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HMRC internal manual

Tax Credits Manual

Specialist areas: international: Other Member States: Other Member States - recovery of family benefit on behalf of OMS

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Checklist

Before you follow this guidance make sure that;

  • the SED refers to Article 72
  • you take a photocopy of the OMS decision letter
  • when dealing with an ongoing recovery under Article 72 you take normal action
  • when dealing with a fully recovered overpayment under Article 72 and the claim is in the renewal period, you end the current claim from 05/04 and capture a BAU claim from 06/04

Background

The recovery of overpayments of family benefits incurred in one Member State (MS) can be recovered from family benefits in another MS (OMS), provided that the national law of each MS allows. This is provided by;

  • Article 111 (2) of European Community (EEC) Regulations 574/72 and
  • Article 72 (1) of European Community (EC) Regulation 987/09

This means that where an overpayment of family benefit is incurred in an OMS it can be recovered from UK family benefits. If the request is not under the correct Article or is unclear, refer the case to TAL for advice.

Note: Article 72/3 deals with social assistance so cannot be applied to family benefits.

When dealing with a recovery request dated between 1 May 2010 and 29 February 2016, use the daily exchange rate published on the date the OMS sent their initial request for recovery.

When dealing with a recovery request dated on or after 1 March 2016, use the working day immediately before the day the OMS sent their final request for recovery.

For example, if a SED is received from the OMS requesting recovery and was completed on 7 December 2014, then the daily exchange rate to use in order calculate the Sterling value, is the one applicable to the relevant MS on 7 December 2014.

Guidance

{#step1}Step 1

Check whether the requested recovery of overpayment is for family benefit.

If the requested recovery of overpayment is for family benefit, go to Step 2.

 If the requested recovery of overpayment is not for family benefit

  • issue FO27 to OMS advising  ‘We are unable to recover the overpayment as the overpayment is not for family benefit’
  • send the case papers to Iron Mountain
  • take no further action.

{#step2}Step 2

Recovery will not be carried out where the debt is more than five years old.  The five-year period is calculated from the date when the debt is established.

Check whether the overpayment is more than five years old.

If the overpayment is more than five years old

  • issue FO27 to the OMS noted ‘Recovery of Family Benefit will not be pursued as the debt is more than five years old’
  • take any required action on the case
  • send the case papers to Iron Mountain.

If the overpayment is not more than five years old, go to Step 3.

{#step3}Step 3

Check whether Child Tax Credits (CTC) is in payment.

If CTC is in payment, go to Step 4.

If CTC is not in payment, check CBOL to see whether ChB is in payment

If ChB is in payment, refer the case to the relevant Child Benefit area.

If ChB is not in payment

  • issue FO27 to the OMS advising ‘We are unable to pursue the recovery of the family benefit overpayment as the customer who incurred the overpayment does not receive Child Benefit or Child Tax Credit’
  • send the case papers to Iron Mountain.

{#step4}Step 4

Check whether the OMS have supplied a copy of their decision letter.

If the OMS have supplied their decision letter detailing the overpayment, go to Step 5.

If the OMS have not supplied their decision letter detailing the overpayment

  • issue a FO26 to the OMS to request a copy of the decision letter
  • BF the case for 3 months
  • on expiry of BF, go to Step 7.

{#step5}Step 5

Check whether the case is complex.

If the case is complex, go to Step 6.

If the case is not complex, end the existing claim and capture a complex claim, go to Step 6.

{#step6}Step 6

Manually calculate the Current Year (CY) award

  • treat the overpayment as ‘overpayment carried forward from PY’
  • add household note II97 – ‘Article 72 case – ongoing recovery of OMS overpayment’ from TCM0160040. For how to do this, use TCM1000001
  • issue FO27 to the OMS to advise of recovery
  • issue TC2054 and a copy of the OMS overpayment decision letter to customer
  • complete PORF and pass to FLM, for how to this use CBM051400
  • take no further action.

{#step7}Step 7

If a copy of the OMS decision letter is received, go to Step 6.

If a copy of the OMS decision letter is not received, take no further action.