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Benefits (Overpayments)

Volume 933: debated on Monday 13 June 1977

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asked the Secretary of State for Social Services if he will explain how £10·5 million was overpaid in social security benefits in the last year; and why it is not possible to recover this sum.

Overpayments of social security benefits arise from fraud, from a mistake by the claimant, or from other causes, mainly official error. In fraud cases, we do all that we can to recover overpayments including recourse to law, but the individual does not always have resources from which recovery can be made.In cases arising from the claimant's mistake which involve insurance benefits the issue has to be referred to an insurance officer for review. Section 119(1) of the Social Security Act 1975 provides that, subject to Section 119(2), the decision given on review shall require repayment except where the claimant has used due care and diligence to avoid overpayment. Where the insurance officer's decision requires repayment, we do our best to recover, otherwise we have no power to pursue the matter. Similar considerations apply to the recovery of other benefits such as supplementary benefit, except in cases where recovery would cause hardship.In cases of official error, where an insurance officer's decision is not in question, we notify the beneficiary that an overpayment has occurred and request repayment, but cannot compel it. Similar procedures apply for supplementary benefit except that no such request is made where hardship would result. Irrecoverable overpayment in 1975–76 represented a little over 0·1 per cent. of the total benefits paid by the Department.

asked the Secretary of State for Social Services what is his estimate of the amount of public money that will be overpaid in social security benefits in the current year; what steps are being taken to minimise it; and what efforts will be taken to recover any such sums that are overpaid.

It is not possible to make a reliable estimate of overpayments which might arise in the current year. The number and value of overpayments are influenced by several factors, including the total number of claimants and beneficiaries, and the frequency with which claims have to be reassessed, for example because of benefit uprating or rent and rates changes.Payments are subject to checks and audit. In addition, information relating to overpayments caused by official error is used as a basis for appropriate staff training. Last year I announced a programme of work to combat overpayments caused by fraud and abuse of the social security system.I have outlined the procedures relating to the recovery of overpayments in reply to the hon. Member's other Question today.

asked the Secretary of State for Social Services how he accounts for the increase in total irrecoverable overpayments by his Department from approximately £4,624,000 in 1971–72 to approximately £10,692,750 in 1975–76

During the period 1971–72 to 1975–76 the benefits paid by my Department rose from £4,222 million to £8,942 million, mainly due to the increase in benefit levels, but the total number of beneficiaries also rose, partly because of the introduction of several new benefits and the increase in the numbers claiming unemployment benefit and retirement pensions. These increases in the value and number of payments provide the main reason for the increase in the value of irrecoverable overpayments; in 1975–76 such overpayments represented just over 0·1 per cent. of the total benefit paid.