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DWP cannot recover benefits overpayments

13 December 2010

The Department for Work and Pensions cannot recover welfare benefit payments through the courts where the claimant is not at fault, the Supreme Court has ruled.

The court heard that between March 2006 and February 2007 the DWP wrote to over 65,000 claimants telling them it could sue them in the county court if they did not return overpayments made as a result of administrative errors.

The benefits involved included income support, incapacity benefit, disability living allowance, jobseekers’ allowance and child benefit. Over £4m was recovered by the department in the financial year 2007-08.

Delivering the leading judgment in The Child Poverty Action Group v Secretary of State for Work and Pensions [2010] UKSC 54, Lord Brown said it was common ground that the secretary of state was entitled to recover overpayments resulting from misrepresentation or non-disclosure.

He said the question was whether section 71 of the Social Security Act 1992, which allows the DWP to recover money in cases of misrepresentation or non-disclosure, provided an “exclusive code for recovery” or whether other cases of “mistakenly inflated awards” could be dealt with through the common law.

“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,” Lord Brown said.

He said it was “entirely rational” for parliament to decide that only those whose behaviour brought about the overpayments should be liable to reimburse them.

He dismissed the government’s appeal. Lords Phillips, Kerr and Rodger and Sir John Dyson agreed.

Alison Garnham, chief executive of the Child Poverty Action Group, said the people the charity spoke to did not know they had been paid too much.“They were not fraudulent or feckless claimants trying to get extra money,” she said. “Rather, they were the innocent victims of DWP error and the complexity of the benefit system.“

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