partners tax credits overpayment from before our relationship

[shamen]

In April I moved in with my then fiancee and we did a tax credits claim together. We got married in July and everythings been going well.

Tax credits have now written to us to say that during 2006,2007 and 2008 my wife was overpaid on her single persons claim (I didnt even know the family back then). What they are saying is that as we now have a joint claim, even though the overpayments were from her single claim, I am jointly liable for them - as this is over £15k im positively bricking it here. The implication is that if she doesnt pay them back, they will come after me for them.

anyone ever heard of that? Is that even right?!

We are disputing it anyways, but its a shock to the system

[Caspar]

Re: partners tax credits overpayment from before our relationship

Probably not what you want to hear, but this is what I've found:

The debt is not your personal responsibility, but it is the responsibility of your partner. The money that is owed is drawn from his or her personal assets. If these funds are drawn from joint assets of your marriage (assuming you have married this person), then you may find yourself contributing to these expenses out of your joint pockets. Assets that are in your name prior to the marriage generally remain in your name, depending on the legal jurisdiction in which you reside. However, joint assets, such as the matrimonial home, may be used to cover any debts. In many jursidictions, the home in which you reside becomes a joint asset at the instant of marriage or the time at which you are deemed to have started a common-law relationship.


£15000 seems a massive amount of money for just three years - an overpayment of £5000 a year (not far off £100 per week!)

I think you need information as to how they arrived at this extraordinary amount.

[catch22]

Re: partners tax credits overpayment from before our relationship

Caspar - while your advice is technically right and applies to most forms of debt, in the case of Tax Credits overpayment, its not quite that simple.

Shamen - The debt will technically be your wifes (and any ex partners she may have held a joint claim with at the time), but they will reduce your current award to repay it and as that is a joint claim with you, obviously it will affect you. The amounts we're talking about here seem to be large so I'm assuming that may include extras such as disability (having read other posts where you state your wife is disabled), childcare, etc. If the majority of the claim you have now was your wife's and you were added as the "additional adult" with no disabilities or anything else, then the reductions to recover are unlikely to affect you too much as the extra being paid for you isn't that much compared to the original award. The reduction rate could be either 10%, 25% or 100% of your award until paid off, depending on your circumstances.

If your wife can get the full reasons and get someone who understands benefits or debt to pick holes in it, the overpayment may get reduced or even wiped out completely, its very common for these things to happen because of an error on Tax Credits part and not the claimant and they sometimes write off the debt because even they can see the difference between innocent mistakes and outright benefit fraud.

I hope you don't mind me making a general observation here but while I appreciate its concerning for anyone in this position, your post didn't show any support or concern for your wife who is probably as worried, if not more, as you are. You seemed very concerned with making sure you were not affected and any problems in a marraige need to be dealt with as a team, regardless of when they originally occurred. Been married many years so hope you don't take offence at me throwing a little sound advice your way on that score, but appologies if I mis-read and caused offence. Good luck with the outcome.

[Caspar]

Re: partners tax credits overpayment from before our relationship

Are you absolutely sure? I know what I wrote is the case for child benefits overpayment.

[catch22]

Re: partners tax credits overpayment from before our relationship

Child benefit is only paid to one parent anyway, usually the mother unless she is either deceased or does not have the parental authority/care for the child, its never a joint claim. Its a statutory benenfit in which the only qualifying criteria is to have a child under 16 or 18 if in full time education and the only way an overpayment occurrs with this benefit is if the claimant fails to advise either that the child leaves full time education or training (in the case of children over 16), that the child has been out of the UK for 8 weeks or more or the child has left home.

Tax credits is a completely different ball game, theres so much impact on income, family status, etc and so many additional elements, overpayments are generally very easy to accrue, especially when people realise that they work on information for the previous year and not the current year... this is where the majority of the confusion arises.

I'm a former welfare rights advisor, so yeah I'm sure.

[Caspar]

Re: partners tax credits overpayment from before our relationship

I'm a welfare rights advisor, so yeah I'm sure.

