12th June, 2019
In recent weeks, there’s been considerable Parliamentary scrutiny of the number of Overpayment debts that are being recovered from UC claimants’ monthly entitlement, leaving, in some cases, less than 60% of their Standard Allowance (e.g. single claimant over 25 – £180 pcm) to sustain themselves, during the month, and putting, in jeopardy, their ability to maintain their tenancy.
As the spotlight intensified, PQ’s were submitted by Frank Field, MP. Through this, we discovered, that in a handful of cases, DWP agreed to waive recovery of the overpayment, and, in more than 16,000 instances, reduced the rate of recovery, following requests from claimants and/or their advisor. A supplementary PQ also revealed, that in 85% of these reduction rate cases, the overpayment was caused by “DWP official error”.
So, in what circumstances might DWP waive or reduce recovery of the overpayment?
In its guidance to staff, DWP explains:
“Where the waiver is requested on financial grounds, full details of the income and expenditure of the debtor, partner, dependants and any other members of the household would need to be provided…………………………………………………………………………………………….Or, where a waiver is requested on health grounds, the debtor must show how the continued recovery of the overpayment would be detrimental.”
The ability of DWP to fully or partially waive recovery is not new. I recall writing to DHSS administration, on behalf of claimants, 30+ years ago, and securing either write-offs or reductions in the rate of recovery; typically, by 50%. However, it was never easy to persuade DHSS. From the low numbers of UC beneficiaries we’ve seen, it seems DWP’s administration is operating on an even less empathetic basis. Alternatively, the low numbers may be due to the fact, DWP doesn’t promote the notion of discretion being applied, resulting in claimants and some advisors not being fully au fait with how to go about asking for the waiver to be applied. As all UC overpayments are “recoverable” (even those caused by official error) this issue is likely to become more troublesome for tenants and landlords as DWP adds a further 5 million claimants to the UC caseload in the next 3/4 years.
How should they apply?
Where the overpayment is caused by DWP error, rather than a failure on the part of the claimant or landlord, the chance of securing success, in this respect, should be better. If you come across a meritorious case, I would recommend you helping the tenant draft a suitable letter, email or insert the request into their journal. The request should explain why the overpayment should be waived; emphasising DWP’s error caused the overpayment; the tenant had no knowledge he/she was being overpaid; the adverse impact recovery would have on the household budget; and highlight any ill-health, disability or multiple debts which might exist, plus any other exceptional circumstances you unearth. I’ve included a sample letter that could be used as a form of template
By letter or email, I would address this to the local District or Partnership Manager and ask that recovery of the overpayment be suppressed until the merits of the request is determined. The same approach could be equally applied to the journal.
In the event, DWP’s response is disappointing, you could then escalate the case to a formal complaint and pursue, after stage 1 & 2, an external review by the Independent Case Examiner (ICE). Doing so, could put recovery of the sum “on hold” for at least 2 years as ICE have an 18 month backlog.
Reduction in Rate of recovery
Assuming there are no other debts to recover, overpayments can be recouped at 15% of the claimant’s UC Standard rate (£45 pcm for single claimant over 25 or £75 pcm for a couple) and up to 25% if the claimant is working. In the hierarchy of debts, overpayments are way down the pecking order, so, in cases, involving other more important debts, like rent, service charges, fuel, council tax etc. they should be given priority. But, in reality, DWP has a tendency to prioritise its own or HMRC debts, sometimes at the expense of “housing costs” when the legislation and its own guidance advises to the contrary. Where recovery of the overpayment debt is legitimate it should be possible to negotiate, at least a 50% cut in the rate. Again, claimants and/or their advisors (with explicit consent) could ask for the reduction by inserting the request on the online journal or via email/letter.
If you require any further information or clarification on this topic, get in touch.
UC Advice & Advocacy Ltd