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Chapter D1: Overpayments, Recoverability, Adjustments, Civil Penalties and Recoupment - UC, JSA and ESA

Contents
D1001:Scope of Chapter
D1002:Which benefits this guidance applies to
D1003:When this guidance applies from
D1004:Meaning of "overpayment"
How UC, JSA or ESA overpayments happen
D1005:General
D1006:Overpayments caused by the claimant
D1007:Overpayments caused by the DWP
D1008:Overpayments caused by a landlord
D1009:DM's action
The requirement for revision or supersession
D1031:Introduction
D1032:The new entitlement decision

Has revision or supersession taken place
D1033:General
D1034:Types of evidence
D1035:Revision or supersession decision not properly made
D1036:Recovery not dependent on revision or supersession
D1037:The overpayment decision
Determination of an overpayment period
D1051:Introduction

Start date of UC overpayment period
D1052:Beginning of a UC claim
D1053:During an existing UC award
D1054:End date of UC overpayment period

Start date of JSA or ESA overpayment period
D1055:Beginning of a JSA or ESA claim
D1056:During an existing JSA or ESA award - entitlement ends
D1057:During an existing JSA or ESA award - entitlement reduces
D1058:End date of JSA or ESA overpayment period
Calculation of an overpayment
D1071:Introduction

Diminution of capital
D1072:UC
D1075:Circumstances when a deduction is required
D1076:Offsetting
D1080:Meaning of "subsequent decision"
D1081:Additional amounts of UC
D1082:Meaning of "overpayment period"
D1083:Meaning of "partner"
Overpayments of UC housing costs
D1084:Meaning of "housing costs"
D1085:Change of dwelling
D1088:CSM collected by the Department
Recoverability of an overpayment
D1101:Introduction
D1102:Meaning of "recoverable amount"
D1103:Person(s) from whom an overpayment may be recovered
D1104:Meaning of "payee"
D1105:Appointees or another person acting on the claimant's behalf
D1106:Payments to Third Parties
Overpayments of UC housing costs
D1107:Change of dwelling
D1108:Misrepresentation or failure to disclose
D1109:Meaning of "material fact"
D1110:Other reasons

Misrepresentation
D1131:Introduction
D1132:What is misrepresentation
Has misrepresentation occurred
D1133:Written statements
D1135:Oral statements
D1136:Circumstantial evidence of misrepresentation
D1137:Allegation of non-responsibility
Failure to disclose
D1151:Introduction
DM's requirements
D1152:Information and evidence in connection with a claim
D1153:Information and evidence in connection with an award
D1154:Notification of any change of circumstances
D1156:Knowledge of the material fact
D1157:Discharging the duty to disclose
D1159:Effect of a failure to disclose
D1160:When a failure to disclose arises
D1161:Clear and unambiguous duty to disclose
D1162:Instructions to notify
D1164:Modification of instructions
D1165:Additional duty to disclose
D1167:Reasonably to be expected
D1168:Timing of the disclosure
D1169:Person alleges that disclosure made
D1170:Disclosure by landlord
Causation
D1191:General
D1192:Causation and misrepresentation
D1194:Causation and failure to disclose
Is there a causal link between the failure to disclose and the
D1195:overpayment
D1198:Burden of proof
D1199:Number of causes for an overpayment
D1200:When is the causal link not broken
Adjustments
D1221:Introduction

Payments on account of benefit
D1222:Introduction
D1223:Bringing payments on account of benefit into account
Abatements and UC
D1241:Introduction
Prescribed income
D1242:General
D1243:What is prescribed income
D1244:What is the prescribed date
Prescribed payment
D1245:General
D1246:Abatement of arrears of UK benefit
D1247:What is a prescribed payment
D1248:What is the prescribed date
D1249:Calculation of the amount to be recovered
Receipts from arrears of EC benefits
D1250:General
D1251:What is the prescribed date
D1252:Calculation of amount to be recovered
D1253:Conversion of foreign currency
D1254:Recovery otherwise than by way of abatement
Civil Penalties
D1271:Introduction
D1272:Prescribed amount of Civil Penalty
When to impose a Civil Penalty
Negligently makes an incorrect statement or representation or
D1273:negligently gives incorrect information or evidence
D1274:DM's consideration
D1276:Meaning of "negligently"
D1279:Meaning of "reasonable steps"
D1281:Claimant alleges reasonable steps were taken
D1282:No response to written enquiries
D1283:Meaning of "overpayment"
D1284:Meaning of "relevant social security benefit"
D1285:Fails to provide information
D1286:DM's consideration
D1287:Meaning of "reasonable excuse"
D1289:No response to written enquiries
D1290:Meaning of "appropriate authority"
D1291:Fails to notify a change of circumstances to the appropriate authority
D1292:DM's consideration
Claimant denies being under an obligation to report or maintains that
D1294:they have reported as required
D1295:No response to written enquiries
D1296:Meaning of "relevant change of circumstances"
D1297:On whom to impose a Civil Penalty
D1298:Exception
D1299:Joint-claim couples
D1300:Appointee cases
D1301:Recovery of Civil Penalty
Recoupment - payments under the Employment Protection Acts
D1351:Introduction
D1352:Recoverable awards
D1354:Monetary awards
D1355:Protective awards
D1356:Meaning of "earned income"
D1357:Action by the DM
D1358:Claimant does not accept amount notified
D1359:Prescribed period
D1361:Claimant raises other questions on recoupment
D1362:Revision or supersession after recoupment action completed
D1364:Partner or dependant entitled to Employment Tribunal award
D1365:Employment Tribunal decision varied

Chapter D1: Overpayments, Recoverability, Adjustments, Civil Penalties and Recoupment - UC, JSA and ESA

D1001 Scope of Chapter

This Chapter gives guidance on overpayment decision making. The topics covered are
1. the requirement for revision or supersession
2. the determination of an overpayment period
3. the calculation of an overpayment
4. the recoverability of an overpayment
5. any adjustments to be made to the amount of an overpayment
6. the imposition of a CPen
7. recoupment.
Note: This Chapter does not give guidance on the methods of overpayment
recovery as this is the responsibility of Debt Management.

D1002 Which benefits this guidance applies to

This guidance only applies to
1. UC
2. new style JSA (hereafter referred to as JSA)
3. new style ESA (hereafter referred to as ESA).
Note
1: ADM Chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.
Note
2: DMG Chapter 09 contains guidance on overpayment decision making for
other benefits, including PIP, not listed above.

D1003 When this guidance applies from

This guidance applies to UC, JSA and ESA overpayments which have arisen on
claims for those benefits, made on or after 29.4.131.
1 SS (Op & Rec) Regs, reg 1(3)

D1004 Meaning of "overpayment"

Subject to D1275, overpayment (1) means an amount of UC, JSA or ESA which may
be recovered under specified legislation (2).
1 SS (Op & Rec) Regs, reg 2; 2 SS A Act 92, s 71ZB(1)
How UC, JSA and ESA overpayments happen

D1005 General

Overpayments of UC, JSA and ESA happen in a variety of circumstances and may
be caused by
1. the claimant
or
2. the
DWP
or :
3.
the landlord (in cases where UC housing costs are being paid directly to the
landlord).

D1006 Overpayments caused by a claimant

A claimant may cause an overpayment by
1. giving wrong information when making their claim or
2. failing to give relevant information when making their claim or :
3.
being late in reporting a change of circumstances which affects their existing
benefit award or :
4.
giving wrong information when reporting a change of circumstances
which affects their existing benefit award.

D1007 Overpayments caused by the DWP D1103

The DWP may cause an overpayment by :
1.
making a mistake when calculating a benefit award or :
2.
making a mistake when taking action on a reported change of circumstances
which affects an existing benefit award or :
3.
failing to act promptly on a reported change of circumstances which affects an
existing benefit award.

D1008 Overpayments caused by a landlord

A landlord may cause an overpayment when :
1.
the claimant no longer lives in the dwelling for which the landlord is paid UC
housing costs or
2. the claimant has never lived in the dwelling for which the landlord is paid UC
housing costs or :
3.
the amount of UC housing costs paid to the landlord is based on incorrect
information supplied by the landlord.

D1009 DM's action

When information affecting entitlement to UC, JSA or ESA is identified, the DM must
take the following action
1. except where D1036 applies, give a new entitlement decision by revising or
superseding all relevant awarding decisions and :
2.
determine the period of the resulting overpayment and :
3.
calculate the total overpayment, that is, the difference between the amount to
which there is entitlement or which is properly payable and the amount which
has been paid and :
4.
where appropriate, offset the benefit paid against the new amount awarded
and :
5.
determine the person(s) from whom the overpayment is recoverable and :
6.
give an overpayment decision and
7. give a decision on whether and on whom to impose a CPen.

[D1010-D1030]

The requirement for revision or supersession

D1031 Introduction

The guidance in this section deals with the requirement to give a new entitlement
decision by way of revision or supersession when information emerges that affects
entitlement to UC, JSA or ESA and which results in an overpayment.
Note: ADM Chapter A3 contains guidance on revision. ADM Chapter A4 contains
guidance on supersession.

