Citizens Advice response to Tax Credit statistics

Katie Lane, Policy officer, Citizens Advice comments: "For the third year running two million families have been overpaid by the tax credits system and we are still seeing thousands of very distressed people suffering hardship and debt as a result. People find themselves struggling to repay large overpayments without receiving proper explanations of how they have arisen, and without being given notice before recovery starts, so they have no time to budget or even challenge the overpayment.

“Thousands of families are also being threatened with court action for the recovery of overpayments which they are still challenging or awaiting explanation for, sometimes not even knowing the amount they owe. Some eligible families who have had problems are now reluctant to claim what they are entitled to.

"The way in which overpayments are recovered needs to be reviewed urgently so that repaying the money does not leave people in hardship. People must get proper explanations, be given time to challenge the overpayment, and more overpayments need to be written off."

Citizens Advice is currently running a survey on tax credits on its website at adviceguide.org.uk. In the last financial year (2005/2006) Citizens Advice Bureaux dealt with more than 150,000 problems relating to working and child tax credits.