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Law Centre NI calls for changes to the recovery of benefit overpayments caused by official error

Law Centre NI is urging change to the treatment of overpayments caused by official error.  When people apply for social security benefits and provide all the correct information to decision-makers, they reasonably expect that their entitlement will be correctly assessed and the right amount of benefit paid.

Law Centre NI’s experience is that this is not always the case. Each year, thousands of people in Northern Ireland receive an overpayment as a result of official error. In 2021-2022, more than 8,000 people in Northern Ireland received an overpayment as a result of official error in Universal Credit alone. These payments are then recovered from claimants.

Following a change to the law in 2015 when the welfare reform changes were introduced, social security claimants are now required to repay overpayments of some benefits regardless of how the overpayment occurred.  Law Centre NI has significant experience of providing advice and representation to social security claimants in this position.  We know that having to repay this money can be very stressful, particularly in the current context of the spiralling costs of living.

How can things improve?

It is in everyone’s interest that benefit entitlement decisions are right first time. There are three steps the Department can take to improve the system and address some of the problems that we see which arise from recovery of overpayments due to official error.

Staff guidance: whilst some official error overpayments are legally recoverable, there are circumstances in which the Department should consider that overpayments should not be recovered.  We recommend that the Department update its own staff guidance to ensure that staff are aware of situations where it would be appropriate to waive the recovery of an overpayment.

Improved communication with claimants: we recommend that the Department amends the overpayment notification letter to explicitly inform people of the option to seek a “discretionary waiver” so that claimants are aware of the options that are available to them.

Improved data collection: we recommend that the Department now officially records and publishes statistics on the level of official error overpayments. This would highlight the rate of overpayments and ensure that action is taken to reduce the occurrence of errors.

Commenting on the impact of recovery of overpayments arising from official error, Owen McCloskey, Head of Social Security at Law Centre NI said:

We want to ensure that decision-makers get decisions and calculations right first time and no one faces financial hardship because of an official error. Our recommendations are intended to make the system fairer and more transparent. People who are seeking social security assistance are entitled to confidence that the payments that they are receiving are correct. We know from working with clients, that recovery of money from someone on a tight budget, that has been received in good faith, can have a significant impact on their mental and emotional health.”

For more information, see our Policy Briefing Paper Recovery of overpayments arising from ‘official error’: current problems and recommendations for change.

Emma’s story

Emma had been in receipt of Employment and Support Allowance (ESA) but on reassessment she was found to be fit for work. She appealed this decision and claimed Universal Credit whilst she awaited her ESA appeal. Emma’s ESA appeal was successful. The Department for Communities made an arrears payment of ESA totalling almost £2,000. As Emma was now in receipt of Universal Credit she contacted the Department to check if she was entitled to use the ¬£2,000 arrears of ESA and that it would not result in an overpayment of Universal Credit.

Emma received assurances that she could use the benefit arrears she received without it causing an overpayment of her Universal Credit. Four months later Emma was told that this had been an official error and received an apology. However, she was informed she must repay the benefit she had received but which she had already used.

Emma applied for a discretionary waiver. This was refused and she is now receiving assistance from Law Centre NI.