D1032 The new entitlement decision D1036

Overpayments of UC, JSA or ESA are only recoverable when, following the
emergence of information affecting entitlement to UC, JSA or ESA, the DM has first
made a new entitlement decision. Except where D1036 applies, the DM must ensure
that the new entitlement decision revises or supersedes all the awarding decisions
which operated during the period of the overpayment or were varied or reversed on
appeal (1).
1 R(SB) 7/91; SS A Act 92, s 71ZB(3)

Example 1

Gavin claims UC from 3 September and it is awarded from and including that date.
On 4 October new information emerges showing that Gavin gave incorrect
information when he completed his on-line UC claim. Had the correct information
been given at the time, Gavin would not have been entitled to UC. The DM revises
the award of UC from and including 3 September.

Example 2

Damian has been awarded UC from and including 4 June and he has been paid up
to and including 3 October. On 7 October a change of circumstances emerges which
affects Damian's entitlement to UC from 31 July. The DM supersedes the award of
UC from 4 July to 3 October.
Has revision or supersession taken place

D1033 General

The DM must be able to produce evidence that revision or supersession has taken
place, otherwise they will have failed to meet the burden of proof required (1). Where
that evidence is unclear to anyone reading it, for example, when included as
evidence in an appeal response to a FtT and fails to clearly illustrate that a valid
revision or supersession has taken place, there must be a full explanation of its
2
contents .
1 R(IS) 2/96; 2 R(IB) 2/04

D1034 Types of evidence

Computer print-outs are commonly presented as evidence that revision or
supersession has taken place and these will usually require an explanation. If
available, a copy of the letter notifying the claimant of the (new entitlement) decision
will be useful, additional evidence. However, this too will usually require explanation
of its contents.

D1035 Revision or supersession decision not properly made

If it is realised after an overpayment decision has been made that there has been no
proper alteration of entitlement for all or some part of the overpayment period, the
overpayment decision is of no force or effect. The DM must ensure that the
awarding decisions for the entire overpayment period are revised or superseded and
a further overpayment decision made.

Example

Asif has been awarded UC from and including 4 June and he has been paid up to
and including 3 October. On 7 October information emerges that affects Asif's
entitlement to UC from 31 July. The DM incorrectly supersedes the award of UC
from 4 September to 3 October. As the resulting decision does not include proper
alteration of entitlement to UC for all of the overpayment period, the associated
overpayment decision is of no force or effect. The DM revises the previously
incorrect superseding decision to correctly remove entitlement from 4 July to 3
October. A new overpayment decision is then made.

D1036 Recovery not dependent on revision or supersession D1009 D1032

D1032 does not apply where the circumstances of the overpayment, e.g. where
there has been an overprovision of benefit, do not provide a basis for the original
awarding decision to be (1)
1. revised under relevant legislation (2) or
2. superseded under relevant legislation (3).
1 SS (Op & Rec) Regs, reg 5; 2 SS Act 98, s 9; 3 s 10

D1037 The overpayment decision

At the same time as or after the DM makes the new entitlement decision they must
make an overpayment decision. The overpayment decision must state
1. the period during which the amount was overpaid and
2. the amount that is recoverable and
3. the person(s) from whom it is recoverable.

[D1038-D1050]

Determination of an overpayment period

D1051 Introduction

The guidance in this section deals with when a UC, JSA or ESA overpayment period
starts and ends.
Start date of UC overpayment period

D1052 Beginning of a UC claim

Where evidence exists that an overpayment of UC has occurred from the beginning
of a claim, the DM must revise the award from its beginning (1). The overpayment
period will start on the same date.
1 SS Act 98, s 9(3)

Example

Alison claimed UC from 4 June and declared that she held capital in the form of an
inheritance to the value of 20,000. Despite providing this information, Alison is
wrongly awarded UC from and including 4 June. On 9 August the DM realises that
Alison's capital affects her entitlement to UC. The DM revises the award of UC from
4 June and the start date of the UC overpayment period is 4 June.

D1053 During an existing UC award

Where evidence exists that an overpayment of UC has occurred during the currency
of an award, the DM must supersede the award from the first day of the assessment
period in which the change occured (1). The overpayment period will start on the same
date.
Note: ADM Chapter E2 contains guidance on assessment periods for UC.
1 UC, PIP, JSA & ESA (D&A) Regs, Sch 1, Part 3, para 20

Example

Oscar and Ellie are a UC joint claim couple. UC has currently been paid for the
monthly assessment period running from 2 May to 1 June. On 10 June Ellie reports
that Oscar left the UK on 6 May to work abroad for 12 months. Oscar's absence
from the UK affects their UC entitlement as a couple. The DM supersedes the award
of UC, made on the basis that Oscar and Ellie were a joint claim couple, from 2 May
and the start date of the UC overpayment period is 2 May.

D1054 End date of UC overpayment period

Where evidence exists that an overpayment of UC has occurred, the end date of the
overpayment period is the last day of the assessment period immediately before the
award is corrected or terminated.

Example

Mary claimed UC on 4 June and declared that she held capital in the form of an
inheritance to the value of 20,000. Despite providing this information, Mary is
wrongly awarded UC for the monthly assessment periods running from 4 June to 3
July and from 4 July to 3 August. On 9 August the DM realises that Mary's capital
affects her entitlement to UC. The DM revises the award of UC from and including 4
June and the UC overpayment period ends on 3 August.
Start date of JSA or ESA overpayment period

D1055 Beginning of a JSA or ESA claim

Where evidence exists that an overpayment of JSA or ESA has occurred from the
beginning of a claim, the DM must revise the award from its beginning (1). The
overpayment period will start on the same date.
1 SS Act 98, s 9(3)

Example

Bradley claimed JSA from 4 June and declared that he was not in employment. He
was awarded JSA from 7 June. Subsequently, the DM became aware that Bradley
had been working on a part-time basis since 20 May. This affected his entitlement to
JSA. The DM revises the award of JSA from 7 June and the start date of the JSA
overpayment is 7 June.

D1056 During an existing JSA or ESA award - entitlement ends

Where evidence exists that an overpayment of JSA or ESA has occurred during the
currency of an award and entitlement ends, the DM must supersede the award from
the date of the change (1). The overpayment period will start on the same date.
1 UC, PIP, JSA & ESA (D&A) Regs, Sch 1, Part 1, para 4

Example

Ed has been paid ESA up to and including 21 November. He started full time
employment on 4 November meaning that he no longer had LCW and was therefore
not entitled to ESA. He reported the change in his circumstances by letter which was
received in the local DWP office on 5 November. However, the DM does not take
action to supersede the award of ESA until 22 November. The start date of the ESA
overpayment is 4 November.

D1057 During an existing JSA or ESA award - entitlement reduces

Where evidence exists that an overpayment of JSA or ESA has occurred during the
currency of an award, but entitlement reduces, the DM will usually supersede the
award of benefit from the beginning of the week in which the change occurs (1).
However, the start date of the overpayment period will be the date on which the
change occurs.
1 UC, PIP, JSA & ESA (D&A) Regs, Sch 1, Part 1, para 3(a)

Example

Emma has been paid JSA up to and including 21 November. Her benefit week ends
on a Thursday. She started part-time employment on 4 November meaning that her
entitlement to JSA is reduced. The DM supersedes the award of JSA from 1
November. However, the start date of the JSA overpayment is 4 November.

D1058 End date of JSA or ESA overpayment period

Where evidence exists that an overpayment of JSA or ESA has occurred, the end
date of the overpayment period is the last day of the payment period immediately
before the award is corrected or terminated.

Example

Jessica has been paid ESA up to and including 21 November. She started full time
employment on 4 November meaning that she no longer had LCW and was
therefore not entitled to ESA. She reported the change in her circumstances to the
local DWP office by letter which was received in the local office on 5 November.
However, the DM does not take action to supersede the award of ESA until 22
November. The end date of the ESA overpayment is 21 November.

[D1059-D1070]

Calculation of an overpayment

D1071 Introduction

The guidance in this section deals with :
1.
the diminution of capital and :
2.
the circumstances when a deduction is required from the amount of a UC,
JSA or ESA overpayment.
Diminution of capital

D1072 UC D1073 D1102

D1073 applies where :
1.
there is an overpayment of UC which has occurred because of an error
relating to the amount of a person's capital and :
2.
the overpayment period is 3 months or more (1).
Note: ADM Chapter H1 contains guidance on capital for UC purposes.

1 SS (Op & Rec) Regs, reg 7(1)

D1073 D1072 D1074

For the purpose only of calculating the recoverable amount of the overpayment as in
D1072, the DM must
1. at the end of the first 3 months of the overpayment period, treat the amount of
that capital as having been reduced by the amount of UC overpaid during
those 3 months and :
2.
at the end of each subsequent period of 3 months, if any, of the overpayment
period, treat the amount of that capital as having been further reduced by the
amount of UC overpaid during the immediately preceding 3 months (1).

1 SS (Op & Rec) Regs, reg 7(2)

D1074

The DM cannot treat capital as reduced over any period other than 3 months, in any
circumstances other than those provided for in D1073 (1).
1 SS (Op & Rec) Regs, reg 7(3)

D1075 Circumstances when a deduction is required

When calculating the amount of an overpayment of UC, JSA or ESA, the DM must
deduct (1) :
1.
any amount which has been offset under specified legislation (2) and :
2.
any additional amounts of UC.
1 SS A Act 92, s 71ZB(4); SS (Op & Rec) Regs, reg 8; 2 reg 16

D1076 Offsetting D1080

D1077 applies where a claimant has been paid benefit under the original decision
which is subsequently :
1.
revised or further revised or :
2.
superseded or further superseded or :
3.
set aside on an appeal (1).

