Monday, August 27, 2007

Tax credits

“Oh, you haven’t got much money to live on at the moment? Well, how much income did you have last year – I’ll divide that by 52 and pretend that’s how much you’re getting this year, then if it’s less than I think you need I’ll top it up this year with weekly payments.
“Then, if at the end of this year you’ve actually had less coming in than you did last year, I’ll give you a lump sum extra to get you through all the hard times you’ve just had…
“But if you end up having had more coming in this year than you did last year, I’ll work out how much extra you’ve had coming in that you shouldn’t have had, and ask you for it back as a lump sum (even if you’ve spent it already).
If you can’t pay it back as a lump sum, I’ll deduct the overpayment from what I pay you weekly the following year, which will be based on what you have coming in this year, meaning of course that you’ll get even less to live on than I decide you need…”
Dear oh dear.

Posted by Anonymous to swanage view at 7:55 PM


Anonymous said...

Well said, another govt. disaster its a mess and then they blame the claimants.

Anonymous said...

At least you have something..That is more than you had previously.

It has to be a a bit awkward because of the fraud aspect.

The hire a cripple is not an imagined thing. In some areas it is rife, with every other dodge that cah be used to get public money.

Anonymous said...

I think the purpose of the original post was to show that the basic precept of the Tax Credit system means that it is inherently subject to error.
It replaced a benefit system that was geared up to help people with money depending on their immediate circumstances, and to deal with changes in their circumstances immediately, rather than waiting a year or so.
The Tax Credit system is in fact more akin to something set up to help businesses that can get overdrafts and budget for a year at a time, than it is for individuals or families, whose low income means that they cannot afford an accountant!
The massive overpayments that have had to be written off by the government show that it is not an efficient system at all.
As for making it difficult because of fraud, as with so much in this country, those who are going to defraud, cheat or break the law, are well equipped to find good ways to do so.
When faced with difficulties in filling in forms, unlike the clever fraudster, deserving people usually cave in and don't get what they deserve.

Anonymous said...

You're right. It's absolutely incredible that the government are still going on about handguns being illegal.
Criminals break the law! They don't care about what's legal and what's illegal!
In the same way, fraudsters might not be prepared to do an honest day's work, but they will work at finding ways to beat the system.
I have had some experience of Tax Credits.
For 3 months I couldn't log on to their website to notify them of changes, and couldn't get through on the phone. I sent them 4 letters and got no reply.
In the end, they wanted back an overpayment of over £250. And they wanted it NOW!
It's that same thing again, government by principles that aren't working in practice, and nobody is taking notice of their eyes and ears.
It's a bit like Sat Navs - they're a good idea, but you can't rely on them alone!
Or you end up **** creek... or in it!

Anonymous said...

If you think Tax Credit is a morass, try getting off Housing Benefit and Council Tax Benefit.
When you try to earn some money to become more independent, they take 85% off your earnings. Fair enough.
But if you're paying, for simplicity's sake, £85 a week rent and council tax, you have to earn £100 to get to keep £15. After that, what you get's your own.
So at the minimum wage you've got to do about 20 hours a week to get £15 extra for yourself.
I have no problem with that, but once you've gone over the government's 16 hours a week rule, you're regarded as being in full-time employment and lose your other benefits!
For many people there is no transitional stage between being on benefit or going to earnings of £20,000 a year.
Come to think of it, why are there so many benefits that relate to the same people?
Income Support
Housing Benefit & Council Tax
Tax Credit
That makes 3 different departments, then there's the Inland Revenue collecting tax off you if you work anyway, that makes 4.

Anonymous said...

Yes, and don't forget that when you're in that transitional stage and come off Income Support, you lose your entitlement to free school dinners, free prescriptions, free dental treatment, and free sight tests etc.
You have to be careful too about coming off Income Support, because you might not be able to get back on it again.

Anonymous said...

Well, well. Today's news is Gordon Brown faces the prospect of having to return hundreds of millions of pounds that has been reclaimed in overpaid tax credits.

Officials broke the law for more than three years by failing to tell claimants that their tax credit awards were under investigation. Ministers admit that at least 250,000 cases will have to be reviewed.

Anybody who knew anything about the benefits system could have told him right from the start. I bet they did but he didn't listen.

You can't get the Inland Revenue, which has been screwing money out of people for centuries, suddenly to become benevolent and pay money out!

The first change that was made was NOT to send out postage paid envelopes when demanding a reply. That said it all!