DWP chasing me for money after bankruptcy

Desperate_Daz

A couple of years ago. I was out of work and signed on as well claimed council tax concession. At the time, I had an accountant who using a loophole in the system had got me to move my pension to a SIP, then from the SIP he moved some of the funds to Limited Company that I had set up with the intention of starting up a travel tour company. When I was in danger of losing my house, in desperation I took Director's loan from my company. I had fully intended to repay the money, as I worked as an IT contractor needed to be able to set up a limited company whenever, I could go back to work.
In the end, all this failed and I was having to go into bankruptcy but then I got called to be interviewed by the DWP and the local council, stating that I had been claiming even though I had other money available to me. All my attempts to explain that I did not see this as my money but rather it was my pension being invested but it just so happened that I was the MD of the company.
All the explanations fell on deaf ears and they ruled that I should pay back the money. In their explanation they state that it was because I had used the lump sum of my pension.
When I went into bankruptcy, the official receiver included this so called payments in the bankruptcy and I thought that this would be the end to it. Six months later I was contacted by the local council who told me that they were also acting on the behalf of the DWP, saying that there would be an adminstrative charge which could be included in the bankruptcy. I went along with it, just to draw a line under all my problems.
The council then contacted me and have been paying a small amount per month.
In February this year, I got a letter from the DWP demanding that I paid the full amount including the adminstrative penalty. I phoned and explained about the bankruptcy, which the person I spoke to, knew nothing about. I spoke to my official receiver rep, who said they had been sent all the documentation in May last year. But she would send it again. Then everything went quiet, so I presume that they had settled the matter. But today, I received another letter asking for the money again. When I debated the issue as to why this affair had stop and started. Their main claim is that because I had agreed to the adminstration penalty, it was an admission of fraud. Even though, this is not stated in the forms that I signed. And that bankruptcy could not include money owed through fraud. As usual I being told that unless I agree to a payment plan to pay the full amount, this will be passed on to a private company and there will be additional costs. I am very angry and concerned. I desperately need advice please. Sorry for this being so long.

Desperate_Daz

I would like to point out that most of my previous posting is providing background and is possibly clouding the issue. I believe that the main points are that in May last year when I was declared bankrupt, the OR sent letters to all my debtors pointing out all the debts being included in the bankruptcy. At this stage, the DWP did not dispute this but 6 months later, they decided charge me with the administration fee. My OR questioned but said that they might have a point. So just to draw a line underneath it all, I agreed to pay the administration fee of £409.38 believing that the overpayment of £1,364.62 was covered by the bankruptcy. When I spoke to the manager today, he said that the payment in May last year was not disputed it was not seen as fraud but my willingness to pay admin penalty, proved that it was fraud and now the whole amount was now due. But he also said that they waited till now because they did not want to burden me further during my bankruptcy which finished in May this year. It does not make sense to me.

fermi

There is some requirement on the burden of proof for an overpayment being fraud so that a debt can excluded from bankruptcy.

In other words, it can't just be excluded due to DWP's "opinion" on the matter.

Not something I can find right this second. Some of the CAB advisors who post here could well know? I'll drop them a PM.

Desperate_Daz

Thank you Fermi, for bringing some hope to my plight.

debt_doctor

The paying of an administrative penalty under the 1992 Social secuity Administration Act is something you can choose to pay (if offered) in the place of being prosecuted for fraud.

Potentially, the goverment department may or may not have the required proof to gain a successful prosecution, so it is important to whey up the decision very carefully.

Paying the penalty IS an admission of fraud. The debt outstanding will survive bankruptcy discharge.

DD

fermi

I feared that after reading up.

Doesn't seem that the OP had that explained to them properly though? At least I get that impression. Could be wrong.

debt_doctor

Yes I was considering that. Could make a formal complaint that the implications were not fully explaned, although (I think) these are usually offered under caution at an interview and if that is the case the conversation would be recorded in exactly the same way as a formal Police interview.
Could proceed to a complaint to the Independent Case Examiner and / or to the Local Government Ombudsman.

DD

Desperate_Daz

Thanks for the help. I have gone back and checked the documents that I signed and no where does it states that their signing was any admission of fraud. I also found a government document from which I have extracted the following quote :-

4.3.2 It is current DWP policy to offer these penalties where the case is
deemed to be not so serious and the offer of an administrative penalty
is considered a suitable alternative to prosecution, and where the gross
overpayment is under £2,000. Unlike cautions no admission of guilt is
required from the customer before offering an administrative penalty,
I think the last line is the most relevant. Would be grateful on others input.

Desperate_Daz

Hi DD,
I was initially interviewed twice under caution and it was taped. But when I was offerred the Adminstration Penalty, it was not under caution and was not taped. Also as it says in the quote, no admission of guilt is required in order to be offered the ADPEN.