Supreme Court rules DWP repayment demands unlawful

8.12.10

The Supreme Court has today dismissed an appeal by Department for Work and Pensions and ruled that the Secretary of State for Work and Pensions cannot recover overpayments of social security benefits through the courts where the claimant is not at fault.

Between March 2006 and February 2007 the Government wrote to over 65,000 claimants telling them it could sue them in the County Court if they did not pay back overpayments which were caused by the DWP’s own mistakes.

Commenting on today’s ruling the Chief Executive of Child Poverty Action Group, Alison Garnham, said:

“This is an important decision that will protect many vulnerable people from debts created by the Government’s own errors. Even though the letters claimants were sent acknowledged it was the Government’s own errors and the debt was unrecoverable under its own social security law, explicit threats of court action were still made.

“We hope that the Department will regret the anguish caused to many of the people who received the letters and will seek to improve its own administration to avoid overpayment problems. The people we spoke to did not know they had been paid too much. They were not fraudulent or feckless claimants trying to get extra money. Rather, they were the innocent victims of DWP error and the complexity of the benefit system.

“It is a very great concern that if the Government’s plans to end legal aid for welfare benefits proceed, claimants will not be able to get advice on these complex issues in future and may face injustices as a consequence.”

One witness, a pensioner, said:

“When I got the letter I was very worried. I am not saying I was suicidal but I nearly felt like that. I couldn’t have afforded to pay back £10,000. I would have had to take out a mortgage on my house to pay back that amount.”

Notes for editors

• This case is about recovery of benefits administered by the Department for Work and Pensions and child benefit and guardian’s allowance. It does not cover housing benefit or tax credits cases.
• The benefits affected include those paid to families and those with disabilities, as well as to pensioners.
• The court’s decision means the government cannot write these letters to claimants in future. It will be a tremendous relief to those many thousands of claimants living in poverty who receive too money through no fault of their own.
• Read our summary and guidance for advisers: Overpayment Recovery Test Case
• For more information on CPAG test cases, visit: www.cpag.org.uk/cro/test.htm
• For up-to-date background facts and stats on UK poverty, visit: www.cpag.org.uk/povertyfacts/
• CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.
• CPAG is one of over 150 member organisations of the Campaign to End Child Poverty, campaigning for public and political commitment to ensure the goals of halving child poverty by 2010 and ending child poverty by 2020 are met.
• The MoJ is consulting on proposals to reform legal aid
  http://www.justice.gov.uk/consultations/legal-aid-reform-151110.htm

For further information please contact:
Tim Nichols
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302 
tnichols@cpag.org.uk

For detailed legal enquiries, contact:

Sarah Clarke
Solicitor
sclarke@cpag.org.uk
Tel. 020 7812 5219

Graham Tegg
Solicitor
gtegg@cpag.org.uk
020 7812 5239