Welfare Reform Bill

Baroness Hollins Excerpts

Wednesday 25th January 2012 Lords Chamber

Moved by

[Baroness Hollins]

62ZC: Clause 103, page 73, line 28, at end insert—
“71ZJ Non-recoverable overpayments
The Secretary of State may not recover any amount of any benefits paid in error by officials when the claimants could not reasonably be expected to know they where being overpaid.””

[Baroness Hollins]

My Lords, the House will wish to know, in connection with this amendment, that I am an appointee for my disabled son's benefits.

The amendment is designed to maintain the legislative position that prevents the state recovering overpayments where the mistake is entirely the fault of officials and where the claimant could not reasonably have been expected to realise that they were being overpaid. This protection has been on the statute book for over three decades, yet it stands to be removed by this Bill. This is of great concern to churches and charities that understand the impact of sudden, unexpected and, in many cases, unaffordable debt.

During Grand Committee, the noble Baroness, Lady Lister, emphasised the importance of this protection remaining enshrined in primary legislation rather than being in a code of practice. Unfortunately, despite the Minister’s assurances that the Government's draft code of practice, What happens if you are overpaid Universal Credit, Jobseeker's Allowance or Employment and Support Allowance, would,

“lead to considered, consistent decision making”,—[Official Report, 23/11/11; cols. GC 467-68.]

it appears incomplete and worryingly inadequate to protect claimants. Nor is there any duty in the Bill requiring officials to comply with the code of practice. Those representing welfare claimants against whom an overpayment recovery is being enforced could prevent costly litigation if they could point to a statutory duty to follow procedure, but the statutory duty is not there.

The opening section of the code of practice encourages claimants to check their award notices and to inform the relevant authority if anything is wrong, missing or incomplete, but even the most incisive individuals may face real difficulties in identifying whether officials have made an error or an omission—perhaps especially the 20 per cent of adults who are estimated to struggle with literacy or numeracy. The principle of expecting those in receipt of benefits to check their notices is, of course, neither new nor unreasonable in itself, but under the proposed changes the consequences of failing to recognise the state’s mistakes will become excessively severe. Will the Minister clarify what extra support people will be provided with in analysing their award notices, particularly in cases where they face barriers in literacy or numeracy or where English is their second language?

The second area of concern I wish to raise relates to the section in the code of practice “If you disagree with the overpayment decision”. Claimants are instructed that they have a period of one month from the day that an overpayment notice is dated in which they may challenge it. This may seem an adequate time on paper, but it takes no account of the reality facing many people at home. Let us take a single mother of four young children who is attending a college course to improve her chance of getting a job receiving an overpayment notification and being threatened with her benefits being stopped. She is balancing an education with raising a young family, and one month in which to challenge the decision would not be long at all. If you add literacy problems, waiting times for advice services and even time lost through postage, there is a very realistic prospect that claimants simply will not be able to respond in time. Will the Minister reconsider what appears to be an inadequate time limit? Will he also outline what provisions will be put in place for those who do not respond within the prescribed time because of any matter out of their control, such as hospitalisation?

In the section of the code “Paying back an overpayment”, claimants are informed that overpayments may be recovered through deductions from their benefits, direct debit, another regular payment method, a lump sum or through the courts. Crucially, it does not mention that an overpayment may be recovered through deductions from earnings, as outlined in the Bill, nor is there any mention of the additional administrative costs that could be imposed in such cases, an aspect that has been of particular concern to organisations such as the Zacchaeus 2000 Trust, which works on the front line with vulnerable debtors. Will the Minister clarify why these powers are not outlined in the code of practice and confirm that they will be conveyed in full to those in receipt of benefits so that those facing the recovery of overpayments in such a manner can fully understand the process and the implications?

Suitable safeguards must be put in place to ensure that the burden of official errors does not fall upon some of the poorest and most vulnerable people in our society. Profound anxiety has been expressed by a number of faith groups, including the five major Christian denominations that are backing this amendment. Noble Lords may have seen a recent letter to the Times by the Roman Catholic Archbishop of Southwark, who underscored these concerns.

--- Later in debate ---

[Lord Freud]

My Lords, I am not sure that I am in a position to give assurance on precise figures and percentages. I am giving a general assurance that that factor will be looked at as part of the financial hardship consideration.

[Baroness Hollins]

My Lords, I thank the Minister for his detailed and careful reply, which contained a number of reassurances. Many of the reforms proposed in the Bill are primarily about changing behaviour rather than reducing expenditure. On the issue of overpayments, it is difficult to argue that the changes to the procedures for repayment fall into the former category. The primary motivations, I understand, are ones of principle and finance.

Until we can be sure that when things go wrong the individual judgment of officials does not subject claimants who have been overpaid to undue punishments, we need clear safeguards. The Minister has tried to reassure the House that those safeguards will be in place. I am reassured by his comments that recovery will not cause hardship and by his reminding us that the DWP would be open to challenge or to judicial review. With great power comes great responsibility, and many Members may believe, like me, that when the DWP alone is at fault the DWP alone should take the hit, and that this ought to be clear in legislation.

However, I am reassured by the Minister’s comments and I beg leave to withdraw the amendment.

Amendment 62ZC withdrawn.