Initial thoughts only I'm afraid - great question though!!
You refer to SB, which suggests that the overpayment was for a period prior to 1995 and the decisions were issued 2001-2002. Do you mean incapacity benefit?
Both decisions would have revised the previous awarding decisions to effect the change. Whether or not either overpayment was recoverable seems to me to be a red-herring.
One of those decisions would have been made before the other one. Therefore, the second decision revising either benefit must have been technically incorrect as it was based on incorrect facts. I.e. if the first benefit decision to be revised was SB to remove the dependant increase, then it must have been (technically) wrong to superseed the ICA decision on the basis that the SB award contained the increase. It's probably likely that both departments would communicated with each other about this, so I'm wondering if an official error review of the second superseeding decision might now be worth a shot?
A further ground for official error review may go back to the start of the award of the second benefit. The OB rules would have applied so the cause of the overpayment in either case must have been an error - so long as the claimant notifed receipt of the first benefit on the claim for the second.
In the alternative to a review, and at the very least (the cost of pursing a new review and an appeal notwithstanding), I would have thought there would be reasonable grounds to argue for non-recovery since the practical effect is that the DWP get to have thier cake and eat it (gluttons!).
From your post, it is not clear when the events occurred, so I might also look to see if the pre SSA1998 review procedures might still apply, or if reference can be made to them in some way. The review procedures in particular were more generous back then.
Hope this helps,
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