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Top Income Support & Jobseeker's Allowance topic #8038

Subject: "Overpayment of IS and section 74" First topic | Last topic
giuseppina
                              

Welfare Rights Caseworker, Brighton Unemployed Centre, Hollingsdean, Brighton
Member since
21st Jan 2008

Overpayment of IS and section 74
Mon 31-May-10 07:24 PM

Hello

The DWP insists to apply section 74 of the SS Aministration Act 1992 to recover some IS which was overpaid because of a late payment within a private transaction (a lodger paid some rent late to his landlady - the landlady was on Income Support).

Section 74 implies automatic recovery, with no protection for the claimant.

My question is: can section 74 be applied to any income?

In 1994, a spokesman for the Secretary of State, Mr Burt, explained to the Parliament that 'Section 74 applies where there has been a duplication of Income Support and another benefit'. This seems also coherent with the structure of the Act (section 74 is grouped with section 73, and the latter is entitled 'overlapping benefits - general').

Can anybody tells me if what I think (below) is wrong?
1) I think that this section should only deal with overlapping benefits. If this is not true, the wording of section 74 is strange. Can any private payment be called 'a prescribed payment' and any date when a private transition was supposed to happen be called 'prescribed date'?

2) I think that there is a different regulation which applies in the case of non-benefit payments (in this case, according to Section 42(3) of the Income Support Regs., this income should be treated as already in possession of the claimant, so there should be no recovery issue).

3) I think that, in the case of overlapping benefits, a benefit which has not been paid yet is NOT treated as already in possession of the claimant. For this reason, section 74 guarantees its automatic recovery.

Please tell me if I am right or wrong. Appeal coming soon.

Giuseppina






  

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Replies to this topic
RE: Overpayment of IS and section 74, jj, 01st Jun 2010, #1
RE: Overpayment of IS and section 74, ariadne2, 01st Jun 2010, #2
      RE: Overpayment of IS and section 74, giuseppina, 02nd Jun 2010, #3
           RE: Overpayment of IS and section 74, jj, 02nd Jun 2010, #4
RE: Overpayment of IS and section 74, giuseppina, 02nd Jun 2010, #5
RE: Overpayment of IS and section 74, Tony Bowman, 09th Jun 2010, #6

jj
                              

welfare rights adviser, saltley & nechells law centre birmingham
Member since
21st Jan 2004

RE: Overpayment of IS and section 74
Tue 01-Jun-10 07:58 AM

section 74 applies only to prescribed income. see reg 8 of the Payments on Account, Overpayments and Recovery Regs.

  

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ariadne2
                              

Welfare lawyer and social policy collator, Basingstoke CAB
Member since
13th Mar 2007

RE: Overpayment of IS and section 74
Tue 01-Jun-10 05:00 PM

Section 74 has two subsections: the first (74(1)) has its "prescribed income" prescribed not under reg 8 of the PAOR Regs but reg 7 which defines it as ALL income required to be taken into account under the IS/JSA/SPC or ESA. Reg 8 of the PAOR regs only applies to payment made out of public funds which are paid late.

  

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giuseppina
                              

Welfare Rights Caseworker, Brighton Unemployed Centre, Hollingsdean, Brighton
Member since
21st Jan 2008

RE: Overpayment of IS and section 74
Wed 02-Jun-10 10:23 AM

Hello
thank you for answering.
I have had kept 7 and 8 in this client's folder for more than a year, and I am still not very convinced about the interpretation and use of Section 74.

The Secretary of State stated in Parliament that Section 74 would apply to cases of duplication of benefits. So did they lie? Also, I have looked into previous Commissioner cases which applied Sections 74 and they are ALL cases of duplication of benefits. I have found no case which uses regulation 74 apart from duplications of benefits.

Has anybody got any reference to previous applications of Section 74 in a case similar to mine, or some authoritative comment about the interpretation of this section?

