This sounds like innocent misrepresentation. Which means the HB is still recoverable. I am not sure what the grounds of appeal are here….she is saying that she is the victim of fraud and I can understand that is a reasonable possibility.
But that means she is asking you to use your discretion not to recover the overpayment. You can decide to write off the overpayment if you wish …but this is outside the jurisdiction of a Tribunal. They cannot intervene.
So far as I can see it, you have made the right decision. There is an overpayment, there is no official error. The grounds are innocent misrep. Without any evidence that her husband made a fraudulent claim….and the onus here is going to be very high and on her…..this is not a stranger after all.
Even if you had evidence that the partner was dubious etc, what then. The money was paid to the appellants bank account. The partner should be arrested if the DPP thinks there is a case to answer and Proceeds of Crime Act may apply etc. But again I struggle to think of anything a Tribunal can do that is within jurisdiction.
