Lump Sum of SRP

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  • #38167
    cameron mackintosh
    Participant

    We have an elderly lady who reported the death of her late husband to the DWP several years ago. They failed to recalculate her basic State Retirement Pension to take into account SERPS.
    The error was discovered this year and her SRP has been adjusted back to 2003 and as a result she has received a lump sum amount in excess of £35k.

    Can I clarify/confirm that:
    1/ We must amend the back awarded SRP to the corrected rate thus creating overpayments. As she would have been unaware she was being overpaid we can consider DWP error and make unrecoverable?

    2/Should we include the £35k as capital from date of receipt therefore ending her entitlement or does Sch 6, 22(1) in the HB(SPC) regs apply to the SRP inherited additions as a relevant* benefit?

    *SRP categories A – D are a relevant benefit.

    Many Thanks

    #107532
    Kevin D
    Participant

    1) I agree subject to one proviso. Did the clmt contribute to the DWP’s oversight? If not, then I agree the o/p has been caused by an error on the part of the DWP and will be irrecoverable.

    2) In my view, para 22 of Sch 6 cannot apply because any disregard is only in respect of a “relevant benefit”. For the purposes of para 22 in Sch 6, a “relevant benefit” is one listed in para 21(2). There doesn’t appear to be any reference to state retirement pension; only to pension credit.

    I then thought “…well, surely para 21(d) must then apply…”. Afterall, it doesn’t mention the word “benefit” and simply refers to amounts paid to rectify, or compensate, for an official error. Trouble is, “official error” is expressly defined in para 22(4) and such errors are limited to the “relevant benefits” which are expressly defined as being those in para 21(2). That doesn’t appear to include SRP.

    Unusually, I’m hoping someone can tear apart my analysis and/or point to something I’ve overlooked because, if the analysis is correct, I can’t see how there is any disregard for the capital in these specific circumstances; not even for the first year.

    #107536
    Anonymous
    Guest

    No I don’t think there is anything wrong with your analysis – the special treatment of arrears payments after official error only extends to those benefits in respect of which normal arrears payments attract a 52-week disregard. RP has never been one of those.

    It is unnecessarily confusing for the Regs to use the term “relevant benefit” here, because it has a completely different meaning from the one that it has for adjudication purposes in the Social Security Act 1998 and HB/CTB D&A Regs.

    #107563
    Anonymous
    Guest

    I don’t see how you can treat the lump sum as capital and at the same time go back and reassess the income. This strikes me as double jeopardy. Surely the pensioner will need the lump sum to pay back the overpayment! I would disregard the £35k as capital and treat it as arrears of income for the period it covers

    #107566
    Kevin D
    Participant

    There is no double jeopardy in this case.

    Money can’t be both income and capital for the same period. In this case, the money will be treated as income for the period it covers and, if that period has expired, only THEN as capital (or later if the receipt date of the capital is after the income period). Case law fully supports this position.

    In this case, the info indicates the overpayment may well be irrecoverable in any case. Even if the overpayment was to be recoverable, the clmt has the money to pay it and can merrily continue claiming benefit (surely no reasonable LA would consider deprivation in these circumstances).

    In any case, there doesn’t appear to be any legal basis on which to disregard the capital for the period the clmt possesses it (once the income attributable period has expired).

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