Tax Credit over payments causing havoc for local families- Hinckley and Bosworth Liberal Democrats

12.00.00am GMT Wed 14th Jan 2009

Many families in Hinckley and Bosworth have been paid the wrong level of tax credits.

They are amongst 1.8m families nationally who have been overpaid tax credits more than once in the last four years, according to figures obtained by the Liberal Democrats.

Michael Mullaney Liberal Democrat parliamentary spokesman for Bosworth said "One in five families who have claimed tax credit have been wrongly paid. Over 9,000 families in Hinckley and Bosworth receive Tax Credits. That's means there could be nearly 2,000 local families here in Hinckley and Bosworth getting the wrong level of Tax Credit.

"Local families need to know exactly how much cash is coming in and when, not live in fear that the taxman will come knocking and asking for the money back."

The figures, released in a Parliamentary answer, also reveal that over half a million families nationally have been underpaid more than once over the past four years.

The figures show that:

over payments overpayments

1.8m families have been overpaid tax credits more than once in the four years that the system has been running, an increase of 400,000 in just one year. That is one in five of all families who have claimed in the same period

Over 60,000 families have been overpaid more than three times

Repeat underpayments

555,000 families have been underpaid more than once since 2003, an increase of 150,000 families in just one year

82,000 families have been underpaid more than twice

6,000 families have been underpaid more than 3 times

Michael Mullaney continued "These figures show that a scheme that was meant to provide support for hard-pressed families has turned into a nightmare for many local families.

"The complexities of the tax credit system mean it is almost impossible to know if you are being paid the right amount. "Even people who have supplied all the correct information can find that they have been overpaid due to Inland Revenue errors and then face repaying thousands of pounds that they have already spent.

"The system needs to be changed so that payments are fixed for at least six months at a time so that people know where they stand."