Tax credit payments wrong for 3,500 H&F families

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2,400 local families will have to repay it

Statistics on the overpayment of tax credits were published recently by HM Revenue and Customs for the very first time. They show that in 2003-04, a third of all awards were overpaid with 2,400 local families having to
repay £1,330. In addition, over 1,000 awards were underpaid by an average of over £800. The tax credits were introduced by the Labour Government in 2003 to help families on low incomes.

Liberal Democrat parliamentary spokesman Alan Bullion said "These figures are unprecedented and reflect the serious problems not only with the computer system, but also with the new tax credit system. A 52% error rate in Hammersmith & Fulham with payments out by on average almost £1,200
is unacceptable.

"Thousands of families are having their budgets thrown into chaos by the tax credit office. This is causing serious problems and hardship especially for those on low incomes.

"What these figures do not say, however, is how many of the overpayments were a result of official error and how many the Revenue will write off.

"This is another example of Labour creating a bureaucratic nightmare instead of solutions that help poor families. Lib Dems want to return to a system of fixed awards that would end this bureaucratic nightmare for many families. This would save money and simplify the process for getting help that families need."

June 26, 2005