Hardship (Introduction)

Payment adjustments are available to claimants whose regular payments have been reduced because of overpayment recovery action, either

• In year

Or

• Cross year

A payment adjustment reduces the amount of overpayment recovered in the current tax year, leaving the claimant with an overpayment to be recovered from future tax credits awards. In year adjustments are automatically set to avoid hardship. For more information, follow the guidance in How Payments Are Profiled

The Tax Credit office (TCO) will set the payment adjustment percentage on the computer after asecondary hardshipreferral has been decided by Debt Management and Banking (DMB)

This section of the Manual provides guidance on

• Dealing with an initial enquiry about payment adjustments
   
• Setting the payment adjustment percentage

• Dealing with secondary enquiries about payment adjustments

• Referring secondary hardship requests for payment adjustment to DMB

• Applying the decision made by DMB on secondary hardship cases