Department for Work and Pensions
It is estimated that for 2004/05, 9.1% of the benefit paid out for Disability Living Allowance (DLA) was overpaid, equivalent to £730m during the year. Underpayments amounted to 2.1% of the benefit paid, equivalent to £200m during the year. For both overpayments and underpayments, most incorrectness was caused neither by fraud nor by errors by the Department. It resulted from changes in claimant circumstances which were not reported to the Department.
K. Lane and J. Wheatley
Citizens' Advice, 2005
Many low-income families rely on tax credits to support children and make low-paid work sustainable. However, research based on the 150,000 tax credit problems handled by Citizens' Advice Bureaux in 2004/05 shows that recovery of overpayments has left some families in severe hardship as substantially reduced incomes lead to serious debt and undermine financial security. In the most extreme cases, CAB clients have been threatened with repossession or eviction from their homes or have been left with insufficient money for food. Payments are supposed to be responsive to rises and falls in income, but the system is complex. Incomprehensible and contradictory notices have left people unable to understand their entitlements or to spot errors in their awards. Tax credit IT systems appear to be unreliable, so that Helpline Advisers are unable to provide accurate information. The net result is growing disillusionment with tax credits.
C. Giles and V. Holder
Financial Times, July 5th 2005, p.3
The tax-credit structure for low-income families may have to be changed if problems with over and underpayments persist, the chairman of Revenue & Customs, has admitted. In 2003-04 about 1.9bn families were paid too much. A large proportion of these families were forced to repay the handout, causing undue hardship because most had already spent the money.
Financial Times, July 6th 2005, p.4
Employers hiring long-term incapacity benefit claimants should be eligible for subsidies up to £70 a week, ministers will be told today. In a report published today the Social Market Foundation think-tank proposes a two-tier system of benefits with a lower rate paid to those less incapacitated who might reasonably be expected to perform some kind of work.
Financial Times, July 18th 2005, p.4
More than 110,000 families with incomes more than £50,000 a year have received tax credits, according to Government figures for 2003-4, released in response to a parliamentary question. The Tories said the data strengthened the case for a wide-ranging review of the tax credit system.