Guide to Financial Redress for Maladministration
Basic principles - redress for maladministration
Overview
14 Important points covered in this section:
- there are seven basic principles to be considered when determining whether or not maladministration (also referred to as official error) has occurred
- all cases must be considered in detail and on their individual merits
- advice can be found on what to do when the customer has died
- deciding cases can be difficult but they have to be resolved and judgements made, sometimes a case has to be decided on a balance of probability
- consideration has to be given to deducting any overpayment or overprovision of benefit from any proposed special payment before the balance of the payment is made
- remember that particularly difficult cases should be referred to DWP Viewpoint.
Seven basic principles
15 Where maladministration has occurred, seven basic principles should be followed when considering redress. These are that
- all mistakes are admitted and put right
- a sincere and meaningful apology is offered
- redress is fair and reasonable
- as far as possible, redress restores the customer—or in very exceptional circumstances a third party—to the position that he or she would have been in but for the official error
- due account is taken both of the need to provide a suitable remedy for the customer and the need to protect the public purse
- arrangements for considering redress are made public
- where it is possible to remedy an error by statutory means that option must be used rather than resorting to an extra-statutory or ex gratia payment.
Official error
16 For the purposes of this guide, the action or inaction by the Department leading to the problem caused for the customer, is defined as `official error'. The term encompasses any error occurring within any part of the Department and, exceptionally, other government departments (OGDs), statutory bodies and contracted bodies when acting on behalf of DWP. Mistakes made by OGDs, statutory bodies and contracted bodies not acting on behalf of DWP will ordinarily be the responsibility of those Departments or bodies.
Official error defined
17 Official error can be broadly defined as occurring when
- a decision maker makes a wholly unreasonable or clearly incorrect decision (see paragraphs 18 and 99 et seq)
- the requirements of the law applicable at the time were not followed (but see paragraph 18)
- incorrect or inadequate action was taken
- correct action ceased prematurely
- a valid claim was overlooked or ignored
- the customer was misdirected (that is, the customer acted on an incorrect or inadequate direction or instruction to his or her detriment).
When will official error not normally be accepted?
18 Official error will not normally be accepted when
- a reasonable decision was given based on the facts available at the time but following receipt of further information, the decision maker decides to interpret them differently or the decision was overturned on appeal. The overturning of a decision by a decision maker or a higher tier of authority is a routine event clearly envisaged in legislation. It will not, therefore, normally give rise to a special payment unless the first decision was wholly unreasonable or clearly incorrect, in the light of evidence held at the time (see paragraph 99 et seq for descriptions of these terms); or the process was excessively and unnecessarily delayed (see paragraph 97 et seq)
- a decision was made on the understanding of the law at that time but it is later interpreted differently by a Social Security Commissioner or the Courts
- the customer was ignorant of the law, did not seek advice and delayed claiming. This could apply when legislation is amended or new provisions introduced, as such changes are usually publicised by the Department
- if helpful but not mandatory procedures fail. For example, the Department usually invites claims to Retirement Pension but legislation still puts the onus on the customer to make a prompt claim
- specific advice or a recommendation given was factually correct in relation to a specific enquiry (but see paragraph 19 below)
- actions taken by officials were justified in the pursuit of establishing or verifying benefit entitlement or maintenance liability
- delays were caused by industrial action, whether within or outside the Department (see paragraph 101).
Information and advice
19 Officials should ensure that customers are given
- full and accurate information (that is, general factual data which is not customer specific) and
- general advice (for example, the promotion of Government policy - work is the best form of welfare; people should save for their retirement) to enable them to make their own decisions
- specific advice where it is appropriate to do so (for example, information tailored to a customer's individual circumstances and requirements, which may identify a number of options but does not indicate the official's view of the best course of action). The specific advice provided should be full and accurate to enable the customer to make his or her own decisions
- recommendations where specific business areas of the Department have specified that it is appropriate to do so (for example, a statement to a customer suggesting his or her best course of action). Under such specific circumstances, the member of staff may provide his or her view (as an official of the Department) of the best option for the customer. Care must be taken when providing specific advice or (where appropriate) a recommendation, to ensure that the customer's personal circumstances are fully taken into account.
