Tax credit system slammed

A full 150,000 people in England and Wales approached Citizens Advice about debt problems relating to the government’s methods of allocating tax credits, the organisation has claimed.

Part of the problem for many people has been what Citizens Advice terms “unacceptable levels of official error” and the charity points to instances of seemingly random overpayments of tax credits being reclaimed at a later date to make its point.

Citizens Advice social policy officer John Wheatley said: “Some families have been left seriously out of pocket and confused because they are being asked to pay back tax credits, which they believed they were entitled to.”

“People often say that they have received contradictory award notices, or been told that the money definitely is theirs, overpayments can even happen when no mistake has been made.”

Last month, Citizens Advice launched a financial inclusion initiative in collaboration with the Association of British Credit Unions.