@ Political failure not IT...

Of course tax allowances for each child (plus a couples allowance) with income supplement for the poor are the way to go, the way it used to be, and the way its still done in most of the rest of the world. But Brown wants as many people as possible on means-tested benefits so that he can control their income, and to make them more likely to vote Labour as the party believed to be most likely to increase benefits.

If this system had been administered by the DSS they have the business knowledge to administer benefits and know that if you overpay a benefit it causes hardship and in any case you have little chance of getting it back. So they put effort into upfront validation and fraud management. But because Brown wanted to disguise this as something other than a means tested benefit, for political reasons, it was given to HMRC (Inland Revenue as was) who created it and run it like income tax, with few checks up front and validation later. This has had the disastrous consequences of massive fraud, massive errors, a huge bureaucracy struggling to manage it, and a department totally unmoved by the social hardship caused by clawed back overpayments.

So lets be clear, it is not Cap or EDS to blame, it is not even HMRC, it is Gordon Brown and Labour's social engineering that is 100% responsible for this farce-cum-tragedy.