Government Gets More Than Half of Tax Benefit Claims Wrong

Figures revealed in Parliament by Torbay MP Adrian Sanders have showed that more than half of the 0.5 million families in the South West receiving tax credits have been given the wrong amount of money since the scheme was set up in 2003.

Treasury Minister Stephen Timms confirmed that 150,100 awards were underpaid and 143,100 were overpaid.  Worryingly 40,000 families received the wrong amount on three or more occasions.

Tax credit overpayments, which may not be easily apparent, can lead to court action and low credit ratings, with people owing the Government thousands of pounds.

Other figures showed that the tax credit system costs almost £90million to administer, despite the majority of families experiencing difficulties.

Adrian has been calling for the Government to sort out the system or think of a simpler and fairer way to structure the tax system.

Adrian said: “Yet again the Government has failed dismally with a sprawling computer system, bringing misery and anxiety to millions of families nationwide.  Thousands of families across the South West will not have received the right amount of money, which sometimes leads to overbearing court and bailiff action by the Treasury.”

“The waste and inefficiency of the system is inexcusable and it would be far better if the Government raised the tax free allowance to a suitable level, saving millions on bureaucracy and saving families from the unnecessary stress and worry the system causes.”

“The Government says that it is doing more for hard pressed working families but for every tax credit claim that goes right, there is one that goes wrong.  Add to this the removal of the 10p tax rate and high rises in bills in recent years and it becomes clear how bad a deal people are getting from this Labour Government.”

“I still see so many cases coming to my surgeries and through my office and for individual cases I can appeal to the Government to sort out problems.  I would urge any Torbay constituents who are having problems with their tax credits to call my office on 01803 200036.”