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Forum Home  →  Discussion  →  Universal credit migration  →  Thread

UC migration and ‘undead’ debts

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Andrew Dutton
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We are all quite rightly concerned about the high levels of deductions for debt from UC payments.

Even people who at first appear to be better off on UC prove not to be so, owing to the huge amounts that are taken off before they receive payment.

There is legitimate concern that Tax Credit overpayments are being taken – at random amounts – even when the claimant has been given no chance to challenge any overpayment.

In addition, I am now seeing cases in which on top of all the other deductions, very, very old Social Fund debts are being recovered, at very high rates.

In one current case, a couple is having £199 a month taken from them, nearly £100 of which is for old SF debts.

They were told by the Jobcentre to move to UC from ESA as they would be ‘better off’ – they didn’t have a change of circumstances and the move was not needed.

Now they are paying back an advance (which didn’t need to be incurred), a TC overpayment which probably arose purely owing to natural migration, and the Social Fund debts.

So instead of being about 50p a week better off on UC………

In another case the SF debts are from 2011 and 2015 and the balances have remained the same from when they were taken out, implying strongly that these are ‘forgotten’ debts which have been mysteriously revived by the transfer to UC.

Is anyone else seeing these ‘undead debts’ popping up to cut claimants’ incomes?

Is DWP trawling for old debts to take back as people go on to UC?

This is a suspicion only at present, there isn’t enough evidence to clarify the matter as yet - but it will be interesting to see how things develop.

[ Edited: 3 Jan 2019 at 04:01 pm by Andrew Dutton ]
Timothy Seaside
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I have an odd one where my client applied for UC and then won her ESA appeal. The DWP gave HMRC over £3,000 of ESA underpayment towards an old tax credit overpayment of about £5,000. But they’re not deducting anything for the debt from the UC. Three months on, we are still waiting for the extra amount for LCWRA; when it eventually comes (as an underpayment) I fully expect them to give it to HMRC as well. And at some point they’ll probably realise they could be taking it out of the ongoing UC.

There does seem to be an aggressive new push to find and recover old debt. I would suggest a DRO is going to be appropriate in a lot of cases.

 

Elliot Kent
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I’ve seen quite a lot of this. I am not sure that it’s a “trawl” as such - I think that there are lots of debts on the DWP computer which just aren’t being recovered for one reason or another and claiming UC basically just gives it a kick so that everything starts up again. In one case, I have a client who has social fund debts of about £1500 dating from 2005-2017 which they have started to recover again. Nobody has been able to give any sensible answer as to why they haven’t already been recovered.

Benny Fitzpatrick
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My take on it is that many of these debts were unrecoverable from legacy benefits due to being caused by official error. The DWP have long hated having to write off debts that they caused, and the different regs around UC, under which all overpayments are recoverable regardless of causation, allow them to recover these debts at punitive rates once claimants transfer to UC.

I have seen a couple of instances where TCO refuse to stop payment when a client claims UC, claiming (incorrectly IMHO) that they must be authorised by UC to close a claim, effectively manufacturing an overpayment.

ClairemHodgson
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Benny Fitzpatrick - 08 January 2019 12:16 PM

My take on it is that many of these debts were unrecoverable from legacy benefits due to being caused by official error. The DWP have long hated having to write off debts that they caused, and the different regs around UC, under which all overpayments are recoverable regardless of causation, allow them to recover these debts at punitive rates once claimants transfer to UC.

but surely, if they are long since written off as official error, they shouldn’t be able to revive them now that we have UC?  that would be to read the UC legislation retrospectively (not allowed).  and if that’s what’s happening needs to go to tribunal to sort ...

Brian JB
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ClairemHodgson - 08 January 2019 01:07 PM
Benny Fitzpatrick - 08 January 2019 12:16 PM

My take on it is that many of these debts were unrecoverable from legacy benefits due to being caused by official error. The DWP have long hated having to write off debts that they caused, and the different regs around UC, under which all overpayments are recoverable regardless of causation, allow them to recover these debts at punitive rates once claimants transfer to UC.

but surely, if they are long since written off as official error, they shouldn’t be able to revive them now that we have UC?  that would be to read the UC legislation retrospectively (not allowed).  and if that’s what’s happening needs to go to tribunal to sort ...

Any overpayments that are being recovered from UC in respect of legacy benefit overpayments will not be cases where the overpayments were determined not to be recoverable at the time (either by DWP or a tribunal). The overpayment rules for UC (+ new style ESA and JSA) - that all overpayments are recoverable - do not apply to decisions made on legacy benefits themselves

hbinfopeter
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Yet UC claimant forums are full of posts about deductions being made for old unknown debts. Most then say they cannot establish where the debt came from and some say they have never been notified / never claimed the particular benefit. Appeals / MR rarely seem to get anywhere; the source of the deduction seems a mystery.

One claimant was told this was due to a unpaid benefit debt from 10 years ago. “But I am only 22 years old” she explained.

ClairemHodgson
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hbinfopeter - 09 January 2019 02:27 PM

One claimant was told this was due to a unpaid benefit debt from 10 years ago. “But I am only 22 years old” she explained.

no words….

