Thousands of families stripped of benefits to have cases reviewed

Updated: 

Thousands of low-income families who were stripped of their tax credits by a controversial US contractor are to have their cases reviewed, the Government has said.

Concentrix, which was originally brought in to cut fraud and error in the tax credit system, was sacked last year by HM Revenue and Customs following a barrage of complaints by MPs and in the media that claimants were wrongly having their benefits removed.

In a report to MPs, the Government disclosed that of 36,000 claimants who lodged an initial appeal against a ruling by Concentrix, 87% have since had their benefits reinstated.

It said the remaining 23,000 claimants (from the 59,000 in total) whose benefits had been cut by the company but did not appeal would now have their cases reviewed as well.

"HMRC will review those cases to establish that decisions made by Concentrix were properly made and communicated to claimants," it said.

"Where absolutely necessary, we will re-contact the claimant to request further information relating to their claim.

"Current plans indicate that this activity could be completed by March 2017 but the scope of this work will be confirmed once an analysis of the total cost has been produced."

Frank Field, the chairman of the Commons Work and Pensions Committee which produced a scathing report on the Concentrix contract, welcomed the Government's agreement to accept their recommendations.

In its report, the committee said that right from the outset claimants found the system was "stacked against them".

The "merest hint" that a claim contained more than a "zero risk" of fraud or error was enough to trigger a compliance check, with those who did not - or could not - reply being treated as guilty until proven innocent.

Mr Field said: "HMRC was right to fire its contractor, but many of the processes used by Concentrix were the same as those used by HMRC itself.

"For many claimants, particularly those who were unwell, lacked self-confidence or had caring responsibilities, the document-heavy process of challenging a wrong decision by Concentrix was surely prohibitively daunting.

"The real answer is of course to root out fraud and error at entry to the system rather than stopping benefits in payment as first resort."

A HMRC spokesman said: "It is important to make checks on tax credits payments to ensure the right people are receiving them under the law, and this work will now be done by HMRC.

"We will not be entering into external contracts for this in future. We apologise to all those who did not receive the standard of service that they should have."