Pursuing overpayment recovery to deter non-reporting of changes in future
This section includes good practice on:
Introduction
Local Authorities (LAs) should have procedures in place to prevent overpayments occurring, but when they do occur there should be clear overpayments policies and procedures, readily available to all relevant employees, that will allow them to:
- identify overpayments promptly
- stop the overpayment continuing
- calculate the overpayment correctly, considering underlying entitlement
- correctly classify overpayments and decide whether they are recoverable, and if so, from whom and whether to recover
- notify customers and other affected persons quickly
- pursue recovery by the most speedy, cost effective and efficient methods available in line with legislation, having regard to policy issues such as the wider consequences of recovery action
- ensure that there is effective financial control during the entire process
Firm and fair action taken by the LA in administering overpayments will have the effect of encouraging customers or their representatives to give correct and timely information regarding their claim and deter benefit fraud.
Managing debt
Good practice includes:
- ensuring documented member endorsed overpayments policies and procedures are used and adhered to by the relevant employees to ensure that overpayments are brought to account, are under appropriate financial control, and there is an audit trail for all decisions on recoverability and classification
- ensuring debts are only written-off, by an authorised officer, in accordance with the LA's corporate or benefit service's write-off policies after all avenues of recovery that the LA considers appropriate have been considered
- ensuring the final overpaid amount, taking into account any underlying entitlement to benefit and unpaid or returned cheques is calculated, on average, within a period of 14 days following the date that the LA receives sufficient information
- producing monthly reports for Benefit Managers on:
- types
- numbers
- value of LA error overpayments
- total value of overpayments
- reason for overpayments
- classification
- length of overpayment periods
- providing annual or more frequent reports to Members on the
- level of debt,
- age of debt and
- percentage of debt recovered
- networking with other LAs to learn lessons and share good practice
- monitoring and reviewing the numbers of successful revisions and appeals arising from disputed overpayment decisions
- analysing the trends and reasons for failure to report changes of circumstances and address the outcomes
- completing a joint review between housing services team and benefits team to improve the cost-effectiveness of reclaiming overpayments
- collecting and analysing data types, values, and length of overpayment period to identify speed of transaction and training needs
- having the electronic means to calculate all overpayments for all case types and circumstances
- establishing good communications with Registered Social Landlords (RSL)/registered provider (RP) in England, and working to prevent build-up of overpayments. In particular, making sure RSLs/RPs and LA housing departments:
- remind their tenants of their duties to report any changes of circumstances to the LA
- notify the LA promptly when relevant properties become empty and promptly report in writing any relevant change of circumstances of which they become aware in relation to housing benefit (HB) cases
- alert the LA in writing to any case raising a reasonable suspicion of fraud, and co-operate with the LA's enquiries into suspected fraud
Recovery
Good practice includes:
- setting targets for the recovery of new and old debt and the LA monitors performance against them
- keeping records of outstanding overpayments when benefit is no longer in payment, in the event of future benefit award, or other change of circumstances, to enable recovery in the future
- putting in place collection and monitoring policy and systems to monitor the recovery of administrative penalties
- ensuring that all new debts are dealt with quickly and prioritising new debts first
- having clear policies on the recovery of overpayments, taking into account who actually misrepresented or failed to disclose information which caused the overpayment
- ensuring policies and procedures cover all the elements of effective collection of overpayment debt and are available to all appropriate employees
- providing a leaflet to customers, with their invoice, explaining what an overpayment of HB is, how they can appeal, what to do if they will have any difficulty in repaying the debt and what will happen if they refuse to repay it
- allowing a calendar month before imposing a sanction such as reducing HB payments or sending a case to a debt collection agency. However, an invoice or reminder should still be sent within that calendar month
- reviewing debts on a regular basis either monthly, or quarterly
- keeping in view the top 10 to 100 debts (depending on the size of the LA) to ensure all appropriate action is taken
- writing off debts where there is little prospect of the debt being repaid
- ensuring that the LA's bad debt provision is large enough to cover written off HB overpayments
- reviewing the strategy, policies and procedures for continued relevance
- publicising the LA's policy to pursue the recovery of all overpayments that are recoverable and the amount of debt recovered, setting out targets and monitoring arrangements
- using all available/appropriate recovery methods
- having a check sheet prompting employees to consider all available/appropriate recovery methods
- co-ordinating recovery efforts with other sections of the LA
- agreeing with other local authorities to recover overpayments from customers who move away from the district
- setting up a benchmarking overpayment recovery liaison group with other authorities
- liaising with DWP in cases when interpretation of overpayment recovery policies and procedures is required. The overpayments policy advice line number is 0113 232 7755
- notifying the landlord as quickly as possible in direct payment cases when new tenants do not receive their full HB entitlement due to instalment recovery of a previous overpayment
- when issuing full written statements to landlords and tenants, ensuring that information given to the landlord does not breach the Data Protection Act but does give them sufficient information to decide if they want to appeal against the decision
