Wednesday, 8 December 2010

Oh dear - there will be emergency legislation to deal with this loop hole...

The Supreme Court has held today that HMG cannot reclaim monies paid in error to benefit recipients.  £1.1 Billion is apparently paid in error every year.  Statute provides that the Secretary of State can recover overpayments where the claimant has misled him or has not made full disclosure - but not where it is his own mistake.  Apparently in 2007-8 the S of S did threaten claimants in receipt of overpayments in error with a common law restitutionary claim and without actually suing anybody and just by making that threat, recovered £4 Million (should HMG now give that money back for demanding it without any legal justification?).

Anyway given the £1.1 Billion lost per year and the widening hole in the benefits budget, I suspect there will be an emergency legislative amendment to reverse this judgment in the not too distant future.....

1 comment:

  1. I guess that you may be proved right. However, CPAG won in the Court of Appeal and Supreme Court.

    As Lord Brown - (in a very readable judgment) - succinctly put it, the case was about overpayments made under awards which are higher than they ought to have been. Absent any misrepresentation or non-disclosure on the part of the claimant then why should the claimant have to repy what might, sometimes, be a substantial amount?

    If they do alter the law on this, then I suppose that there would have to be some time limit on the ability of the government to recover the money otherwise a recipient would not be able to rely on the payment.