My brother is Executive Director of Change for the Department for Work and Pensions (literally incharge of it for the whole country) - Google Jonathan Lindley DWP.

I'm not saying you're wrong as you deal with it day to day, but he was happy with my answer as I ran it past him!

[catch22]

Re: partners tax credits overpayment from before our relationship

Thats fair enough, but you did say your answer was based on a wholly different benefit with different qualifying criteria.

So straight from the Tax Credits Code of Practice...

"For example, you and your partner separated and you then made another claim as a single person or in a new couple. We could ask you to pay back your current overpayment from your current award as well as a direct payment from your previous award"

So essentially, yes some of the current "joint" award could be reduced or your wife may need to pay it back herself directly or a combination of both. Without a full story of the break down of award or the circumstances, it's hard to give an accurate answer.

If you're no longer entitled to tax credits, it will become payable solely by direct payments, in which case, the liability is on your wife and any other people previously in a claim with her but not you as her current joint claimant, unless there is any overpayment from the current claim. So no, they will not "go after" you, in the event she fails to pay.

As your wife may be disabled (I'm assuming based on previous information), I thought this may come in handy to help dispute - Ferret Information Systems, welfare benefits computer software . I took this from the section regarding overpayments:

"Tax credits - overpayment

The biggest problem with tax credits remains the issue of overpayment and although to a much lesser extent, underpayment. This is because of the annual, tax-based, retrospective nature of tax credits calculation, which is always “catching up” with people’s circumstances. This is particularly the case for disabled people, who are more likely to be moving in and out of work, and are one of the groups who are routinely going to be overpaid at the start of their claim."

As I said, definately worth going through the entire claim and possibly doing a subject access request to get all the files and telephone calls, then point out all mistakes not just one relating to the overpayment, it will weaken their case and give more credibility to the possibility that there was an error in either advice given or the accuracy of the recording/use of information given by your wife.

[Caspar]

Re: partners tax credits overpayment from before our relationship

[quote=catch22;180286]Thats fair enough, but you did say your answer was based on a wholly different benefit with different qualifying criteria.

quote]

Thanks for a thorough post. I did not say the above though, I said my original answer certainly applied to that, not that it was based on that.

I think your last post gives a good rounded balanced answer - spot on, thank you!

[Caspar]

Re: partners tax credits overpayment from before our relationship

I'm still very concerned about the amount of money here having been side tracked with two of us doing our best to help. I would definitely do an SAR enclosing £10 and specifying that it is to pay for the SAR and must not be used towards paying off the debt.

Do not panic - I can understand your instinct to do so! Definitely a shock to the system, but neither of you were to know this, it's their mistake, not yours or your wifes.

They cannot get blood out of a stone, so even if it turns out you do owe this money they will need to come to a SENSIBLE repayment plan with you both, so please do not panic.

Get the SAR off asap then we know where we stand exactly.

[catch22]

Re: partners tax credits overpayment from before our relationship

Caspar, couldn't agree more with the last post.

Your wife is probably caught up in a situation where her disability and the nature of how disability benefits are administrated almost guarantees she will incur an overpayment from the start. It's very unfair and heightens the disadvantage her disability already puts her in. She will definately need support from you, regardless of whether or not the overpayment affects you.

[shamen]

Re: partners tax credits overpayment from before our relationship

Thanks for the thoughts chaps

Believe me Catch22, I do worry about the situation it will put my wife in (and us both TBH, at the end of the day even if she is only liable from a legal standpoint we both end up paying anyway). My concerns were that the taxman would follow me around directly for this (even though he will be following me indirectly through my wife if the overpayment is not wiped). Im a director of a company as well as employee of others and i do not want HMRC chasing me for money via any of these avenues. Thats all. A director is never considered a good investment when the tax man is following him, in my experience.

