Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to support people who are having difficulty in paying back overpayments of working tax credits in the context of rising living costs.

Support is available for tax credits claimants who are experiencing difficulty with their repayments. HMRC can reduce the rate of repayment on a case-by-case basis where claimants are in financial hardship. HMRC also work to identify vulnerable customers and refer them to the Extra Support Team for assistance, with more information available here.

Where claimants with overpayments have migrated to Universal Credit, they can similarly contact DWP to discuss a reduction in their rate of repayment and may benefit from the cap on debt deductions which the government reduced to 25 per cent of the standard allowance in April 2021. Work coaches can also signpost other financial support.

Furthermore, the Government is providing significant financial support – up to £350 – to the majority of households which will cover more than half of the forecast £700 rise in energy bills for the average household. This support – worth £9.1bn in 2022-23 – is on top of the existing £12 billion support the government is providing for the cost of living this financial year and next. This includes reducing the Universal Credit taper rate, raising the National Living Wage, freezing alcohol and fuel duties and providing targeted help with energy bills.