The Government has recently confirmed that thousands of poorer families with a disabled child or children were paid too little in tax credits due to a lack of communication between Government departments between 2011 and 2014. It is believed that around 28,000 families have received between £3,000 and £4,400 less than they ought to have done during this period.
The mistake occurred after the Department for Work and Pensions (DWP) failed to inform HM Revenue and Customs (HMRC) that the families in question were eligible for extra money in tax credits. Parents on lower incomes, with a child who qualifies for Disability Living Allowance (DLA) or Personal Independence Payments (PIP), have been affected. Such families are entitled to a higher rate of child tax credit worth £60 - £84 per week, or £3,120 - £4,368 per year, but a failure by the DWP to share information with HMRC about this entitlement meant that families did not receive the higher amount.
In theory, it is the individual’s responsibility to inform HMRC that they are in receipt of disability benefits for their child. However, the form that parents complete for the DWP when applying for such benefits asks whether the family receives tax credits, and this information would usually be passed on to ensure that vulnerable families receive the benefits to which they are entitled. A processing error, however, meant that this was not done. It was therefore left to the parents themselves to realise that they were receiving a lower sum and to contact HMRC to report the error. Given that this was usually done automatically, many individuals, quite understandably, assumed that they were receiving the correct sum and so missed out.
HMRC has set aside £360 million in order to repay the money owed in the 2016-2017 tax year, but there are currently no plans to reimburse the sums owed for earlier years, meaning that many vulnerable families will have permanently lost out due to the error.
Camilla Wonnacott, an associate in the clinical negligence team at Penningtons Manches, said: “We see first-hand the difficulties that families of disabled children face every day. For low-income households this can be even more of a challenge. These families should be provided with all the support to which they are entitled. The decision not to repay those who have missed out in earlier years disadvantages those who are most vulnerable in our society.”
+44 (0)1256 407208