Public confidence in tax credits must be restored, says CPAG

Public confidence in the tax credit system must be restored, a leading charity said today as figures were published showing that £1.8 billion was overpaid in 2004/05. 529,000 families were overpaid more than £1,000. In the same year, £556 million of underpayments were made.

Alongside other organisations, the Child Poverty Action Group (CPAG) has campaigned for reform of the tax credit system to help low-income families and many of the changes it has called for are now being implemented.

CPAG Chief Executive Kate Green said today:

“Tax credits have helped millions of low-income families, but they have not always worked as successfully as they should have done. Behind the £1.8 billion figure are the stories of thousands of families who have struggled to survive when overpayments have been clawed back by the Revenue.

“We must now look to the future and a package of reforms now being implemented should both radically reduce the scope for overpayments and limit the impact of recovery on the poorest families in future years. The Revenue must ensure these reforms work successfully so that public confidence in the tax credits system is fully restored.

“CPAG would like to see further reforms including a statutory right of appeal against overpayment decisions and the option of face-to-face advice for claimants who need it, perhaps by basing Revenue staff in local Jobcentre Plus offices.

“As we move forward from the problems of the past CPAG urges politicians from all parties to commit to further investment in tax credits as a way of lifting children out of poverty and helping parents back to work.”

For further information from CPAG please contact:
Alex Belardinelli
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302
abelardinelli@cpag.org.uk