Forum Home → Discussion → Decision making and appeals → Thread
Recovery of Overpayment while Appeal ongoing
My client has an overpayment of Incapacity Benefit. I recently submitted a late appeal. I contacted Debt Management to ask them to suspend recovery of his overpayment. I was informed that it was not possible as the decision had not been appealed within one month as if it had they could have frozen the recovery. Does anyone know whether and how I can challenge this?
forum member
Welfare Benefits Casework Supervisor, Brixton Advice Centre
Total Posts: 87
Joined: 25 June 2010
1. It used to be the DWP’s policy that it would suspend recovery if an in-time appeal had been made and recovery had not yet begun. Where recovery had already commenced, or where an appeal was made out of time but accepted as a late appeal, the policy was to continue with recovery. In practice, it would often suspend recovery even in these circumstances where a request for the same was made. However, what happened in practice very often depended upon which office was dealing with the appeal and recovery – and once the department moved the administration of recovery to the various Debt Recovery Centres there was no consistency of policy at all.
Policy, such as it was can be found in the Overpayment Recovery Guide. It is not now available on the DWP website and was last updated in 2005. I have a copy if you wish, but I am unsure that I would wish to rely on it – aside from being out of date, it is only guidance and no authoritative statement as to the law.
2. The issue of whether the department is able to recover whilst an appeal remains to be determined is not something that has received a significant amount of attention in caselaw – decisions have focused on the issues of whether a claimant has in fact been overpaid or whether a particular overpayment is recoverable.
There is, however, one decision which may be of use – R(SB) 5/91. That decision was concerned with whether section 9 (1) of the Limitation Act 1980 applied before an overpayment was found to be recoverable – i.e. the claimant argued that in computing any overpayment the calculation was unable to go back more than 6 years. The appeal was dismissed and Commissioner Rice held that it was only once the amount of an overpayment had finally been determined that time begins to run for the purposes of the Limitation Act. Nevertheless, what he also said about when the Secretary of State may recover is of relevance;
6. The same question which came before the tribunal appears to have been ventilated in an earlier case CSB/1158/1982, where
at paragraph 9 the learned Commissioner stated as follows:
“9 . . . . in my judgment the Limitation Act has no relevance. Recovery under section 20 (which is for the Secretary of State
alone) only arises once the adjudicating authorities have determined there is a recoverable amount and have
determined what it is. That is the sole jurisdiction of the adjudicating authorities. They are not concerned with whether
money can or should be recovered, see paragraph 4 of R(SB) 44/83.”
The Commissioner then went on to point out that time began to run within section 9(1) only after the appellate procedure had been exhausted:
“Accordingly until adjudication is complete the Secretary of State has no right to recover. It is only from then that the Limitation
Act period will apply as only then does the Secretary of State’s right of action accrue. To accept that notification of the date of the
adjudication officer’s decision as the relevant date will mean that the Secretary of State was entitled as of that moment to
recover notwithstanding that there was an appeal in progress. It would not I think be the intention of Parliament to provide for
appeals against an initial determination if such were the case . . .”
Commissioner Rice was clearly quoting with approval those passages from CSB/1158/1982 to the effect that the Secretary of State had no power of recovery until the adjudication and appeal process was complete – or at least assumes them to be uncontroversial.
The difficulty is that R(SB) 5/91 was dealing with the old supplementary benefit scheme under which not only was recovery (including issues regarding the exercise of discretion in deciding whether to recover) a matter for Secretary of State, but the SoS was an entity entirely distinct from and unable to interfere in the adjudication process – adjudication officers were legally independent of the SoS, whereas under the Social Security Act 1998, a decision maker is, at least for decision making purposes, that same SoS. Given this fundamental change in the legislation, R(SB) 5/91 is probably now no more than persuasive authority for the proposition that Parliament would not have provided for appeals against a decision if the Secretary of State had the power to recover immediately from the date of the decision of a DM. Certainly, there is no express provision in the legislation to prevent recovery commencing whilst an appeal is pending.
3. You do not say whether the department is proposing to recover by deductions from ongoing benefit or whether your client’s benefit has stopped, with the consequence that it would have to recover via action in the County Court as provided for in s. 71 (10) of the Social Security Act 1998. In the latter case, your client would be in a stronger position – the department would need to produce a decision (of a DM, or First-tier or Upper Tribunal) before the court can enforce that decision. Evidence that the decision was subject to an appeal would, I think, persuade the court to agree to a delay in enforcement - and perhaps be persuaded not to agree any order at all – the procedure provided by statute for determining whether there has been a recoverable overpayment has not been exhausted and the claimant ought to be spared the additional cost and trouble of having to return to court to get the order set-aside in the event the appeal process determines there has been no recoverable overpayment.
If any recovery will be by deduction from benefit your client may find it more difficult to prevent this. I have had some success with the arguments in paragraph 2, above, but I’ve some doubt as to whether they’d succeed with a JR action if the department then continued to recover.
[ Edited: 30 May 2017 at 03:16 pm by webmaster ]Thanks for taking the time to post such a detailed reply. This is very helpful to me, I will let you know how I get on.
Thanks Tony. I have not yet heard whether the late appeal has been accepted.
forum member
Customer support team manager - The Guinness Partnership
Total Posts: 35
Joined: 16 June 2010
I have a similar case where the late appeal has been admitted but debt management have said that collection will continue. I have written asking them to explain their differing treatment of appeals and late appeals. I will post their reply but from memory I’m with Tony - they fold when asked for it in writing.
Thanks. Fingers crossed they accept the late appeal.
forum member
Independent HB/CTB administrator, consultant & trainer (Essex)
Total Posts: 474
Joined: 16 June 2010
In CH/1757/2009 (paras 40-41), Judge Williams issued a formal Direction effectively preventing the LA from pursuing recovery of an alleged overpayment of CTB. The Direction was further served on the bailiffs.
I’m wondering if a FtT can issue a Direction to similar effect in relation to other benefits. On the face of it, I can’t see why not….
File Attachments
- CH 1757 2009.doc (File Size: 59KB - Downloads: 4866)
forum member
Welfare Benefits Casework Supervisor, Brixton Advice Centre
Total Posts: 87
Joined: 25 June 2010
Interesting decision Kevin - and I agree there should be no reason why a First-tier Tribunal couldn’t issue a similar direction.
The question remains, though - what to do short of a tribunal direction?
forum member
Solicitor, CMH solicitors, Tyne And Wear
Total Posts: 186
Joined: 17 June 2010
and i’m currently dealing with a case where debt management have suspended recovery whilst the adverse decision is appealed…
forum member
Customer support team manager - The Guinness Partnership
Total Posts: 35
Joined: 16 June 2010
I had a call back today from Debt Management telling me that in fact the appeal in my client’s case was not late and therefore they would not continue to seek to recover until the appeal was heard. I asked what would have happened if it had been a late appeal and got a vague answer about it being up to Glasgow. So not much help I am afraid.