Government must refund clawed back housing benefit
Benefit rulings could cost DWP
The government may have to refund overpayments of housing benefit it has already clawed back, following legal action.
The Department for Work and Pensions faces shelling out after losing a legal case at the end of July. In that case, the administrative court ruled it was unlawful to use deductions from future payments of benefits as a means of recovering overpayments from people who had taken out debt relief orders.
Debt relief orders are fast track forms of insolvency for people who are in debt and have little disposable income. More than 20,000 have been issued since their introduction last year.
The case concerned two women, Gail Cooper and Eunice Payne, who had applied for debt relief orders which included an overpayment of incapacity benefit and an unpaid social fund loan respectively.
In both cases the department had refused to stop docking money from these women’s benefits after the debt relief order had been granted.
Mr Justice Cranston ruled that when benefit claimants had obtained debt relief orders which included overpayments or loans, the secretary of state was barred from pursuing repayment through deductions during the period that the order was valid.
The Court of Appeal last month awarded a stay of judgement which means the DWP does not have to refund any deductions until an appeal against the decision.
The appeal is set for 22 October. Four days after this, the department will also appeal against a 2009 case in which the Child Poverty Action Group argued successfully that the department cannot recover overpayments caused by official error.
A spokesperson for the department said there was no estimate of how many housing benefit and council tax benefit overpayments have been included in debt relief orders.
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Readers' comments (4)
Chris | 03/09/2010 10:34 am
This would seem a fair outcome, especially considering the other situation where if underpayment is discovered the claimant has to prove why they still need the money before it is paid - i.e. you've managed without it this long so you obviously do not need the back payment!
The net overpayment is over £4bn per year, masking who knows what extent of underpayment. The bigger issue of civil service competence needs to be explored so that in future circumstances are swiftly assessed and payments correctly awarded.
This issue makes the current fraud pogram minor by comparison.
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Melvin Bone | 03/09/2010 2:00 pm
I'd expect to see the DWP amend the current legislation to make these cases irrelevant.
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| 05/09/2010 9:28 am
civil service competence? It's a contradiction in terms isn't it? The move to smaller government is a direct result of civil service competence. Or the lack of it. In the final analysis, all these public sector workers who will loose their jobs (some of which were non-jobs and some of which were not) only have themselves to blame. The ship of reform is an oil tanker and takes a while to change direction. But when it does, the course is set for some time. Incompetent civil servants were always living on borrowed time and the chickens have now come home to roost; please excuse the mixed metaphors...!
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Chris | 05/09/2010 6:46 pm
What a surprise - it appears that the majority of job losses in the civil service will be at local level, whilst the 'elite' senior posts serving the ministers will be protected. Thus the most expensive, and most likely source of the competence level discussed, will escape the effects of the cuts, whilst the average and low paid workers will pay the price for their leaders failings.
ILAG may gnash his teeth at the prospect of these menials being sacked, but anyone with more that a solitary brain cell will work out that those responsible for error will remain. I do hope at some point working people will remember that attacking each other will only lead to things becomming worse.
Meanwhile - we now face the prospect of being forced to pay back husge sums for errors by the Inland Revenue - yet will Mr Green and Co have to pay back the money legally 'stolen' through tax avoidance.
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