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Forum Home  →  Discussion  →  COVID-19: Benefit claims and administration  →  Thread

Recovery of all debts from benefits suspended - whats included

sakhtar
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Welfare Rights, Govanhill Housing Association, Glasgow

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I called debt management today for a UC claimant who had two debts for benefits overpayment recovery being deducted to see if I could have them reduced and there was an automated message saying that recovery of all debts from all benefits has been suspended due to Covid 19.  Does anyone know more about this and whether it includes rent arrears deductions too?

Thanks

LauraGSLC
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MMAS - South Lanarkshire Council

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Yes all suspended - I just called

roecab
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Welfare benefits supervisor - Roehampton CAB

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Fantastic news and the message on the debt recovery helpline is very clear!!!

From the other side
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Information received from our Partnership Manager

DWP are stopping debt recovery activity as soon as possible. This includes all benefit-related overpayments, Social Fund loans and Tax Credit debts. Many activities will cease immediately but others may take longer to implement. The suspension of recovery action is in place until further notice.

What this means

• Deductions from Universal Credit and Legacy for benefit overpayments, Social Fund loans and Tax Credit debts managed by Debt Management will be suspended. This action will commence immediately but an IT solution will need to be implemented to stop some deductions for Debt Management.
• The recovery of Advances by deduction from Universal Credit payments will continue.
• Local Authorities will suspend referral of Housing Benefit overpayments.
• The transfer of Tax Credit debt from HMRC has already been suspended.
• Recovery from estates will temporarily cease.

For citizens who are not on benefits, we have directed private sector debt collection agencies to stop their activity for Debt Management customers and we are suspending voluntary debt repayments and recovery by Direct Earnings Attachments.

Please note the part that recovery of Advances will continue.

mycatismo
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Housing Systems, Leeds

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Just checking this real….because of the date?

WillH
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Locum adviser - CPAG in Scotland

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Yep - real. Message was certainly there yesterday too.

mycatismo
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Housing Systems, Leeds

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Great. Sorry getting old and cynical

sakhtar
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From the other side - 01 April 2020 11:26 AM

Information received from our Partnership Manager

DWP are stopping debt recovery activity as soon as possible. This includes all benefit-related overpayments, Social Fund loans and Tax Credit debts. Many activities will cease immediately but others may take longer to implement. The suspension of recovery action is in place until further notice.

What this means

• Deductions from Universal Credit and Legacy for benefit overpayments, Social Fund loans and Tax Credit debts managed by Debt Management will be suspended. This action will commence immediately but an IT solution will need to be implemented to stop some deductions for Debt Management.
• The recovery of Advances by deduction from Universal Credit payments will continue.
• Local Authorities will suspend referral of Housing Benefit overpayments.
• The transfer of Tax Credit debt from HMRC has already been suspended.
• Recovery from estates will temporarily cease.

For citizens who are not on benefits, we have directed private sector debt collection agencies to stop their activity for Debt Management customers and we are suspending voluntary debt repayments and recovery by Direct Earnings Attachments.

Please note the part that recovery of Advances will continue.


no mention of the rent arrears deductions though?

From the other side
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Or Council Tax arrears!

WillH
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It may be that there’s a distinction between DWP debts (tc overpayments etc) and third party deductions (rent arrears, court fines, CT)?

So it is that all DWP debts are not being recovered - other than advances?

Damo
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I think councils and Landlords would be in uproar if it included third party deductions. DMU is closed now so I can’t hear the message. It occurs to me that if a client has multiple debts, both benefit overpayments and rent and council tax arrears that the third party debts will just be bumped up the hierarchy temporarily and the client will be no better off.

Sangeeta1
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What does this mean?

“Local Authorities will suspend referral of Housing Benefit overpayments.”

Will existing overpayment recovery be suspended, or just that new ones won’t be actioned?

Thanks,

shawn mach
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Here’s a transcript of the message you get when you call Debt Management (0800 916 0647, Option 3) -

Due to the recent global coronavirus outbreak, we are stopping recovery action associated to benefits overpayments, tax credits debt being managed by DWP, and social fund loans for a temporary period.

