Dear All,

Does anyone have any information on a Commissionner's decision that states when DWP start to recover outstanding overpayments they can continue to recover. We have an appeal against an Income Support overpayment that has been referred to Debt Management Centre and Debt management started to recover the overpayment the same day the GL24 was received. We asked them to suspend recovery but they have told us a new commissionner's decision states once recovery has started they can continue to recover and they are following this guidance.

I would appreciate it if anyone could give us any advice in how to proceed or if we can get a copy of this commissionner's decision.

Thanks,

Debbie
Wirral CAB (Wallasey centre)

Don't know of any case law and I can't see why recoverability is affected by whether they have commenced recovery. Whether or not to recover is discretionary anyway and I can'tsee the Commissioner having jurisdiction. However ... we have had a problem with Debt Management Centres when the appeal has been late. The line they take is that the overpayment is not under appeal until the late appeal has been admitted so they weon't suspend until either the TS or a DM have admitted the appeal. Is this what they mean?

Richard Atkinson

I think this is probably what they mean- we've encountered the late appeal problem a lot. To make it worse, I've been told on numerous occasions by officers on the helpline that the policy is to continue to recover even when a late appeal HAS been accepted...

debt recovery continue to recover even when the appeal is in time ....nightmare. at a very excessive rate, as well!

And then try getting it back when the appeal is won. It gets quite surreal from then on in!

I've just had a letter from Debt Management saying they do not stop deductions (for recovery of an alleged overpayment) until the customer has won the reconsideration/appeal. This seems bizarre to me, as surely there is no actual overpayment to recover until the reconsideration/appeal is lost.

I can't find anything in the regs (looking at Soc Sec (Payments on Account, Overpayments and Recovery) Regulation 1988), but surely this can't be legal?

Has anyone think of anything in any regs. that I can use to threaten them with JR? Help. Thanks.

Chris

The only thing I can put to you is to consider whether the argument is that no overpayment has in fact been made - in which case there can be no argument at all about paying the appellant back if they win; or if indeed the fact of overpayment is acknowledged by and appellant who is only appealing on recoverability. I have certainly seen it argued - on what basis I do not know - that if the latter, the Dept is not obliged to repay any monies "incorrectly" deducted in the interim.

Chris, it's all a bit of a mess. They shouldn't be recovering while the appeal is outstanding - you can get to a copy of the overpayment recovery manual via rightsnet's toolkit - you could try quoting it at them. some advisers have experience of deductions being made immediately, before the appeal period is up, and sometimes, but not always, difficulties getting them stopped. so there is a gap between what the manual instructs and what happens, although, imo, a quick glance at the manual explains some of the confusion. Some debt recovery, but not all is outsourced. i don't know if that explains a bit more of the confusion...it's patchy...

the manual states at 1.41that - "The SofS has an obligation to ensure that, wherever possible, an overpayment is recovered. That policy applies to both recoverable and non-recoverable overpayments."

this has caused a lot of confusion, and notices have been seen which threaten court action under common law, in wording that does not appear to be in the draft letters. there is an outstanding test case being brought to JR by CPAG...they are advising to dispute in cases where the o/p is official error, and i believe the JR concerns the issue of the common law recovery letter, which the ORG itself states are not followed up unless the overpayment is more than £2500 (C/L cases), but of course, many vulnerable people don't dispute...

the ORG also refers to the overpayment classification C/L in what it calls 'Over provision cases' and has considerably muddied the water with this. My understanding is that the DWP claims to have always had a policy of asking for repayment when an overpayment has occurred, which i.m.e. is 'economical' with the truth. There has always been provision for seeking common law recovery in overprovision cases, but it was only sought on an exceptional case by case basis - these types of cases used to be called payments in excess, and are not reviewable.
There Dept has also always been able to ask for repayment on a voluntary basis, but hadn't used to do that in O/E cases.

