Secondary Hardship Referral Received By TCO (Info)

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If a claimant has suffered a reduction in their regular tax credit 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 will look at all such hardship referrals following the guidance in Manually Adjusting Payments To Avoid Hardship - TCO Only.

If the claimant still maintains the reduction in tax credits is causing them hardship, TCO will consider secondary hardship by referring the case to Debt Management and Banking Service (DMBS).

You may receive a secondary hardship WAM referral form or a DMBS referral form TC871 from

• An Enquiry Centre

• A Contact Centre

Or

• An internal referral from the Director’s Complaint Team (DCT), MP Hotline, Customer Relations Team (CRT) or Appeals teams

You may also receive

• A letter from a claimant informing you that a reduction in their tax credits payment is causing them hardship

Or

• An internal referral from Customer Relations or Appeals Teams

This reduction will have been caused by a recovery of an overpayment, either by

• An in year adjustment

• 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 authority to decide hardship criteria. This criteria is investigated and decided upon by DMBS. TCO will refer secondary hardship cases to DMBS for investigation. DMBS will

• Examine the claimant’s income and expenditure, to determine whether a relaxation of the recovery rates or if a partial or full remittance of the overpayment is appropriate

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

Where a decision is made to fully remit the overpayment, DMBS will process this remittance before informing TCO of the decision.

In all other circumstances, TCO will complete the action on the case. 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.