TCM0226040 - Payment - overpayments (D-E): Overpayments - direct recovery action

Information

The pursuit of any outstanding overpayment is the responsibility of Debt Management and Banking (DMB) whenever

  • entitlement to tax credits ends

or

  • a household breaks down.

In some circumstances where a household has ended and the customer submits a new claim, we may recover any outstanding overpayment from the customer’s new award. This is known as cross award recovery. DMB will pursue the overpayment directly from the customer when

  • a customer separates from their partner and subsequently makes a claim with a new partner
  • a single customer does not make a new claim
  • joint customers do not make a new claim
  • a customer’s partner dies and the customer subsequently make a new claim.

When an overpayment is to be recovered direct from the customer

  • the customer will receive a Finalised Award Notice or Statement Of Account that informs them of the total overpayment for both WTC and CTC as appropriate
  • at this point they may decide to repay the overpayment which will balance their award and prevent any further action taking place
  • if, after 30 days have elapsed, no response is received from the customer a form TC610 Notice to Pay is issued. This provides them with a payslip and gives them a further 30 days to settle the overpayment
  • when form TC610 is due to be issued the computer checks the amount of outstanding overpayment. If the amount is on or below the ‘lower remission limit’ of £32.00, the overpayment is automatically remitted and direct recovery action stops. A TC610 will not be issued.
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  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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  • the overpayment is automatically referred by the tax credits computer to the IDMS used by DMB
  • DMB then starts its recovery processes
  • in some cases, DMB may issue form IDMS15 to the customer, which sets out what action will be taken if the overpayment is not repaid and the options open to the customer to repay it.
  • IDMS is automatically notified when any repayments are received against the overpayment and posted to the tax credits computer.

If the customer still does not repay the overpayment, DMB will take any stronger steps they deem necessary to pursue it.

DMB has a dedicated Payments Helpline that the customer can use to arrange repayment of their overpayment. However, if the case has appeared before a Court, the customer must make the repayments as directed by the Court.

If the amount of the overpayment changes at any time, due to repayments received or late posted manual payments, IDMS is not automatically updated to reflect the correct amounts until re-profiling of the award takes place. If the customer clears the overpayment, recovery action is automatically stopped.

If, after checking the claim, TCO decides

  • the overpayment is recoverable
  • the recovery processes continue
  • any recovery suspension applied will be lifted
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

All complex cases - for example, polygamous marriages or Other Member State cases - are manually referred to DMB if the overpayment is to be recovered direct from the customer. This is because these awards have all been manually worked off system.