Category: London Foodbank

Gina is chased for a £732 working tax credit ‘debt’: ‘It’s another form of sanction’

Gina is chased for a £732 working tax credit ‘debt’: ‘It’s another form of sanction’

Gina Lomax says it is "immoral" that she has been told to pay back £732 in working tax credit.
Gina Loxam says it is “immoral” that she has been told to pay back £732 in working tax credit.
When is a debt not a debt? When it’s £732 that the government says is now owed by Gina Loxam in Working Tax Credit (WTC).

Gina, a single woman of 58 from the north-west of England, had been on WTC – a means tested payment for those in low-paid work – including self-employed people. It’s paid by HM Revenue and Customs (HMRC). Unfortunately Gina, who lost her beloved pet shop business in the recession, became very ill with depression. Following an assessment by ATOS, she was placed on employment and support allowance (ESA) in the work-related activity group. Because she was receiving WTC, this amount was deducted from her ESA to ensure she only got £100 per week.

She did her WTC return only to discover she was no longer entitled to it after 28 weeks off sick. She has now been told that she owes HMRC £732. ESA will not back date their reduced underpayments to cover this, saying she should have informed WTC directly when she went onto ESA. Gina says of this demand from the HMRC: “I was in no fit state to even feed myself let alone notify loads of different departments of my current status. I am now left with a debt of £732 for money I never received off the ESA. This is morally wrong and theft. Apparently this is happening to a lot of people on WTC who went onto ESA. Why are these departments not liaising and ensuring the claimants are aware of the rules? This is another way of sanctioning the vunerable.”

Gina wants the ESA to backdate her full benefit to the date the WTC ceased so that she can pay the WTC back from the reimbursed ESA underpayments. She adds: “I also want to raise awareness of how immoral this whole situation is. I am not asking for anything I was not entitled too. If I have to pay this back, it means I would have been only receiving £47 for three months instead of £100. It boils down to theft of benefits.”

She says of people who are ill and in her situation: “It’s ridiculous to have a debt you don’t really owe because you were underpaid ESA. How many people have been affected by this? It’s another form of sanction. I have worked all my life and to be in this position is abhorrent. I’ve written a letter to the HMRC telling them I can’t pay.”

Gina wrote to her local MP, Conservative David Morris, for help. He replied: “There is no scope for discretion within the law relating to Social Security, and that is something which we must all accept as fact, regardless of whether or not we agree with it. It has long been intrinsic within Social Security Legislation that the onus of responsibility to provide accurate information, details and documentation both at the outset of a claim, and at all stages thereafter, rests with the claimant. This would include therefore, reporting change of circumstances. The regulations say that it is your duty to report any change in your circumstances which you might be reasonably expected to know could affect your right to, the amount of, or the payment of, your benefits.
This is Regulation 32(1A) and (1B) of the Social Security (Claims and Payments) Regulations 1987. It is not the responsibility of any individual or Government Department to notify someone either that they are eligible to claim a particular benefit, or to take action on an assumption of a change of circumstances. If you fail to disclose a material fact which affects your entitlement, (whether unintentional or otherwise) then an overpayment will be deemed to have occurred. Such overpayments are then generally recoverable.”

She wrote back to Mr Morris telling him that she did not receive an overpayment. “The Government can’t have it both ways. I was underpaid my ESA. If I had been getting the full benefit for WTC and ESA I would have been overpaid. But this is not an overpayment as I did not get my full ESA entitlement! I don’t even want the money paid back to me but to go direct to HMRC clearing my ‘debt’. An inter department transfer.”. She continued: “The whole situation is theft and a sanction. I am sure you would not be happy if you were expected to lose seven weeks of your salary due to an honest mistake.”

Gina wants to know how many people have been affected by this issue. She added: “It’s just immoral. It’s a secret sanction. They’re not telling people what they need to do, yet they are very quick to penalize people for not doing it. I was bouncing back (from depression), but I’m not now. I’m worrying about money I’ve lost that I should have had. I’m not going to pay this. I refuse.”

She points out that when she applied for ESA she had to note on the claim form which benefits she was claiming and that she listed WTC. “So they would have had that information, they knew I was on it. Why wasn’t that automatically flagged on the system once I’d been on ESA for more than 28 weeks? The DWP should automatically send out a letter after 28 weeks to those on WTC informing them that they are now going to get full ESA and they will either inform WTC or you have to. Simple.”

Thanks to Gina for flagging up this issue. Please get in touch if you have had similar problems with WTC and ESA.

The state owes citizens money they are entitled to – then they fall into debt

Manager of Greenwich food bank Alan Robinson has been aware for some time that the clients who come here for help need more than the food they’re given to see them through an immediate crisis. They also require longer-term support to tackle the underlying problems, which often include inadequate incomes and unmanageable debts. The local authority – The Royal Borough of Greenwich – is also mindful of this. The two organisations have submitted a bid for funding that would enable the food bank to “triage” clients with money problems.

If the joint bid is successful, the funding would come from the Money Advice Trust – which has today launched a new report saying that households are becoming susceptible to serious debt problems because they can’t afford basic household bills.