The circumstances in which information, advice or recommendations should be made can be found in relevant procedural guidance.
Decisions with a right of review or appeal
20 Under the Decision Making and Appeals (DMA) arrangements, customers are able to dispute a decision within one month of the decision being made. Disputed decisions can be re-examined and any mistakes corrected without the case having to go through a formal appeal process. Where an appeal seems appropriate, it should be established whether the customer has used the disputes process before the case is considered further. If the disputes process has been used but a Departmental error has not been corrected, the continued failure to rectify the mistake may constitute maladministration. This is especially so if the outcome of the disputes process misleads the claimant into believing that an appeal would not be successful.
Customer's own actions
21 There may have been clear and unambiguous Departmental error or, on the balance of probabilities, DWP may accept that there has been Departmental error. It will then be necessary to consider whether there has been any fault on the part of the customer or anyone acting on the customer's behalf. In this context, `fault' refers to whether incorrect or inadequate action or inaction by the customer was a significant contributory factor to the error, either because
- it helped cause the error in the first place or
- it caused the error to continue for longer than necessary.
Child Support Agency clients
22 In cases of delay experienced by Child Support Agency clients, the Agency is not responsible for delays which result from a failure to co-operate by either the Non-Resident Parent (previously referred to as the Absent Parent) or the Parent With Care, providing the Agency has done all that is reasonable to obtain co-operation. Before coming to a decision, it should be established whether the Agency's maladministration led to the failure to co-operate.
Effect of a customer's actions
23 If fault is considered to be a relevant factor, it could affect any special payment in one of two ways, depending upon the extent of the customer's contribution to the error. It could either
- remove the need to make a special payment altogether, for example when it is considered that it would have been reasonable for the customer to have acted promptly to counteract the effect of the Departmental error (see paragraph 24 regarding excessive time); or
- reduce the amount of the special payment.
Correction of an error relies upon information being provided by the customer
24 A reduction in the amount of a special payment may be due when an error is discovered after a period of time but its correction relies on information being provided by the customer. If the customer was clearly asked to provide such information and, without good cause, failed to provide it for an excessive period of time, then such periods of contributory delay should be excluded from the calculation of the special payment.
Deciding whether the customer acted reasonably in relation to their dealings with the Department
25 Each case should be considered on its own merits when deciding whether the customer acted reasonably in relation to their dealings with the Department. The following factors should be taken into account before making such a decision:
- the customer's age and health
- the customer's knowledge of dealing with such issues
- whether a reasonable person of the customer's age, health and knowledge would have acted as they did
- whether the customer gave false, misleading or incomplete information which the Department could not have been expected reasonably to challenge
- the nature, standard, accuracy of the official information provided to the customer, either orally or in leaflets, letters, or forms and the ease with which such information could be understood
- the information available to the general public through Departmental publicity
- the length of time before a customer acted, if there is no reasonable explanation for the delay. As a guide, DMA regulations provide a time limit of one month for the provision of information or a longer period determined by the Secretary of State. Where repeated delays are experienced because of customer action/inaction, consideration should be given to the aggregate effect.
Deciding individual cases
26 Deciding individual cases can be problematic because, for example
- there is often a long time between the date of the alleged error or misdirection, the date its effect becomes apparent and the date the complaint is made
- there may be little, or no, written evidence available to support or contradict the customer's assertion that misdirection or error occurred, and
- the individual's assessment of financial loss may not seem reasonable.
Nevertheless, a fair and defensible decision must be reached using whatever evidence is available.
Evidence to support the customer's assertions
27 Documentary or incontrovertible proof of misdirection is not an essential requirement for the authorisation of a payment. The fact that documents may have been routinely and correctly destroyed in the normal course of events or that an officer cannot remember the case, would not in itself justify a refusal to make a special payment.
