Claimant Would Like To Extend Date To Repay Their Overpayment (Setting An Informal Arrangement) (Info)

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After finalisation a claimant will have been notified on their award notice if they have an overpayment for tax credits.

If the claimant has a continuing award then any overpayment will be recovered from their new award at a rate of 10%, 25% or 100% depending on their circumstances. This is called cross year recovery.

If the claimant does not have a continuing award, they will

• Be issued with form TC610 Notice to Pay 30 days after the Award Notice was issued. This will inform them that they have to pay the overpayment back within the next 30 days

And, if

• Any overpayment is still outstanding after the 30 days, the overpayment will be automatically forwarded on to Receivables for their action

Note: Some claimants will still be receiving tax credits from a new claim in a different family, but this is not a continuing award

The claimant will contact you in writing or inform you whilst you are in contact with them that they are unable to pay back this overpayment within the 30 days and they would like an extension

You can only extend the date of repayment by another 30 days, the ‘To be paid by date’. This is called an Informal Arrangement. This will suspend the recovery process and will not forward the overpayment to Receivables until the ‘To be paid by date’ is reached.

An Informal Arrangement cannot be set if the claimant’s overpayment is being repaid by cross year recovery

Setting an Informal Arrangement for the claimant is done in Function MAINTAIN OVERPAYMENT. On entering the screen you will see the following details for the claimant

• Claimant’s name and NINO

• Award period start and end date

• Amount of any overpayment with a breakdown into WTC / CTC amounts. Note: This will be blank if the overpayment is being repaid by cross year recovery

• Issue date of the Notice to Pay

• The recovery status

And, if applicable

• The reason for the suspension of the overpayment recovery

Claimants can only have the date to pay extended once, after which time Receivables will deal with the recovery action.

If the claimant would like an extension beyond the Informal Arrangement date, you will need to forward the details to Receivables who will then set up a Formal Arrangement, the ‘Time to Pay’ with the claimant.