1 SS A Act 92, s 71ZF; SS (Op & Rec) Regs, reg 16(1)

D1077 D1076

Any UC, JSA or ESA paid in respect of a period covered by the subsequent decision
is to be offset against arrears of entitlement to benefit under that decision and,
except to the extent that the UC, JSA or ESA exceeds the arrears, is to be treated
as properly paid on account of them (1).
1 SS (Op & Rec) Regs, reg 16(2)

Example

Nathan has been paid UC for the assessment periods running from 5 November to 4
December and from 5 December to 4 January. Nathan becomes entitled to JSA and
an arrears payment for the period from 2 December to 4 January is calculated. The
amount of UC paid to Nathan for the period from 2 December to 4 January is to be
offset against the arrears of JSA now payable to him.

D1078

Where an amount has been deducted as in D1081 or D1085 to D1087, an
equivalent sum is to be offset against any arrears of entitlement under the
subsequent decision except to the extent that the sum exceeds the arrears and is to
be treated as paid on account of them (1).

1 SS (Op & Rec) Regs, reg 16(3)

D1079

The DM should note that :
1.
they can make an offset decision at any time before arrears of UC, JSA or
ESA are paid and :
2.
whenever possible, they should include the offset in the new entitlement
decision.
The DM should ensure that any offset of benefit is dealt with before considering
whether any UC, JSA or ESA has been overpaid. This is because an overpayment
decision prevents the recoverable amount from being considered for offset later on (1).
1 SS (Op & Rec) Regs, reg 16(4)

D1080 Meaning of "subsequent decision"

Subsequent decision means the decision referred to in D1076 1., 2. or 3. which was
taken in relation to the original decision (1).
1 SS (Op & Rec) Regs, reg 16(5)

D1081 Additional amounts of UC D1078

When calculating the recoverable amount of a JSA or ESA overpayment, the DM
must deduct (1)
1. any amount which has been offset under specified legislation (2) or :
2.
any additional amount of UC which was not payable to the claimant or their
partner under the original or any other determination, but which should have
been determined to be payable in respect of all or part of the overpayment
period, to the claimant, or the claimant and their partner jointly
2.1 on the basis of the UC claim as presented to the DM or
2.2 on the basis of that claim as it would have appeared if any change of
circumstances, except a change of the dwelling which the claimant
occupies as their home, had been notified at the time that change
occurred or
2.3 where the overpayment arose from a misrepresentation or failure to
disclose a material fact, on the basis that that misrepresentation or
failure to disclose had been remedied prior to the award being made or
2.4 where the overpayment arose because of an error made by, or on
behalf of, the Secretary of State, on the basis that that error had not
been made.
1 SS A Act 92, s 71ZB(4); SS (Op & Rec) Regs, reg 8; 2 reg 16

D1082 Meaning of "overpayment period"

Overpayment period means the period over which the overpayment accrued (1).
1 SS (Op & Rec) Regs, reg 2

D1083 Meaning of "partner"

Partner means, where the person being referred to is a member of a couple, the
other member of the couple (1).
1 SS (Op & Rec) Regs, reg 2
Overpayments of UC housing costs

D1084 Meaning of "housing costs"

Housing
costs (1) means any amount included in an award of UC in respect of rent
payments as defined in legislation (2).
Note: ADM Chapters F2, F3 and F4 contain guidance on UC housing costs.
1 SS (Op & Rec) Regs, reg 2; 2 UC Regs, Sch 1, para 2

D1085 Change of dwelling D1078

The guidance in D1086 and D1087 applies when an overpayment of housing costs
has occurred in the following circumstances
1. the claimant has moved from their previous home (dwelling A) to another
home (dwelling B) or
2. they have been awarded housing costs for dwelling A to which they are no
longer entitled because they do not, or are treated as not, living there or
3. housing costs are paid to the same person in respect of the claimant's
occupation of dwelling B as it was paid in respect of dwelling A1.

1 SS (Op & Rec) Regs, reg 9(1)

D1086 D1085 D1087

When the DM is calculating the recoverable overpayment, they may at their
discretion, deduct an amount equal the claimant's entitlement to housing costs for
the assessment period in respect of dwelling B for the number of assessment
periods equal to the number of assessment periods during which the claimant was
overpaid housing costs for dwelling A1.

1 SS (Op & Rec) Regs, reg 9(2)

D1087 D1078 D1085 D1102

Where a sum has been deducted as in D1086, an equivalent sum is to be treated as
having been paid in respect of the claimant's entitlement to housing costs for
dwelling B for the number of assessment periods equal to the number of
assessment periods during which the claimant was overpaid housing costs for
dwelling A1.
1 SS (Op & Rec) Regs, reg 9(3)
CSM collected by the Department

D1088 UC

When the DM is calculating an overpayment of UC involving a case where CSM
payments are being collected by the Secretary of State for the whole or part of the
overpayment period, the amount of CSM collected is to be disregarded in the
calculation of the overpayment (1).
1 SS A Act 92, s 74A

Example

Louise is entitled to CSM of 150 per month. This is collected by DWP. She is
entitled to UC of 583.63 per assessment period. CSM is not treated as income for
the purposes of UC entitlement. A change of circumstances means that Louise is no
longer entitled to UC and an overpayment has been calculated. There is no provision
for reducing the amount of the overpayment on account of the CSM collected by
DWP. Therefore, the overpayment is the full amount of Louise's entitlement to UC.
However, although Louise would be liable to repay the full amount of overpaid UC,
the Secretary of State cannot recover the overpayment twice. Louise is required to
repay the gross amount of the UC overpayment less the amount of any CSM that
has been collected.

[D1089-D1100]

Recoverability of an overpayment

D1101 Introduction

The guidance in this section deals with
1. the meaning of a recoverable amount
2. the person(s) from whom an overpayment may be recovered
3. misrepresentation
4. failure to disclose
5. causation.

D1102 Meaning of "recoverable amount"

Recoverable
amount (1) means
1. subject to D1072 to D1087, the amount of any overpayment or
2. any other amount recoverable under specified legislation (2).
1 SS (Op & Rec) Regs, reg 3; 2 SS A Act 92, s 71ZE(3); s 71ZG; s 71ZH; s 115B(4); s 115C(4); s 115D(4)

D1103 Person(s) from whom an overpayment may be recovered

Overpayments of UC, JSA and ESA will normally be recoverable from the claimant.
This includes overpayments that have arisen as a result of the circumstances
described in D1007. However, in certain circumstances, overpayments may be
recovered from someone other than or, in addition to, the claimant. D1105 to D1111
gives guidance on deciding the person from whom an overpayment is recoverable
and in which circumstances (1).
1 SS (Op & Rec) Regs, reg 4(1)

D1104 Meaning of "payee"

Payee means the person to whom the overpayment has been paid (1).
1 SS (Op & Rec) Regs, reg 4(9)

D1105 Appointee or another person acting on the claimant's behalf D1103 D1110

Where the payee is a person (1) :
1.
appointed under specified legislation (2) to act on the claimant's behalf or :
2.
who the DM has directed that payment be made in accordance with specified
legislation (3)
then the overpayment is recoverable from the claimant and the payee.
1 SS (Op & Rec) Regs, reg 4(2); 2 UC, PIP, JSA & ESA (C&P) Regs, reg 57; 3 reg 58

D1106 Payments to Third Parties

Where the payee is a person to whom UC, JSA or ESA has been paid under
specified legislation (1), then, to the extent that the amount paid does not exceed the
amount payable to the payee under that legislation, the overpayment is recoverable
from the claimant instead of the payee (2).
Note: ADM Chapter D2 contains guidance on Third Party deductions.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6; 2 SS (Op & Rec) Regs, reg 4(3)
Overpayments of UC housing costs

D1107 Change of dwelling D1110

Where the DM is satisfied that an overpayment of UC housing costs has occurred
because of any change of the claimant's dwelling, then, if the claimant and the
payee are not the same person, the overpayment is recoverable from the claimant
and the payee (1).
1 SS (Op & Rec) Regs, reg 4(5)

D1108 Misrepresentation or failure to disclose D1110 D1131 D1151 D1170 D1191

Where the DM is satisfied that the overpayment of UC housing costs occurred
because of a misrepresentation of, or failure to disclose a material fact (in either
case, whether fraudulently or otherwise) by any person ("M"), then, if "M" and the
payee are not the same person, the overpayment is recoverable from "M" instead of
the payee (1).
Note: D1131 et seq gives guidance on misrepresentation and failure to disclose.
1 SS (Op & Rec) Regs, reg 4(6)

D1109 Meaning of "material fact"

Material fact means any fact which had it been known about and properly acted
upon by the DM would have prevented all or part of the overpayment in question. It
is a fact which is objectively material to the DM's decision to make an award of
benefit. A fact is material where, on disclosure, it would prompt further enquiries or
investigations by the DM in order to decide whether an existing entitlement continued
or required some change (1).
1 R(IS) 7/94

D1110 Other reasons D1111

Where the DM is satisfied that an overpayment of UC housing costs has occurred
for a reason other than as in D1107 or D1108, then, except where D1105 or D1111
applies in relation to the overpayment, if the claimant and the payee are not the
same person, the overpayment is recoverable from the claimant instead of the
1
payee .

