CCM10730 – Penalties and Interest: Incorrect Claims – Meaning of Failure to Take Reasonable Care - Enquiries or Examinations Opened on or after 6 April 2008

Where an over-claim arose from an error which was the result of a Failure to Take Reasonable Care we will charge a penalty of 15% of the over-claim (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Once you have established that the claimant has made an incorrect claim or declaration, or supplied incorrect information, see CCM10060 you need to consider:

• whether there are there any circumstances which limited that particular claimant’s ability to provide a correct declaration or information?

The circumstances which could influence a claimant’s ability to provide correct information could be:

• their health or general well-being, including the impact of a disability;
• capacity to deal with financial and other matters;
• limited access to support or guidance or advice;
• personal circumstances such as recent bereavement or household breakdown.

Note: If a claimant is disabled or has limited understanding of tax credit or other matters that is not an automatic excuse for errors: advice and help on tax credits is freely available and there are many people in similar circumstances who take reasonable care in their tax credit claims. You must be sure that the claimant’s circumstances were decisive in their making an incorrect declaration. You will need to look carefully but sympathetically at their circumstances. The claimant is still expected to take reasonable steps to submit an accurate claim. Were they aware of their limited ability? Is this a condition that affects them all of the time or is it sporadic? How do they deal with other aspects of their life such as domestic bills, insurance, banking or official forms? Did they seek help at the time they made the claim from the person representing them now?

You do not need to actively identify circumstances which could influence a claimant’s behaviour but you should take them into account if they are apparent or the claimant tells you about them.

A claimant has failed to take reasonable care if they have provided incorrect information and

• they have not taken as much care as an average person would, and
• either there were no circumstances which limited their ability to be careful or the circumstances were insufficient to excuse the error.

See CCM10735 for examples of what is a Failure to Take Reasonable Care.