Reply To: Underlying Entitlement


The Circular is correct in terms of the outcome, but for neither of those reasons!

In the ALG example, the following decisions have been made:

– an entitlement decision has been made somewhere around the end of May that the claimant is entitled to (X – £47.70) from 10 April (DECISION 1)
– an overpayment decision has been made somewhere around the end of May to the effect that the claimant has been overpaid by £47.70 a week over 7 weeks (DECISION 2)
– a superseding decision has been made (DECISION 3) which supersedes DECISION 1; the advantageous change rule means that this decision takes effect as if the non-dep went onto JSA in June and it runs from 26 June. The claimant is now entitled to (X – £7.40)
– new information about the overpayment has come to light within a month of the overpayment decision being made: we now know that the last three weeks of the overpayment period should be reduced by underlying entitlement of £40.30 a week (i.e. 47.70 – 7.40). The overpayment decision (DECISION 2) is therefore revised in the claimant’s favour and the new amount is (4 x 47.70) + (3 x 7.40). This creates a new decision – DECISION 4 – which carries new appeal rights.

The reduction of the overpayment has nothing to do with good cause or changes of circumstance. The decision was wrong at the time when it was made and luckily the Council has found out quickly enough to revise it.