We will no longer start to recover any new debts and will be suspending repayment of any debts already being recovered. This includes deductions for the repayment of benefit overpayments, tax credit debt and social fund loans from all benefits, direct debit plans, and repayments made to employers.

You do not need to speak to an adviser to ask us to do this, we have arranged this on your behalf.

If you currently make repayments through a bank standing order, please contact your bank to cancel your arrangement. If you currently make repayments by bank giro credit, please suspend these payments immediately. If you currently make repayments through online banking, please suspend these payments immediately.

Information is also available on the gov.uk site

Carolyn McA
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Sangeeta1 - 02 April 2020 12:01 PM

What does this mean?

“Local Authorities will suspend referral of Housing Benefit overpayments.”

Will existing overpayment recovery be suspended, or just that new ones won’t be actioned?

Thanks,

I interpret it as meaning: existing overpayment recovery will continue (as HB o/ps are not on the list of suspended debts, and they are debts to the LA not central government) but new ones won’t be actioned until after the suspension is lifted.

Mandy
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South Tyneside Citizens Advice/Money Advice

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Can I just check if the deductions are stopped/cancelled how this will impact on other deductions that continue i.e. will they increase these to the maximum level as normal practice as this will defeat the purpose.

Regards

Peter Turville
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Carolyn McA - 02 April 2020 03:09 PM
Sangeeta1 - 02 April 2020 12:01 PM

What does this mean?

“Local Authorities will suspend referral of Housing Benefit overpayments.”

Will existing overpayment recovery be suspended, or just that new ones won’t be actioned?

Thanks,

I interpret it as meaning: existing overpayment recovery will continue (as HB o/ps are not on the list of suspended debts, and they are debts to the LA not central government) but new ones won’t be actioned until after the suspension is lifted.

LA benefits manager advised that they have been requested not to make any new referrals to DWP Debt Management (for recovery of HB o/ps from UC etc). DWP Debt Management recorded message states these recoveries have been suspended anyway. Recovery of o/p from current awards of HB will continue. It is possible some LAs will not action recovery of ‘new’ o/ps from current HB as this may not be regarded as priority work at present.

shawn mach
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Couple of updates to gov.uk ...

The DWP has updated its Benefit overpayment recovery: staff guide page to say that 'claimants do not need to make any repayments until July 2020 at the earliest' (although the overpayment recovery guide has not yet been updated).

In addition, the DWP has added a message to its Direct Earnings Attachment: an employers' guide page to say that 'you should not make any DEA deductions to your employees’ pay in April, May or June 2020. You’ll be told if this will be extended' (but has not yet updated the employer's guide).

 

BakerK
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[From what has been said am I right in thinking that DWP deductions (tc overpayments etc)are now stopping and third party deductions (rent arrears, court fines, CT) will still be deducted ]

shawn mach
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Finally .... here’s a gov.uk press release ....

https://www.gov.uk/government/news/recovery-of-benefit-overpayment-suspended

Uncleduff
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Hi,  It doesn’t mention HMRC overpayment recovery-I have a client with a Child Benefit Overpayment, will that be siuspended too?

Daphne
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It says -

We are stopping debt recovery activity as soon as possible. This includes all benefit-related overpayments, Social Fund loans and Tax Credit debts. Many activities will cease immediately but others may take longer to implement.

so I think CB would come under benefit-related overpayments. If tax credit debts are included it would seem to cover HMRC as well as DWP

acg
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Welfare rights service - Greenwich Council

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I spoke to HMRC Intermediaries helpline today and they say there is no policy for them to suspend recovery of benefit overpayments from tax credits.
They were quick to offer a suspension of recovery for the duration of covid-19 for my customer,but said it would have to be considered on a case to case basis. There was no indication that they would be proactive in looking at this.

Chloe
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Hi

I have a client who is current in receipt of Income Support, she received a letter dated 05.05.20 explaining that her social fund loan repayment deductions have been stooped, but that she must now arrange her own repayments. Has anyone else come across this?

Thanks

acg
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Welfare rights service - Greenwich Council

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I have not seen this letter but it clearly cannot be correct.

It should say that recovery has been paused, not stopped,so there is no obligation on the claimant to look at any other forms of repayment as recovery will resume at a point to be determined by DWP.