Wednesday, May 09, 2007

Tax Credit Fiasco gets worse

According to a report issued by the Public Accounts committee of the House of Commons losses through fraud and overpayment. Apparently another £1.4 billion is likely to be written off.

What actually concerns me more though is the number of people who have no clue, because the system is opaque in the extreme, how much it is they are supposed to be getting. They could after all be getting more or less than their entitlement. If they are underpaid, then they have 3 months to claim the underpayment yet if they are overpaid the money can be claimed back for 6 years! That does not seem fair to me.

It does however get worse. When people have been overpaid, they get new payments stopped or worse still get money demanded with menaces. If you are on a tight budget the last thing you need is a debt collection firm on your back collecting money you did not know you had borrowed, who can effectively deduct money at source with out consulting you.

The net result is that many families are going through difficult times because of administrative errors, not knowing from one week to the next what their income is, whilst many on working tax credit are not claiming at all.

It is clear that at best the system needs a major shake up and simplification.

The BBC has this.


ChrisD said...

Benedict, it is just another appalling statistic in a rapidly growing list which seems to be dripping into the public domain in a "good week to bury bad news".
Gordon Brown is busy making sure that all the bad news has been swept under the carpet before his coronation so that nothing can detract from his 100 day celebrations as sweeps the country of its feet in a wave of renewal and thanks giving.

Benedict White said...

ChrisD, yes Gordon is doing a good job of hiding during the bad news!

But don't worry, there will be some more along in a minute.

ChrisD said...

Benedict, when do you predict the much hailed honeymoon bounce in the polls?
If it occurs, will it be during the tour of the Deputy leadership hustings as he greets his subjects in the Labour party or will it be during his much talked first 100 days in office as he finally comes out of the shadows and back rooms to tell us his vision?
I cannot fail to be uninspired and sarcastic because this whole process seems more akin to leadership change in the mould of the old Soviet Union.

Benedict White said...

ChrisD, if there is going to be a bounce and I am not convinced there will be it will be in the next two months and will have fizled out in 3 or 4 from now.

james higham said...

Chris is right here. These things are so wrong.

Benedict White said...

James, I agree.

I feel for the people caught between a rock and a hard place as these mistakes are made.

Just another government statistic as some one is pushed closer to the edge.

Maggie Thatcher Fan said...

The Govt also changed the rules (cant remember exactly how) but I thin if your salary changed by less than £xxxxyr????? then you didn't have to pay back any over-payments.
Suddenly with a magic wand, serious over-payments became entitlements. Illusion politics ....It's an utter disgrace, the who thing stinks... and it's still going on

Benedict White said...

Maggie Thatcher Fan, You are right, they did. To some extent they did so because of the retrospective way the credit is calculated meant that far too many people were getting caught in the over payments trap.

A quick and dirty fix to a fairly flawed system.