CCM15640 - Undisclosed Partners: Recovery of Overpayments - Examples of Incorrect Claims where Examination or Enquiry settled between 17 May 2007 and 17 January 2010
Example 1
Billy is in low paid work and lives with his mother. He rings the Contact Centre to ask if he is able to claim WTC and they say he can claim even though he is living with his mother. Billy fills in the claim form but misunderstands what is meant by a partner and shows his mothers name etc but not her income. His mother also signs the form. The claim is selected for a compliance enquiry because a data match of earnings reveals income for his mother. When the compliance officer discusses this with Billy they find he has shown his mother in error and it was treated as a joint claim. This should never have been a joint claim and all of the tax credits have been paid in the wrong capacity. Had Billy claimed as a single person he would have received exactly the same amount. The incorrect claim arose out of a genuine error and confusion. We would therefore agree that Billy does not have to repay the overpayment as Notional Entitlement will cover the full overpayment.
Example 2
In April 2007 Ellie made a single claim when she began work. In December 2007 she rings the Contact Centre to notify a change of circumstances as her boyfriend, Tom, has moved in with her that week. During the conversation Ellie learns that she has made an incorrect claim. Tom was previously a long distance lorry driver who was only home on a Friday and Saturday. He is not the father of her children, the house is in her name and she thought she did not need to include him on the claim form. On 3 December he had started a new job and will be home each night. Ellie thought this meant the relationship had changed to a permanent one and so she needed to tell HMRC. Ellie and Tom were always a couple, he was simply working away from home on a long term basis, and they should have made a joint claim. Ellie made a genuine error but has been overpaid tax credits as she claimed in the wrong capacity. Ellie can be given Notional Entitlement. The TCO would calculate how much the couple would have received had they claimed correctly and only recover the difference.
Example 3
The facts are as in Example 2 but Ellie does not ring the Contact Centre in December. Instead an enquiry is opened into her 2007/2008 claim in July 2008 because we have information to suggest Tom is living with her. Ellie made a genuine error with her claim but in December 2007 she could no longer believe her claim was correct because her circumstances had changed. Notional Entitlement would only be given for the period from April 2007 to December 2007.
Example 4
Chloe is 19 and in May 2007 made a single claim when she went back to work after having a baby. In October 2007 Chloe rings the Contact Centre to say she made a mistake with her claim. Chloe had married Joe in March 2007 but had not shown him on her claim form because they have not been able to live together. They cannot afford a house of their own and neither parent will let the other one stay at their house so they have continued to live with their respective parents whilst they try and save up enough money for a rental deposit. Chloe only found out she had made an incorrect claim when she was talking to a housing adviser about their chance of getting housing together. Chloe made a genuine mistake but has been overpaid tax credits as she claimed in the wrong capacity. The TCO would calculate how much the couple would have received had they claimed correctly and only recover the difference.
Example 5
The facts are as in Example 4 except that in September 2007 you open an examination because child care costs are high compared to income and there is information to suggest another adult lives at her address. The other adult is her step brother but at your meeting Chloe explains about Joe and why she did not show him on her claim form. Notional Entitlement will be due as Chloe has made a genuine error with her claim.
Example 6
The circumstances are as in Example 4 except that Chloe does not speak to the housing adviser so continues to believe her claim is correct. In September 2008 you open an enquiry into the 2007/2008 award and at a meeting Chloe tells you her situation. Even though Chloe renewed her 2007/2008 incorrectly this was still as a result of a genuine error. Notional Entitlement will be available for 2007/2008 and 2008/2009.
Example 7
Julia made a claim for tax credits on 18 November 2005. In January 2008 you open an enquiry into the 2006/2007 award because we have information to suggest there is another adult at her address. At the interview Julia admits that Ed lives with her. She did not put his details on the claim form because he is a student who has no earnings or income and it is a very volatile relationship so she never knows how long it will last. She did not think this made her claim incorrect because Ed had no income to take into account. Julia has made incorrect claims for 2005/2006, 2006/2007 and 2007/2008. Although she knew she had a partner she reasonably believed her award was correct because Ed did not have any income to take into account. Notional Entitlement will therefore be available for all years.
Example 8
In June 2006 Vicki made a single claim and renewed this in May 2007. In July 2007 Vikki’s claim is selected for an enquiry because we hold data to suggest another adult was living at her address. During the enquiry Vikki admits Matt has been living with her since 2005. She agrees they should have made a joint claim but did not do so because he had previously told the CSA that he lived alone, otherwise they would have taken Vikki’s earnings into account. Matt did not want the CSA to find out he was living with someone. Vikki has made an incorrect claim. This was not as a result of a genuine error; she knew it was incorrect at the time she made it. We will look to recover all of the tax credits that have been paid under that claim.