(please move if in the wrong place...)

I have a client with a £10k HB overpayment - I have contacted the section and they say it is due to the fact he did not declare earnings... So its fraud - yes...? They call it fraud...

However, he was not prosecuted and did not have the penalty charge imposed... He has since gone bankrupt...

Now generally with HB o/p they cannot recover once the BR is discharged... but with fraud they continue to recover cant they...?

So, if with fraud they can continue to recover, how can they do this when they neither prosecute or impose the penalty..? Surely, they could argue all o/p's are fraud... I know what Im thinking but finding it hard to write... Are you following..? I hope so...

Are there any guidelines about this...?

From the OP Guide.

Fraud overpayments
40% subsidy
2.31 Definition: Fraud overpayment means an overpayment, which falls wholly or partly after 31 March 1993 and which is classified as fraudulent by a designated officer of the LA, and
occurs as a result of a payment of HB or CTB arising from a
breach of section 111A or 112(1) of SSAA1992, or
person knowingly failing to report a relevant change of circumstances, contrary to regulation 75 of the HB Regs, or regulation 65 of the CTB Regs, with intent to obtain or retain HB or CTB, either for themselves or someone else.

For subsidy purposes there is no need to record as fraud any overpayments that may occur because of a fraudulent claim. However for the purpose of overpayment recovery, any overpayment that is fraudulent attracts a higher rate of recovery. However the definition for a fraudulent overpayment with regards to the recovery rate is different from that in the subsidy order. The LA can recover at the higher rate if the claimant has;

been found guilty of an offence whether under statute or otherwise, or
made an admission after caution of deception or fraud for the purpose of obtaining relevant benefit, or
agreed to pay a penalty under section 115A of the SSAA and the agreement has not been withdrawn

So does that mean if he hasnt made an admission under caution or agreed to a penalty, that they cannot make the higher payments.. and as he has gone BR... can they only therefore colletc for the 1 year until he is discharged...?

I don't know about the reaons for classification involving subsidy etc, but from a fraud point of view there could be a number of reasons why the benefit team or the fraud section has classed the case as fraud but no further action has been taken. It could be due to age/not in the public interest/welfare grounds/admin delay with the case/ even tapes lost, the sort of thing that would scupper a court case, but does not mean your client did not commit fraud.
Hope this helps...........

I don't know about guidelines etc. but I think I can see what you're getting at, i.e. If the claimant has not been prosecuted for fraud then is it a fraud so far as insolvency legislation is concerned?

I don't know the answer to this but it is probably YES it can be - see the last post for reasons. However, logically it seems to me there must be some involvement of the OR in the decision making process as otherwise you could have a situation where any creditor of a bankrupt decided that there was fraud and went on claiming the money back.

Was your client advised in writing that what he/she had done was deemed to be fraud? If not, on what grounds are the LA now saying it is? Has the OR been involved? If not it might be a good idea to find out his view.

the classification of overpayments for recovery purposes shouldn't be influenced by questions of subsidy, as far as i'm aware. the same clasifications are used by the DWP - it was always a secretary of state function, not an adjudication issue, and the rule when i was there (before ad. pens were introduced) was that an F classification required a fraud conviction - so my guess is rule jmembury referred to in his final paragraph holds.

Thanks for the replies - lots of things to mull over and so good that you grasp what I was trying unsuccessfully to say... Thanks again.. x

now youve got the reply you needed, tell me this. are you the same plumduff that uses the debt forum?