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Last Updated: Saturday, 29 October 2005, 14:22 GMT 15:22 UK
Minister mulls tax credit appeals
By Paul Lewis
BBC Radio 4's Money Box

A father and daughter
Concerns have grown that tax credit problems have caused hardship
People may be allowed an independent appeal against decisions to recover overpaid tax credits, the government has told the BBC.

Last year nearly two million families were overpaid more than 2bn in tax credits.

Around 217,000 of them disputed the recovery of this money, but if the Revenue upholds the decision no further appeal is allowed.

In June this year the Parliamentary Ombudsman made 12 recommendations to improve the administration of tax credit. One was for an independent right of appeal.

The government's response made no reference to this recommendation. Campaigners and some MPs took this to mean it had been quietly rejected.

All of the ombudsman's recommendations, with the exception of writing-off all errors, are being considered
Paymaster General Dawn Primarolo
But speaking on BBC Radio 4's Money Box programme, the minister in charge of tax credits, Paymaster General Dawn Primarolo, confirmed she was considering introducing a new independent right of appeal against the decision to recover the overpayment.

"All of the ombudsman's recommendations, with the exception of writing-off all errors, are being considered," she said.

And when asked if that meant the independent right of appeal was being considered she replied: "Of course it is."

That news was welcomed by the Director of the Child Poverty Action Group (CPAG), Kate Green.

"I would be absolutely delighted if that was something the government was thinking of. We could never understand what the problem was. There's always been a right of appeal in these situations for other social security benefits," she said.

Suspended recovery

Ms Primarolo also explained to the programme the details of her decision - announced this week to Parliament - that while there was a dispute over whether the Revenue had the right to recover an overpayment, it would not recover it.

The money should not be recovered if an official has made a mistake and the customer can prove they did not realise they had been paid too much.

It puts the onus on the claimant to think there might be a problem and to raise a dispute
Kate Green, CPAG
The minister explained the new policy to the programme: "Where a claimant for tax credits disputes a notice of overpayment, the overpayment recovery will be suspended while that dispute is settled," she said.

"We currently have something like about 40,000 that are in the process, and by about mid November all the current stock of appeals will be in the new process, and of course any applications that come in subsequently will come in that process... When I have a specific date I will announce that."

CPAG's Kate Green also welcomed this change.

"The announcement that the Revenue will suspend recovery while it investigates disputes is a good start," she said.

"But of course it puts the onus on the claimant to think there might be a problem and to raise a dispute.

"A lot of the overpayments that occur are not through any fault of claimants themselves.

"It has always been recognised that recovery of overpayments could cause serious hardship to low income families."

BBC Radio 4's Money Box was broadcast on Saturday, 10 September, 2005 at 1204 BST.

The programme was repeated on Sunday, 11 September, 2005 at 2102 BST.

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