The recovery of tax credit overpayments
Tax credits are administered by Her Majesty’s Revenue and Customs (HMRC). They are part of the benefits system that is being replaced by Universal Credit. Tax Credits comprise two parts: working tax credit and child tax credit and are awarded to people who are on a low income for their particular circumstances.
Overpayments and underpayments are a normal part of the tax credits system. This is because when you receive a tax credits award it is not finalised until after the end of the tax year for which it has been given.
If you have been advised that you have an overpayment of tax credits and action is being taken to recover it, please read our factsheet:
The impact (or not) of the benefit cap on blind and partially sighted people
The government has placed a limit on the total amount of benefits that most people of working age can receive. This benefit cap affects a large number of benefits for people aged 16 to 64 and covers your entire household.
The good news is that you should be exempt from the benefit cap if you receive a benefit such as PIP, ADP (Scotland), DLA, CDP (Scotland) or the support component of ESA. As many blind or partially sighted people successfully claim these benefits, this means that the impact on people with serious sight loss should be minimal.
The “Bedroom tax”
You may have heard of the “under-occupancy charge” or “Bedroom tax”. This “tax” is a change to the rules for Housing Benefit – a benefit that helps people on low incomes with their rent – for people of working age that live in social housing (council or Housing Association tenants). The change to the rules mean that you could receive a reduced amount of Housing Benefit if your local council believe that you have more bedrooms than you need.
If your council notifies you that they are reducing your Housing Benefit because of “under-occupancy”, please speak to our benefits advisers if you want to talk through your options - this could include applying for discretionary housing payments from your local council. Call 0303 123 9999 or email [email protected].
Housing benefit is not normally paid out to claimants of Universal Credit; instead, a housing element can be included in your claim to help with rent. The bedroom tax equally applies to this element.