Andrew Dutton
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I wonder if we need to think about wording for any approach to the DWP to try to get more about each case. Including (thinking aloud):

what is this debt?
when was it incurred?
by whom?
for which benefit?
when was the claimant notified of the debt?
did the notification include appeal rights?
was any MR received and what became of it?
if deductions for the debt ceased, when and why did they cease?
if deductions never commenced, why is this the case?
what justification in law does DWP have for commencing deductions now?

(runs out of ideas pro tem)

Thoughts?

If DWP has disposed of records because of their age and can’t show where the debt came from, is it possible to argue that they have no greater standing as a creditor than , say, Honest Sid ‘Kneecapper’ Binks?

Paul_Treloar_AgeUK
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ClairemHodgson - 09 January 2019 03:54 PM
hbinfopeter - 09 January 2019 02:27 PM

One claimant was told this was due to a unpaid benefit debt from 10 years ago. “But I am only 22 years old” she explained.

no words….

i’ve got a few words but they’d probably get me banned from here….

ClairemHodgson
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Paul_Treloar_AgeUK - 09 January 2019 04:48 PM
ClairemHodgson - 09 January 2019 03:54 PM
hbinfopeter - 09 January 2019 02:27 PM

One claimant was told this was due to a unpaid benefit debt from 10 years ago. “But I am only 22 years old” she explained.

no words….

i’ve got a few words but they’d probably get me banned from here….

indeed.  and the policy doesn’t even like asterisks…...

Mike Hughes
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Brian JB - 09 January 2019 11:50 AM
ClairemHodgson - 08 January 2019 01:07 PM
Benny Fitzpatrick - 08 January 2019 12:16 PM

My take on it is that many of these debts were unrecoverable from legacy benefits due to being caused by official error. The DWP have long hated having to write off debts that they caused, and the different regs around UC, under which all overpayments are recoverable regardless of causation, allow them to recover these debts at punitive rates once claimants transfer to UC.

but surely, if they are long since written off as official error, they shouldn’t be able to revive them now that we have UC?  that would be to read the UC legislation retrospectively (not allowed).  and if that’s what’s happening needs to go to tribunal to sort ...

Any overpayments that are being recovered from UC in respect of legacy benefit overpayments will not be cases where the overpayments were determined not to be recoverable at the time (either by DWP or a tribunal). The overpayment rules for UC (+ new style ESA and JSA) - that all overpayments are recoverable - do not apply to decisions made on legacy benefits themselves

I will politely disagree. The first GMWRAG GM UC Forum has deductions as 1 of only 2 items on the agenda (the other is inevitably the WCA) for precisely this reason.

1) Aware of a case where an o/p which was deemed non-recoverable at appeal 26 years ago has been deducted from UC resulting in nil benefit.

2) There has most definitely a trawl going on as Neil Couling explained at the last GMWRAG meeting,

Brian JB
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I had intended to post a further reply to say that, of course, there may well be cases where recovery is carried out wrongly. The case you refer to Mike could easily be the situation we encounter now, where Debt Management tell us that the Benefit Office has not informed them that the decision has been changed on MR or appeal. As far as they are concerned, there is a recoverable overpayment until they are told otherwise (by another part of DWP) - one hand not knowing what the other hand is doing. I suspect this case is the exception rather than the norm.

I was not at the meeting so cannot comment on what Neil Couling said - did he say there is a trawl for ALL overpayments in legacy benefits, irrespective of whether they were determined to be recoverable or not? Recovery by deduction from UC for legacy benefit overpayments can only be for amounts determined to be recoverable under section 71(1) or Section 74 of the SSAA (regulation 15 of the Social Security (Payments, Overpayments and Recovery) Regulations 1998.

Mike Hughes
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From the minutes of the meeting

“• . Neil Couling admitted that the Government over the last 18 months has demanded a push to recover old debt and has provided UC with extra funds to do this. However, he maintained that there should be adequate documentary evidence to justify that it is a valid debt, and if there is any doubt about the validity of a debt or the decision to recover it then the claimant or their adviser should make enquiries to obtain the evidence the DWP have used. To help with this, before Christmas there will be a new feature on the UC system which will explain to claimants what the debt is and where it is from. “

Brian JB
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Thanks Mike

That does seem to confirm that they are trying to recover overpayments that have been determined to be recoverable, rather than “official error” overpayments (or rather overpayments deemed “non recoverable” because Section 71(1) or Section 74 not satisfied). I think his comment that there should be “adequate documentary evidence to justify that it is a valid debt, and if there is any doubt about the validity of a debt or the decision to recover it then the claimant or their adviser should make enquiries to obtain the evidence the DWP have used” makes that fairly clear.

If a person had a tribunal hearing and succeeded ,and DWP have no record of that now (which may have happened in the case you are aware of), I can appreciate that this causes great difficulties for the person from whom the allegedly recoverable overpayment is being recovered

Andrew Dutton
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‘To help with this, before Christmas there will be a new feature on the UC system which will explain to claimants what the debt is and where it is from.’

I take it that Christmas, in this context, never came?

One problem with Mr C’s advice is that advisers seeking information on these debts will be blocked by UC’s cavilling about authorisation, as is still happening.

But at least we know that there is some sort of push to recover monies owed (which is not illegitimate in itself) and we can take it that errors will, ahem, inevitably crop up.