GIGANTIC overpayments of tax credits, which caused hundreds of thousands of families financial problems have been repeated, says a report published today.
HM Revenue and Customs (HMRC) paid out around £15.8bn in child and working tax credits to five million families in 2003-4 and a similar amount in the following year.
The chairman of the House of Commons Public Accounts Committee said today it was "deplorable" that £2.2bn of overpayment - which is clawed back - should have occurred two years in succession.
Edward Leigh said the cycle of overpayment and clawback was an inevitable part of the way the credit scheme was devised, but the Government had failed to anticipate that it would happen on such a large scale.
The overpayments were made to about 1.9m families - more than double the amount expected when the system was set up.
In many cases, repayments were required because claimants' circumstances had changed, but in others errors were due to official error or fraud by claimants.
Because of the difficulties many of the country's poorest families faced in repaying cash which had already been spent, HMRC has made provisions to write off debts worth around £1bn.
Mr Leigh said:
"What came out of the blue for the Government was that overpayment would routinely occur on such a gigantic scale - an estimated £2.2bn for 2003-04 and probably again for 2004-05.
"This is a deplorable situation for the hundreds of thousands of vulnerable families who have to find money for repayments."
