A third of tax credit payments are for the wrong amount – Steve Webb

Almost a third of tax credit payments have been for the wrong amount, figures obtained by the Liberal Democrats have revealed.

More than 2m families have been repeatedly overpaid in the 5 years since tax credits were introduced, answers to Parliamentary Questions show.

The number of families repeatedly underpaid was up 42% to almost 1m over the same period.

A staggering 50,000 families have been taken to court in pursuit of overpayments in the last three years.

Commenting, Liberal Democrat Shadow Work and Pensions Secretary, Steve Webb said:

“These figures should shame ministers into making changes to the tax credit system.

“Families are put on a financial rollercoaster when they are forced to repay tax credits after continual mistakes. This is not the kind of help they need when times are hard.

“Families need to know exactly what cash is coming in and when. They should not have to face sleepless nights wondering when the Revenue will come knocking asking for money back.

“Ministers should fix tax credits payments for six months at a time so overpayments could be avoided, but they refuse to admit the system is anything but perfect.”