Tax credit overpayments hitting the poorest the hardest
01.06.05

…families still not getting the right amount at the right time…

Government figures released today show problems with the tax credits system continue, with nearly half of tax credit awards in 2003/04 being either overpaid or underpaid.

The Child and Working Tax Credits statistics for the latest finalised awards show that in one third of awards, an overpayment occurred – meaning the family affected would have to pay back money from already stretched resources.

Three quarters of underpayments which occurred – families receiving less tax credit than they were due – happened to families with incomes below £20,000.

'These figures are deeply concerning,' said CPAG’s Chief Executive Kate Green OBE. 'While the problems with the wrong payments being made continue, those who are suffering the most are the poor.

'While we welcome the recent recognition of the Paymaster General that the Government needs to address the problems, there is now a real urgency for action.

'Over half the overpayments errors made affected those in the lowest income group – the very people who will struggle to pay them back. This level of error is not good enough.

'Tax credits can and should be helping those from low income households most. The Government must focus on dealing with this problem as a matter of urgency. We also need to know take-up figures for tax credits – which are not included in today’s figures – so that we can be sure that all families entitled to them are accessing the system,' she said.

For further comment:
Ashley Riley
Press Officer
Tel. 020 7812 5216
Mobile 07811 324339
Email ariley@cpag.org.uk

Notes:

CPAG have published a manifesto 'Ten steps to a society free from child poverty' which calls on all political parties to sign up to 10 demands.

• Download a copy of CPAG's manifesto (205 KB pdf file)
  
  
• Download a leaflet summary of CPAG's manifesto (471 KB pdf file)

CPAG’s ten steps to a society free of child poverty are:

• All political parties to commit to eradicate child poverty.
• Poverty proof policies – make each consistent with eradicating child poverty.
• Uprate the combined value of child tax credit and child benefit at least in line with the fastest growing of prices or earnings. The element of this that is child benefit ought to be maximised.
• Increase the adult payments within income support in line with those for children.
• Reform the administration of tax credits and benefits – ensure they get the right amount to the right people at the right time.
• Ensure all children have full access to the requirements – meals, uniforms and activities – of their education.
• Provide benefit entitlements to all UK residents equally, irrespective of immigration status.
• Work towards better jobs, not just more jobs.
• Introduce free at the point of delivery, good quality universal childcare.
• Reduce the disproportionate burden of taxation on poorer families.