Louise Hubball The Politics Show South West

Hayley Sandford was not credited for trying to save government money

You may remember the financial mess caused over the last couple of years when the Government paid too much family tax credit to thousands of people?

They then claimed it back after many had spend the money.

According to a Cornish MP, underpayment is also a serious problem.

Two mothers in her constituency obtained temporary work over the summer to reduce their dependence on the state.

But they were dismayed to find that benefits they were still entitled to were stopped.

Then, when their period of employment finished, they were left with no benefits at all.

No colourful future

Painting a more secure financial future was Hayley Sanford's aim when she went out to work this summer.

But she says that thanks to delays in benefit payments, her personal finances are now a wash out.

For seven weeks she worked long hours with her friend Donna, face painting at tourist attractions round the county.

Under the government system, by working, you automatically lose some of your benefits, and the more you work, the fewer benefits you receive.

When Hayley's face painting stopped, so did her tax credits...

But when you stop a period of seasonal work, benefits should return as before.

This is not what happened in Donna and Hayley's case, and for a time they were receiving no benefits at all.

Six weeks on they are still fighting for the money they are owed from the summer.

Donna said: "You find yourself so much worse off than when you started... which just makes you feel why did I bother.

"I don't want to sit at home and not go to work, I want to go to work and do something and provide for my son, but when they make it so difficult how are you supposed to do it.

"The government is letting single mums and their children go without food and electric and gas - the bare essentials, without giving a damn, you know. It's not fair, we shouldn't have to live like this."

Double entitlement

Both women are entitled to child tax credit from the government to provide for their two young sons.

Their seasonal work means they were also entitled to working tax credit, which is for those in work, but on low pay.

Because their child and working tax credits still have not been paid for the period they worked over the summer, they believe this could add up to a thousand pounds each.

The mums say it has been an immensely stressful time, and they have been forced to borrow from family and friends.

Whilst the children are at school, much of their time has been spent on the phone, chasing their benefit payments.

"When you're a mum and you're looking after your child and you give them what they need - love and food, when you can't it makes you feel really insignificant, you know, worthless."

Local businesses lose out

Donna is still fighting for what Hayley and she sees as tax justice

Donna and Hayley believe the delay in their benefits is having a knock on effect on local businesses.

Whilst the mums were working over the summer, Ryan and Cain came to this after school and holiday club in Camborne.

Because they have not received their tax credits, the women say they have been unable to pay for six weeks of care.

"The government is supposed to be supporting these parents in providing the tax credits for them to do that...so if they can't pay me, I can't pay my staff, I can't run my business."

It is a difficulty also faced by Donna and Hayley's part time employer.

John Carter owns a body art business, and believes the delays in payments offer no incentives for people on benefits, to go into short term contracts, at a time when he is keen to expand his business.

"There's no way I can approach new clients or existing clients with confidence, that, one we're going to be able to fulfil the contract, and, two they're going to be well trained."

This is not the first time tax credits have caused controversy.

Widespread problems

Introduced in April 2003, they were hailed as a way of integrating welfare benefits into the tax system.

But problems arose nationally, not because of delays in payments, but ironically because the system was paying out too much.

Thousands of families were affected - to the tune of �1.8bn alone, between 2004 and 2005, and consternation was caused when some of the money had to be repaid.

Julia Goldsworthy is inundated with Tax Credit problems

Local MP Julia Goldsworthy says delays in processing benefits payments, now make up around half of the cases she sees in her constituency surgery.

"What you increasingly see for people on very low incomes is that they need certainty and I think a decision does need to be made, it needs to be looked at very carefully in terms of people on very low incomes, certainty in terms of the benefits they receive or flexibility.

"The tax credit system is designed to offer flexibility, but a moment is just causing frustrations to many families."

HM Revenue and Customs, who are the government department responsible for tax credits, were unable to give an interview but in a statement a spokesperson said...

"We are sorry to learn of the difficulties experienced by these two women. Due to taxpayer confidentiality we are unable to discuss individual cases, but the details have been passed to our Tax Credit Office".

Donna and Hayley have both recently studied at Cornwall College.

They say the financial instability they have experienced since working over the summer, means they are now keen to start up their own businesses, rather than be dependent again on the minimum wage and the tax credit system.

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