Judgement must be made on the plausibility of the allegation
28 Each case must be decided on its own merits. When there is no, or little, clear and confirmed evidence of official misdirection or error, a judgement must be made on the plausibility of the allegation. In making such a judgement the following points should be considered:
- the likelihood that wrong advice could have been given in the particular situation - taking into account the experience of the staff involved and whether the particular statutory provisions/procedures were well known or new
- whether the customer's account of events seems reasonable
- the consistency of the allegations made
- whether the passage of time could have distorted the customer's recollection of events
- the level of knowledge the customer could reasonably be expected to have from their past contacts with the Department
- whether there has been confusion rather than misdirection for example, where a customer has been claiming more than one benefit and misinterpreted advice
- the fact that whilst an enquiry or question may be a routine transaction for the Department's agencies and business areas, it could be more complicated for the customer.
Balance of probabilities
29 A decision on whether or not an official error occurred may ultimately depend on the balance of probabilities. It is not a case of giving the customer the benefit of any doubt. Nor is it necessary to prove a point beyond reasonable doubt. It is a matter of weighing the evidence and judging the most likely of any options. The decision must not be arbitrary, based on bias or prejudice and must be publicly defensible. If an error is accepted, the customer should be afforded redress which, as far as possible, restores him or her to the position he or she would have been in but for the error.
Offsetting amounts against the overpayment or overprovision of benefit
30 Financial redress may be appropriate in cases where there is either an outstanding overpayment or overprovision of benefit. An overpayment of benefit results from a customer error or failure to disclose information. An overprovision of benefit results from a Departmental error, for example, a failure to act upon information received. The decision on whether financial redress is appropriate should not be influenced by the existence of an overpayment or overprovision. However, before a special payment is made, consideration should be given to deducting any such overpayment or overprovision from the special payment.
Guidelines that should be followed when considering deduction of the overpaid or overprovided benefit from a special payment
31 There are two basic guidelines that should be followed when considering a deduction of the overpaid or overprovided benefit from a special payment:
- any overpayment or overprovision of benefit of less than £40 should be ignored
- only overpayments or overprovisions that have been notified to the customer should be deducted from the special payment.
Circumstances when deduction from a special payment should not be made
32 An overpayment or overprovision of benefit should not be deducted from a special payment where this would leave the person with an outstanding debt that arose because of the error. For example, where a customer has entered into a financial commitment following incorrect advice (see paragraphs 73 and 74). Additionally, no recovery should be made from
- a consolatory payment or
- payments in respect of actual financial loss where the customer is in receipt of an income related benefit.
Deduction from a special payment in Child Support Agency cases
33 Deductions would also apply to special payments made to Child Support Agency clients where social security benefits are paid which would not have been payable had a maintenance assessment or calculation been in force.
Any residual balance
34 If an overpayment or overprovision of benefit is offset against a payment of arrears, compensation on any residual balance should be considered, subject to normal compensatory interest criteria. If the arrears payment is fully extinguished by the offset, no compensation will be payable.
Alternative arrangements - need to consult DWP Viewpoint
35 If, exceptionally, alternative arrangements are proposed on a particular case, DWP Viewpoint should be consulted without delay.
Death of customer
36 In the event of the death of a person who has either submitted a request for compensation because of Departmental maladministration or in respect of whom the need to consider compensation has been identified, action should be taken as follows.
Decision made to award a compensatory payment before the death of the customer
37 If, prior to the death of the customer, it has been decided that a compensatory payment should be made, payment should be issued to the person dealing with the deceased person's affairs.
Next of kin or a third party submits a request for compensation
38 If the next of kin or a third party (for example a friend of the deceased person) submits a request for compensation because
- he or she has suffered an actual financial loss
- that loss was incurred because he or she helped support the deceased person and
- such support was offered because benefit to which the deceased person was entitled had not been paid because of maladministration
then redress should be offered in respect of the actual financial loss suffered by the next of kin or third party, rather than that suffered by the deceased person.
Next of kin or a third party submits a request for a consolatory payment
39 In addition, the next of kin or a third party (for example, a friend of a deceased person) may request a consolatory payment because of their personal suffering (rather than that suffered by the deceased person) as a result of the Department's maladministration. These cases should be referred to DWP Viewpoint where consideration will be given to the individual circumstances of each case and to any objective evidence that has been provided.
Referral of cases to DWP Viewpoint
40 All other requests for redress on behalf of a deceased person and cases that cannot be resolved because they are complex, should be referred to DWP Viewpoint for consideration and advice.