Reply To: Overpayment Classifications

Julian Hobson

I think the legal position is relatively simple ! The subsidy order states at article 18(6):

In paragraph (2)(a), “authority error overpayment” means an overpayment caused by a mistake made, whether in the form of an act or omission, by an authority where the claimant, a person acting on his behalf or any other person to whom the payment is made did not cause or materially contribute to that mistake but excludes any mistake of law which is shown to have been an error only by virtue of a subsequent decision of a court.

Not dissimilar from the definition of official error in Reg 100.

The real issue is what constitutes a mistake by act or ommission ? If a mistake is made (and the customer didn’t contribute to it) then any OP will be LA error.

The commissioners have raised the perfectly rational point that LA’s can’t be expected to deal with everything they receive on the day they receive it and as a result have refused to accept that the authority’s failure to act immediately amounts to a mistake. We are left with lack of clarity as to what delay (ommission) is acceptable.

My main point is that each case must be considered on its own merits, firstly to establish if there was a mistake and secondly because we need to establish whether the customer contributed to it. That sounds familiar, when we make a decision on overpayments we have to decide recoverability and look at whether the overpayment or any part of it was caused by official error. Once that decision is made it can only be revised under certain circumstances and can only be revised by the LA, tribunal, commissioner etc following an appeal by a person affected, or by the LA if there was an official error (which includes errors of law).

So on the one hand the auditor comes along and says I don’t like this, this bit of the OP is LA error because you could have stopped the cheque. We say we thought about that at the time and decided that we aren’t superman and looked at the commissioners decision and what you now see is what you get.

The auditor says “well your overpayment decision is wrong because that bit of the OP is official error”. We say “are you saying that I must revise my decision” he says “yes”. We say “on what grounds ? I have no appeal and there is no error of law, because I have a commissioners decision that says I’m right. I could accept the need for an anytime revision if you could show me a commissioners decision or court decision that shows I’m wrong”

I can see no justification for the rate of subsidy to be “adjusted” in individual cases, without revisiting the actual decision. The appropriate subsidy is a consequence of the overpayment decision not an arbitrary sum that can reasonably be adjusted up and down.