The True Cost of Tax Credits

by Whitevanwoman.

Another weekend will be wasted…

I’ve got a free weekend coming up. Great. What shall I do? Visit family and friends, shopping, have a day out in the hills or on the beach with the dogs? Nope. I should really sit down and write a number of letters and spend hours going through paperwork in respect of my working tax credit dispute.

I’m one of the lucky one’s in that my claim is currently correct and in payment but that is only as a result of the assistance and intervention of my MP, David Maclean. I’m lucky again in that I have a Conservative MP so he was quite happy to help me fight my battle against tax credits. However, although recovery has been suspended as I have disputed it, there is still an outstanding overpayment of approx £1500 for the year 2005/06. I’ve heard nothing further about this alleged overpayment since my current claim was sorted out in June, but I know that at some point, I will probably be hit with another demand for repayment or I may hear back from TCO informing me that my appeal against it has been refused. And then the battle will start again.

And so I’m in two minds at the moment – do I just do the ostrich thing and ignore it, playing the waiting game, anxiously waiting every day for the postman in case there is one of those dreaded brown envelopes with HMRC stamped on it, or do I do something proactive and risk rattling their cage and doing battle in the run up to Christmas when there’s all the extra stress anyway.

What I need to do in the immediate future is chase up the Data Compliance office for CD recordings of my telephone calls. I wrote to them in the summer requesting my documentation, and whilst I received paper copies of everything within the 40 days, there was a note inside saying that the CDs would follow at a later stage. The 40 days were up on the 1st Sept so it is now approximately 80 days since my request. I know that I need to write to chase these recordings up and I suspect that it may even take several letters and its likely to be months rather than weeks before I get them, if I get them at all. And it is likely that when I do receive them, there will be some conversations missing. And those missing conversations are likely to be the crucial ones which will prove my case. More letters, more cost, more hours wasted, more stress.

I need to write to my MP to thank him for his help and to update him on the situation. That at least will just be a short letter as there isn’t really any news to update him with. But more time, more cost.

But the big task which I’ve been working on for some time and which I really need to finish is the calculation of what the past 3 years of my war with TCO has actually cost me in monetary terms. This means going back through 3 years of phone bills (and then adding on VAT and interest to the call costs, so I need to brush up my accountancy skills; more internet research needed, more hours spent in front of the computer and scratching my head), calculating all my printing and photocopying costs, postage, and then there’s the bank statements and the bank charges incurred as a result of payments being stopped or delayed, the late mortgage payment charges, the credit card late payment penalties, the mileage incurred in having to drive a 26 mile round trip (I live in a rural area) to pay manual payments into my bank account every 4 weeks for 2 years, and then I need to visit my local council tax benefit office (42 mile round trip) to see if they can help me calculate how much council tax I have overpaid as a result of being on manual payments for 2 years and therefore unable to prove I was in receipt of working tax credit.

At a guess, I am probably looking at trying to reclaim about £500 in expenses incurred. According to tax credit publications, I am entitled to be reimbursed for all of the above expenses but I will be gobsmacked if I get any more than about 10% of that.

If I could claim minimum wage for every hour I’d spent trying to sort out my tax credit problems, I wouldn’t need to work or claim tax credits for the next year. But we claimants are expected to have the same knowledge about claims as trained HMRC staff, accountants, tax specialists and legal experts. If I could claim back for my hours at the same hourly rate of HMRC staff, I’d be laughing all the way to the bank, and if I could claim back at the same rate as an accountant, tax specialist or legal expert, I could retire early.

All this because 3 years ago, after having a long period of illness, I decided I wasn’t going to just sit on benefits for years and decided to get back into part time work and try to pick up my career again. This is what the government wanted people with disabilities or long term sick to do. I thought I was doing the right thing. More fool me. The “benefit” of tax credits was supposed to help me support myself whilst I was only able to work part time, to be a stepping stone back into full time employment.

Three years later, my condition (a severe anxiety disorder) has substantially worsened and I am now on additional disability benefits as a result, having been more ill than I have ever been in the past due to the stress of my financial situation caused by the continuing tax credit problems, the non payment & stoppage of my tax credits and the stress of having to try to deal with all the paperwork, research, and battling with the system, to the point where I was nearly hospitalized as a result. It was only down to my pleading with support workers not to be hospitalized to due the chaos it would cause in respect of stopping / starting my tax credit claim and other benefit claims that they agreed I could stay at home and be treated at home. It is now looking unlikely that I will be able to return to full time work for some time, if ever.

My story highlights the human cost of tax credit errors but looking at it from a financial point of view, the errors in my case will end up costing HMRC, my dependence on benefits will continue to cost DWP, and my frequent sickness absence at work is costing my employer (local government).

Oh, I forgot to mention – the reason for my alleged overpayment : right back in the very early days of my claim, I was told I was not entitled to WTC because I was not registered disabled (although this was not a requirement for the disability premium). Strangely my overpayment includes a payment for Child Tax credit – I don’t have any children. Now at least, my claim in theory should go through automatically, as my condition has worsened so much that being on the highest care rate of Disability Living Allowance qualifies me for the disability premium. That’s the true cost of Tax Credits.

www.TaxCC.org