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Families must pay back surplus credit

The Government is to press ahead with clawing back overpayments of tax credits to two million families, ignoring advice from the parliamentary ombudsman that they should be written off for poorer families. Paymaster General Dawn Primarolo has written to ombudsman Ann Abrahams indicating that she intends to try to get back 1.9bn in overpayments. Those who can prove they could not have 'reasonably' been expected to recognise an error will not be pressed for repayment.

Paymaster General Dawn Primarolo has written to ombudsman Ann Abrahams indicating that she intends to try to get back 1.9bn in overpayments. Those who can prove they could not have 'reasonably' been expected to recognise an error will not be pressed for repayment.

In a damning report earlier this year the ombudsman had argued that writing off repayments caused by errors in the first two years 'would be a sensible and proportionate response to the situation and would give much needed relief to people who have been caused considerable distress and hardship'.

The impact of the policy has already been felt by nurseries where parents facing demands for repayments have reduced the hours their children spend in childcare. Nursery owners are also reporting rising levels of non-payment, with parents citing the tax credit fiasco as a reason for them not having money.

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