I am representing a couple who wished to claim Hben + Ctax Ben. They had recently been awarded Tax Credits. This was noted on the Hben form, but at the LA office a clerk looked at this entry and said that Tax Credits were not applicable, and crossed out the entry of some £90 made by the claimant. Needless to say an overpayment arises!
Overpayments were made for 3 years from July 2003 until a review in 2006.

Clearly if the clerk did say this (and this will be a matter of fact the Tribunal will need to establish) my view is that that claimants can argue that despite being aware of a general duty to disclose any 'change of circumstances' since they had been told Tax Credits were irrelevant they did not believe they had to disclose these ever, and hence have not 'caused' the error rendering the overpayment NOT recoverable. Is this a fair view to maintain?

Can anyone help with the following queries;
1. Is there any duty on the part of the LA to investigate the Tax Credit issue further? - it is clear from the copy of the application form that the tax credit entry was crossed out and a clerk was involved- should the LA have made specific enquiries to establish why the entry had been crossed through as part of the initial processing?
2. In view of the ongoing compound nature of the original 'error' if the LA do not have a duty in respect of the initial claim do they have a duty to investigate further renewal forms? I have established that a data-matching service was used, and the LA has a verification framework - my investigations show that a data-match occurred in Nov 2005 which was duly reported to the LA in Dec 2005. No action was taekn until a review (which may/not have been made purely as a result of the data match - I don't yet know) - in view of the continued payments which were clearly excessive should the LA have been obliged to perform a more timely review in order to mitigate the overpayments.

A final question- bearing in mind that all LA's now get a subsidy from the Govt to get overpayments repaid by the claimant- is a blanket-policy to always maintain any overpayment is recoverable some form of HRights infringement? (The LA gets the overpayment plus I believe some 20% in addition - ostensibly to meet anti-fraud costs such as verification framework and data matching)It is of course very much in the interest of the LA to always pursue overpayments!

Your views please.

Thanks Cablou

For a variety of reasons, I have chosen only to respond to this aspect:

"is a blanket-policy to always maintain any overpayment is recoverable some form of HRights infringement?"


There is no breach under the Human Rights Act so long as the LA doesn't impede the clmt's right(s) to request a revision, or to appeal. If the LA obstructed that particular process, that could be a potential breach of Article 6 of the HRA (Right to fair hearing etc). However, if an LA has blanket policy of trying to make every o/p recoverable, even when it is patently not the case, there *may* be a basis on which to pursue a formal complaint about abuse of power - upto the Ombudsman if appropriate. In extreme cases, there may even be a case for compensation (stress / anxiety / time taken to deal with the matter etc).

Hope the above helps.

IMHO there seems little doubt that the LA caused an official error and that that error was perpetuated each time they had reasonable grounds to believe that clients were in receipt of WTC. In light of what clients were told at the start of hte claim, it also fairly clear that claimants did not contribute to the error being made. The significant issue in respect of recovery of the overpayment is whether the claimants knew, or could reasonably have been expected to know they were benig overpaid. I think you at least have an argument in favour of them not having known or being expected to know.

In respect of the blanket policy issue, it smells more like a Judicial reveiw matter to me, i.e. fettering of discretion. If you have evidence of such a blanket policy, bang in a JR pre-action protocol letter and in it request that the LA reconsider their decision to recover and that they withdraw the policy. You can find the JR pre action protocol at:

http://www.dca.gov.uk/civil/procrules_fin/contents/protocols/prot_jrv.htm

I would agree that there does seem little doubt it is (in my view) an LA error. My concern would be about the HBMS match - these all have to be resolved with 2 months unless they are referred to fraud - what happened with the match - was it just ignored? It is unusual for a match to prompt a review - the reviews are generally given to us on a scan by the DWP but these are seperate to the HBMS matches.
Certainly at my Council anyway, if this had come up on a match we would have looked to interview the customer and would not have done any review......................

imo the overpayment on the original claim is caused by official error and in the circumstances you describe the overpayment should not be recoverable. the wrong advice, or misdirection by the official would also mitigate any failure of duty to disclose a c/circs in tax credit payments imo - i agree with your approach.

where i think there may be a difficulty is on the subsequent claim forms, where i think the LA would argue misrepresentation rather than than failure to disclose. a misrepresentation may be wholly innocent, and it is undeniable that a material fact was misrepresented - i suspect that the LA is bound to make a decision that it is recoverable - would be happy to be wrong about it, and maybe somebody else knows a way round it?

failing that, the LA is not obliged to seek recovery of the overpayment, and in view of the circumstances (the claimant's misrepresentation caused by official misdirection) and if the claimant will be caused hardship, you may be able to argue that it would be unfair to seek recovery. i believe the stats for write-offs of recoverable overpayments are very low nationally. the written evidence supports your client's account, and if your case goes to appeal and the tribunal, as i would expect, thoroughly considers the evidence of what took place when the initial claim form was amended, their findings of facts and the written statement may help significantly with this.

