Tax credit causes chaos

This has prompted concern from Citizens Advice that those on low incomes will be forced to go into debt by borrowing money to repay overpayments, as well as pay for food.

Organised fraud and IT problems have been blamed for the problems and has led to calls by opposition parties for the paymaster general to be sacked.

In 2004 the overpayments were £2.2 billion and the government hopes to reduce overpayments by a third next year.

“Last year, Citizens Advice Bureaux (CAB) across the UK advised on around 150,000 tax credit problems,” Katie Lane from the charity told BBC News.

“CAB experience is that the recovery of overpayments has caused significant hardship to many families as payments have stopped without warning or explanation.”

However, the large amount of overpayments means that many fear debt if forced to return the money, though the government told the website it would not if overpayment was the government’s fault.

Despite these assurances, comments posted on BBC News suggest that repayments are being forced and tax credits stopped.