Concerns are being raised over the collection of tax credit overpayments. Campaigners have called on the government to ensure debt collectors have high standards when collecting tax credit overpayments. This appeal comes after a pilot scheme is launched by the tax credits office which sees overpayment collection being outsourced to debt collectors on a payment- by-results basis.
Tax credits are payments from the government to those on low incomes. People who are responsible for at least one child or young person may qualify for child tax credit. Those who work, but are on a low income, may qualify for working tax credit, or both. Overpayments and underpayments are commonplace as claimants circumstances change. The tax credit system is notoriously complicated overpayments are often received unknowingly and in good faith.
At present, collections of overpayments are carried out by HM Revenue and Customs (HMRC). Where possible any overpayments are taken out of future tax credit payments. The government however wants private companies to take the job of debt collection on