A survey by Citizens Advice found almost half of respondents said they would be less likely to claim credits in future as a result of their experiences. Overpayments which are suddenly demanded back by the Governnment were found to be the main issue.

Another report, by Parliamentary Ombudsman Ann Abraham, detailed how HM Revenue and Customs was accused of "unfair or unreasonable recovery of overpayments".

The credits were introduced by Gordon Brown'in 2003 to boost the income of around 6million families. But the system has been dogged with prob¬lems, with the Government recently admitting it had made more than £6bil¬lion of excess payments in error.

Citizens Advice found a third of respondents had been overpaid by £500 to £1,499 - but more than a quarter had been told they owed more than £2,500 and one in 10 more than £5,000.

Abraham said: "The report shows the distress which can be caused to some of the most vulnerable families when they find themselves with such a debt to repay - often unexpectedly, and some¬times a very long time after the money has been received and spent."

David Harker from Citizens Advice said: ''A significant number of respondents highlighted the devastating impact tax credit problems had had on their family. Some referred to having to sell or remortgage their homes, their families breaking up under the strain, and to severe stress and illness."

Chas Roy-Chowdhury from the Association of Chartered Certified Accountants said: "Your entitlement for tax credits changes if your income goes up or down, or if certain personal cir¬cumstances change. The problem is many people don't know when and what to inform the Revenue about - and it can take a long time for the Revenue to process information when it is recieved.

"This delay can lead to prolonged overpayments which are then suddenly demanded back."
Claimants should inform the Revenue of any change in income or circum¬stance, added Roy-Chowdhury.

Chase Saunders have seen evidence of this over the last few years and the hardship it causes is tremendous and really tips people over the edge.

Right or wrong some people live to their means and will borrow on the strength of the income they get including tax credits, when there is a change in the tax credit they receive their financial situation collapses and mounting debts are the result.

Chase Saunders can help with the debts that have built up. Chase Saunders will find a solution to put all debts together into one affordable monthly or weekly payment, even if those debts in the tens of thousands.

A Chase Saunders Financial Management debt advisor is contactable on FREE PHONE 0800 138 2299 or online at www.chasesaunders.co.uk