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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

Underpayments withheld in full to offset overpayments

KMJones
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Early Warning System, Child Poverty Action Group

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The Early Warning System has received a few cases regarding UC claimants not receiving ANY underpayments whilst there are outstanding benefit overpayments.

For people who have accrued (more) debts whilst waiting for their UC entitlement to be paid, withholding the funds in this way is crippling. And is unnecessary when overpayments can continue to be recovered by deduction without putting them into an even more precarious situation.

I’ve asked the DWP to clarify their internal guidance on when an underpayment should be withheld in full. So far, they’ve confirmed it is a decision to be made by debt management and that it CAN be withheld - but nothing further. I’m concerned that underpayments are being offset in full against overpayments by default, without any consideration at all of other options, even for claimants who have received no income for up to 6 months whilst a UC entitlement issue is resolved.

I wanted to check whether this is a prevalent issue before pursuing my FOI request further: https://www.whatdotheyknow.com/request/debt_management_guidance_for_off

Is this an issue that you’ve come across? Would further clarification of the guidance assist?

wbamic
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Mind in Croydon

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On Friday i was told by a Case Manager that in UC land at the moment that they have been told to only issue underpayments where they are requested and not to even think about working on over payments at the moment.  My client has an payment of potentially thousands that is apparently showing on the internal system but no decision has been issued as there isn’t capacity to work on over payments currently.  Not exactly the situation you refer to KMJones in your post, but appears to be a related issue that might be wide spread?  Makes me wonder if there are lot disasters coming over the next few months/years/decades!

Andyp5 Citizens Advice Bridport & District
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Citizens Advice Bridport & District

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KMJones - 13 October 2020 10:12 AM

The Early Warning System has received a few cases regarding UC claimants not receiving ANY underpayments whilst there are outstanding benefit overpayments.

For people who have accrued (more) debts whilst waiting for their UC entitlement to be paid, withholding the funds in this way is crippling. And is unnecessary when overpayments can continue to be recovered by deduction without putting them into an even more precarious situation.

I’ve asked the DWP to clarify their internal guidance on when an underpayment should be withheld in full. So far, they’ve confirmed it is a decision to be made by debt management and that it CAN be withheld - but nothing further. I’m concerned that underpayments are being offset in full against overpayments by default, without any consideration at all of other options, even for claimants who have received no income for up to 6 months whilst a UC entitlement issue is resolved.

I wanted to check whether this is a prevalent issue before pursuing my FOI request further: https://www.whatdotheyknow.com/request/debt_management_guidance_for_off

Is this an issue that you’ve come across? Would further clarification of the guidance assist?

Just emailed details of another one to EWS.

Ideally a code of practice, but further clarification of the guidance would be handy…........

 

Tara CAC
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Children's Centre Project: Citizens Advice Cornwall

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this was issued shortly after your foi request

http://data.parliament.uk/DepositedPapers/Files/DEP2020-0646/160._Underpayments_v8.0.pdf

When arrears are not offered to Debt Management
Arrears are paid to the claimant and not offered to Debt Management if any of
the following reasons caused all or part of the underpayment:
 housing costs
 late verification of a child
 late verification of a disabled child
 late verification of caring costs
 childcare costs
 the ending of a sanction
 the removal of a sanction


I’m confused by the ‘late verification of caring costs’ which seems odd phrasing - is it meant to be the carer element?

Kez Dare
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Help to Claim, Citizens Advice Havant

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Tara CAC - 06 April 2021 02:29 PM

this was issued shortly after your foi request

http://data.parliament.uk/DepositedPapers/Files/DEP2020-0646/160._Underpayments_v8.0.pdf

When arrears are not offered to Debt Management
Arrears are paid to the claimant and not offered to Debt Management if any of
the following reasons caused all or part of the underpayment:
 housing costs
 late verification of a child
 late verification of a disabled child
 late verification of caring costs
 childcare costs
 the ending of a sanction
 the removal of a sanction


I’m confused by the ‘late verification of caring costs’ which seems odd phrasing - is it meant to be the carer element?

Hi all - we have a client whose UC underpayment of £1500 has been sent straight to debt management for £1200 arrears of TC… meanwhile client’s rent is not being covered due to being underpaid UC for 4 months….

Any idea whether the above guidance will cover this? Reason for underpayment was late verification of LCWRA…
Could this be ‘they were not paid their full award at the end of assessment period?’

Also, is this document just guidance or legal basis?

Thank you!

Helen Rogers
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Welfare rights officer - Stockport MBC

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I attended a DWP Customer Forum recently.  The DWP staff in attendance told us they were very worried about vulnerable clients who were due large amounts of arrears of LCWRA element and might spend it all on illegal substances.  They said steps were being taken before arrears were released to check this.  They didn’t seem all at concerned, however, about vulnerable clients who might need the arrears to pay off rent arrears, buy food, clothes etc.

EJ
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Benefits advice line - Coventry City Council

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Client and partner had agreed an arrangement with Debt Management for recovery of a very old o/p and debt was being recovered @ £86 per month from their UC.. 
Underpayment of UC (for LCWRA) was calculated and £3065 of arrears was due to client.  Has been told this week that it is all going to meet the overpayment (balance £3165).

FWK77
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Welfare rights officer - Leeds City Council

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We’ve just had a situation where a claimant had a historic Tax Credits debt which was being deducted from their UC seemingly appropriately, when UC then incorrectly included student finance in her assessment period even though the course had ended. They accepted that this was their error because they hadn’t put a stop date in for it. However when recalculating her UC for the next month debt management have taken the ‘underpayment’ back to pay off the outstanding Tax Credits debt.  Ignoring the scandal of that as a concept, when I read the guidance doc supplied it states, after the first lot of bullet points detailing when it shouldn’t be offered to debt management, the following:

Arrears are also not offered to Debt Management when the claimant is paid late
because:
 they were not paid their full award at the end of the assessment period

I read that this could be interpreted to cover the situation she finds herself in, basically due a late payment of recalculated UC because she wasn’t given the full award as she should be at the end of the previous assessment period.

Has anyone else experienced this, or have any thoughts?

Cheers

Tara CAC
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Children's Centre Project: Citizens Advice Cornwall

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where arrears are specifically for the current or previous 2 assessments they shouldn’t be taken to pay off debts

Rosie W
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Welfare rights service - Northumberland County Council

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Just recently had a Deputyship client whose arrears of LCW component (which was ridiculously complicated to get reinstated due to UC staff apparently having no understanding of - pretty much anything - it seems at the moment) have been withheld in full due to various deductions, one of which is an alleged tax credits overpayment.

We have written requesting a full breakdown and asking them to specify the legal basis for this; heaven knows if we will get a response.

This was a UC account taken over by the Deputies acting as corporate appointee; it is a mess right from the start of the claim and all our requests for information via the online account have been ignored. Our Partnership Manager (who has since moved on) simply repeated back what she was told by UC, which was incorrect.

We have now done a SAR. Will be interesting to see what we get back from that and whether it is helpful in any way.