old benefit overpayment and bankruptcy

fermi

debt_doctor wrote: »

Yes you are correct, quote s40.102 of the Insolvency Service Technical Manual.




40.102 Overpayment of state benefits (amended August 2013)
Overpayment of state benefit, such as housing benefits, jobseekers allowance or tax credits may be made as a result of mistakes, change of circumstances or fraud.
It has been held that a debt in respect of an overpayment of benefits made prior to the date of the bankruptcy order would be a contingent liability (see Part 7) provable in the bankruptcy, whether the recovery decision was made before or after the bankruptcy order date URL="http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter40/part6/Notes/Notes.htm#7"][SIZE=3][COLOR=#0000ff]Note 7[/COLOR][/SIZE][/URL.
Such a debt incurred through fraud would not however be released upon discharge (see paragraph 40.12A).
It is considered that overpayments which are made after the date of the bankruptcy order are a post bankruptcy liability, for which the bankrupt would be liable to repay, even though they arose following an error (the decision to overpay) which occurred before the order.



It is the date you were overpaid, not the date you were asked to repay that matters.

DD

Yes, and the Supreme Court Judgement in note 7 there is: Re Nortel and others [2013] UKSC 52

fermi

You can also send DWP a copy of their own circular, and make the fools eat their words.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/251957/g10-2013.pdf

Bankruptcy and overpayment recovery

31. A minor change to guidance is required in respect of insolvency following a recent case in the Supreme Court.

Whilst the case was not related to benefit HB/CTB or indeed to personal debt, one particular aspect of the decision will have an impact on how we deal with overpayment debts from bankrupt debtors.

32. DWP had previously held the view that a benefit overpayment (including HB or Council Tax Benefit (CTB)) does not become a fixed liability until such time as the decision maker has made a determination that the overpayment, or part of it, is recoverable under social security legislation.

33. This was confirmed in 2005 in the case of (R) Steele v Birmingham City Council and the Secretary of State for Work and Pensions.

You can refer to previous bulletins HB/CTB U1/2011, HB/CTB U6/2011, and HB/CTB U1/2012.

However, a recent case Nortel (2013) has overturned the judgement in the Steele case.

35. When a debtor is discharged from bankruptcy (or Sequestration in Scotland) then any non-fraud debts, where the end date of the overpayment is before the date of the bankruptcy or sequestration order, must be written off. This must take effect immediately.

36. Legal advice is that DWP should do everything possible to identify cases impacted by this judgement. The approach is
likely to be similar to what was done following the Payne and Cooper judgment which involved matching Debt Management (DM) records against a list of bankruptcies provided by the Insolvency Service, examining matches and identifying affected cases.

Queries

If you have any further queries about the information contained in this item please contact: [EMAIL="HBandCTB.overpayments@DWP.gsi.gov"]HBandCTB.overpayments@DWP.gsi.gov[/EMAIL]

bornjoyful

Thanks guys- that should do it! I will update as soon as I hear back. They said manager would call on Monday (holding breath!)

bornjoyful

copy of second letter sent!

Mr Pxxxx,

Your decision letter of 26/03/20134 is saying exactly the same as what I was told on the phone in 2008 when I questioned it as owing due to bankruptcy.

I refer you to s40.102 of the Insolvency Service Technical Manual.


40.102 Overpayment of state benefits (amended August 2013)
Overpayment of state benefit, such as housing benefits, jobseekers allowance or tax credits may be made as a result of mistakes, change of circumstances or fraud.
It has been held that a debt in respect of an overpayment of benefits made prior to the date of the bankruptcy order would be a contingent liability (see Part 7) provable in the bankruptcy, whether the recovery decision was made before or after the bankruptcy order date URL="http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter40/part6/Notes/Notes.htm#7"][SIZE=3][COLOR=#0000ff]Note 7[/COLOR][/SIZE][/URL.
Such a debt incurred through fraud would not however be released upon discharge (see paragraph 40.12A).
It is considered that overpayments which are made after the date of the bankruptcy order are a post bankruptcy liability, for which the bankrupt would be liable to repay, even though they arose following an error (the decision to overpay) which occurred before the order.

and also

Supreme Court Judgement in note 7 there is: Re Nortel and others [2013] UKSC 52

and also-
your own circular which can be found here-

https://www.gov.uk/government/upload...7/g10-2013.pdf
Bankruptcy and overpayment recovery

31. A minor change to guidance is required in respect of insolvency following a recent case in the Supreme Court.

Whilst the case was not related to benefit HB/CTB or indeed to personal debt, one particular aspect of the decision will have an impact on how we deal with overpayment debts from bankrupt debtors.

32. DWP had previously held the view that a benefit overpayment (including HB or Council Tax Benefit (CTB)) does not become a fixed liability until such time as the decision maker has made a determination that the overpayment, or part of it, is recoverable under social security legislation.

33. This was confirmed in 2005 in the case of (R) Steele v Birmingham City Council and the Secretary of State for Work and Pensions.

You can refer to previous bulletins HB/CTB U1/2011, HB/CTB U6/2011, and HB/CTB U1/2012.

However, a recent case Nortel (2013) has overturned the judgement in the Steele case.

35. When a debtor is discharged from bankruptcy (or Sequestration in Scotland) then any non-fraud debts, where the end date of the overpayment is before the date of the bankruptcy or sequestration order, must be written off. This must take effect immediately.

36. Legal advice is that DWP should do everything possible to identify cases impacted by this judgement. The approach is
likely to be similar to what was done following the Payne and Cooper judgment which involved matching Debt Management (DM) records against a list of bankruptcies provided by the Insolvency Service, examining matches and identifying affected cases.


I therefore contest that the overpayment is owing as it was named on the bankruptcy and was incurred prior to the bankruptcy. It does not matter how long it took the DWP to make a decision . I am surprised that no-one seems to know this although I am more inclined to think that it is indeed known and that the DWP prefers to ignore it and try to recover from unsuspecting individuals.

I have never once suggested that the social fund loan of £650 from 2008 is not owing.
I have paid £475 total to date and will pay the outstanding £175 .
I will not hesitate to involve the official receiver if this matter is not resolved with this letter
Please consider this an official appeal.
Txxxx Bxxxx

woodformoretrees

definitely worth sending these recorded delivery with a copy to the OR.

bornjoyful

I have had a response from the DWP. Any comments???

''The supreme court ruling in July 2013 principle says that it is the period when your debt incurred and your overpayment wa sincurred prior to the bankruptcy.
HOWEVER, this type of ruling normaly only applies fropm the time it was made and so the DWP is currently deciding how this ruling affests cases like yours which predate the Supremem court ruling.We have suspended the recovery until a decision is made .''

TheGardener

I would read that as
" I don't want to lose face here so I'm going to tell you that you are wrong but I am going to pretend to ask someone higher up/more knowledgeable than me and tell you we have suspended recovery for now so that I don't have to apologise and say I am wrong and we'll all just quietly forget about this for now - shall we?"

Of course I could be wrong...;)

debt_doctor

TheGardener wrote: »

I would read that as
" I don't want to lose face here so I'm going to tell you that you are wrong but I am going to pretend to ask someone higher up/more knowledgeable than me and tell you we have suspended recovery for now so that I don't have to apologise and say I am wrong and we'll all just quietly forget about this for now - shall we?"

Yes, I would agree with that!
DD

bornjoyful

so do you think I will never hear back from them on it?

debt_doctor

Quite possibly yes.
They were wrong, and they know it.
Their own circular tells them how to deal with the situation! - no need for any 'confirmation'


DD