Secondary Hardship Referral Received By DCT, MP Hotline, TCO Appeals Or CSU - For Cases Automatically Restricted After 29/06/07 (Info)

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If a claimant has suffered a reduction in their regular tax credits payments as a result of an adjustment that has been applied to their award, they may feel this reduced amount of tax credits will result in the household being in hardship.

In the first instance, TCO would look at all such hardship referrals following the guidance in Manually Adjusting Payments To Avoid Hardship - TCO Only - For Cases Automatically Restricted After 29/06/07.

If, after consideration of the claimant’s circumstances using the above guidance, the claimant still maintains the reduction in tax credits is causing them hardship, the TCO will then consider secondary hardship.

The following teams may receive secondary hardship referrals

• Directors Complaint Team (DCT)

• MP Hotline

• Tax Credit Office (TCO) Appeal

• Customer Support Unit (CSU)

You may receive a letter or a telephone call from a claimant informing you that a reduction in their tax credits payment is causing them hardship This reduction will have been caused by the recovery of an overpayment, either by

• An in year adjustment

• A cross year recovery

Or

• A combination of both of the above

For more information about in year adjustments and cross year recovery, follow the guidance in How Payments Are Profiled

Secondary hardship will only be considered in exceptional circumstances. This is in line with departmental policy.

TCO do not have the facilities to decide hardship criteria. This criteria is investigated and decided upon by Debt Management and Banking  (DMB). TCO will refer the secondary hardship cases centrally through the Manually Adjusting Payments To Avoid Hardship (MAPTH) team to DMB for investigation. DMB will

• Examine the claimant’s income and expenditure, to determine whether to relax the recovery rates or whether the remittance of the overpayment is appropriate

And they will then

• Advise TCO of the result of any investigation and any action required

Where the decision is to remit the overpayment, DMB will process this remittance before informing TCO of the decision.

In all other circumstances TCO will complete the action on the case. This action will be completed by the MAPTH team. This could be

• Authorising further additional payments to alleviate hardship

Or

• Rejecting the secondary hardship claim

In all instances the claimant will be required to provide evidence as to why they think they have exceptional circumstances.