Recovery of overpayment

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    We have a claimant with a HB overpayment in excess of £10,000 (non declaration of earnings – joint fraud investigation with DWP). We are currently recovering from ongoing benefit. However we have just been notified that he was declared bankrupt in June and he is now laughing at us, saying that we need to write the overpayment off!!! We don’t really want to do that if we can help it!

    The claim was made by MR and Mrs – claim forms signed by both. The overpayment letters were addressed to him alone – and it is just him who has been made bankrupt! Can we recover the overpayment from Mrs?

    Your thoughts are very welcome.

    Paul Duggan

    My understanding is that you would still be able to recover the overpayment from ongoing HB entitlement despite the bankruptcy, however if he was in a position where he was not in receipt of HB, then it would not be possible to chase the O/P via invoicing for the debt, as you would be expecting him to repay the debt directly as a bankrupt, rather than deductions from an entitlement as above, which are not considered in the same way.

    Unless that is i’ve misunderstood the guidance in this area ! 🙄



    I think you have got that just about right! 8)

    Kevin D

    [Edit: this was being compiled as others posted]

    Well, I think it may be more than possible to wipe the smile from the little so and sos face…. 😈 .

    But, a couple of observations. Even if the claim forms are signed by both the clmt and partner, there can only be ONE claimant – there is no such thing as a joint claim for HB/CTB [see [b:a82d6cddba]CH/3817/2004 (p8 )[/b:a82d6cddba]].

    The clmt (i.e. the bankrupt party). Sadly for him (not), the rules for recovering HB/CTB overpayments are not the same as for other debts.

    This earlier thread should go a long way to giving the answer(s) you need:

    In the alternative, can you recover from the partner? Depending on what happened when, I’d tend to say yes. Possibly, you could go after both of them. But, dates will be needed for a definitive answer (e.g. period of o/p; date of decision; date of notification etc).

    Hope the above helps.


    Darren W

    I had this recently and after a little digging found this,

    Recovery of an overpayment may continue from on-going benefit under the conditions of Section 71 and 78(2) of the Social Security Administration Act 1992.

    This is allowed because even though an Administration Order prohibits a creditor from making a claim against an asset of the bankrupt person, recovery from benefit is not classed as a recovery from an asset.

    Hope this helps.


    I was under the impression that if a debt was incurred through fraudulent activity it was not capable of being included in bankruptcy.
    I’ve been looking into this subject over the last couple of days and most people agree that debts incurred through fraud are exempt, however I am yet to track down the relevant legislation to rely on.
    (If anybody knows where this is it would be a great help)


    Kevin D

    The “Steele” cases should point in the right direction – see the links above.


    Thanks for your help – much appreciated

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