awareness amongst members and branches of the unfair claw- hack of Tax Credit overpayments commonly caused by the system itself. 2) urge regional committees and branches to include the issue on their agenda and disseminate information to members about the “Tax Credit Casualties” website and support their campaign seeking a repayment Amnesty; 3) consider affiliation and donation to “Tax Credit Casualties” as part of the agreed UNISON affiliations process; 4) bring this matter once again to the urgent attention of the Financial Secretary overseeing the Tax Credit system, to expedite further urgent system reform in the interests of a safer, fairer Tax Credit system, including ensuring enough resources are provided to HMRC for an improved efficient delivery of the service; 5) ensure regional welfare committees have the training and resources to continue to support members faced with Tax Credit related financial difficulties; 6) use the positive working relationships UNISON has established with the Government, through Labour Link, to encourage dialogue and consultations between Treasury ministers and Tax Credit Casualties as to how the system can be made more accurate, accountable and equitable for all. West Sussex County Motion 100 - TAX CREDIT OVERPAYMENT - UNFAIR CLAWBACK OF PAYMENTS |
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Tax Credit Casualties (TCC) is a voluntary, unfunded, not for profit
organisation run by members for members. We cannot take any responsibility for
decisions made by HMRC, The Parliamentary Ombudsman, The Adjudicator, or any
other organisation, regarding claimants cases. We offer free advice on how to
dispute unfair overpayments based on our own experiences, the experiences of
other claimants and HMRC guidelines.
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Conference congratulates the South West regional women’s committee on its work in previous years on the issue of the Tax Credit system.