Direct Recovery Action (Info)

The pursuit of any outstanding overpayment is the responsibility of Debt Management whenever

• Entitlement to tax credits ends

Or

• A household breaks down

This means that no recovery of any outstanding overpayment will be made from the claimant's new award. Instead Debt Management will pursue the overpayment directly from the claimant when

• A claimant separates from their partner and subsequently makes a claim with a new partner or on their own

• A single claimant makes a new claim with a partner

Or

• A claimants partner dies and the claimant subsequently make a new claim

When an overpayment is to be recovered direct from the claimant, the following sequence of events will occur

• When entitlement ends or a household breaks down the claimant will receive a Finalised Award Notice or Statement Of Account which informs them of the total overpayment for both WTC and CTC as appropriate

• At this point they may decide to repay the overpayment which will balance their award and prevent any further action taking place

• If after 30 days have elapsed, no response is received from the claimant a form TC610 Notice to Pay is issued to the claimant. This provides them with a payslip and gives them a further 30 days to settle the overpayment

• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
   
• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
   
• If the overpayment has been passed to IDMS and any repayments are received against the overpayment and posted to the tax credits computer, IDMS are automatically notified

• If after the initial Debt Management recovery processes the claimant still does not repay the overpayment, Debt Management will take any stronger steps they deem necessary to pursue it

Debt Management has a dedicated Payments Helpline that the claimant can use to arrange repayment of their overpayment. Unless the case has appeared before a Court, in which case the claimant must make the repayments as directed by the Court

If the amount of the overpayment changes at any time, due to repayments received or late posted manual payments, IDMS is not automatically updated to reflect the correct amounts until re-profiling of the award takes place. If the claimant clears the overpayment, recovery action is stopped automatically

The Tax Credit Office (TCO) suspends recovery of an overpayment if the claimant disputes the reason for the overpayment.

If after checking the claim, the TCO decide

• The overpayment is recoverable, the recovery processes are re-started
   
• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

All complex cases, for example, polygamous marriages or Other Member State cases, are referred manually to Debt Management if the overpayment is to be recovered direct from the claimant. This is because these awards have all been manually worked off system.