Politicalog - Fighting the Spin: Tax Credit Fiasco

Tax credits backfire on families

The government's tax credit system is subject to "completely unacceptable" errors, Citizens Advice (CAB) has said.

A third of recipient families have been overpaid - and many forced into poverty when HM Revenue & Customs (HMRC) takes back overpayments, the charity said.

In another report, the Parliamentary Ombudsman accused Paymaster General Dawn Primarolo of failing to give a clear picture of the problem to MPs.

Both reports call for such overpayments to be written off.

It is long overdue that the goverment should be held to account for this mess. I urge you all to follow the BBC link and look at the comments. They do not make for happy reading.

This particular hot potato has cropped up a couple of times on Politicalog.

UPDATE: Minister 'misled' MPs on tax credits

Treasury Minister Dawn Primarolo is under pressure today for apparently misleading MPs over the crisis in the tax credits system.

Two reports today highlight major problems after a million families were overpaid thousands of pounds in credits.

The Treasury's clawing back of the overpayments meant many families had their payments cut to zero without warning.

Some had to accept handouts from the Salvation Army while others turned to loan sharks for help, the reports say.

Opposition MPs today demanded Ms Primarolo, the Paymaster General, explain why she assured MPs in February that the system was working well.