The system for claiming tax credits is causing distress for residents as the number of cases of overpayment continues to rise. Nationally, 1.8 million families have been overpaid more than once over the four years the tax credit scheme has been running.

Don said, “I see so many cases where people have contacted the tax credit office in good time, to inform them of changes to their circumstances, only to find, at the end of the year, that they have been overpaid and have to repay substantial sums.

“One case stands out in my mind. A constituent wrote to inform the tax credit office that she would be working a 20-hour week for £6 an hour. Later in the year, when she was offered 5 extra hours, she wrote again to notify them but at the end of the year she found she had been overpaid because the tax credit office had failed to add on the extra wages!

“I have seen examples of residents being asked to pay back over £4,000 immediately, even though the overpayment was the fault of the tax credit office. In one case a debt collector turned up at someone‚Äôs door demanding £4,500 there and then!

“This is money that families have included in their budgets and often already spent, because they have done everything that has been asked of them.

“Families need to know exactly how much cash is coming in and when, not live in fear that the taxman will come knocking and asking for the money back.

“The system needs to be changed so that payments are fixed for at least six months at a time so that people know where they stand."