Secondary Hardship TCO Action On Receipt Of DMB Decision (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, where an automatic restriction has not been applied, 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 (DMB).

TCO do not have the authority to decide hardship criteria. This criteria is investigated and decided upon by DMB. TCO will refer secondary hardship cases to DMB for investigation. DMB 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 the action required

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

This guidance will enable you to deal with a reply from DMB following their investigation and undertake the action they have specified.