Arrears of benefit to recover from an overpayment

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  • #39931
    Anonymous
    Guest

    This is a subject that has caused a debate within our department.The guidance and legislation is quite wishy washy (its panto season).

    However, thanks to ATLAS we have highlighted changes that were not declared on previous periods, ie Tax Credits have increased, Earnings down and up etc.

    Following revision/supersession these changes will create unders and overpayments (all these changes are notified outside one month). Also the over and underpayments are different periods.

    two questions!

    Can we use arrears of benefits to offset the over and reduce the o/p but any remaining underpayment is written off.

    OR

    should we even be creating unders when they are different periods as not underlying entitlement, so just create a huge overpayment and say tough.

    #113972
    Andy Thurman
    Keymaster

    UE can only be applied against a period of an overpayment BUT, in most cases, this can be looked at ‘favourably’ i.e. create an overpayment using all relevant changes going back as far as you have to. This then gives an overpayment period onto which every advantageuous change can be applied – within the whole period, the UE CAN exceed the overpayment at any given point so long as it doesn’t exceed the total.

    #113973
    Kevin D
    Participant

    Whilst I don’t think this was the intention behind HBR 104, I broadly agree that the wording of HBR 104 has so many holes in it, the interpretation suggested by Andy is possible. What is clear is that any ULE / underpayment in respect of a period prior to the first date of the overpayment period cannot be offset – CH/0401/2008 (I compiled the LA’s submission to the Cmmr in that case).

    #113974
    Anonymous
    Guest

    Thank you. So can someone shed light on their undestanding of arrears of benefit? The cases we have are overpayment for a short period then an underpayment and vise versa. These periods do not cross over so
    am I correct in assuming that we can offset unless there is an underpayment prior to the o/p using 104?

    Sorry I have become so confused with everyone elses views and being a trainer you have to get things spot on as the blame always falls onto the trainer (boo hoo) :((

    #114043
    nick dearnley
    Participant

    If by arrears of benefit you mean anything that builds up while payment is suspended while you deal with a change, you can only make a total deduction equal to the weekly deductions that would have been made if the benefit had kept paying out. EG payment suspended for eight weeks; deduct 8 x £10.20(or whatever the applicable rate would have been) = £81.60.

    You can’t offset as such in the situation you describe as you will have different new awards for different periods, one giving an underpayment and one an overpayment. So you have a an underpayment which you should pay out for one period and recoverable overpayment for the other. You could ask the claimant if they mind you offsetting one against the other, but you can’t force it.

    Other than that, it’s as Andy and Kevin describe above.

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