News story

22nd June 2005

Urgent Action Needed To End Tax Credit Misery Of Local Families

In the light of two damning reports about the Government's tax credits system, Northavon MP Steve Webb has called for urgent action to end the "misery" that the system is causing to local families. This week both the Parliamentary Ombudsman and the National Association of Citizen's Advice Bureaux have published reports highlighting the administrative chaos of the tax credit system which has left thousands of families in financial crisis.

The reports have been welcomed by Northavon MP Steve Webb who said that he regularly met families at his constituency surgery who had suffered at the hands of the tax credits system.

One particular problem is where, through an error by the Inland Revenue, a family is accidentally paid too much money in tax credits. Because of the complexity of the system, families are very often not aware how much they should be getting and so do not realise that they are not getting the correct amount. In some cases they ring up to query the award and are assured that everything is fine, only to have the Inland Revenue change their mind a year later and start clawing the money back.

Steve Webb said:

"For too many families, a system that was meant to help them has turned into a nightmare. Local families have found their finances on a roller coaster where they never know for sure how much money they have to live on. The Inland Revenue has been hopelessly inefficient and has then punished people for its own errors.

"I believe that where people have acted in good faith, and supplied accurate information when required, any overpayments of tax credits should now be written off. The Government should also move to a system where people's tax credit awards are fixed for at least six months, instead of being constantly reassessed."