Response to House of Commons Committee of Public Accounts report into tax credits

Leading children’s charity share MPs' damning verdict on tax credits system
22.04.04

‘… Amnesty is the only answer…’ says Child Poverty Action Group

Responding to the publication of today’s report Inland Revenue: Tax Credits by the House of Commons Committee of Public Accounts, leading children’s charity the Child Poverty Action Group have said:

“Today’s report is further authoritative proof that the implementation of the new tax credits system has been totally unacceptable,” said Welfare Rights Manager at CPAG Paula Twigg.

“CPAG agree with the comments of the committees Chair Edward Leigh MP that the system has been nothing short of disastrous. We join him in urging the Inland Revenue to dramatically reduce the level of overpayments and explain to claimants how recovery will impact on other benefits.” she said.

“These problems have resulted in many low-income families suffering hardship. Many claimants have seen awards adjusted automatically to recover an overpayment discovered during the course of the tax year without any explanation of how the overpayment arose, leaving some with weekly incomes substantially below income support levels.”

“Many of the overpayments in the first year of the scheme’s life have been caused by official error and a number of factors, such as delayed payments, payments without award notices, incorrect and unclear award notices, have made it impossible for claimants to know what their correct award should be.” said Paula Twigg. “Yet the IR has sought to recover the majority of these overpayments.”

CPAG is supporting a Parliamentary Early Day Motion 325, which is calling for an amnesty on the recovery of overpayments in the first year of the scheme. 96 MPs have signed this EDM and CPAG is pressing once more for the Government to grant this amnesty. Such a move will relieve hardship for low-income families and should help restore some confidence is the system that has been heralded as having a major role to play in the pledge to eradicate child poverty.

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

• Copies of the report, Inland Revenue: Tax Credits Fourteenth Report of Session 2003-04 by the Committee of Public Accounts are available via the House of Commons website at www.parliament.uk
  
  
• Early Day Motion 325 states: “That this House welcomes the government's pledge to end child poverty by 2019; but is concerned that the problems in the administration of the tax credits system may undermine the aim of the scheme to reduce child poverty; is concerned that these problems have resulted in unnecessary overpayments, which have led to difficulties and hardships for families with children when these overpayments are recovered automatically from future tax credits entitlements; and calls on the Inland Revenue to introduce an amnesty in respect of all overpayments of tax credits made in the tax year 2003/4 unless the overpayment was caused by fraud on the part of the claimant.”
  
  
• CPAG promotes action for the relief, directly or indirectly, of poverty among children and families with children. We work to ensure that those on low incomes get their full entitlement to welfare benefits. In our campaigning and information work we seek to improve benefits and policies for low-income families, in order to eradicate the injustice of poverty

Also see Tax Credits pages for more information.