A tenant applied for a CCG and was refused. I completed a review with the tenant and this was faxed through on Thursday. On Friday lunchtime the tenant contacted me to say she had recieved a phone call from Social Fund who informed her a Social Fund payment had been paid into her account by "accident". I have contacted Socila Fund and there is not a trace of this payment being paid into the tenants account. They have asked the tenant to return the money. Tenant has checked and payment is in the account.I am wondering if tenant is within her rights to keep money? and under what grounds could she keep it?

Nothing to stop her keeping it.
BUT the DWP are wthin their rights to pursue recovery under Common Law, and will perhaps pass the case to their Debt Centre to chase recovery if she does not refund it now.

payments do not get into accounts by 'accident', the payment implies an award... she should certainly ask for a full explanation of how the grant came to be accidentally paid to her... has she had a decision notice of any sort?

She has not recieved a decision yet and we will be asking for a full explanation. Thanks

As a general matter of law, if you receive money paid to you by accident (eg into your bank account or from a defective cash machine), you are liable to repay it. If you know you are not entitled to it, but hang on to it and treat it as your own, that is theft. If you are not certain, you should keep the money aside and NOT SPEND IT until you are sure whether it is yours or not.

The law will protect an "innocent volunteer" who has received in good faith and dissipated money in circs in which they genuinely believe that the money is due to them - eg because they have queried it with the source of the money. If however the money has been turned into something of value - eg a washing machine - the owner of the money can still claim the washing machine back.

However if they are not an innocent volunteer, ie they knew or ought to have known that the money had been paid in error, they will still have to pay it back even if they have spent if and have nothing to show for it. This is what is (erroneously) called by the DWP recovery at common law, but is actually the doctrine of "unjust enrichment". That means you ahve been wrongly enriched at the expense of the rightful owner of the money.

After all, if the bank wrongly credited your pay to someone else's bank account as a result of a computer error, you'd want it back, wouldn't you?

Thanks for this. We are now in the process of returning the payment and obtaining a full explanation as to how this has happened.