No one takes credit from payments delay fiasco

Elizabeth Lewis extended her overdraft, remortgaged her home and even packed her 12- year-old daughter off to her sister's house in a desperate effort to make ends meet while she waited for her tax credit payments to come through. "Much longer and I was going to sell up and emigrate. I said this to the people at my local tax office, but they just said 'good, what country would you go to'."

A victim of the tax credit fiasco that has enveloped hundreds of thousands of people, Ms Lewis contacted Jobs & Money when her overdraft limit was exhausted. "I was at rock bottom. I have never had a credit card or a loan. I have been trying to get an answer since April. When I rang the helpline they gave me a different answer every time."

Ms Lewis is a single parent who works as a nurse in a hospice a few miles from her home in south London. She claimed the working tax credit, child tax credit and childcare allowance last October for her and her daughter. In November, her 82 year-old mother was diagnosed with a terminal illness and she was forced to go part-time, cutting her annual pay from £22,000 to less than £11,000.

She immediately informed the tax credit office and was told to call again in January when her award notice was sent out. When she called back, she was told her award would be amended from £43 a month to £256. In April the inevitable happened and the £43 cheque was paid into her account. Since then she has spent large sums of money phoning and getting nowhere.

Last month she ran out of money and decided to cut her costs by lengthening the term of her mortgage from 18 years to 25. This will cost her thousands of pounds. She has also been running an overdraft for most of the period since April.

After Jobs & Money intervened, it emerged that the Inland Revenue kept 12 files on Ms Lewis, all of them containing different information. Each time she got through to the helpline another file was generated and as a result subsequent attempts to determine how much she was owed failed.

A flurry of phone calls between various senior officials and the tax credit office was able to calculate that Ms Lewis was owed £822 and a cheque was dispatched by courier. "I went straight out to the supermarket and bought some food."

She says the Revenue failed to send a letter with the cheque or an assessment that would tell her how the sum was calculated.

For the 18 weeks since the new tax credits came into effect the Revenue has paid her £54.90 a week, which falls short of the £256 a month she was promised eight months ago. A spokesman said officials were distressed to hear about Ms Lewis's case, but believed she was an exception and everyone who had made a claim before April was now receiving the correct payments.

"We believe it is a very isolated case, but if there is one person out there not receiving the right amount then we want to hear about it." But given the chaos, it cannot say with any assurance that there are not any more cases like Ms Lewis.

It is believed that thousands of compensation claims have been sent to the tax credit office in Preston and the Revenue is on the verge of sending out the first payments.

Treasury minister Dawn Primarolo, who has been heavily criticised by the treasury select committee for her role in the fiasco, has promised to make compensation payments a priority.

However, a review of the complaints process has drawn criticism from the Low Incomes Tax Reform Group. First stop under the new rules is the customer service manager at your local tax office. An appeal must be sent to a director of the Revenue, but there is no indication which of the 21 directors should be the target.

It says the complaints procedure is not clear, discriminates against disabled people and fails to allow emailed claims. John Andrews, Chairman of LITRG, says: "We want to see a service which is geared to the customer and not to the complex internal structures of the Inland Revenue. It is important for someone who feels badly treated not to feel intimidated or frustrated by the process of complaining."