You are correct that the overpayment includes disability and childcare elements, hence the high figure. We have gone through the SAR we got back from HMRC and its clear to us from both the paperwork and all of the phone call recordings they sent that the wife advised them of the correct circumstances at the time and that they have processed that data incorrectly. Interestingly some of the recording 'cut off' in the middle of the call but who knows why that is.

HMRC's current argument is even though my wife informed them of the correct circumstances and that it appears they made the mistakes, my wife should have picked up on this on her award notification that they sent and that the wife should have called to correct them. That seems a weak argument from my standpoint, but knowing HMRC its completely legal somehow.

P.S. thanks to the wife for pointing out there were replies to this post.Life has been hectic for me lately so I haven't been checking out forums much.

[Caspar]

Re: partners tax credits overpayment from before our relationship

Does this help at all?

http://news.bbc.co.uk/1/hi/business/8233538.stm

As I understand things with the DWP there is no limit on how far back they can go with their claim. With HMRC I think, emphasise think there is a limit.

I don't wish to appear nosey, but what is your financial status now. One thing I noticed in the article was that if you can prove hardship HMRC can abandon the claim.

[shamen]

Re: partners tax credits overpayment from before our relationship

As luck would have it, my main income was stopped yesterday due to redundancy. Im still a director, but income from that is extremely low due to the current financial climate - a case of making a business through self sacrifice at this stage. I also have dribs and drabs coming in from contract work I do for other companies but its nothing stable.

My wife ran out of SSP back in july so she is going through a claim for permanent health insurance (though her employers are hampering this to the tune of 4 months delay to date).

Maybe the hardship line is a good avenue, but im unlikely to be out of work longer than a month as I already have offers coming in for new jobs.

[Caspar]

Re: partners tax credits overpayment from before our relationship

As luck would have it, my main income was stopped yesterday due to redundancy. Im still a director, but income from that is extremely low due to the current financial climate - a case of making a business through self sacrifice at this stage. I also have dribs and drabs coming in from contract work I do for other companies but its nothing stable.

My wife ran out of SSP back in july so she is going through a claim for permanent health insurance (though her employers are hampering this to the tune of 4 months delay to date).

Maybe the hardship line is a good avenue, but im unlikely to be out of work longer than a month as I already have offers coming in for new jobs.

So you need to act quickly. Fill in an I/E sheet:

http://www.legalbeagles.info/forums/...ad.php?t=19592

Post it on here. Remember pets are not essential. Haircuts, telephones, house repairs, etc.... are.

Mine's attached if you want a laugh (I mean if you want one to help you!)

Post it back asap and then we'll get a letter together. I'll work on that now assuming you're going to be able to demonstrate hardship.

[Caspar]

Re: partners tax credits overpayment from before our relationship

LETTER # 4

Ask Creditors to Write Off the Debt Due to Your Circumstances
Your Address
Date

Dear Sir/Mr

Ref: Your Account Number: xxxxxxxxxxxxxxxxxxxxxxxxxx

We wish to inform you of a recent change to our circumstances and as such we are facing significant financial hardship.

Unfortunately I have just been made redundant and have no immediate prospect of regaining employment, especially in the current climate.

Please find enclosed an up to date Income and Expenditure sheet which details our present financial circumstances. As is apparent, our outgoings far outweigh our income and as such we are experiencing extreme financial hardship.

We have recently been informed that due to an overpayment to my wife dating back to 2006-08 we owe a sum in excess of £15000.

We can manage to make a one off payment of £x in full and final settlement of the debt. This will obviously be a struggle for us and we would be grateful if you would consider writing the remaining amount off.

We would like to assure you that it was never our intention to renege on our financial responsibilities, but there was no way of us knowing about this debt till it appeared out of the blue (it dates back before our marriage and is putting great strain on it), and unfortunately our current circumstances are such that we realistically cannot maintain payments of any kind.

We would greatly appreciate any help you can give us and look forward to your comments on this matter.

Yours faithfully/sincerely




If this doesn't work, it will be a case of trying to reach a mutually agreeable repayment plan. The IE sheet will help keep this low, though they may well want to review every 6 months or so.