Can NHS Pensions deduct an old overpayment from a new rebate?

mirta_2

I had a rebate about two years ago of around £450, and quite a few months later they told me they had overpaid about £80 and asked me to repay. I wrote back saying the money was gone and could not afford to repay (I hadn't noticed the overpayment). Since then they have just sent me a couple of letters continuing to ask me to repay with no acknowledgement of my stated position. I was fairly confident that I wasn't obliged to repay from what I'd heard of similar situations.

I have now stopped contributing again and applied for another rebate (I know, it's not ideal), but they have put my rebate on hold until they discuss the overpayment with me again. This strikes me as deeply flawed. They can try and discuss it, but they have put the processing on hold before doing so. I don't know yet if they will refuse to give me the rebate unless I agree to the £80 deduction.

I wondered if anyone had a clear idea of what they can and can't do in this situation. Thanks for any help received.

EDIT 11/7/10. This issue has been resolved in my favour. Please see my post 7th July below.

dunstonh

I was fairly confident that I wasn't obliged to repay from what I'd heard of similar situations.

I dont know what similar situations you have heard of because legally you owe them the money and there is enough evidence available to back that up.

I have now stopped contributing again and applied for another rebate (I know, it's not ideal), but they have put my rebate on hold until they discuss the overpayment with me again. This strikes me as deeply flawed.

actually it seems like common sense to me.

wondered if anyone had a clear idea of what they can and can't do in this situation.

You owe them the money and they have a right to be repaid. The repayment should be affordable and agreeable (i.e. if it was £8000 then they would have to give you 12-18 months to repay it). With it being just £80 then I think it would be easy for them to justify taking it from the refund.

mirta_2

@dunstonh If you put £80 in someone's pocket by mistake and they didn't notice, and you realised your mistake six months later, would they owe you money?

(Of course it would be noticed, but it is easy to see how someone might not notice an overpayment in a pension rebate. Even a wage overpayment isn't owable if the recipient didn't notice. This is one of the circumstances where a wage overpayment may not be recoverable and comes under the concept of Change of Position).

It's flawed is because it's opportunistic. It is a new transaction and they are doing it because they can, despite a large question mark over whether they should as per my example above. I don't mind discussing it - they have ignored my letter, but to stop the processing and (perhaps) imply by this they may just take it from my earnings seems to me a questionable tactic.

dunstonh

@dunstonh If you put £80 in someone's pocket by mistake and they didn't notice, and you realised your mistake six months later, would they owe you money?

If you have no legal entitlement to that money and an error was made then the person that received the money does not have a legal claim to it. There are a couple of caveats to that but nothing that would apply here.

mirta_2

Just a few of the relevant quotations from a HM Treasury guide to overpayment recovery: unfortunately I'm not allowed to post the url as a new user:

"Legal advice is often wise to make sure that proper account has been taken of any valid defence against recovery recipients may have."

"The decision on how far recovery of an overpayment should be pursued in a particular case will be influenced by whether the recipient has acted in good or bad faith:

•where recipients of overpayments have acted in good faith, eg genuinely believing that the payment was right, they may be able to use this as a defence (though good faith alone is not a sufficient defence);

•where recipients of overpayments have acted in bad faith, recovery of the full amount overpaid should always be sought."

"Change of position

A.4.11.14 The recipient of an overpayment may seek to rely on change of position if he or she has in good faith reacted to the overpayment by relying on it to change their lifestyle. It might then be inequitable to seek to recover the full amount of the overpayment. The paying organisation’s reaction should depend on the facts of the case. The onus is on the recipient to show that it would be unfair to repay the money. This defence is difficult to demonstrate.

Estoppel

A.4.11.15 A recipient who has changed his or her position may also be able to rely on the rule of evidence estoppel if the paying organisation misled the recipient about his or her entitlement, even if the overpayment was caused by a fault on the part of the recipient. However, a mistaken payment will not normally of itself constitute a representation that the payee can keep it. There must normally be some further indication of the recipient's supposed title other than the mere fact of payment.

A.4.11.16 The paying organisation can be prevented from recovery even where it has made no positive statement to the payee that the latter is entitled to the money received. If, following a demand for repayment, the recipient can give reasons why repayment should not be made, then silence from paying organisation would almost certainly entitle the recipient to conclude that the reply was satisfactory and that he or she could keep the money.

A.4.11.17 It is essential for public sector organisations to seek legal advice where change of position or estoppel are offered as defence against recovery."

I can't for the life of me think why these might not apply. I am getting full legal advice tomorrow. I am not bothered by the money so much by the delay in processing my rebate and the using of it as leverage when they have ignored my previous responses.

Annisele

Sorry, but I think it's unlikely that you could argue estoppel or change of position for a payment of £80. £8,000 maybe, but not £80.

If you can genuinely show that you changed your lifestyle as a result of receiving £80 to which you were not entitled, then you can argue change of position.

I'm not convinced that the statements you've posted on estoppel constitute anything like the full legal position, but I still can't see how it could be inequitable for them to reclaim £80 wrongly paid to you.

mirta_2

It's all right anyway I will get definitive advice tomorrow. Change of position is wider than the above. I have learned a few things while reading during the course of posting.

mirta_2

UPDATE

I have just had a phone call from NHS Pensions. They told me they cannot recover the overpayment from the rebate without my consent, and I will receive the full rebate.

In my situation at least, the answer to my question is "no".