The C/L classification is fairly new, in departmental terms and seems to have caused problems. They are mentioned at 2.12 and 5.14, very simplisticly, and the references to common law recovery do not refer to the need to obtain a court order for recovery first, and might give the wrong impression to barely trained staff, as indeed, the letters give the wrong impression to claimants, which is why CPAG are taking them to court. to be fair, the wording doesn't claim the right to recover -
eg 3.29 "An overpayment decision can not be given for such an overpayment. However, it is established under common law that the SofS has the right to request repayment in such circumstances." but may put weaselly, scuzz-bucket words into the mouths of trusting customer service advisers. it is also possible, when reading section 5 on recovery of non-recoverable overpayments, that the manual is so badly written that it leads to a conflation of overprovision cases with M classification irrecoverable decisions. i think this may have happened, because of the issue of common law recovery letters to claimants with M irrecoverables, which have been seen...

now, the department has a problem with refunding deductions it has made on overpayment decisions which have been made, but found to be irrecoverable on appeal or reconsideration - it feels uncomfortable paying monies out which it regards as repayments of an amount which it knows to have been overpaid. to an extent, this is understandable (see their stated policy, and duty to taxpayer etc) but is largely of their own making. if your client agreed to the deductions, i suspect they will treat them as voluntary repayments, and you might have the devil's own game to get them refunded.

there is a problem here in that recovery, as distinct from recoverability, is a secretary of state's decision, not a decision-maker's/tribunal etc decision, which is why they can only be disputed by JR. the practice of not recovering during an overpayment dispute is 'best practice', in accordance with Ombudsman's guidance (and basic rationality), and is not covered by statute. One would hope that the government had learned by now that the Ombudsman's guidance is disregarded at their peril, and i believe the DWP advises local authorities to follow the best practice principle on suspending recovery during a dispute. it's not clear why the ORG prefers the Magnus Magnusson approach, but i'm not aware of there being any difficulties with this before Debt Management was introduced...

nevip has raised this problem in a previous discussion, and some kind soul might be able to find you a link to it. i might have the same problem on my hands, i'm about to find out. in this case an appeal was lodged and has been decided the overpayment is not recoverable on reconsideration. several months of deductions have been made, despite our request to stop them.

where the regulations do help is that reg 15 of payments on account etc enable recovery by deductions of recoverable overpayments under sections 71 and 74 only. the DWP is not entitled to regard unlawful deductions from weekly benefit entitlement as voluntary repayments of an earlier overpayment, and there is a right of appeal against deductions and the weekly rate of benefit awarded. until these problems are resolved, reps might need to put in precautionary appeals against deductions, tiresome as it is for all concerned.

Years ago, if, say, a giro went missing and the department dragged their feet over replacing it, we sometimes used to take the Secretary of State to the small claims court to claim the missing benefit. The current benefit award letter was evidence of entitlement; the amount paid was evidence of the gap. I think someone in Merseyside did a guide on how to do it (nevip - do you still have a copy?)

I can't remember a case ever reaching a hearing - they used to settle.

Do you think there's any scope for a similar approach to get back these deductions for irrecoverable overpayments?

Hi Gerry. Here: -

"Mr ………. was first awarded an increase in his Incapacity Benefit in respect of a dependant on 00/00/00. In 2006 that decision was superseded under section 10 of the Social Security Act 1998 and the dependant’s addition was withdrawn. On 00/00/00 a further decision was made under section 71 of the Social Security Administration Act 1992 that Mr ……… had been overpaid the sum of £……… because it was alleged that he had failed to disclose the material fact that his wife’s earnings had increased and that that sum was recoverable from him.

A Social Security Appeal Tribunal sitting on 00/00/00 overturned that decision and determined that although there had been an overpayment it was not recoverable as it was satisfied that Mr ……..had not failed to disclose increases in his wife’s earnings.

While the appeal was waiting for disposal the Debt Recovery Centre had begun to recover the overpayment by direct deductions from Mr ……..’s ongoing award of Incapacity Benefit, despite our request, made on 00/00/00, not to do so until the appeal had finally been disposed of.

On contacting the Debt Recovery Centre on 00/00/00 both Mr …….. and ourselves were informed that although the deductions from his benefit would now stop the amount already deducted would not be repaid to him. We were provided with a copy of Departmental guidance on this matter to the effect that benefit can only be legally payable if authorized by a valid entitlement decision and the fact that the overpayment is later found to be non-recoverable does not provide the Secretary of State with a valid decision authorizing repayment to the claimant.

