Housing benefit & tax credits unaffected
The government cannot recover overpayments of social security benefits where the claimant is not at fault, the Supreme Court has ruled.
In the 12 months from March 2006, the Department of Work and Pensions (DWP) wrote to more than 65,000 claimants warning them they had been overpaid and could be sued for repayment.
The letters acknowledged the overpayments were entirely the fault of the government’s own administrative errors—and therefore not recoverable under statutory law, s 71 of the Social Security Administration Act 1992—but warned that court action would be taken under common law in the county court.
Delivering judgment in Child Poverty Action Group v Secretary of State for Work and Pensions [2010] UKSC 54, Lord Brown said it was “common ground” that overpayment resulting from misrepresentation or non-disclosure could be recovered under s 71.
The issue, he said, was whether s 71 provided an “exclusive code for recovery” or whether common law could be used to recover overpayment arising from “official error”.
Holding the former option, Lord Brown said: “It seems to me inconceivable that Parliament would have contemplated leaving the suggested common law restitutionary route to the recovery of overpayments available to the secretary of state to be pursued by way of ordinary court proceedings alongside the carefully prescribed scheme of recovery set out in the statute.
“Such an arrangement, moreover, would seem to me to create well-nigh insoluble problems. Could there, for example, be parallel recovery proceedings against the maker of the misrepresentation under section 71(3) and against the recipient of the benefit at common law in the courts?”
The ruling does not affect overpayments of housing benefit or tax credits.
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