Tax credit overpayments to fall by a third

Despite an increase in the number of families that were overpaid their tax
credits in the last year, the government said the full implementation of new
measures would reduce overpayments in future years by around a third.

The new measures first take effect during the 2006/2007 tax year.

Latest statistics for the 2004/2005 tax year revealed that a total of £1.8bn
in tax credits was overpaid to 1.96 million claimants, compared to £2.2bn paid
out to 1.88 million claimants in 2003/04.

Families do not have to pay back overpayments as long as it is the
government’s fault the BBC reported.

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