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Claimants can keep benefit overpayments

The Supreme Court has ruled that the government cannot sue benefit claimants for money it has wrongly overpaid them.

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The Department for Work and Pensions was contesting a Court of Appeal verdict from 2009 which said the government could not recover overpaid benefits from claimants who were not at fault.

The department had written to 65,000 benefit claimants between March 2006 and February 2007, demanding back overpayments caused by its own officials’ mistakes. The letters had said the DWP could sue the claimants in the county court if they did not repay the money.

But yesterday the Supreme Court judges said the department had no right to do this, and also ordered that no more such letters be sent out.

Anti-poverty groups had fought the letters in the courts. Alison Garnham, chief executive of the Child Poverty Action Group, said: ‘We hope that the department will regret the anguish caused to many of the people who received the letters and will seek to improve its own administration to avoid overpayment problems.

‘The people we spoke to did not know they had been paid too much. They were not fraudulent claimants trying to get extra money. Rather, they were the innocent victims of DWP error and the complexity of the benefit system.’

A DWP spokesperson said: ‘We have a duty to the taxpayer to ask for money back when an overpayment has been made. However, the department will, of course, comply with this judgement and is considering all the implications, both legal and financial.

‘We suspended all attempts to recover these types of official error overpayments from the date of the original hearing in 2007, and have written off the debt. We have never enforced repayment where we know it will cause hardship.’

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