Deductions of a third from ESA for benefit fraud

Hi

I have a client who is paying back a large amount of housing benefit which was obtained by fraud. She is on the assessment phase of ESA and they are taking approximately £18 per week to recover this. She has recently been contacted for a review of this and been told by DWP that from April they will be taking a third from her ESA around £24 per week. Just wanted to see if anyone else had heard of this and if this is correct? On top of this she is a 25% bedtax case : (

My colleague in Bristol had a case like that yesterday - there have already been problems about them taking the full £18 without discretion to reduce - see thread here http://www.rightsnet.org.uk/forums/viewthread/7657 - unless the maximum amounts for deduction have gone up massively in 2015/16 - which I’m not aware of - this seems outside the law. I would go back to them and query - be interested to hear what they say…

assume it is income-related ESA? - they can take more if contributory…

Thanks Daphne

Client was working so on contributory ESA but I will phone DWP when I see my client next and see what they say and feedback.

Thanks for your prompt reply

Well I phoned and asked them and they basically said pretty much what has been discussed in the fraud thread. They said the new legislation started in Nov 2014 (regulations from 1988 amendments 2015) and the amendments are to be implemented from 13 April 2015. I asked about the guidance and they said it can only be considered to lower the recovery rate in situations where they have a dependent child and exceptional circumstances such as if they are about to be evicted.

My client has receives £74.20pw ESA and from this they will be taking £29.60pw DWP overpayment. In addition the client is paying back Housing Benefit Overpayment of £18.95pw and client’s Discretionary Housing Payment (DHP) for 25% bedroom tax is about to expire which will be £20.38pw. Leaving a grand total of £4.17pw to splash out on food and utilities.

I’ve written (on behalf of client) to the DWP debt management to see if they will consider lowering this £29.60. (As well as doing another DHP for bed tax). Hopefully they will consider because failing that I have no idea how this client is going to manage and is at serious risk of losing their home because of this.

Shazz - do you know where the figure of £29.60 comes from? As far as I know the maximum recovery is the £18.95 if claimant on income-related ESA or contributory ESA if they would be entitled to income-related ESA at the same rate. So I don’t think it should be above £18.95 at all and they should be using their discretion to lower it further. Let me know how you progress.

Also can you negotiate to get the HB overpayment recovery reduced too?

Hi Daphne

Sorry I don’t know how they have worked out the £29.60 figure. They just told me that this would be the amount the deduction would be recovered at and when I asked why it was this amount they told me it was because of a change in legislation. My colleague has previously tried to appeal the £18.25 HB ovp but again was told it can not be reduced as it is fraud.

Looks like they’re recovering twice - ie, £11.10pw (maximum overpayment recovery rate) AND £18.50pw for fraud overpayment recovery, hence = £29.60.

Thanks Morti.

Are they allowed to recover twice? It’s extremely harsh.

Thanks

Sharon

No - it’a an ‘or’. Reg 16(4) and (5) of the SS(PAOR) Regs make it clear that in fraud cases it’s 25% of the personal allowance and in any other cases it’s 15% of the personal allowance. Go back to them.

Good spot to work out that’s what they were doing though!

No I don’t believe they can - despite their claims, I know of no new legislation since this announcement in November 14. As far as I’m concerned the max deduction pre-uprating was £18.25pw and is now £18.50pw.

Not looked at this in detail but I think the relevant legislation is Reg 16 of the SS (PAOR) Regs 1988.

Does your client have a HB o/p and ESA o/p ?

I think your original post said they are recovering the HB o/p from ESA is that right ? Is there any reason the HB o/p is not being recovered from on-going HB entitlement?

Sorry if I’ve missed something…...

I would agree that reg.16 only allows a maximum deduction of up to 25% of the personal allowance from ESA-IB in respect of an ESA o.p.

It’s also clear that an LA can request a HB overpayment be recovered from other benefits where it is not possible for them to recover from HB and fraud is involved - given that this client already has a bedroom tax deduction with requires DHP to make up shortfall, one could well imagine such a request being made to DWP.

However, at p.1240 of WBH 2014/15, it states that, in relation to HB overpayment being recovered from other prescribed benefits, there are no rules limiting the maximum amount that can be deducted, before going onto provide arguments about reasonableness. However, crucially, it then goes onto refer to p.1228 in advancing why maximum amounts should be in keeping with reg.16 rules.

This appears to stem from the fact that HB overpayments are dealt with under s.75 of the SSAA, which isn’t specifically covered by reg.15 of the PAOR regs. This creates a rather bizarre situation whereby reg.105 of HB regs allows a LA to seek recovery of a HB o/p by the SoS through the use of deductions from prescribed benefits, but then no powers within the relevant regulations which govern how much should be recovered through the PAOR regs.

