The Department of Work and Pensions has been accused of trying to recover a Universal Credit overpayment by lying and keeping legal advice secret.
Benefits and Work, a welfare rights website, claims that the DWP 'deliberately lied' to a claimant in order to recover an overpayment of over £8,000 which, it says, was entirely due to the DWP’s own mistakes. A High Court decided this month that the mother, who had two disabled children, did not have to repay Universal Credit money paid to her in error, and campaigners at Benefits and Work claim 'many tens of thousands' of people have been 'hoodwinked' in the same way.
In a decision made on February 7, the High Court ruled that the DWP "unlawfully" tried to recover the debt and it should not have to be repaid as it was caused by repeated mistakes by the DWP. The DWP said it is considering the judgment, although a spokesperson cast doubt on Benefits and Work's claims of how many may be affected.
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The High Court heard that the claimant’s disabled son was on an apprenticeship, but the DWP wrongly considered him to be in full-time education and so incorrectly paid the claimant child elements of Universal Credit. The mother had brought the error to the DWP's attention several times, but the additional money had continued to be paid to the claimant.
The DWP eventually realised its error and attempted to recover the overpayment. The claimant appealed, but a tribunal agreed that there had been an overpayment, although they also found that the overpayment was due to official error and that DWP “repeatedly” miscalculated her entitlement over a prolonged period, in what was a “profound lapse in service”’.
With the help of an advice centre, the claimant asked the DWP in writing to waive recovery of the overpayment. She explained that she had two disabled children with autism and ADHD, that her role as their carer meant that she could not work longer hours and that she was already struggling so badly that she was having to use a foodbank.
According to Benefits and Work, when the DWP didn’t respond, the claimant then sent the request again, at which point the DWP said that as she had already been to a tribunal there was no further route to pursue the matter. The claimant wrote again, telling the DWP that the complaints handler on her case had advised she ask for a waiver of her overpayment, to which the DWP responded: "Neither myself or anyone working for Universal Credit can reconsider your overpayment as you have exhausted all appeal routes with us. The legislation you have quoted does not apply directly to the processes that we have here.”
At that point, the claimant, with the help of the Public Law Project, launched a judicial review of this decision in the High Court, and the judge found that the claimant gave all the information that was asked of her and “took all reasonable steps both to clarify her entitlement and to prevent any UC overpayment by actively querying her entitlement on at least four occasions.”
The review was around the DWP's interpretation of their Benefit Overpayment Recovery Guide (BORG), which stated that the DWP has the discretion to waive overpayment recovery where appropriate. The judge held that the failure of the DWP to publish the Decision Makers Guide to Waiver was unlawful because a claimant would not be able to fully understand the DWP’s policy on waiving overpayments. But the DWP said the Decision Makers Guide to Waiver was designed to accompany the policy on when an overpayment should be waived, which was always published and accessible on gov.uk.
The judge ruled, however, that the policy itself was not found to be unlawful.
The judge found that the claimant had reasonably relied on the DWP’s repeated reassurances that she was entitled to the payments to her detriment by spending money she would later be asked to repay. If she had known the true position she would have acted differently, possibly by finding a different course for her son or seeking to claim benefits for her son in his own right. Accordingly, the judge found that the DWP’s refusal to waive the overpayment was unlawful and breached the claimant’s legitimate expectations and so the DWP could no longer recover the £8,000 it had wrongly paid.
B&W said: "In lay person’s speak, ‘manifestly unlawful statement of the position’ could reasonably be translated as ‘barefaced lie’." and the Public Law Project said the ruling of this case could be "significant" to others who have faced official benefit overpayments in the future.
A DWP spokesperson said: “We are aware of the recent High Court decision in relation to this case, and we are considering the judgment. We carefully balance our duty to the taxpayer to recover overpayments with our support for claimants, and safeguards are in place to ensure deductions are manageable.”
The judge also looked at statistics on overpayments and recovery by the DWP and found that from 1 April to 2020 31 March 2021 337,000 UC claimants were asked to repay overpayments whose cause was error by the DWP. The total value of those overpayments was £228 million. The DWP claims that just 47 claimants asked for their overpayments to be waived in the whole of 2020 and just seven of those requests were granted.
Benefits and Work said: “Many thousands may have requested a waiver and been ignored, whilst many thousands more may have had no idea that they even had the right to ask. Undoubtedly, the test for waiving an overpayment is a hard one to pass, but the DWP have a legal duty to allow claimants to have their request properly considered. Instead, the department continues to push struggling claimants even deeper into poverty, with only a very rare court case like this one shining a light on their dishonest and unlawful tactics."
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