In our view this is based on a complete misunderstanding of the legal position. A valid entitlement decision is only required on a claim for benefit. This was done when benefit was first awarded. A subsequent superseding decision under section 10 of the Social Security Act 1998 based on a later change of circumstance does not invalidate the original awarding decision.

A further overpayment recovery decision under section 71 of the Social Security Administration Act 1992 does also not invalidate the original award decision. However, a subsequent decision of a tribunal renders the recovery decision of no legal effect and any recovery of benefit made under it is unlawful unless and until the tribunal’s decision is overturned by a social security commissioner or a court.

To state that a new valid entitlement decision is required before the Secretary of State can refund the recovered overpayment is to confuse administration with adjudication. A decision of a tribunal that an overpayment is not recoverable is just that and the executive must implement it, and implement it in full. The executive is not free to modify it or disregard it. Executive administration is subject to legal adjudication and not the other way around.

For the executive to blatantly disregard a decision of the judiciary is not only unlawful but also unconstitutional. It is unlawful in that a judicial body has ruled that a decision of the executive (the overpayment recovery decision) is of no legal effect. It is unconstitutional in that it places the executive above the judiciary in that the executive has placed itself above the law, by deciding that it can pick and choose which of the judiciary’s decisions to follow and which to ignore. This undermines the fundamental checks and balances at the heart of our constitution.

The refusal to implement in full the decision of the tribunal also deprives our client of the right to a fair hearing at common law and under article 6 of the Human Rights Act 1998. Imagine a situation where the full amount of an overpayment was recovered before a tribunal was able to sit and the Department had no intention of repaying the claimant. The tribunal would have had its judicial teeth removed in advance as no matter what the tribunal’s decision was it would not and could not assist the claimant.

In these circumstances, although the claimant would have access to a hearing, the real outcome, as opposed to the judicial outcome, is only going to go one way so the hearing becomes an irrelevancy. This also constitutes a breach of natural justice as justice must not only be done but also seen to be done. The impartial reasonably minded observer, while not impugning the independence of the tribunal might view the entirety of the situation as farcical.

Finally to withhold the money may constitute a breach of article 1, protocol 1 of the Human Rights Act 1998, which states: -

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties”.

We submit that it is not in the public interest for the executive to be able to disregard a lawful decision of the judiciary to deprive a person of his property in this way. The machinery of justice already provides an appropriate remedy if the executive is dissatisfied with a decision of a tribunal and that is to apply for leave to appeal on a point of law to a social security commissioner. This it has chosen not to do. It, therefore, must not be allowed to go behind the back of the tribunal and render its decision of no effect. This attacks at the heart of our constitutional democracy.

We give notice, therefore, that unless the outstanding sum is repaid to our client within 14 days then he will have no option but to instigate proceedings against you in the County Court.

We thank you for your time in this matter and if you require any further information please do not hesitate to contact me".

If its of use to anyone then feel free to adapt to suit.

Just to add and update.

A copy of a letter should also be sent to the DWP Solicitor's Office who will then ask the Adelphi to investigate. In my client's case, roughly £900 out of £1300 has been returned. We have had, via the Solicitor's Office, a reply full of admin jargon and this is currently being chased up.

My guess, and it is only a guess, that the withheld sum may be the amount that was recovered before we requested them to stop, which is still not on in my view.

Thanks Paul, that's really interesting. I had in mind a rather dog-eared leaflet that one of my previous workplaces had which was specifically about the process for claiming the unpaid benefit due on the current award. First saw it in the early eighties I think, and I'm pretty sure it came from your neck of the woods.

I was simply thinking about the possibility of making a claim for the unpaid benefit, on the strength of the award notice, and waiting to see what justification the other side comes up with for non-payment. Your argument above looks like a good rebuttal of the likely excuses, though!

Is it this one from the site several years ago? It's a very poor copy.

http://www.rightsnet.org.uk/pdfs/Walsh_v_DSS.pdf

Sue

Thank you to everyone who has contributed to this thread. I have now managed to use the ORG to challenge the recovery on the basis that I requested the review before they had commenced payments (due to the fact that the DWP has sent out several contradictory letters about when they were commencing payments, so I've used the one that suited me). I may not win, but at least I will have caused them some inconvenience in having to argue back with me.

The joys of advice work. Thank you to everyone who posted info/advice for me on this.