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Tax credit mayhem increasing risk of poverty

22 June, 2005

Sinn Féin spokesperson on Poverty, North Belfast MLA Kathy Stanton commenting after the publication of two highly critical reports into the Tax Credit system has said that Sinn Féin constituency offices have been inundated with complaints about the Tax Credit system and called for urgent action to tackle the mayhem.

Ms Stanton said:

"These reports from the parliamentary ombudsman and Citizens Advice show that the Tax Credit scheme is flawed. Working Tax Credit and Child Tax Credit was supposed to help families on low income. Instead it has driven many into debt that will take years to pay off. Not only are they having huge amounts taken out of their Working Tax Credit, they are also losing a large chunk of their Child Tax Credit. The danger is that it will increase the risk of poverty and debt levels for some of the poorest people in our society.

"We met with the regional director of Inland Revenue earlier this year. Sinn Féin believe that a flexible partnership approach should be at the heart of the Tax Credit system. We also made a number of recommendations in relation to forms and challenged the legality of the computer-based assessments.

"Ever since the introduction of this scheme in 2003 there have been major IT failures and very serious problems with over-payments. It is time to sort out the mayhem because the way that Inland Revenue are going about its business and particularly the way it is attempting to recover over-payments is causing great hardship and huge anxiety.

"The Tax Credit scheme was intended to tackle poverty and get people, particularly women, back into employment and training. However, these two reports, particularly the report from Citizens Advice provide hard evidence that the system is failing families most in need. This is making it harder for people to move into and continue with employment.

"Last year Sinn Féin called for an amnesty on overpayments with a clean start for those who are reapplying for tax credits. The recommendation to write off overpayments that result from Inland Revenue errors should be given real consideration but this in itself would not tackle the problems within the system.

"A large percentage of my time is spent dealing with tax credit issues. Hundreds of constituents have been placed in a difficult situation through no fault of their own. The computer system seems unable to cope and the safety nets that should help sort out problems have failed. The problem is that tax credit system is not transparent and isn‚t working." ENDS

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