1 SS (Op & Rec) Regs, reg 4(7)

D1111 D1103 D1110

For the purposes of D1110, this refers to overpayments that have occurred due to
the amount of the payment exceeding the amount of UC housing costs for which the
claimant is liable (1).
1 SS (Op & Rec) Regs, reg 4(8)

[D1112-D1130]

Misrepresentation

D1131 Introduction D1108

Where an overpayment of UC housing costs as in D1108 has occurred, either
1. the claimant
or
2. both members of a joint-claim couple or
3. the landlord
could be responsible for the misrepresentation that caused the overpayment.

D1132 What is misrepresentation

Misrepresentation occurs when inaccurate information is provided or information is
omitted. It can be done either innocently or deliberately (1) and can be by either by
word or action. It does not matter if the person providing the information believed it to
be correct - once it is shown to be incorrect, misrepresentation has occurred.
1 R(SB) 2/92

Example 1

Eric has claimed UC and states on his on-line claim form that he is liable for rent
amounting to 300.00 pw. He is awarded UC including an amount to cover his
housing costs. It is later discovered that Eric's rent liability is actually 200.00 pw.
This means that he has been overpaid an amount of housing costs. Eric's
declaration that his rent liability amounted to 300.00 pw is a misrepresentation.

Example 2

Ben is George's landlord. George is a UC claimant. In support of George's claim for
UC housing costs, Ben provides a copy of George's tenancy agreement which says
that he is liable for 300.00 pw in rent. UC housing costs are awarded and paid to
George on that basis. It is later discovered that George is in fact liable for rent of
250.00 pw resulting in an overpayment of housing costs. Ben's declaration that
George's rent liability is 300.00 pw is a misrepresentation.
Has misrepresentation occurred

D1133 Written statements

Whether a misrepresentation has occurred may depend on the precise wording of
any declaration that has been signed (1). In principle, a person can misrepresent a fact
that he is unaware of. However, if he declares that "as far as I know, the information
on this form is true and complete" (or something similar), there will only be a
misrepresentation if the person misstates or omits a fact which he knows about.

1 R(IS) 7/94

D1134

However, if the person simply declares that the information he has given is "true and
complete", any error or omission about the facts will be a misrepresentation. It will
not matter that the person did not know the fact in question.

D1135 Oral statements

If there is evidence of information provided orally by a person and that information is
found to be incorrect, the DM should regard the oral statement as a
misrepresentation. Oral information is commonly given to an interviewing officer and
recorded in a report. However, where the DM is relying on an oral statement and the
person appeals, the written record should be produced as evidence and the
interviewing officer may be called to the FtT hearing as a witness.

D1136 Circumstantial evidence of misrepresentation

If direct evidence of misrepresentation is unavailable, the DM may still consider
misrepresentation where there is circumstantial evidence to support this. However,
the DM :
1.
should not normally ask for direct evidence to be produced, or for
circumstantial evidence to be sought where it is not already available and :
2.
can usually decide recoverability on the alternative ground of failure to
disclose (see D1151 et seq) on the evidence already available.

D1137 Allegation of non-responsibility

A claimant or their representative may state that an incorrectly completed form with
a signed declaration is not a misrepresentation because the claimant completing the
form did not know what they were doing (1). This may happen where someone should
have been appointed to run that claimant's affairs and the claimant completed the
forms in question. That claimant may not be held responsible for the completion.

1 R(IS) 4/06

D1138

Where it is claimed that a claimant is not responsible, the DM should consider the
following points (1) :
1.
Non-responsibility is limited to those who are blind, illiterate or do not fully
understand a particular form they have signed. This may be caused by poor
education, illness or mental incapacity and can be temporary or permanent. :
2.
Poor education, illness or mental incapacity alone is not sufficient to show
non-responsibility. People are expected to take reasonable steps to
understand what they sign. :
3.
The burden of proof rests with persons who contend that they are not
responsible. Those who are merely content to sign without taking the trouble
to find out the general effect of the form cannot claim to be non-responsible. :
4.
People may contend that they are not responsible because, having signed the
form, they believe it had one effect when in fact its effect was quite different.
They must show that they had taken steps or been given information which
gave grounds for their belief and there was a radical, serious or very
substantial difference between what they signed and what they thought they
were signing. :
5.
People are responsible where they were merely mistaken as to the legal effect
of the form, whether the mistake was there own or that of an advisor.
1 Saunders v. Anglia Building Society [1971] AC 1004 HoL

[D1139-D1150]

Failure to disclose

D1151 Introduction D1136

Where an overpayment of UC housing costs as in D1108 has occurred, either
1. the claimant
or :
2.
both members of a joint-claim couple or
3. the landlord
could be responsible for the failure to disclose that caused the overpayment.
DM's requirements

D1152 Information and evidence in connection with a claim

The DM may require a claimant or where applicable, a landlord, to provide
information or evidence in connection with a claim for UC that may include in the
calculation of an award, an amount in respect of housing costs (1).
1 UC, PIP, JSA & ESA (C&P) Regs, reg 37(1) to (6)

D1153 Information and evidence in connection with an award

The DM may require a person to provide information or evidence in such a way and
at such times as the DM may determine, in connection with the payment of UC
housing costs that have been awarded (1).
1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(1) to (3)

D1154 Notification of any change of circumstances D1155

A person must notify the DM of any change of circumstances which that person
might reasonably be expected to know might affect (1) :
1.
continuing entitlement to UC housing costs or :
2.
the amount of UC housing costs awarded or :
3.
the payment of UC housing costs
as soon as reasonably practicable after the change occurs.

1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(4)

D1155

A notification as in D1154 must be given (1) :
1.
in writing or by telephone (unless the DM decides that notice must be given in
another way or accepts notice given other than in writing or by telephone) or :
2.
in writing where the DM requires written notice (unless the DM accepts notice
given other than in writing)
and must be sent or delivered to, or received at, the appropriate office.
Note: ADM Chapter A2 gives guidance on the meaning of appropriate office.
1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(5)

D1156 Knowledge of the material fact

Persons have a duty to disclose
1. material facts that are known to them and
2. material facts which they ought to know by making reasonable enquiries (1).
Note: The burden of enquiry placed upon them, varies from case to case depending
on the nature of the material fact and how easily they could have discovered it.
1 R(SB) 28/83

D1157 Discharging the duty to disclosure D1164 D1169

In order for a person to discharge their duty to disclose, a disclosure must
1. be of the material fact itself and
2. be made in relation to the claim for UC housing costs and
3. be made in the manner and to the place instructed by the DM (1).

1 R(SB) 54/83; R(SB) 15/87; Hinchy v Secretary of State for Work and Pensions; R(IS) 7/05

D1158

Disclosure means "to reveal"1 a material fact which, as far as the claimant (the
discloser) knows, is unknown to the person who is owed the disclosure (2) (i.e. the
DM).
1 Hinchy v Secretary of State for Work and Pensions EWCA [2003] Civ 138; R(IS) 7/05; 2 R(SB) 15/87

D1159 Effect of a failure to disclose

Where a person has not complied with issued instructions and therefore fails to
disclose information or notify a change of circumstances, any resulting overpayment
of UC housing costs will be recoverable (1). The recoverable amount is limited to the
amount of benefit that would not have been paid if the person had actually disclosed
at the correct time. However, the DM must ensure that the person was under a duty
to disclose (2).
1 SS A Act 92, s 71ZB(1) & (2); 2 UC, PIP, JSA & ESA (C&P) Regs, regs 37 & 38

D1160 When a failure to disclose arises

A failure to disclose arises
1. when a change of circumstances occurs between written statements of
circumstances, e.g. the on-line claim form and a review form, and the change
is not reported or
2. where a written statement is inaccurate or incomplete.

D1161 Clear and unambiguous duty to disclose D1165

A person must disclose a material fact where they (1)
1. have been clearly and unambiguously advised of the need to disclose the fact (2)
and
2. were aware of the fact or
3. ought to have been aware of the fact by making reasonable enquiries (3).
Note: The burden of enquiry placed upon the person varies from case to case
depending on the nature of the material fact and how easily they could have
discovered it.
1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(1) to (3); 2 R(IB) 4/07; R(IS) 9/06; 3 R(SB) 28/83

D1162 Instructions to notify

Instructions to persons about the notification of information are usually given in on
line claim forms, notes that accompany claim forms and leaflets. These can be
accepted as sufficient to inform the person of their obligation to disclose any change
of circumstances as listed therein. However, the instructions must be clear and
unambiguous (1).

