The government has admitted that the IT system to support the new tax credits has run into difficulties.
Problems with downtime, speed and stability have hit the system, developed by EDS, to the extent that staff working on public helplines have been unable to handle child tax credit claims.
Dawn Primarolo, the Paymaster General, said: "The system has not been working as well as we expected and there has been unscheduled down time as a result.
"The Inland Revenue is working urgently with its IT partners to improve the system's availability, speed and stability."
An Inland Revenue spokeswoman claimed that the volume of claims and calls has slowed the system down. "We deal with around 25,000 cases a day," she said.
"We're catching up with the number of payments, but some five million families are entitled under the new tax credits compared to just over one million under the old tax credit system."
The spokeswoman insisted that families will not be losing out while problems with the system are addressed.
"We have temporary measures in place while we are making the system more robust," she explained. "People can go to their local Inland Revenue enquiry centre and get a giro."
However, Conservative MP for Aylesbury, David Lidington, who asked a parliamentary question about the system, described it as an "utter disgrace".
"The failures have left many of my constituents and thousand of others out of pocket. If they manage to get through to the helpline, many are just told that the system is 'down'," he said.
"There needs to be an investigation. It's a wretched state of affairs that would not be tolerated in the private sector.
"If it is the fault of EDS, the money should be recouped. If the Treasury has been imposing unrealistic deadlines then there should be a public statement.
"There have been so many cases of government IT schemes floundering that there is no excuse for not checking."
Last month Revenue chairman Sir Nick Montagu raised the possibility of EDS facing financial penalties for supplying systems that have not lived up to promises made by the vendor, and for leaving thousands of families without vital financial support.
Both the Inland Revenue and EDS refused to comment.
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