Hi all,

The Regs have changed from 6 April to allow 40% deduction in fraud cases: http://www.legislation.gov.uk/uksi/2015/499/contents/made

See this thread for a discussion of the discretion to reduce the recovery rate: http://www.rightsnet.org.uk/forums/viewthread/7657/

Any word on the FOI request Daphne?

Jon

Thanks Jon - should have known that - rightsnet story here - http://www.rightsnet.org.uk/welfare-rights/news/item/increases-in-overpayment-recovery-rates

No news on FOI request yet - will let you know as soon as I do

Thought I’d update as I saw my client yesterday. Appeal was declined to do a reduced recovery rate for the DWP overpayment (client wasn’t told this though, we had to phone up to find out almost a month later.) It was declined on the basis that the client doesn’t fit the criteria and that because it was fraud they have to recover as quickly as possible. I asked what the criteria was and I was told that because there was no evidence sent in with the appeal that the client was at risk of losing their home they would not consider it. I explained that the client will be left with £4.71 per week after all the deductions were taken out (£29+ for DWP ovp, £18.25 Housing benefit ovp and £20+ for bedroom tax.) Adviser said that there was no evidence of the £18.25 being taken from client’s DWP benefits, I explained that this is because this amount goes onto the rent account as it’s HB that has to be paid back. I also explained that the client at the moment does not have any recovery action for rent arrears as they are not at a high enough level, however, it is certain that the client is not in a position to pay towards rent and therefore it is more than likely that the client will accrue rent arrears which will eventually lead to court action (with further costs for the client to pay.)

I have now sent off a rent statement showing the £18.25 HB on the account as well as the reduction of £20+ HB for the bedroom tax, in the hope that they may reconsider. (I have previously done a Discretionary Housing Payment Application and awaiting outcome.)

From the discussion with the adviser it is unclear what the criteria is for at risk of being made homeless. It appears that rent arrears need to accrue first and legal action taken and be on the cusp of eviction before they will consider? Instead of preventative measures. It is evident this client is not in a position to be able to afford to pay the rent and down the line will go through court proceedings through non payment and incur further court costs. It just doesn’t make sense.

The route of the problem comes from the ‘Fraud’ and these fraudulent claims usually arise out of; ignorance, intimidating domestic situations and interviews under caution being conducted improperly. What deliberate fraudster would admit guilt under caution and offer self incriminating statements to the fraud investigation officers?
In our local court over a 3 month period last year there were 37 people charged with offences (Fraudulent claims) under Social Security Administration Act 1992 or Tax Credits Act 2002. There were 29 females and only 8 male offenders in this cohort. Over 90% of the women were first time offenders. The reasons for the high proportion being females are various including; high incidence of women being the claimant in the household, intimidation from males involved in fraudulent claims and ignorance of the benefits system.
It is impossible for us to dispute the overpayments at tribunal (which are usually calculated inaccurately) once a guilty plea is entered and the amount of overpayment has a direct bearing on the chances of a custodial sentence. The amount of the fraudulent overpayment is often reduced through ‘horse-trading’ by the lawyer at court on the day of trial. Lawyers will encourage clients to borrow money to payback this reduced figure to keep them out of prison what they don’t tell them is their clients will still be expected to repay the full overpayment. Technically the reduced figure is the fraudulent overpayment and any other overpayment should be treated as normal and in these situations we should argue it should not be subject to the new Overpayment and Recovery regulations i.e. £18.95 not 40% of the applicable amount.
Beyond this it is necessary to try and educate people of the implications of being invited along to their Local Authority offices for an ‘interview’  and the explicate need to have a lawyer present, oh and most importantly, to get that lawyer to speak to a Welfare Rights Worker before hand.

Its in the new CPAG handbook- page 1253. £29.60 maximum rate in fraud cases-

SI 2015 No 499- Reg 2(3) amends the recovery rate to 8x 5% of the PA in fraud cases.

This aligns the old system with the UC rules (so ensuring “equal treatment” of all claimants with fraud overpayments by treating them all equally badly).

On another note, I had an enquiry from someone who had been told that the DWP will only consider reducing the amount recovered on medical grounds (eg not on boring old financial hardship). My understanding is that the guidance on this has not changed but just to be sure I have done an FOI request for the latest guidance. It will be here when DWP release it:
https://www.whatdotheyknow.com/request/overpayment_recovery_guide_2#incoming-650851