Discretion in overpayment recovery

Abstract

R v Secretary of State for Work and Pensions [2023] EWHC 233 (Admin) calls into question at least three aspects of the long-established practice of the Department for Work and Pensions (DWP). The case concerns the DWP’s discretionary power to waive the recovery of overpayments. In former times, the rules governing recovery only rendered claimants liable if they had misrepresented or failed to disclose a material fact. Tax Credits had required low income families to repay substantial amounts of money delivered in error – a process the Ombudsman condemned as ‘fundamentally unsuited’ to their needs (Parliamentary and Service Ombudsman 2007, p. 5). Following this example, in 2013 a general power to recover overpayments from other benefits was introduced, governing Universal Credit, Jobseekers Allowance and Employment and Support Allowance. In the present case, the DWP had ‘repeatedly’ miscalculated the benefit, and assured the claimant that the payments were correct. The claimant had taken ‘all reasonable steps to repeatedly clarify her entitlement and provide information’ (para. 1). There was no dispute that the overpayment was the result of official error. The DWP had apologised for ‘this profound lapse in service’. The claimant asked the DWP in three separate applications to exercise its discretion to waive repayments, and the DWP refused at every point. The first issue this case raises concerns the DWP’s use of its discretion. For decades – at least since the 1960s – the DWP and its predecessors have limited their use of discretion by the development of national rules, intended to ensure that there is no inconsistency between judgements made in different parts of the country (Hill 1969, Spicker 2011). The ‘discretion’ being exercised here is the discretion permitted to the Department, not the judgment of individual officers. In 2012, the then junior minister Chris Grayling explained to Parliament: ‘There will be an absolutely clear code of practice that will govern the circumstances in which recovery action will or will not be taken, to ensure consistent, considered decision making’ (cited at para. 122). As it turned out, the code of practice did not consider that the egregious fault of the DWP could be considered a sufficient reason for not pursuing recovery. The (unpublished) guidance (cited at para 37) states: