DMBM555430 - Debt and return pursuit: tax credits overpayments: household breakdown cases: initial contact with a claimant and subsequent recovery action

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Initial contact with a claimant in a household breakdown case

When contact is first made with a claimant (telephone call, letter or personal call) in a HHBD case, you should

  • advise the claimant that
  • they are only responsible for payment of half of the overpayment
  • they will not be asked to pay back more than half where their ex-partner does not pay their share of the debt or where their ex-partner’s whereabouts are unknown
  • if one of the claimants wishes to pay more than 50% this can be accepted without the need for agreement with the ex-partner
  • former partners may agree between themselves to vary the percentage that they each repay
  • if no offer is made, or a payment arrangement is no adhered to, we reserve the right to seek 50% from each of them
  • make it clear that the amount from each is 50% of the original overpayment, not necessarily 50% of the overpayment remaining following any payments on account
  • ask the claimant for their ex-partner’s address
  • confirm the claimant’s payment responsibility in writing. You should include details of any time to pay arrangement, ensure that only 50% (or other agreed share) of the overpayment is shown and that the ex-partner’s name and NINO are omitted
  • make a note in IDMS Action History and NTC Household Notes that the claimant has been advised that they are required to only repay 50%
  • move the case on to the next stage in IDMS for recovery from the other claimant (re-scheduled call, and so on) and, if contacted, proceed as above.

Note: The Debt Management TO in whose area claimant one (from IDMS) lives should continue to take responsibility for the conduct of the whole case.

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Subsequent recovery action

You should

  • ensure that you issue all letters and demands manually and ask only for the amount for which each claimant is responsible
  • treat each claimant’s share of the overpayment as if it were effectively a separate debt. Time to pay, hardship, RLS, BY, mental health cases and so on should be applied, as appropriate, only to each claimant’s share of the debt
  • ensure that time to pay arrangements are monitored closely by periodically reviewing NTC ‘View Household Account - Postings’. This is important because all payments will be posted to the same record. Where possible, you should avoid a time to pay arrangement where both parties will be repaying the same amount on the same day. If there is any doubt about which claimant has made a particular payment you should ensure that the matter is resolved satisfactorily. NB: The IDMS Instalment Arrangement (IA) functionality does not allow arrangements to be set up for less than the total overpayment.

Note: The Tax Credit and IDMS systems will continue to reflect a joint record.

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Section 29(3) warning

Before commencing enforcement proceedings, a claimant must have received a S29(3) warning.

From 6/4/09, the Notice to Pay (TC610), issued automatically by the NTC system, includes a S29(3) warning.

You will still need to issue a S29(3) Enforcement Warning Letter (EWL) for TC610s issued before 6/4/09. To establish the date of issue of the TC610, in the NTC system

  • select the screen for the relevant period from ‘View Overpayment’
  • click on ‘DETAILS’ and the date of issue will be shown in the ‘Notice To Pay’ section.

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Remissions

Normal criteria apply (DMBM725000) but please remember that the system will not allow partial remission for remission types

  • 1 (Gone Unknown)
  • 2 (Death. No estate and Bankruptcy)
  • 4 (NWFP)
  • 5A (Hardship)
  • 7 (Gone Abroad).