|
From the HB/CTB Overpayments Guide: Amendment 1 December 2004 available at: http://www.dwp.gov.uk/housingbenefit/manuals/overpay/parts/04reco_i.asp#bbbb
Write-offs
Deciding whether to recover a recoverable overpayment
4.430 Just because an overpayment is recoverable, it does not necessarily mean that it must be recovered, the law states that such overpayments are recoverable, not that they must be recovered. See “Types of overpayments” earlier in this guide.
4.431 A recoverable overpayment may be recovered at the LAs discretion. If an LA has a 'blanket policy' to recover all recoverable overpayments, the policy would be open to legal challenge.
Discretionary write-offs
4.432 A recoverable overpayment can be considered for write off if the LA uses its discretion at the outset and decides not to recover it. These types of write-offs are often called 'discretionary write-offs'.
4.433 It is advisable that LAs do not consider fraudulent overpayments for a 'discretionary write-off'.
4.434 The usual scenarios for considering an overpayment for a 'discretionary write-off' will be on financial or hardship grounds. However, the medical condition of the claimant or family may be relevant and should always be recorded to assist such a decision being made.
4.435 By its very nature, discretion cannot be prescriptive and therefore there are no hard and fast rules or examples that can be given. Each case must be decided on its own merits.
4.436 However the following situations should be considered
financial hardship
terminal illness
senility or low intelligence
severe medical conditions
Financial hardship
4.437 Each LA will have its own policy and 'Bad Debt Provision' with regard to such write offs, however as a guide, it would not be feasible to consider a write off request if the claimant
does not qualify for HB/CTB
has capital over the usual amount considered for funeral expenses
4.438 In order to establish the claimant is suffering financial hardship it is advisable to do an income and needs comparison and possibly interview the claimant. Hardship is proved when the income, minus priority debts, gives a figure of more than £8.40 below the applicable amount. This figure is uprated annually and is based on the maximum that the DWP recovers from IS or JSA(IB).
4.439 Priority debts include
rent, CT, utilities, eg gas, electric, water - ongoing weekly amount to pay, plus any arranged weekly repayment of arrears
fines - any weekly repayment amounts
medical expenses - although these are not priority debts as such, if it can be shown that the claimant has high prescription charges/travel costs to hospital, or high diet costs, which must be maintained for health reasons, all relating to a long term illness, then they may be considered priority debts
4.440 Other factors you may wish to consider in such a scenario might be
the health of the claimant and members of the household
any savings the claimant has
the level of disposable income in comparison to people receiving IS, see above
whether they have tried to make an arrangement for minimum repayments
whether they have any priority debts, see above
whether a non dependant can contribute to other household expenses
whether it would be feasible to postpone repayment of the debt rather than write it off
writing off part of the overpayment rather than all of it
whether the claimant has contacted their other creditors to reduce repayments in order to repay this debt
Note: this list is not prescriptive.
4.441 The decision not to recover an overpayment is an exceptional step to take and needs co-operation from the claimant in order to prove hardship. If the claimant is not prepared to provide such details an LA may decide to pursue recovery of the debt anyway.
4.442 If hardship can be proven an LA may wish to consider the overpayment for a 'discretionary write-off' and the claimant should be notified of the decision.
4.443 In case of possible hardship it may be prudent to advise the claimant to contact their local Citizens Advice Bureau (CAB) for proper financial advice.
4.444 The LA should also consider the cost effectiveness of recovering an overpayment. Is the overpayment too small to consider recovery action?
4.445 Each LA will have its own level at which it decides not to pursue recovery. This will usually be included in the LAs Bad Debts Provision.
4.446 It is not advisable to continuously 'write off' overpayments as it removes the incentive for the claimant to report future changes of circumstances, which may cause overpayments. This is because if it is decided that a claimant does not have sufficient resources to repay one overpayment then it is hard to make a case to say that they are able to repay a subsequent overpayment at a later date, unless, of course their circumstances have improved considerably.
Note: Because the person affected has no right of appeal against a decision to recover an overpayment, this also means there is no right of appeal against a refusal to 'write off' an overpayment.
Standard write-offs
4.447 An LA may, within its Bad Debts Provision, wish to hold some money back for writing off debts, which have 'come to the end of the road'. This could be because the claimant cannot be traced or all methods of recovery have been tried and have been unsuccessful. These overpayments should only be considered for 'write off' if there is nothing further at this time that they can attempt.
4.448 Examples of such overpayments are
a debtor cannot be traced to consider further recovery action
debts which become unrecoverable due to the Limitations Act
debts when all action has been considered/taken and it is decided not to pursue any further
the debt cannot be substantiated
the debt is 'too small' - this would be for the LA to decide at what level not to recover
Note: Even though an overpayment is written off, it can be resurrected and recovered at a later date. For example, if a claimant cannot be traced, the overpayment can be written off. The claimant will not be notified of the 'write off' as their whereabouts are not known. If they then apply for HB/CTB at a later date, the overpayment can be resurrected and recovered. The overpayment can only be resurrected if the claimant has not been notified of the 'write-off'.
4.449-4.999
|
