State pension deductions

euanT

My wife was paying back an overpayment of ESA(IB) but she has now reached retirement age. She has just recieved a letter from the pension service stating her pension will be reduced by £315 ever 4 weeks till the overpayment has been payed back, one full year bacically. This is almost a 1/3 of the pension, can they do this? We are on P/C & carers allowance.

Dazed_and_C0nfused

euanT said:

My wife was paying back an overpayment of ESA(IB) but she has now reached retirement age. She has just recieved a letter from the pension service stating her pension will be reduced by £315 ever 4 weeks till the overpayment has been payed back, one full year bacically. This is almost a 1/3 of the pension, can they do this? We are on P/C & carers allowance.

Do you mean can they take it back from her State Pension?

Or is the length of time you are questioning?

TimeLord1

Are you on pension credit?

They should only reduce it by a percentage per week depending on if it puts you and your wife into financial difficulties. The amount seems rather high. Is it the total amount of £315 she owes them every month?

Have they listed the breakdown of how this overpayment was originally made?



You should probably contact the debt management team to discuss this with them, to discuss a payment plan.

https://www.gov.uk/government/publications/dwp-debt-management-performance-data/dwp-debt-management-customer-service-standards

Don't accept this situation without challenging it. The deduction seems very high given your circumstances. Contact the Pension Service and DWP Debt Management immediately and seek advice from welfare rights organizations. They can help you understand your rights and negotiate a more manageable repayment plan

If you disagree with the decision to recover the overpayment or the amount being recovered, you usually have the right to ask for a mandatory reconsideration.

TimeLord1

And please make sure the letter is legitimate and don't make any payments until you establish it is. 🙏

Newcad

Yes they are alowed to recover outstanding DWP debts at that rate from State Pension.
(See Appendix 1 of the BORG linked below).

If/when there is no Income Related benefit to recover benefit overpayments from then DWP Debt Management are allowed to take deductions from non-income related benefits, including State Pension.

The standard debt recovery rate from non-income related benefits, including State Pension, is one third of the rate of the personal benefit. (Which is higher than recovery rates from IR benefits).
See the Benefits Overpayments Recovery Guide (BORG), paragraph 5.24

https://www.gov.uk/government/publications/benefit-overpayment-recovery-staff-guide/benefit-overpayment-recovery-guide#chapter-5

5.24. For other contributory benefits, as a matter of policy, the maximum rate is set at one third of the rate of personal benefit (that is excluding additional allowances for partners, dependants) and applies to both fraud and non-fraud debt.

Note that that 1/3 recovery rate is "..a matter of policy, ..." meaning that rate it is not set by law - it's just what they have decided to do.

If you believe that recovery of the debt at the standard one-third rate is too much to pay (generally meaning that it would leave you in "hardship") then you can ask for repayment to be suspended for a while, to be reduced and repayed over a longer period, or to be waived altogether.

Paragraph 5.4 of the BORG:

5.4. Where a debtor is unable to repay the overpayment or penalty at the agreed rate there are a range of hardship options available including temporary suspension of recovery, reduction in recovery rate or in exceptional cases write-off of the debt.

EDIT-
Thinking about this - As the one-third rate is not set by law then it could be arguable that they should reduce it if asked whether hardship applies or not.
So it may be asking for it to be reduced to say 15% anyway? (around £140 or to make it nice and round £150 every 4-weeks). Noting that 15% is the current debt repayment rate from UC.
I don't know how they would take that, but wouldn't be at all suprised if they agree without arguing.

euanT

Thanks everyone, another slight issue is the deduction does not tally between the pension service letter & the Debt recovery letter. DR letter states a deduction of £315.44, PS letter states her pension will be reduced to £630.88.
There is a difference of about £18 per 4 weeks!
They are taking back the full arrears over 1 year only(£4100) which seems a bit severe.
She is going to phone this afternoon, wish us luck🤞🤞

Spoonie_Turtle

Newcad said:

If/when there is no Income Related benefit to recover benefit overpayments from then DWP Debt Management are allowed to take deductions from non-income related benefits, including State Pension.

The OP mentions being "on P/C" in their first post. 

OP can you clarify, do you claim Pension Credit?

I don't know if that would change anything, but just in case it does it would be helpful for the members above to have all of the information in order to advise.

8dayweek

Spoonie_Turtle said:

Newcad said:

If/when there is no Income Related benefit to recover benefit overpayments from then DWP Debt Management are allowed to take deductions from non-income related benefits, including State Pension.

The OP mentions being "on P/C" in their first post. 

OP can you clarify, do you claim Pension Credit?

I don't know if that would change anything, but just in case it does it would be helpful for the members above to have all of the information in order to advise.

I think you’re thinking what I’m thinking…

My assumption was the Pension Credit is in Husband’s name with Wife as a Partner so the income-related benefit is not technically in “her name” hence the deduction from State Pension rather than Pension Credit…?!