1 R(IS) 9/06; R(IB) 4/07

D1163

The person should comply with the instructions given to them. They are not entitled
to form views about how the benefit system works or what knowledge the relevant
DM might have (1). As claim forms and leaflets are periodically updated, the DM will
need to ensure that they have a copy of the relevant version when looking at what
instructions the person has been given and when.
1 Hinchy v. Secretary of State for Work and Pensions [2005] 1 WLR 967; R(IS) 7/05

D1164 Modification of instructions

Notwithstanding the person's instructions regarding their duty to disclose as
discussed in D1157, it is possible for those instructions to be modified by an officer
acting on behalf of the Secretary of State. The effect of this modification is that the
claimant no longer has to do all or part of what they were originally required to do (1). A
modification can be done orally or in writing and where a duty to disclose has been
modified, the DM should consider what the modified duty was. This should be based
on what was said to the claimant. For example :
1.
if the claimant was, in effect, told that further disclosure was unnecessary,
there will be no duty to disclose from that point onwards. It follows that there
will be no failure to disclose from then on or
2. if the claimant was not, in effect, told that further disclosure was unnecessary,
the DM should consider what the claimant was, in effect, still required to do.
The DM should consider which parts of the previous instructions were
changed and which were not changed. The DM should then determine what
the claimant still had to disclose, and when, how and to whom it had to be
disclosed. This will form the claimant's new duty to disclose from the date of
modification onwards. There will be a failure to disclose only if the claimant
does not comply with the new duty.
1 R(A) 2/06

D1165 Additional duty to disclose D1166

In addition to the duty described in D1161, the person also has a duty to disclose if
1. they were aware of the material fact and
2. the fact represented a change of circumstances and
3. it was reasonable to expect the person to know that their benefit might be
affected by the change in circumstances and
4. they did not report the change as soon as reasonably practicable after it
occurred (1).

1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(4)

D1166

A notification as in D1165 must be given (1)
1. in writing or by telephone (unless the DM decides that notice must be given in
a particular way or accepts notice other than in writing or by telephone) or
2. in writing where the DM requires written notification (unless the DM decides to
accept notice other than in writing)
and must be sent or delivered to, or received at, the appropriate office.
Note: ADM Chapter A2 gives guidance on the meaning of appropriate office.
1 UC, PIP, JSA & ESA (C&P) Regs, reg 38(5)

D1167 Reasonably to be expected

The test is what could reasonably be expected of the person concerned, having
regard to their circumstances. It is not necessary for the person to understand the
actual impact of the change. The DM must look at the information given to the
person about
1. the conditions of entitlement to UC housing costs and
2. why it had been decided that the person satisfied those conditions and thus
became entitled to UC housing costs and
3. what changes the person may have been told to notify.

D1168 Timing of the disclosure

Disclosure has to be made as soon as reasonably practicable to be effective.
However, there is no requirement for a person who is aware of a change that is
about to take place, to notify the relevant office in advance (1).
1 R(SB) 3/81

D1169 Person alleges that disclosure made

Where a person alleges that the material fact was disclosed orally or in writing, but
no trace of the disclosure can be found, the DM should decide whether disclosure
was actually made. If the DM decides that disclosure :
1.
was not made, they should consider recoverability of the overpayment in the
normal way or
2.
was made, the DM should consider whether the disclosure was sufficient as in
D1157.

D1170 Disclosure by landlord

In the case of an overpayment as in D1108, the duty to disclose which is placed on
the claimant(s) may also be placed on the landlord. Where recovery is sought from
the landlord, the DM must be able to show that the landlord has a legal duty to
disclose.

[D1171-D1190]

Causation

D1191 General

For an overpayment as in D1108 to be recoverable, the DM must establish whether
the overpayment has been caused by a misrepresentation of or failure to disclose a
material fact. If it has, then the necessary causal link has been established and the
DM is entitled to recover the overpayment (1).
1 R(SB) 3/81; R(SB) 21/82; R(SB) 15/87

D1192 Causation and misrepresentation

To determine whether an overpayment has been caused by a misrepresentation, it is
necessary to consider whether, at any of the stages described at D1193 below,
correcting the misrepresentation would have made any difference to the
overpayment.

D1193 D1192

When the DM is considering whether the necessary causal link exists, it is useful to
establish the following
1. when, and what, if any, information was received by the Secretary of State
and
2. what, if anything, happened to that information after it was received by the
Secretary of State in the office where disclosure should have been made and :
3.
what, if any, action was taken by the Secretary of State in response to
receiving that information.

D1194 Causation and failure to disclose

To determine whether an overpayment has been caused by a failure to disclose a
material fact, it is necessary to consider whether the overpayment would still have
occurred if there had been proper disclosure of that fact. The DM should note that
1. if the overpayment would not have occurred, if there had been proper
disclosure of the material fact, a failure to make that disclosure is a cause of
the overpayment, whereas
2. if the overpayment would have occurred, even if there had been proper
disclosure of the material fact, a failure to make that disclosure is not a cause
of the overpayment.

D1195 Is there a causal link between the failure to disclose and the overpayment D1196

Where there has been a failure to disclose a material fact, the DM should consider
whether the necessary causal link with the overpayment exists by establishing the following
1. when, and what, if any, information about the material fact was received by
the Secretary of State and :
2.
what, if anything, happened to that information after it was received by the
Secretary of State in the office where proper disclosure should have been
made and :
3.
what, if any, action was taken by the Secretary of State in response to
receiving that information.

D1196

If the material fact which the person should have provided has, in fact, been
provided by someone else, that does not necessarily mean that the person's failure
to disclose is not a cause of the overpayment. The DM should still establish whether,
at any of the stages at D1195 1., 2. and 3., disclosure from the person would have
prompted the office to which disclosure should have been made, to take action that
would have brought the overpayment to an end sooner than was the case.

D1197

If, at any stage, it can be shown that the overpayment would have continued
regardless of the disclosure of the material fact, then the causal link is broken. The
recoverable amount should not therefore include any amount overpaid after the date
on which that link is broken.

D1198 Burden of proof

It is for the DM to show that the person's failure to disclose was a cause of the
overpayment. The DM should have regard to all available records and any
background knowledge about office procedures and practices that the DM or other
officers hold. If it is not possible to determine what would probably have happened if
the person had made the required disclosure (eg. because the DM cannot establish
what happened to a letter from a third party that contained the required information),
the overpayment will not be recoverable.

D1199 Number of causes for an overpayment

It is possible for there to be more than one cause for an overpayment. For example,
the person may have failed to disclose a material fact but argues that the
Department failed to take reasonable steps on its own initiative that would have
brought the material fact that had to be disclosed, to the Department's attention.
Both failures helped bring about the overpayment. However, providing that one of
the causes was the person's failure to disclose, then the causal link is not broken (1).
1 Duggan v CAO; R(SB) 13/89

D1200 When is the causal link not broken

Examples of when the causal link is not broken include:
1. wrong assumptions are made about a person's circumstances which give rise
to an overpayment or
2. administrative duties are performed negligently in some way, eg. a failure to
link two cases in the same household or
3. the discovery of the material fact by an office other than the one to which
disclosure must be made (1) or
4. receipt by the office to which disclosure must be made, of information that
does not allow a revision or supersession to be done, eg. receipt of a letter
alleging fraud, but which does not contain sufficient detail to identify the
relevant claimant or
5. the discovery of information that might allow revision or supersession but the
details of which must be put to the person first, eg. the receipt of a General
Matching Service (GMS) printout.
1 Morrell v Secretary of State for Work and Pensions; R(IS) 6/03

[D1201-D1220]

Adjustments

D1221 Introduction

This section gives guidance on preventing duplicate payments, specifically :
1.
bringing POAOB (formerly known as interim payments) into account and :
2.
abatement and UC.
Payments on account of benefit

D1222 Introduction

Under certain conditions (1) DMs may make discretionary payments of UC, JSA or
ESA. These are called POAOB.
Note: Operational guidance dealing with the circumstances when a POAOB may be
made, how much may be paid and repayment schedules is available.
1 SS A Act 92, s 5(1)(r); SS (POAOB) Regs, regs 3 to 9

D1223 Bringing payments on account of benefit into account D1224

Where it is practical to do so and where a POAOB was made in anticipation of an
award of benefit, it should be brought into account by means of an offset against the
sum payable to the claimant under the award (1).

1 SS A Act 92, s 71ZG; SS (POAOB) Regs, reg 10(a)

D1224

Whether or not made in anticipation of an award, a POAOB which is not offset as in D1223is to be deducted from :
1.
the sum payable to the claimant under the award of benefit on account of
which it was made or :
2.
any sum payable under any subsequent award of that benefit to the claimant (1).
1 SS (POAOB) Regs, reg 10(b)

[D1225-D1240]

Abatement and UC

D1241 Introduction

The guidance in this section concerns the recovery of UC if it would not have been
paid if :
1.
a prescribed income or :
2.
a prescribed payment
had been paid on the prescribed date.
Prescribed income

D1242 General D1243

The DM is entitled to recover any amount of UC that would not have been paid if the
prescribed income had been made on the prescribed date (1).
1 SS A Act 92, s 71ZB(5)

D1243 What is prescribed income D1244

For the purposes of D1242, prescribed income is income that is to be taken into
account (1) in accordance with specified legislation (2).
Note: ADM Chapters H3, H4 and H5 contain guidance on income for the purposes
of UC.
1 UC Regs, Part 6, Chapters 2 & 3; 2 SS (Op & Rec) Regs, reg 6(1)

D1244 What is the prescribed date

The date on which income as referred to in D1243 is to be treated as paid is :
1.
where the payment of income is made in respect of a specific day or period,
that day or the first day of that period or :
2.
where the payment of income is not made in respect of a specific day or
period, the day or the first day of the period to which it is fairly attributable (1).
1 SS (Op & Rec) Regs, reg 6(2)

Example

Sam has been awarded UC from and including 5 November. He has been paid
450.00 for the monthly assessment period running from 5 November to 4
December. On 6 December Sam receives a letter from his former employer stating
that he is entitled to an occupational pension amounting to 100.00 per month
beginning on 11 November. Had the pension been paid without delay from 11
November, Sam's UC entitlement would have been 350.00 per monthly
assessment period. The amount of UC to be recovered from Sam's next UC
payment is 100.00 (i.e. 450.00 (the amount that Sam was paid) minus 350.00
(the amount that Sam should have been paid)).
Prescribed payment

D1245 General

The DM is entitled to recover an amount of UC that would not have been paid if a
prescribed payment had been paid at the prescribed time. There are 2 methods of
recovery. These are :
1.
abatement of arrears of UK benefit or :
2.
receipt from arrears of EC benefits.

