CPAG response to tax credit overpayments announcement
27.10.05

The Child Poverty Action Group (CPAG) today responded to Paymaster General Dawn Primarolo’s announcement that from mid-November tax credit overpayments will not be clawed back until disputes with claimants have been resolved. Ms Primarolo also told the Treasury Sub-Committee that the Revenue would aim to settle each disputed case within four weeks.

Kate Green, Chief Executive of CPAG, said:

“CPAG welcomes the Paymaster General’s recognition that the recovery of overpayments are causing hardship and that action will now be taken to prevent automatic recovery in disputed cases.

“We remain concerned that the current system still puts all the onus on the claimants to know that they can dispute the recovery of an overpayment. CPAG has had legal advice that automatic recovery, without first applying discretion, is unlawful. As a result, hundreds of thousands of families are facing financial hardship. It is now up to the Revenue to demonstrate that they have taken these concerns fully on board.

“Tax credits are crucial to reducing child poverty and that’s why it’s so important to get the system right. These cases must be dealt with urgently and the Revenue will have to devote substantial resources in order to do this within the four week target. The jury’s out and we’ll be watching closely to see if the Revenue can deliver on their promise in the weeks to come.”

For further information please contact:

Alex Belardinelli
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302
abelardinelli@cpag.org.uk