The government overpaid £1.8bn in tax credits last year
The government's tax credits - Child Tax Credit and Working Tax Credit - were introduced in April 2003.
But there are growing calls for the system to be reformed, after revelations that for the second year running, nearly two million families were overpaid.
Many families now face having to pay the money back.
What has gone wrong with the system?
The aim of tax credits was to integrate welfare benefits into the tax system, instead of merely handing out cash to needy families.
But the credits are based on income for the previous year, so overpayments are an intrinsic part of the system, financial advisers say.
If families' circumstances have changed from one year to the next, they may no longer be entitled to the same level of tax credit.
However, much of the overpayment has been blamed on errors by HM Revenue and Customs.
The House of Commons' Public Accounts Committee has described the tax credit system as a "nightmare" and "frustratingly arcane". It believes the system may be too complex to implement properly.
There is also strong evidence that tax credits have been targeted by organised fraudsters who see them as easy pickings.
Fraud problems forced the Revenue to close its online tax credits application system in December 2005.
What can I do if I have been overpaid tax credit?
The government says you will not be forced to repay money if the overpayment was the fault of HM Revenue and Customs as long as it was "reasonable for the customer to think their payments were right."
If your income in the tax year in question was less than the estimate on which your tax credits were based, the HMRC will normally pay you the difference.
If the income is greater - but the difference is £25,000 or less - since April this year the HMRC will not claim back any tax credits. For changes before 1 April 2006 much stricter rules applied, with income changes of just £2,500 resulting claims from the HMRC.
If the difference is greater than this, however, then you will be expected to pay some back, probably over a period of time.
If you think that the overpayment was caused because HMRC made a mistake in calculating your entitlement, then you have the right to have the entitlement decision looked at again by an independent tribunal.
Contact the HMRC and ask for Form TC846: "Request to reconsider recovery of tax credits".
How widespread is the problem?
It appears that nearly a third of all families benefiting from the government's tax credits are routinely overpaid.
The Public Accounts Committee says that in the first year of the new system, 5.7 million families received £16bn in credits between them.
However, 1.88 million of the claimants were paid too much, amounting to £2.2bn of overpayments during the 2003/04 tax year.
The latest figures, covering the 2004/05 fiscal year, show little improvement. According to the Treasury, the level of overpayment fell slightly, to about £1.8bn, but the number of families affected rose to 1.96 million.
How can I claim tax credits?
People who think they may be eligible can contact Revenue and Customs, through its telephone help line, or through an HM Revenue and Customs inquiry centre (see link).
If you think you may be eligible but haven't applied, you can get a claim pack by phoning 0800 500 222.
The Working Tax Credit/Child Tax Credit helpline is open from 0800 - 2000 BST seven days a week, and can deal with queries about claims.
In Great Britain: 0845 300 3900 (textphone 0845 300 3909).
In Northern Ireland: 0845 603 2000 (textphone 0845 607 6078).
Will I lose other benefits as a result?
Child benefit is unaffected by tax credits. It will continue to be paid, regardless of income, to all families with children under a certain age.
Tax credits can be paid in addition to most other benefits. However, they may count as income for some means-tested benefits.