D1246 Abatement of arrears of UK benefit D1247 D1248

The amount of the prescribed payment of a UK benefit is reduced by the amount
calculated in D1249 where (1)
1. the prescribed payment is not made on or before the prescribed date and
2. it is decided that an amount of UC has been paid that would not have been
paid if the prescribed payment had been made at the prescribed time.
1 SS A Act 92, s 74(2)

D1247 What is a prescribed payment

For the purposes of D1246, prescribed payments are (1) :
1.
any benefit under specified legislation (2) (except any grant or gratuity or WPT (3))
2. PIP (4)
3. CHB (5) :
4.
WDP or WWP which is not a gratuity and any payment which the DM accepts
as similar to such a pension (6) :
5.
an allowance paid under the Job Release Act (7) :
6.
a training allowance (8) :
7.
receipts from EC benefits (9) :
8.
any BB apart from BPT (10)
9. JSA (11)
10. Financial Assistance Scheme payments (12)
11. ESA (13).
1 SS (POR) Regs, reg 8(1); 2 reg 8(1)(a); SS CB Act Parts II to V; 3 R(SB) 28/85;
4 SS (POR) Regs, reg 8(1)(aa); 5 reg 8(1)(b); 6 reg 8(1)(d); 7 reg 8(1)(e); 8 reg 8(1)(f);
9 reg 8(1)(g); 10 reg 8(1)(i); 11 reg 8(1)(j); 12 reg 8(1)(k); 13 reg 8(1)(l)

D1248 What is the prescribed date

For the purposes of D1246, the prescribed date is the date the receipt of, or
entitlement to the prescribed payment, would have to be notified to the DM in time
for it to be taken into account in the UC award (1). This means that an amount can be
recovered if :
1.
the prescribed payment has not been made and :
2.
the DM was notified of entitlement to the prescribed payment and the UC
award could not be revised or superseded.
1 SS (POR) Regs, reg 8(2); R(SB) 28/85

D1249 Calculation of amount to be recovered D1246

The amount to be recovered should be worked out by comparing the amount of
1. UC paid
and :
2.
UC which would have been paid if the prescribed payment had been made at
the prescribed time.
Receipts from arrears of EC benefits

D1250 General D1251

Where :
1.
a payment of EC benefit (made under the legislation of any Member State
other than the UK) is not made on or before the prescribed date for the
payment and :
2.
an amount of UC has been paid which would not have been paid
the DM is entitled to receive, from the EC benefit, the amount as in 2.1.
Note: DMG Chapter 07 Part 1 contains a list of Member States.
1 SS A Act 92, s 74(2); SS (POR) Regs, reg 8(1)(g)

D1251 What is the prescribed date

For the purposes of D1250, the prescribed date is the date by which receipt of, or
entitlement to the EC benefit would have to be notified to the DM for it to be taken
into account in the award (1). This means that receipt from an EC benefit is possible
only where :
1.
the EC benefit has not been paid and :
2.
if it were to be paid, the UC award decision would not be revised or superseded
to take it into account.
1 SS (POR) Regs, reg 8(2)

D1252 Calculation of amount to be recovered

Where IPC is aware that UC is in payment to the claimant, they ask for arrears
payments of EC benefits to be paid directly into the DWP's account at the Bank of
England. The bank deducts charges and commission before notifying the DM of :
1.
the net sterling amount due to the claimant and :
2.
the period for which it is payable.
When IPC receive this information, the UC DM will be asked to determine the
amount of EC benefit they are entitled to receive from the sum due to the claimant.

D1253 Conversion of foreign currency

When working out the amount of EC benefit that the DM is entitled to receive, they should
1. use the sterling figure obtained when the EC benefit was converted and
2. allow any banking charges or commission (if not already deducted)1.
1 SS (POR) Regs, reg 10

D1254 Recovery otherwise than by way of abatement

Where an amount could have been recovered by way of abatement but has not
been so recovered, the DM may recover it otherwise than by way of abatement from
the person to whom it was paid (1).
1 SS A Act 92, s 74(4)(a)

[D1255-D1270]

Civil Penalties

D1271 Introduction

The guidance in this section relates to the imposition of a CPen where there is an
overpayment of UC, new style JSA or new style ESA. The CPen was introduced on
01.10.12 and is part of the strategy to reduce fraud and error within the benefit
system. A CPen (1) can be imposed in cases where
1. there is
no benefit fraud involved and
2. there is a recoverable overpayment amounting to 65.01 or more and
3. the overpayment period begins on, or falls wholly after, 29.04.13.
Note: CPens cannot be imposed in relation to overpayments arising solely from
official error.
1 WR Act 12, s 116

D1272 Prescribed amount of a Civil Penalty

The prescribed amount of a CPen is 50.001.
1 SS (CPen) Regs, regs 2, 3 & 4
When to impose a Civil Penalty

D1273 Negligently makes an incorrect statement or representation or negligently gives incorrect information or evidence D1274 D1300

The DM may impose a CPen where they are satisfied that :
1.
a person has negligently made an incorrect statement or representation or
has negligently given incorrect information or evidence (1)
1.1 in or in connection with a claim for a relevant social security benefit (2) or
1.2 in connection with an award of a relevant social security benefit (3) and :
2.
the person fails to take reasonable steps to correct the error (4) and :
3.
the error results in an overpayment (5) and :
4.
the person has not, in respect of the overpayment, been (6)
4.1 charged with an offence or
4.2 cautioned
or
4.3 given a notice under relevant legislation (7).
1 SS A Act 92, s 115C(1)(a); 2 s 115C(1)(a)(i); 3 s 115C(1)(a)(ii); 4 s 115C(1)(b);
5 s 115C(1)(c); 6 s 115C(1)(d); 7 s 115A

D1274 DM's consideration

Once it is established that the claimant has either :
1.
made an incorrect statement or representation or :
2.
given incorrect information or evidence
and which resulted in an overpayment, the DM is required to decide if a CPen should
be imposed in accordance with the circumstances described in D1273.

D1275 D1004

Before imposing the CPen, the DM must establish that the claimant :
1.
has acted negligently and :
2.
has not taken any reasonable steps to correct the error that lead to the
overpayment.

D1276 Meaning of "negligently"

DMs should note that negligently should be taken to mean acting carelessly, not
paying sufficient attention to the task in hand or disregarding the importance of what
is required to be done in relation to the claim or an award.

D1277

In some cases, the DM may decide that the claimant has made a simple mistake. In
these circumstances it may not be appropriate to impose a CPen. However, much
will depend on the individual circumstances of the case.

D1278 D1282

In deciding whether the claimant has acted negligently, the need for further enquiries
(either by telephone or letter) and the precise nature of those enquiries will depend
on the circumstances of the case. Where further evidence is required, it will usually
be sufficient to simply ask the claimant to explain why they acted as they did. It may
be useful to preface the question with a description of the claimant's actions that
have resulted in the overpayment.

D1279 Meaning of "reasonable steps"

DMs should note that taking reasonable steps means taking sensible or practicable
actions or interventions to correct an error.

D1280 D1282

In deciding whether the claimant took any reasonable steps to correct the error, the
need for further enquiries (either by telephone or letter) and the precise nature of
those enquiries will depend on the circumstances of the case. However, it will usually
be sufficient to simply ask the claimant to describe what, if any, steps they took. If it
has not already been done, again it may be useful to preface the question with a
description of the claimant's actions that have resulted in the overpayment. It should
be noted that if the claimant can show that they took reasonable steps, then they will
avoid the imposition of a CPen even if they acted negligently in the first instance.

D1281 Claimant alleges reasonable steps were taken

Despite the fact that an overpayment has occurred, sometimes a claimant will say
that certain steps were taken. In such cases, the DM may need to investigate the
reasonableness of these steps before deciding whether it is appropriate to impose a
CPen.

D1282 No response to written enquiries

Sometimes no response will be received to written enquiries made to the claimant as
described in D1278 and D1280. In such cases, DMs should note that the mere fact
that there is no response does not constitute sufficient grounds for imposing a CPen.
The DM should consider what evidence they do have before them before deciding
whether it is appropriate to impose a CPen.
Note: DMs should refer to operational guidance relating to time limits for responding
to enquiries.

