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Fine after benefit fraud ...
Hello all !
And a very quick one ...
Is there a law or guidline which states DWP will only fine someone for a benefit fraud offence if the overpayment is above £2.000.00 ?
Have a good evening all and thanking you in advance for any thoughts ...
I was given to understand that the DWP will always seek prosecution when the sum involved is £2000 or more. That does not imply that prosecution will not happen for lesser sums.
See here, particularly para 4.4.1:
As ever, all very helpful, thank you !
“4.3.2 It is current DWP policy to offer these penalties where the case is deemed to be not so serious and the offer of an administrative penalty is considered a suitable alternative to prosecution, and where the gross overpayment is under £2,000. Unlike cautions no admission of guilt is required from the customer before offering an administrative penalty,”
This is from the document Nevip linked to.
It seems to me to imply that an adpen is less serious than a caution because no admission of guilt is required. And yet, the claimant has to pay 30% more for than adpen than a caution! Have I got this all wrong?
A few years ago I had a case (with my debt advice hat on) where client had signed an adpen. Question arose as to whether this was a fraud admission which would mean the debt wasn’t wiped out in bankruptcy. Conclusion - after taking advice - was that it would be treated as fraud. Having read the above document I wonder whether it could at least be argued it might not be - as no admission of guilt is required.
An administrative penalty is an admission of guilt as it’s been taken as an alternative to possible prosecution. I know that it is an excluded debt for the purposes of DROs.
The definition of a “fine” (which can be found in section 150 of the Magistrates’ Courts Act 1980) for the purposes of the Insolvency Rules is:
“…. any pecuniary penalty or pecuniary forfeiture or pecuniary compensation payable under a conviction;”
Hope that helps
My conviction has been that an adpen is an excluded debt in DRO, & I would certainly not want to argue the opposite.
However, the DWP document says no admission of guilt is required for an adpen and the definition of a fine refers to a conviction – and there clearly is not a conviction if an adpen is entered into. It is an alternative to possible prosecution – but a prosecution does not amount to a conviction until/unless the Court decides on guilt.
Tony
Sorry to come back on this again - perhaps it’s been too long a week! You say an adpen is not a fine, (which I understand from the legislation you quote) but then you say it does meet the requirements for a fine. Have you accidentally missed out a “not”, or have I failed entirely to see the point?
If it does not meet the requirements then it seems to me it is a civil matter & - as such - is not an excluded debt in a DRO unless (as you say) covered elsewhere in the relevant legislation. And it appears from the wording of the section that the adpen prevents DWP from later prosecuting to turn the overpayment into a fine.
Hi,
The debt would be a qualifying debt for DRO purposes and would count towards the £15k limit but it wouldn’t be written off at the end of the moratorium period if it arose through fraud- s.251I(3) Insolvency Act.
This is so if they have accepted a penalty as an alternative to prosecution and not withdrawn from the agreement – see http://www.dwp.gov.uk/docs/g5-2009.pdf para 1-9
However the LA has no remedy in respect of the debt during the moratorium period so any benefit deductions should cease.
A client could stop paying it back as agreed and it would then be up to the Courts to decide whether or not the debt was incurred through fraud
Lauren
(thanks to CitA SSU for confirming this position to me as I was starting to get a bit unclear myself!)
Hi Tony
My post was in response to the ‘debt rules’ and how a benefit overpayment and an ad pen are treated in a DRO / Bankrupcty situation.
Regards
Lauren
Lauren
You say: “A client could stop paying it back as agreed and it would then be up to the Courts to decide whether or not the debt was incurred through fraud”
SSA Act 1992 S115A says (subsection 2) that if he agrees to pay the penalty no proceedings will be taken; & (subsection 4) that if he agrees “in the specified manner” to pay the penalty no proceedings will be instituted “for an offence (under this Act or any other enactment) relating to the overpayment”.
There is nothing there saying he actually has to pay the penalty - just that he has to agree to do so. There is nothing in the section about him withdrawing his agreement other than in the first 28 days after making it.
On the face of it then, DWP could not take him to Court if he just didn’t pay. However, I do not know what “in the specified manner” means. It’s quite a long time since I saw an Adpen agreement form & I can’t recall what it says. If there are regulations governing what is to be on the form & the form then makes it clear that - under these regulations - Court action can/will be started if he fails to pay then I can follow what you are saying. Do you know whether this is the case please?
That’s my understanding Derek. If someone has agreed to take an admin penalty and they then don’t pay it as was agreed then the case will be put back to the position as if they never took the penalty in the first place.
I’ve now looked back on the case I mentioned (about 5 years old). We had advice from both SSU & Insolvency Service Technical Help. It related to bankruptcy, but I don’t see that DROs would be any different in this respect.
Summarising the advice, it is not necessary for there to be a fraud conviction (or admission) for S281(3) IA86 to apply. What would happen is that the debt (i.e. an Adpen and any overpayment where no fraud prosecution had occurred but where DWP considered one possible) would be provable in the bankruptcy but, following discharge, DWP would take civil Court action to recover the debt (presumably by applying for a CCJ). The debtor’s defence would be that the debt was provable in the bankruptcy & so has been released on discharge. DWP would argue (with evidence) that the debt had been incurred through fraud or the forbearance of fraud and therefore was not released by virtue of S281(3).
Because these proceedings would be in a civil Court the civil standard of proof would apply - ie balance of probabilities, so it seems very likely (if not inevitable) that signing an Adpen would be taken as sufficient evidence of fraud.
Following this, it seems to me the overpayment & any Adpen would be a qualifying debt in a DRO, but DWP could act as above once the 12 month moratorium ended.
Any comments or contrary views?