Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to protect vulnerable tax credit claimants who have accrued overpayment debt through no fault of their own.

The Government takes a considered and balanced approach to the recovery of benefit debt and HMRC has strong processes in place to support those that may be struggling to pay back tax credits overpayments with manageable recovery plans.

HMRC calculates tax credit awards across the financial year to ensure customers receive regular and consistent financial support. Customers are required to tell us of any change in circumstances and when they do, awards are recalculated and balanced across the remainder of the period. Customers are made aware of any overpayment that is generated as a result and the process to challenge the overpayment if they do not agree it is correct.

HMRC has a well-established approach to help tax credit customers who are having difficulty repaying a debt and require extra support, including offering its customers debt advice referral to the Money and Pensions Service Money Adviser Network for a free bespoke independent debt service.

HMRC will work with customers and can agree a temporary reduction in the rate of repayment based on their financial circumstances. In some cases, recovery of the debt can be paused. When customers and their tax credit debt move to Universal Credit, they can continue to access support through DWP.