Tag Archives: overpay

UC ‘glitch’ means massive overpayments. What happens when the DWP demands the money back?

The Department for Work and Pensions is apparently overpaying people by thousands of pounds, due to a ‘glitch’ in the Universal Credit system.

Claimants are unlikely to know that they are being overpaid. But what will happen to them when the government contacts they to demand repayment?

That’s the question posed by Hayley Kercher, of Bridgwater. She did notice what was happening, and reported it to the DWP.

But when she told the department that she believed she had been overpaid as her back account was larger than she expected, she was told she’d have to guess how much had been overpaid – and the money would have to be paid back.

How pathetic!

It is practically demanding that this woman – who correctly reported an overpayment – penalises herself for the DWP’s mistake. It is up to the government to work out the amount of the overpayment, not the claimant.

Worse still is the fact that many people may be unaware that they have been overpaid, and are building up a huge debt that the Tories will demand is returned to them at some point in the future.

It could almost be described as entrapment – a deliberate attempt to force people into debt by paying too much and then clawing it back.

People on Universal Credit can’t afford to be messed around in this way.

The new system is touted as being much fairer than the legacy benefits it replaces – but how can that be true if it can’t even get payments right?

My advice to claimants is: check what you’re getting – and if there’s any hint of overpayment, take steps to work out what the difference is and save up to ensure you can pay it back at some point in the future.

But don’t notify the DWP until you are sure that you can repay the full amount.

Source: Mum reveals ‘huge glitch’ in Universal Credit system she fears is wasting taxpayers’ money – Somerset Live

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Tax credit debt collection is a double-edged attack on the poor

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There’s more than a little of the piscine about the fact that our Conservative-led has set debt collection agencies onto poor families who have been overpaid tax credit due to errors made by HM Revenue and Customs.

Firstly, the move undermines the principle behind the tax credit system – that it is there to ensure that poorly-paid families may still enjoy a reasonable living standard. Tax credits are paid on an estimate of a person’s – or family’s – income over a tax year and the last Labour government, knowing that small variances could cause problems for Britain’s poorest, set a wide buffer of £25,000 before households had to pay anything back.

By cutting this buffer back to £5,000, the Conservatives have turned this safety net into a trap. Suddenly the tiniest overpayment can push households into a debt spiral, because their low incomes mean it is impossible to pay back what the government has arbitrarily decided they now owe.

And the sharks are circling. Instead of collecting the debt on its own behalf, HMRC has sold it on to around a dozen debt collection agencies who are harassing the families involved with constant telephone calls, mobile phone messages and letters to their homes.

In total, HMRC made 215,144 referrals to debt collectors in 2013-14. Of the working families involved, 118,000 earned less than £5,000 per year.

This takes us to our second area of concern. Remember how the Department for Work and Pensions has been encouraging people – particularly the disabled – to declare themselves as self-employed in order to avoid the hassle and harassment that now go hand in hand with any benefit claim? You know – the refusal of benefits based on arbitrary ‘descriptors’ that were originally devised by a criminal insurance company as a means to minimise payouts, and the constant threat of sanctions that would cut off access to benefits for up to three years unless claimants manage to clear increasingly difficult obstacles.

And do you remember how the DWP reported earlier this year that more than 3,000 people who were subjected to the government’s benefit cap have now found work? This blog suggested at the time that many of them may have been encouraged to declare themselves self-employed in order to escape the hardship that the cap would cause them.

Both of these circumstances are likely to lead to a verdict of overpayment by HMRC, as the self-employment reported by these people is likely to be fictional, or to provide less than required by the rules – either in terms of hours worked or income earned.

Suddenly their debt is sold to a collection agency and they are suffering government-sponsored harassment, alarm and distress (which is in fact illegal) far beyond anything they received from the DWP; debt collection agencies are not part of the government and, as Dame Anne Begg pointed out in the Independent article on this subject, “The tactics they use to collect the debt are not tactics a government should use.”

Maybe not. So why employ such tactics?

Let’s move on to our third, and final, worry. By setting sharks on the hundreds of thousands of minnows caught in the government’s trawler-net (that was formerly a safety net – and I apologise for the mixed metaphor), the Tory-led administration is creating a handy distraction from the huge, bloated, offshore-banking whales who donate heavily into Conservative Party funds and who are therefore never likely to be pursued for the billions of pounds in unpaid taxes that they owe.

The government has promised to clamp down on tax evasion and avoidance, but ministers would have to be out of their minds to attack the bankers and businesspeople who pay for their bread and butter.

George Osborne suffered huge – and entirely justified – derision last year when HMRC published a list of its top 10 tax dodgers, which revealed that public enemy number one was a hairdresser from Liverpool who had failed to pay a total of £17,000.

It seems likely that the Conservatives have decided that future announcements will involve the reclamation of far larger amounts, and from far more people…

Innocent people who were either cheated by Tory-instigated changes to the system or by Tory-instigated misleading benefit advice.

Meanwhile the guilty parties continue to go unhindered. Their only payouts will continue to be made to – who was it again?

Oh yes…

To the Conservative Party.

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