UC overpayment

Client had been on UC for several years, then decided to take occupational pension early, prompted by a cancer diagnosis, and received a lump sum payment of £19000 in April 22 with a monthly pension payment of £400. She did not declare this, “letter said it was tax free” was her reasoning. In July/August 22 client contacted by Compliance re pension and ultimately they continued to pay her full UC entitlement until 8/11/22, without deducting the pension payment and then totally closed her claim and decided that she had been overpaid from the start of her UC claim! DWP reasoning for this was because they stated client had failed to provided copies of all requested bank accounts back to start of claim, client states she did! Because of this deprivation of capital, which will be an issue, has not even been considered yet!

I have now obtained all relevant bank statements and will be entering appeal about entitlement and overpayment. 

Would I be correct in thinking that because all bank statements have now been provided that a supersession of the decision in November 22 should be considered and deprivation of capital/diminishing notional capital rules used with the possibility that even though there maybe one AP in which she had no entitlement that this will be treated as a closed period and entitlement can continue for the original UC claim?

I would hope that client will have reduced below £16000 within the AP that she received the lump sum, or the next, with allowable reasonable transactions but I have a funny feeling an appeal will be required for this!

This is one of those cases which highlights why the terminology of ‘closing a claim’ is so problematic. What the DWP have actually done here is to revise all of the entitlement decisions from the start of the award so as to disentitle her to benefit for the whole period. Thinking about it in those terms would highlight that its for the DWP to establish on the balance of probabilities that she was not entitled for the period in question - and obviously in this case there doesn’t seem to be a shred of evidence to allow a conclusion that she was disentitled for any period before the pension came in in April 2022. So hiding behind this innocuous sounding ‘claim closure’ is a decision which is unlawful on its own terms.

To answer your question, the position would be that there would need to be findings as to the actual capital level (materially) at the end of each AP up until the decision was made in November 2022. The overpayment can then be calculated from those figures. Assuming that the capital was below £16k at the actual decision date, any overpayment can be dealt with as a closed period supersession with no need to end the award. I wouldn’t worry about deprivation unless DWP actually raise it as an issue.

Elliott,

Thanks for the reply which fortunately confirmed a lot of my thinking. I do think deprivation will be a consideration as when Compliance were speaking with her they were asking what she had spent her money on! Client had also made a further claim to UC in Feb 23 and it was closed almost immediately although I have not yet seen any decision letters! I have also got her to enter a further claim and we will see how that goes in conjunction with the appeal against the previous entitlement decision and overpayment which is in.

As an update to this case which was appealed by me, the UC expert who reviewed the appeal was very considerate (not often we say that about UC staff but credit where credit is due!) decided that the client did indeed go back below £16000 within the AP she received her £19000 lump sum and was below £16000 by December 22 so there was only a closed period O/P which would then be offset against an underpayment of UC from Nov 22 - Oct 23 and client is due arrears as well as the ongoing award of UC and additionally her £36000 overpayment was wiped out. A very happy client.

This is great news, but the sad thing is that, without an advisor prepared to challenge the legality of the decisions, it would probably have gone unquestioned.  Terms like “closed” are used, and the ordinary claimant takes them at face value.  Anyway, a good outcome.

That is so true. I have another case, Carers Allowance overpayment which after I had submitted my submission indicating that rather than 9 weeks overpaid it should only be a 4 week overpayment, thereby saving the client over £300 the Appeal response writer has apologised for the oversight by the original decision maker, MR decision maker, initial appeal writer but still feels it is appropriate to seek a civil penalty from the client!