Thanks
Josephina

  

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jj
                              

welfare rights adviser, saltley & nechells law centre birmingham
Member since
21st Jan 2004

RE: Overpayment of IS and section 74
Wed 02-Jun-10 12:20 PM

guissipina, going back to your first post, this is not an overlapping benefits case. overlapping benefit provisions refer only to contributory benefits. section 74 is headed " Income Support and other payments" and the purpose of the section reflects the fact that income support is a _means-tested_ benefit. Prevention of duplication of payments is a fundamental operation of means-testing. the terms may appear misleading, but prevention of duplication of payments is nothing whatsoever to do with overlapping benefit provisions - which simply provide that where a person qualified for more than one contributory benefit, only one of them (the highest rate) can be paid.

applied correctly, there's not a lot of wiggle room in section 74, but a lot of mistakes do get made in section 74 _calculations_, and there will usually be more scope for argument around the particular facts of the case, than focussing on the law itself.

if your client was receiving income support at the time the payments from her lodger should have been paid, and if the income was not already taken into account in her IS award, and if the lodger really was a lodger and not a non-dependant, and the section 74 recovery amount has applied the correct disregard...etc... what argument will you make to the tribunal?

  

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giuseppina
                              

Welfare Rights Caseworker, Brighton Unemployed Centre, Hollingsdean, Brighton
Member since
21st Jan 2008

RE: Overpayment of IS and section 74
Wed 02-Jun-10 06:36 PM

In their first (botched) attempt to apply section 74 to this case, which happened more than a year ago, the DWP conflated my client's rent payment with her lodger's Housing Benefit, and presented this case to the Tribunal as a case of duplication of benefits. However, their argument collapsed at the hearing, for other reasons. The DWP has now presented a new submission.

Since the Secretary of State explained in Parliament that section 74 applied 'where there has been a duplication of Income Support and another benefit' (sic), I wondered if the DWP could use section 74 in this case.

Those of you who replied to me seem to confirm that they can. If this is true, we have no arguments.

However, my question remains: can someone give me information on a previous case similar to mine? In my experience I have always seen section 74 applied in cases when there was a duplication of benefits.

Thank you
Giuseppina

  

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Tony Bowman
                              

Welfare Rights Advisor, Reading Community Welfare Rights Unit
Member since
25th Nov 2004

RE: Overpayment of IS and section 74
Wed 09-Jun-10 01:05 PM

Hi Giuseppina. I feel your frustration.

In the meantime, I'm afraid I have to agree with JJ and Ariadne. Tracing it through the conclusion is as follows:

s.74(1) SSAA 92: Where a payment by way of a prescribed income is (paid late, etc)...

prescribed income is defined by reference reg 7(1)(a) SS (PAOR) Regs 1988: for the purposes of s.74(1) of (the act)..., income required to be taken into account (is that in) part V of the income support regulations (IS regs 40-42)

Reg 40 IS regs: (from the first paragraph in the annotation to the reg: "this paragraph mainly confirms that all forms of income other than earnings falls into this category, and provides that the gross amount is to be taken into account. Reg 40(2) applies the disregards in schedule 9 and includes HB (para 5), non-dependant contributions (para 19) - see JJ's post - and 'lodgers' disregard of £20 plus £50% of the balance (para 20).

Reg 41 deals with income from capital and reg 42 deals with notional income. This would apply in resepct of s.74(1) where, for example, the IS award is later revised after it was discovered that that claimant had deprived himself. The resulting 'notional income' would be taken into account to create the overpayment under s.74(1) if it was applied retrospectively.

All things considered therefore, although I confess I've no memory of dealing with s.74 cases, I would have to say your client's case seems somewhat unwinnable on the facts you've presented. Even if the DWP make a hash of things, the tribunal can - and should - give the decision the DM should have given.

A couple of things that I would want to be looking out for though...

1) that the 'lodger' was not a 'non-dependant'
2) that the disregards have been properly applied
3) that there has been no change to the definition of 'prescribed income' since the overpayment occurred (I'm using the current legislation volumes)
4) the the overpayment recoverable under s.74 only extends up to the late payment was made. Thereafter, I would suggest that any continuing overpayment ought to dealt with under s.71

For fullness, late payments of 'prescribed benefits' as opposed to 'prescribed income' are dealt with under s.74(2) and reg 8 PAOR regs.

Finally, and in respect of the SoS comments, I would want to see the context in which these were made. It's also worth bearing in mind that the annotation to the section says that the provision largely mirrors its predecessor in the supplementary benefit act 1976, from which it was taken.

  

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