Contractor Capgemini has been forced to repay nearly £4.5m to HM Revenue and Customs because of problems with the tax credits computer systems.
The tax credit IT system has been repeatedly hit by crises, contributing to overpayments to claimants totalling £4bn between 2003-04 and 2004-05.
Capgemini took over the Aspire IT contract with HMRC in June 2004, and has been paid £64m since then.
But in a parliamentary written answer, paymaster general Dawn Primarolo revealed that the company has also been charged £4.49m in “service credits” because of IT failures between July 2004 and January 2007, including 18 hours and 30 minutes of disruption to online services.
The answer to the question from Liberal Democrat work and pensions spokesperson David Laws showed that 15 hours and 45 minutes of this downtime occurred in the first year of the contract. No hours were lost in 2006..
The paymaster general also admitted that around 1.6m tax credits were made manually between April 2003 and January 2007, and 34,500 households currently receive tax credit payments made manually – 0.5% of the total.
Earlier this year, Primarolo was forced to admit that the equivalent of 55 full-time staff a year were employed purely to carry out manual adjustments to limit the amount of money that claimants who have been overpaid by the tax credit system have to pay back.