Guide to Financial Redress for Maladministration
Extra-statutory: Loss of statutory entitlement
Overview
43 A special payment must not be made where a statutory solution is available. Where incorrect or inadequate advice leads to a failure (for example to make a claim within the time limits) and all other conditions for benefit are satisfied, a special payment, equivalent to the benefit that would otherwise have been paid, should be made. The deduction of any overpaid benefit and the payment of interest for loss of use of the sum should be considered. A special payment may also be appropriate in respect of any linked benefit.
Definition
44 Loss of statutory entitlement refers to cases where official error has led to a customer losing entitlement to a benefit that would have been received had the error not occurred or had the case been actioned timeously.
| Example of loss of statutory entitlement |
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A claim for benefit is made three years late, as a result of the customer being advised not to make a claim by an officer of the Department. There may be clear evidence that misleading advice was given and clear evidence that the conditions of entitlement, other than the failure to make the claim, had been satisfied throughout the three-year period. In these circumstances, a payment can be made for the maximum three-month statutory period of backdating and a special payment considered for the remaining period of two years nine months. A payment for loss of use of the funds should also be considered - see paragraph 49. |
Change in entitlement rules
45 A loss of statutory entitlement may also arise where entitlement rules change following misdirection and it is no longer possible for the customer to claim benefit.
Financial disappointment rather than a loss of entitlement
46 Misdirection generally involves the provision of incorrect or inadequate information and can apply to any benefit or other service provided by the Department. It may not lead to a loss of statutory entitlement but may lead to financial disappointment (see paragraphs 55 and 72).
Using statutory powers
47 Where an error has been made, a special payment must not be paid where a statutory solution is available. Thus a special payment will not be payable where
- existing powers can be used to review decisions and backdate benefit
- letters can be treated as claims and benefit paid on that basis
- a claim to one benefit can additionally/alternatively be treated as a claim to another benefit.
Such powers are there to be exercised and must be used before considering a special payment. However, even if a statutory solution is found, where an error has occurred, a special payment for compensation for delay may still be appropriate However, even if a statutory solution is found, where an error has occurred, a special payment for compensation for delay may still be appropriate (see paragraph 88 et seq).
What to pay
48 When it is established that error has occurred and the customer has suffered a loss of statutory entitlement, the payment made should be equal to the amount that the customer would have received had benefit been paid correctly. Any overpaid benefit should be deducted in accordance with paragraph 30 et seq.
Adding interest
49 Interest for the loss of use of the funds should be paid when the relevant criteria for compensation for delay are satisfied (see paragraph 88 et seq). In the case of Retirement Pension (RP) increments may be earned where a claim for RP has been deferred. In such cases interest for loss of use would not be considered. Increments are calculated over the period for which the RP was deferred and are designed to compensate, in time, for the person not having received his or her pension from the earliest possible date.
Linked benefits
50 The award of certain benefits (linked benefits) depends on the customer being in receipt of an associated benefit (the qualifying benefit). For example, where the higher or middle rate of care component is payable with Disability Living Allowance to a customer, their carer may be entitled to Carer's Allowance (or Invalid Care Allowance before 1 April 2003).
Error in determining the qualifying benefit
51 When an error in determining the qualifying benefit causes significant delay in payment, this can have a knock-on effect on the award of the linked benefit. Where DWP administers both benefits, the Department should consider a payment for loss of statutory entitlement on both benefits. See paragraphs 118-121 regarding compensation for delay for linked benefits.
Revised April 2003