D1283 Meaning of "overpayment"

Overpayment (1) is defined in specified legislation (2).
1 SS A Act 92, s 115C(6); 2 s 115A(8)

D1284 Meaning of "relevant social security benefit"

Relevant social security benefit (1) is defined in specified legislation (2).
1 SS A Act 92, s 115C(6); 2 s 121DA(7)

Example

Lucy has been receiving UC since May 2013. After a short period of receiving
benefit, she returns to full time employment. The Benefit Centre receives information
that Lucy has capital which came into her possession in November 2012. A check of
Lucy's claim form shows that she did not declare that she held this capital. Had she
done so, it would have affected her entitlement to UC. Lucy is shown a copy of her
claim form and asked why she did not declare the capital when making her claim
and to describe what steps she has taken to correct this error. Lucy explained that
she was in a rush when she filled the claim form in and didn't realise she had made
the error so she didn't take any steps to correct it. The DM decides that the
overpayment has arisen due to Lucy's negligence at the time of making her claim
and that she has not taken any reasonable steps to correct the error. A CPen is
imposed on Lucy.

D1285 Fails to provide information D1286 D1300

A
CPen (1) may be imposed on a person by the DM where (2) :
1.
the person, without reasonable excuse, fails to provide information or
evidence in accordance with requirements imposed on the person by the
appropriate authority in connection with a claim for, or an award of, a relevant
social security benefit (3) and :
2.
the failure results in the making of an overpayment (4) and :
3.
the person has not, in respect of the overpayment, been (5)
3.1 charged with an offence or
3.2 cautioned or
3.3 given notice under relevant legislation (6).
1 SS (CPen) Regs, reg 3; 2 SS A Act 92, s 115D(1); 3 s 115D(1)(a); 4 s 115D(1)(b);
5 s 115D(1)(c); 6 s 115A

D1286 DM's consideration

Once it has been established that a claimant has failed to provide information or
evidence, the DM is required to decide whether there is a reasonable excuse for that
failure and if not, they must impose a CPen in accordance with the circumstances
described in D1285.

D1287 Meaning of "reasonable excuse"

DMs should note that having a reasonable excuse means having a credible reason
or justification for a person failing to do what was required of them, or for doing it
late.

D1288 D1289

In deciding whether the claimant has a reasonable excuse, the need for further
enquiries (either by telephone or letter) and the precise nature of those enquiries will
depend on the circumstances of the case. However, it will usually be sufficient to
simply ask the claimant to describe why they failed to provide the required
information or evidence or, if applicable, why they provided it late. It may be useful to
preface the question with a description of the failure that has resulted in the
overpayment.

D1289 No response to written enquiries

Sometimes no response will be received to written enquiries made to the claimant as
described in D1288. In such cases, DMs should note that the mere fact that there is
no response does not constitute sufficient grounds for imposing a CPen. The DM
should consider what evidence they do have before them before deciding whether it
is appropriate to impose a CPen.
Note: DMs should refer to operational guidance relating to time limits for responding
to enquiries.

D1290 Meaning of "appropriate authority"

Appropriate authority means the Secretary of State (1).
1 SS A Act 92, s 115C(6)

Example 1

Mustafa makes a claim for new style JSA. He declares that he receives a private
pension and explains that he expects to receive an increase in the amount of that
pension in the near future. Mustafa is awarded new style JSA taking into account his
current rate of pension. Mustafa is told to advise the Benefit Centre when the
pension increase comes into effect. Three months later, a routine check is
performed and a member of staff notices Mustafa's statement about the expected
pension increase. The DM writes to Mustafa to ask for details of the pension
increase. Mustafa reveals that the pension did in fact increase and this has resulted
in an overpayment of new style JSA. When asked why he didn't provide the relevant
information at the right time, Mustafa explained that he had simply forgotten. The
DM decides that, without reasonable excuse, Mustafa failed to provide information in
connection with the award of new style JSA. A CPen is imposed on Mustafa.

Example 2

Liz makes a claim for UC and declares that she receives a private pension. She
provides further information that she expects to receive an increase in the amount of
her private pension in the near future. Liz is awarded UC taking account of her
current rate of pension. Liz is told to send in evidence of her new rate of pension
when received. However, when the increase comes into effect, she couldn't get the
evidence because it was at her former marital home. Liz had fled from her marital
home and it was unsafe for her to return to get the evidence. As a result, Liz had to
write to the pension company for copies of relevant papers and this took longer than
expected. By the time Liz sent the evidence to the Benefit Centre, she had been
overpaid UC. The DM determined that Liz had a reasonable excuse for the delay in
notifying the pension increase. A CPen is not imposed on Liz.

D1291 Fails to notify a change of circumstances to the appropriate authority D1292 D1300

A
CPen (1) may be imposed on a person by the DM where (2)
1.
the person, without reasonable excuse, fails to notify the appropriate authority
of a relevant change of circumstances in accordance with requirements
imposed on the person under relevant legislation (3) and
2. the failure results in the making of an overpayment (4) and
3. the person has not, in respect of the overpayment, been (5)
3.1
charged with an offence or
3.2
cautioned or
3.3
given a notice under relevant legislation (6).
1 SS (CPen) Regs, reg 4; 2 SS A Act 92, s 115D(2); 3 s 115D(2)(a); UC, PIP, JSA & ESA (C&P)
Regs, reg 38; JSA Regs 13, regs 31 to 33; 4 SS A Act 92, s 115D(2)(b); 5 s 115D(2)(c); 6 s 115A

D1292 DM's consideration

If a CPen is to be imposed in the circumstances described in D1291 the DM must
first be satisfied that the claimant has been made aware of their obligation to report a
relevant change of circumstances. In doing so, it may be necessary, particularly in
the event of an appeal to the FtT, to identify when the claimant was made aware of
their obligation and how they were made aware of it, i.e. by the issue of an
information leaflet or by signing a declaration to that effect on the claim form, on a
certain date.

D1293 D1295

Once the DM is satisfied that the claimant was under an obligation to report a
relevant change of circumstances, they must then consider their reasons for failing
to report the change as required. The need for further enquiries (either by telephone
or letter) and the precise nature of those enquiries will depend on the circumstances
of the case. However, it will usually be sufficient to simply ask the claimant to explain
why they have failed to report the change as required. It may be useful to preface the
question with a description of the requirement to notify that has been placed on the
claimant and how and when it was placed.

D1294 Claimant denies being under an obligation to report or maintains that they have reported as required

Where a claimant denies being under an obligation to report or maintains that they
have reported the relevant change of circumstances as required, the DM will need to
investigate the circumstances further before deciding whether it is appropriate to
impose a CPen.

D1295 No response to written enquiries

Sometimes no response will be received to written enquiries made to the claimant as
described in D1293. In such cases, DMs should note that the mere fact that there is
no response does constitute sufficient grounds for imposing a CPen. The DM should
consider what evidence they do have before them before deciding whether it is
appropriate to impose a CPen.
Note: DMs should refer to operational guidance relating to time limits for responding
to enquiries.

D1296 Meaning of "relevant change of circumstances"

Relevant change of circumstances (1) means a change of circumstances which affects
entitlement to any benefit, other payment or advantage under relevant social security
legislation (2).
1 SS A Act 92, s 115D(6); 2 s 121DA(7)

Example 1

Kate was awarded UC and given information about the requirement to report
changes of circumstances straightaway to the Benefit Centre. The Benefit Centre
conducts a telephone review with Kate on 04.04.14 reminding her of her obligations
to report relevant changes of circumstances which she signed on her claim form. At
this point, Kate mentions that she has been abroad visiting relatives from 17.12.13 to
31.01.14 but that she spoke to Steve at the Benefit Centre on 13.12.13 about this.
Steve is identified and a record of his conversation with Kate is found, but no action
taken. Consequently, an overpayment of UC occurred. The DM decides that Kate
had reported the change in accordance with the instructions. A CPen is not imposed
on Kate.

Example 2

Helen was awarded new style JSA and given information about the requirement to
report relevant changes of circumstances straightaway to the Benefit Centre. One of
those changes relates to starting full time work. The Benefit Centre conducts a
telephone review with Helen on 04.04.14 reminding her of her obligations to report
changes. At this point, Helen mentions that she has done some full time work from
17.12.13 to 31.01.14. Helen is informed that the Benefit Centre holds no record of
the work having been done and an overpayment of new style JSA has occurred.
Helen explains that when she started work she asked her boss to inform the Benefit
Centre on her behalf. When asked why she chose this course of action instead of
informing the Benefit Centre herself in accordance with her obligation to report
changes of circumstances, Helen said that she thought it would be easier for her
boss to report the change when she received her first wage. The DM decides that
Helen has not reported the change in accordance with her obligations and that she
has no reasonable excuse for her actions. A CPen is imposed on Helen.