Alan said: “The Money Advice Trust is offering funding for initiatives that are innovative, but help meet people’s basic needs…approaches that would help them get relief from debt and educate people so they don’t get into debt. Greenwich Council had been bouncing this problem around internally, so they called me up and said could we work together and get a bid in.” The initial “triage” would take place at the borough’s food banks, which are part of the UK-wide network of Trussell Trust food banks. Clients with the most severe problems would be immediately referred to specialist debt advisors in the borough – either Christians Against Poverty (CAP), Meridian Money Advice, or Citizens Advice.

A second group assessed as heading for serious debt problems would get advice from trained volunteers, and Alan says the food bank may also employ a debt and advice specialist. A third group of people with the least severe problems would get help and encouragement on a range of issues, including advice on cookery classes, “smart” shopping and smoking cessation. The gateway to the advice would be food banks, but Alan says it’s possible that the scheme could be extended to other venues including children’s centres. The proposed scheme mirrors a recent announcement by the Trussell Trust that it is to launch a pilot scheme to give financial advice. The move comes after the food bank charity received a six-figure donation from money saving expert Martin Lewis. Lewis is quoted in the Guardian saying: “Those who go to food banks are already open to asking for help….If we can intervene at that point…it will hopefully cut down on the number of return visits.”

While what Lewis says is undoubtedly true, it’s crucial to remember what the Trussell Trust itself underlined in its June report Below the Breadline: The Relentless Rise in Food Poverty, published jointly with Oxfam and Church Action on Poverty. The report says that “cuts to social security since April 2013 have had a severe impact on poor and vulnerable families across the UK” and that “these cuts have been coupled with an increasingly strict and often misapplied sanctions regime – 58 per cent of sanction decisions are successfully challenged, suggesting that many people needlessly suffer a loss of income through no fault of their own”.

The report says the abolition of the Social Fund has stopped thousands of households from being able to access crisis loans. The Trussell Trust, “estimates that 49 per cent of people referred to food banks are there due to problems with social security payments or because they have been refused a crisis loan”.

The move by the Trussell Trust to launch the pilot money advice scheme and the bid to run something similar here in Greenwich are to be welcomed. But expert social security advice and help with challenging sanctions and speeding up back payments appear to be what clients need most. In essence, the state owes them money that they are entitled to. They’re not getting it, hence they are in debt and that leads to them not being able to pay their water bill or council tax. The most effective cure would of course be a humane social security regime, and an approach to sanctions that is fair and proportionate. A move away from zero hours contracts by employers would also be a significant move to transform lives. The problems faced by most of the people who visit the food bank are not fundamentally caused by lifestyle issues or bad choices. The vast majority of the food bank clients are innocent victims of an increasingly unfair and cruel welfare system.

James is now destitute following a sanction: ‘It’s bully boy tactics’, he says.

James is now destitute following a sanction: ‘It’s bully boy tactics’, he says.

James Dearsley, 60, receives a three-month sanction while on the Work Programme
James Dearsley, 60, receives a three-month sanction while on the Work Programme

A vulnerable 60-year-old has been left penniless and dependent on food bank support after his Jobseeker’s Allowance (JSA) was sanctioned at the end of July while on the Work Programme. South-east Londoner James Dearsley received a letter from the Department for Work and Pensions (below) telling him that he had been sanctioned from July 29 and that his JSA would not be reinstated until October 29. James, who is already in arrears with his council tax, has spent more than three weeks without social security. This withdrawal of money means that he’s already been forced to use Greenwich food bank twice.

He says the local job centre told him he was being sanctioned because on three consecutive occasions he had failed to turn up for his Work Programme appointment with a Seetec job search support club. The letter from the DWP states: “We have decided that you did not comply with the requirements of the scheme to which you have been referred and that you did not have sufficiently good reasons for doing so.”

The letter from the Department for Work and Pensions to James Dearsley concerning his three-month sanction
The letter from the Department for Work and Pensions to James Dearsley concerning his three-month sanction

James, who has health issues, says he was not able to make his July 16 appointment because he was sick. He received a phone call from Seetec and he told them he was ill. He says he was able to attend his next appointment on July 23, and also turned up for his appointment with Seetec on July 30, “but they sent me home because they said I had a sick note and because of that I couldn’t stay there”. He added that later they “said verbally that they were sanctioning me because of three supposed missed appointments”.

He has now submitted an application for a hardship payment – which is an emergency payment at a much lower rate than JSA. He was told last week that it would take seven to 10 days for this to come through. James has also very recently submitted an application for employment and support allowance (ESA).

How does he feel about the three-month sanction and the effect it could also have on his housing? “It’s draconian. I also owe £300 in council tax. If they cut my money off I’ll lose my flat. I’m also totally in the dark over when the ESA will come through. To state the brutal truth, it’s bully boy tactics.” James has submitted a request for a review of the decision to sanction him.

As Polly Toynbee points out in the The Guardian here, “Jobcentre Plus offices have become sanction factories”, with staff under massive pressure to cut people off. She mentions the case this summer of a diabetic former solider, who was “sanctioned into starvation” and who tragically died.

Does anyone in the system responsible for these welfare policies – including setting up a Work Programme described by the Government as “offering personalised support for claimants who need more help looking for and staying in work” – genuinely believe that giving James a three-month sanction that forces him to the food bank will ultimately lead him closer to a job and a more secure and healthy future?

Many thanks to James and to all the food bank clients who are prepared to share their experiences.