Recoverable overpayment due to late payment of student loan

Hi,

I would be grateful for advice assistance with this issue.

My client was a student receiving student loan and grants, and also was receiving ESA. Due to her ill health, the university allowed her studies to be interrupted in March 2020. Student Finance were notified and payment of the student income ceased. ESA were also notified that client’s studies had been interrupted and student finance income had ceased. There was a reassessment of ESA entitlement and it was decided that she was entitled to be paid her full entitlement of ESA.
Client restarted her course in January 2021 (course end date being 31/05/2021). She, the client, applied to Student Finance for finance for the remainder of the course. On 03/02/2021, Student Fianance notified her that this had been granted. Client notifed ESA of the award on that same day. The ESA payments were adjusted but was more than had been paid before. This was queried with ESA client was assured that the figure being paid was correct.

Subsequently, ESA decided that there had been a failure to disclose; ESA had been overpaid; the overpayment was recoverable; and a penalty notice was issued.

Following MR appeals: the penalty notice was withdrawn; the overpayment for the period after 03/02/2021 was decided was not recoverable because there had been no failure to disclose.
However, it was decided, first, that even though the student loan was not paid until February 2021, it ought to be taken into account from the start of the academic year in September 2020, and so, client was not entitled to the full amount of ESA that had been paid, there was an overpayment and that overpayment, was recoverable.

Also, a second similar decision was made that as student income was due to be paid from the beginning of the semester in January 2021, there was a recoverable overpayment because benefit had been paid in consequence of a late payment of student income.

This area of recoverability of benefit - especially involving student income - is new to me. I would be grateful for advice/ guidance as to a response. Even, if it is to say that DWP have got it right.

Thanks

The overpayment for the period covered by arrears of student finance is not recoverable due to failure to disclose - it is covered by the separate rules about backdated income.  See s74 of the Social Security Administration Act 1992 and Reg 7 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988.  DWP can recover these overpayments irrespective of the claimant’s conduct.