D1297 On whom to impose a Civil Penalty D1298

Unless D1298 applies, a CPen (1) may be imposed by the DM (2) :
1.
in any case, on the person (3) who made the incorrect statement, who failed to
provide information or who failed to notify the change of circumstances or :
2.
in a case where person A is making, or has made, a claim for the benefit for a
period jointly with person B, on B instead of A4.
1 SS (CPen) Regs, reg 2; 2 SS A Act 92, s 115C(2); 3 s 115C(2)(a); 4 s 115C(2)(b)

Example

Paul (person A) makes a claim to UC for himself and his wife Linda (person B). Paul
declares that they have 3 joint bank accounts with total capital of 6,000. Two
months after payment of UC commences, a further unused joint bank account
surfaces in the house and which was not included in the original claim information.
However, it means that they have been overpaid UC, due to the additional savings
held within the unused bank account. Linda notifies the local office of the error. Both
Paul and Linda are considered to be jointly negligent for the wrong information, even
though Paul (person A) completed the original claim form. This regulation allows for
the CPen to be imposed upon either person A or person B, where the claim has
been made jointly. In this case, the DM may impose the CPen on either Paul or
Linda. In the event, the CPen is imposed on Paul as he is the current benefit payee.

D1298 Exception D1297

D1297 does not apply if person B was not, and could not reasonably be expected to
have been, aware that person A had :
1.
negligently made the incorrect statement or representation or :
2.
given the incorrect information or evidence (1).
1 SS A Act 92, s 115C(3)

Example

Philip (person A) makes a claim to UC for himself and his wife Ann (person B). Philip
declares Ann's part time earnings from the outset of their claim. Although Ann told
Philip that her earnings have increased due to a recent pay rise, Philip forgets this
and does not declare the correct amount, instead declaring the old amount of
earnings. Afterwards, Philip realises his error and notifies the local DWP office. Ann
was completely unaware that Philip had made this error due to him not paying
sufficient attention to recording the correct amount. This regulation allows for a CPen
not to be imposed upon person B (in this case, Ann) if they had not and could not
reasonably be expected to have been, aware that person A (in this case, Philip) had
been negligent. The DM considers that as Ann could not have reasonably been
expected to know that Philip had entered the wrong amount of (Ann's) earnings, the
CPen cannot be imposed on Ann. However, a CPen is imposed on Philip.

D1299 Joint-claim couples

Where a person has made a joint-claim for benefit and either or both of them fail to
disclose information (1) or a relevant change of circumstances (2), where they have both
been advised of their obligation to do so, only one CPen may be imposed in respect
of the same overpayment (3).
1 SS A Act 92, s 115D(1); 2 s 115D(2); 3 s 115D(3)

Example

Cathy makes a claim to UC for herself and her partner, Annie. UC is awarded from
23 October. Annie accepts an offer of employment abroad and leaves the country on
2 December. Cathy does not report the change until 2 January, explaining that the
reason for the delay was her distress at Annie accepting employment abroad. She
also wrongly reports that Annie left the country on 23 December. Although Annie left
the country on 2 December both members of the joint-claim had a duty to report the
change. The DM determines that both are liable and the CPen is imposed jointly on
Cathy and Annie.

D1300 Appointee cases

Where an appointee is in place and that person has acted negligently as in D1273 or
failed to disclose information as in D1285 or failed to report a relevant change of
circumstances as in D1291 and an overpayment has resulted, the CPen will be
imposed on (and recovered from) the appointee. This will be the case, even though
the overpayment may be recoverable from the claimant.

D1301 Recovery of Civil Penalty S2412

A CPen imposed under specified legislation (1) is recoverable by the appropriate
authority from the person on whom it is imposed (2) in the same way as an
overpayment.
Note: Responsibility for the recovery of a CPen rests with Debt Management.
1 SS A Act 92, s 115C(2); s 115D(1) & (2); 2 s 115C(4); s 115D(4)

[D1302-D1350]

Recoupment - payments under the Employment Protection Acts

D1351 Introduction

The Secretary of State can recover UC from certain Employment Tribunal awards (1).
Recovery is made from the claimant's employer who deducts it from the amount
awarded by the Employment Tribunal before payment. This is called recoupment.
1 Employment Tribunals Act 96; EP (Recoupment of Benefits) Regs, reg 2(1)

D1352 Recoverable awards D1359 D1359

Recovery can be made from the following Employment Tribunal awards
1. guarantee
payments (1) :
2.
guarantee payments under a collective agreement or wages order for which
an exemption order has been made (2) :
3.
remuneration on suspension on medical grounds (3) :
4.
unfair dismissal payments under an order for reinstatement or re-
engagement, or an award of compensation (4) :
5.
unfair dismissal payments under an interim order for reinstatement or re-
engagement, or an order for the continuation of the contract of employment or
for compensation (5) :
6.
remuneration in pursuance of a protective award (6) :
7.
payments under an order made following the employer's failure to pay
remuneration due to the employee under a protective award (7).
1 ER Act 96, s 28; 2 s 35; 3 s 64; 4 s 112, 113 & 124; 5 s 128 & 132;

6 TULR (C) Act 92, s 189; 7 s 192

D1353

The Secretary of State issues a notice to the employer stating the amount to be
recouped (1). A copy of the notice is also sent to the claimant (2).
1 EP (Recoupment of Benefits) Regs, reg 8 & 9; 2 reg 8(4)

D1354 Monetary awards D1356

In the case of monetary awards the appropriate amount shall be whichever is the
less of the following two sums (1) :
1.
the amount of the prescribed element (less any tax or social security
contributions which fall to be deducted therefrom by the employer) or :
2.
in the case of an employee entitled to UC for any period ("the UC period")
which coincides with any part of the period to which the prescribed element is
attributable, any amount paid by way of or on account of UC for the UC period
that would not have been paid if the person's earned income for that period
was the same as immediately before the period to which the prescribed
element is attributable.
1 EP (Recoupment of Benefits) Regs, reg 8(2)

D1355 Protective awards D1356

In the case of remuneration under a protective award the appropriate amount shall
be whichever is the less of the following two sums (1) :
1.
the amount (less any tax or social security contributions which fall to be
deducted therefrom by the employer) accrued due to the employee in respect
of so much of the protected award as falls before the date on which the
Secretary of State receives from the required information (2) from the employer
or :
2.
in the case of an employee entitled to UC for any period ("the UC period")
which coincides with any part of the protected period falling before the date
described in 1. above, any amount paid by way of or on account of UC for the
UC period that would not have been paid if the person's earned income for
that period was the same as immediately before the protected period.
1 EP (Recoupment of Benefits) Regs, reg 8(3); 2 reg 6

D1356 Meaning of "earned income"

For the purposes of D1354 2. and D1355 2. earned income (1) has the meaning
specified in legislation (2).
1 EP (Recoupment of Benefits) Regs, reg 8(12); 2 UC Regs, reg 52

D1357 Action by the DM

The case is referred to the DM if
1. the claimant disagrees with the amount of the recovery (1) or
2. recoupment has been made and the award of UC is revised or superseded.
In these cases the DM needs to calculate the exact amount of benefit paid in the
period of the award. Any amount recovered in excess of the DM calculation is
refunded to the claimant (2).
1 EP (Recoupment of Benefits) Regs, reg 10(1); 2 reg 8

D1358 Claimant does not accept amount notified

If the claimant does not accept the amount shown on the recoupment notice the DM
is asked to decide the amount of benefit paid (1). The DM should calculate the exact
amount of UC paid to the claimant in the prescribed period.
1 EP (Recoupment of Benefits) Regs, reg 10

D1359 Prescribed period

The prescribed period is for awards listed at
D1352 1. 1. to 5. - the period of the award (1) or
D1352 2. 6. to 7. - the part of the protected period which falls before the date of
termination of employment or the date on which the Secretary of State
receives details of the employees affected by the award from the employer
whichever results in the lower amount being recouped (2).

1 EP (Recoupment of Benefits) Regs, reg 2(3); 2 reg 8(3)

D1360

The prescribed period ends when the decision of the Employment Tribunal is given
verbally at the hearing or afterwards in writing (1).
1 EP (Recoupment of Benefits) Regs, reg 2(3)

D1361 Claimant raises other questions on recoupment

An award of UC can be revised or superseded if the claimant raises any question
affecting the amount to be recouped (1). The DM should revise or supersede the
awarding decision as if
1. the employer had paid the Employment Tribunal award for the prescribed
period and
2. any UC which is to be recouped had not been paid and was not payable.
1 EP (Recoupment of Benefits) Regs, reg 10(1)

D1362 Revision or supersession after recoupment action completed

Recoupment action ends when the
1. amount of benefit paid in the prescribed period has been recovered or
2. time limit (1) has ended and the Secretary of State has not issued a recoupment
notice.

1 EP (Recoupment of Benefits) Regs, reg 8(5)

D1363

The DM should revise or supersede the award of UC and take into account the
effect of the Employment Tribunal award on entitlement to benefit. The Secretary of
State will repay to the claimant any amount which has been recovered in excess of
the amount recoupable (1) .
1 EP (Recoupment of Benefits) Regs, reg 10(3)

D1364 Partner or dependant entitled to Employment Tribunal award

UC cannot be recouped from an Employment Tribunal award payable to a claimant's
dependant or partner (1) .
1 EP (Recoupment of Benefits) Regs, reg 8(2)

D1365 Employment Tribunal decision varied

The DM may need to give a further decision if the Employment Tribunal award is
revised by the Employment Tribunal.

[D1366-D1999]