Most hard working families with children now receive tax credits to supplement their income, and many of the low income families absolutely rely on them. But the Citizens Advice report, recently published, shows that the tax credit system is failing large numbers of families, pushing them into poverty and debt.

Huge errors have occurred - a third of all claiming families, that's around two million, have been overpaid and nearly 750,000 families have been underpaid. When people try to sort out their problems it is complex and there are long delays.

In the meantime, where families have been overpaid, the payment suddenly drops drastically or stops altogether. Families are left struggling below the breadline in some cases, falling into debt, taking out loans as a stop gap, or even having to give up their job. That's the very opposite of the hardship tax credits were designed to prevent.

The picture that emerges from our report is that hard working families and CAB advisers are in despair and extremely frustrated at the terrible catalogue of errors.

The claim form for tax credits is long with accompanying help notes that run to 56 pages. It is complex and daunting even to claim. The award notices that families receive from Inland Revenue are equally difficult to understand with simply not enough information so it's not surprising that many families don't know that they have been over or underpaid. They are at a loss to understand what's gone wrong when their income suddenly changes dramatically for the worse.

We are concerned about the hardship that it is causing families - they can't pay bills, or buy even essentials for their children so they are forced to borrow money, quite often at extortionate rates of interest to provide the basics. In some cases people don't have the money to pay for childcare and so have to give up their job as a result.

There has to be a rapid improvement in the administration of tax credits. We believe many existing overpayments caused by Inland Revenue error will need to be written off. There must also be changes to the rate at which overpayments are recovered so that families are not disadvantaged, and that they should have a proper independent right of appeal against decisions to recover money paid out by Inland Revenue mistakes.

If your family is suffering because of the tax credit award system, or if you are just confused, pop in to see us at CAB we are very happy to help. Our telephone helpline number is 01256 322814