Disabled kids lose out in tax credits blunder

THOUSANDS of Scots with disabled children missed out on a tax credits boost due to an admin blunder – and the Government won’t pay all the money back.

A “completely damning failure” by two Government bodies to communicate meant an estimated 28,000 cash- strapped UK families each lost out on as much as £ 4400 a year between 2011 and 2014.

The cash would have seen the families, many of whom were grappling with life on the breadline, between £60 and £84 a week better off, but scrutiny of Chancellor Philip Hammond’s Autumn Statement revealed payments would only be backdated to April.

That means individual families could lose out on up to £ 20,000 they were entitled to.

The foul-up came after Department for Work & Pensions ( DWP) workers failed to inform HM Revenue & Customs (HMRC) that families should get the extra cash.

SNP MSP Sandra White said: “This is a damning failure by the UK government that has hit thousands of families with disabled children in the pocket.

“And with this costly administrative failure coming at a time when axeman Iain Duncan Smith was frantically pursuing dozens of his ideological reforms, it’s clear that Tory ministers have put pet projects above good administration – and families with disabled children have paid the price.

“It’s simply not acceptable for the UK government to refuse to compensate these families for the lost funds.”

Charities have demanded a compensation fund be set up to help those affected. John Dickie, director of Child Poverty Action Group in Scotland, said: “With families affected by disability too often at a greater risk of poverty, it is vital they get the financial support they are entitled to.

“Vulnerable children should not miss out because of administrative complexities.”

Families caring for a severely disabled child are eligible for a higher tax credit rate if the child is in receipt of a Disability Living Allowance or Personal Independence Payments.

When they apply for a benefit, a tick-box asks if they receive tax credits. If they say yes, the DWP should automatically aler t HMRC.

But between 2011- 2014 – a time of massive upheaval at HMRC under former Work & Pensions Secretary, Iain Duncan Smith – a processing error described as “a gap in the data feed between HMRC and DWP” meant files were not updated.

Experts believe it will be extremely difficult for families to mount a legal case but charities say it is wrong to leave vulnerable people out of pocket.