January is always a tough month after the financial costs of Christmas and, with the costs of living continuing to rise, people are facing a tough year ahead. For some people who have received an overpayment of benefit caused by official error, the impact of having to repay that from their benefits causes real problems.
Previously, if someone received an overpayment in their benefits that was caused by an official error, this was not recoverable. One of the changes made to the social security system as part of welfare reform was to give the Department for Communities the ability to recover any overpayments of Universal Credit (as well as some other payments) from claimants where the overpayments were caused by official error. A claimant can make an application for a “discretionary waiver” to stop the Department from recovering the overpayment in certain circumstances. The pre-welfare reform legal position for the other “legacy” benefits continues to prevent recovery from claimants where they are not responsible for causing the overpayment.
Owen McCloskey, Head of Social Security at Law Centre NI, commented:
“For someone on benefits, every penny counts. We want to be sure that decision-makers get a decision and calculations right first time and no one faces financial hardship because of Departmental errors in decision-making.
We know there has been an increase in overpayments caused by official error and we urge the Department to regularly publish official error overpayment statistics so that the impact of the change in law can be monitored.
We are also calling on the Department to review and amend the guidance on when to apply a Discretionary Waiver in cases of official error overpayment. We would like to see the guidance amended to better reflect the individual circumstances of claimants. We would like the guidance to consider factors such as the capacity of the claimant to identify the Departmental error; the use of the benefit in good faith; and the time that has passed since the benefit has been spent. It is so important that claimants can confidently rely on the social security system and not have to double check and query the payments they receive to make sure they are correct before spending them.”
When the change in law was initially debated in Westminster, the Minister for the Department for Work and Pensions, Chris Grayling stated:
The practical reality is that we do not have to recover money from people where official error has been made, and we do not intend, in many cases, to recover money where official error has been made. There will be an absolutely clear code of practice that will govern the circumstances in which recovery action will or will not be taken, to ensure consistent, considered decision-making.
Recovery of money a claimant received in good faith, and which been spent in the belief they were entitled, can have a significant impact on someone trying to manage on a tight benefits budget. The social security system can be notoriously complicated and difficult to negotiate. Claimants who have provided all of the correct information when making their claim have a legitimate expectation that the Department will make the correct decision and that they are entitled to spend the benefit they receive.
Law Centre NI has been tracking the impact of this for some time as we know that this can adversely impact on some claimants’ mental and emotional health, particularly when the overpayment has arisen through no fault of the claimant.
One of the actions we took was to encourage the Department to record statistics on overpayments caused by official error. We have highlighted our concerns about overpayments with the Department and through the media on a number of occasions. In October 2019, we also produced a guide for advisers and the public to help people to make an application for Discretionary Waiver. This is available here: Legal Information Briefing on social security overpayments and discretionary waiver. Our guide provides practical help for claimants, including an example of a Discretionary Waiver request letter.
We encourage advisers and claimants to look closely at their options for requesting that an overpayment is waived. A waiver would relieve claimants of the worry of the financial burden of making repayments from an already constrained budget.
Law Centre NI is aware of some clients whose legacy benefit continued to be paid after they made a claim for Universal Credit. This is an official error overpayment, as a stop notice should have prevented the continuation of the legacy benefit. We consider that such cases should not be treated as Universal Credit overpayments.
If you, or one of your clients, are in these circumstances, we can give you legal advice. Please speak to the Law Centre Social Security team as soon as possible. You can contact our Social Security Legal Team on 028 9024 4401 or email firstname.lastname@example.org.