the question whether any overpayment after the data-match information was obtained should be recoverable is debateable. the failure of internal prevention of overpayment procedures - the means by which different sections communicate benefit information to each other, have pretty exhaustively been found in case law, not to absolve claimants of their responsibility to report changes - it's possible that you may be up against the argument that it is the claimant's, not the LA's responsibility etc. on the other paw, it is arguable that the chain of causal connection was broken by the data-match exercise, which is a very specific (and in this case, failed) intervention for the purpose of detection and limitation of overpayments. the LA had in its possession the information which it had sought and obtained for that purpose, and then failed to act on it timeously - an official error to which the subsequent overpayment may be attributed.
i certainly think it's worth arguing in view of the role of official error from the outset of the overpayment. although overpayment case law is hardening against the claimant, i still see decisions where D-Ms are limiting overpayment periods and not seeking recovery in periods where actioning information received from various sources was delayed, so all is not yet lost!

on your last question, i'm not sure about an HR infringement, but _appearing_ to incentivise adverse overpayment adjudication is a stinker of a policy in terms of civil justice. i realize that LA funding is a very complex issue, and i am a bear of no brain at all when it comes to subsidy matters. fortunately, the question whether this a very bad way to fund LA's is a no brainer, and one wonders what happened to the rolls royce knowledge of checks and balances at the top of the Dweep... here's a question, why incentives for overpayment work but not underpayment work - they are both wrong payments needing to be rectified, right? perhaps what is needed is a campaign?

the LA's duty is a general one -to give accurate decisions on benefit entitlement. they also have many other duties, and also get a bunch of targets, so there is potential for conflicts.

jj wrote:

"where i think there may be a difficulty is on the subsequent claim forms, where i think the LA would argue misrepresentation rather than than failure to disclose. a misrepresentation may be wholly innocent, and it is undeniable that a material fact was misrepresented - i suspect that the LA is bound to make a decision that it is recoverable - would be happy to be wrong about it, and maybe somebody else knows a way round it?"

This may clarify (er, hopefully!). In deciding recoverability, the issues of disclosure, or misrepresentation, don't affect the tests for HB in the same way for as other DWP benefits. In summary, the tests are:

1) Is there actually an overpayment?

2) If there is an overpayment, was it as a result of an official error?

3) If there was no official error, the overpayment is alwaysrecoverable - irrespective of any other circumstances / issues.

4) If there was official error:

a) did the clmt (or payee) contribute to the mistake that caused the overpayment? Or;

b) could the clmt (or payee) reasonably have been expected to realise that s/he was being overpaid at either the time of the payment(s), OR, at the time of any notice relating to the payment(s)?

If the answer to either "a" or "b" is "yes", then the overpayment is once again recoverable, irrespective of any other consideration.

There is a right of appeal in respect of whether or not an overpayment is recoverable.

5) Any recoverable overpayment may be recovered. Although LAs have the discretion to seek recovery, or not, there is no formal right of appeal against actual recovery.

Law: HBR 99; HBR 100; s.75 SSA 1992

Hope the above helps to lift any fog.

yes, thanks kevin... i'm having a very foggy day today : )

I think the actions of the officer who took the original claim amount to an official error, and so there was no failure to disclose on the part of the claimant.

Mr Deputy Commissioner Mark allowed an appeal in CIB/2126/2002 from an incapacity benefit claimant who did not disclose work that was in a non exempt category because advice given from the DWP’s own Benefits Enquiry Line contradicted advice given in the order book. Similarly, Mr Commissioner Rowland allowed an appeal in CA/2298/2005 from someone who had not disclosed to the DLA unit that the claimants care home fees had started being paid by the local authority. He wrote at para 13:

“13. However, what she argues is that the ordinary duty to disclose was modified in this case by the Customer Liaison Manager This submission needs further analysis. A representation by an officer that there is no need to make further disclosure may have an impact on the duty to disclose imposed by regulation 32(1), (1A) and (1B) in a number of ways. Where regulation 32(1) or (1A) is concerned, the claimant might understand the representation as a modification of written instructions to furnish information because, perhaps, he or she might understand that the information would not be relevant to entitlement to benefit in the particular circumstances of the claimant’s case.

There is no reason why an officer acting on behalf of the Secretary of State may not modify written instructions because there is nothing in regulation 32(1) or (1A) to suggest that the requirement to furnish information or evidence need itself be in writing. Where regulation 32(1B) is concerned, the claimant might again understand the representation as meaning that the change of circumstances that he or she would otherwise have disclosed would not in fact have any effect on his or her entitlement to benefit so that, after the representation has been made, the change would no longer be one the claimant “might reasonably be expected to know might affect” entitlement to, or payment of, benefit"

The Council might be able to establish misrepresentation at some point, but I would argue that any alleged misrepesentation did not cause the overpayment it was the original official error by the Council that was the cause. For authority I would rely on the House of Lords opinion in Empress Car Company (Abertillery) Ltd <1998> UKHL 5; <1999> 2 AC 22; <1998> 1 All ER 481; <1998> 2 WLR 350 (5th February, 1998)

As for the claimant contributing to the mistake by misrepresentation, I would argue that the claimant did not contribute to the initial official error that was the actual cause of the overpayment, simply that the error was subequently perpetuated.

You will also be supported by CH/0602/2004. In that case an LA had failed to reord that a person was getting industrial injuries. . benefit, although he delcared it with his claim. The LA only recored his DLA and incapacity benefit

His industrial injuries benefit was subsequently increased but he did not delcare it. Mr Commissioner Mesher held that CTB paid in respect of the period after the increase in the industrial injuries benefit was caused by the council's initial error.