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Victory in overpaid benefits case | Victory in overpaid benefits case |
(about 3 hours later) | |
A charity has won a legal bid to stop the government clawing back millions of pounds in overpaid benefits. | A charity has won a legal bid to stop the government clawing back millions of pounds in overpaid benefits. |
The Child Poverty Action Group brought the case after 65,000 benefit claimants were warned they could face legal action if they did not pay back cash. | The Child Poverty Action Group brought the case after 65,000 benefit claimants were warned they could face legal action if they did not pay back cash. |
Judges in the Court of Appeal ruled the government had no power to recoup the overpayments unless they were the result of misrepresentation or fraud. | Judges in the Court of Appeal ruled the government had no power to recoup the overpayments unless they were the result of misrepresentation or fraud. |
They also ordered benefits officials not to send warning letters in future. | They also ordered benefits officials not to send warning letters in future. |
The action group's solicitor, Sarah Clarke, said she was "delighted" the ruling. | |
"We brought this case because we know that letters sent to vulnerable claimants threatening court action if they do not repay, have caused considerable distress," she added. | |
We do not enforce repayment as we know that many of our customers are in a vulnerable position DWP spokesman | |
The Department for Work and Pensions (DWP) had stopped issuing warning letters, pending the appeal court's decision. | The Department for Work and Pensions (DWP) had stopped issuing warning letters, pending the appeal court's decision. |
Between March 2006 and February 2007, the government had written to 65,000 claimants who had received too much in benefits, saying it was allowed to ask for the money back. | Between March 2006 and February 2007, the government had written to 65,000 claimants who had received too much in benefits, saying it was allowed to ask for the money back. |
It argued it had a duty to recover public money paid out in error. | |
A High Court judge ruled in the department's favour in February this year, when the action group first challenged it legally. | |
But lawyers for the group, which aims to influence policy to help low-income families, appealed. They claimed the judgement would adversely affect hundreds of thousands of people. | |
Lord Justice Sedley acknowledged that the DWP's letters sought "not to threaten and not to alarm unduly". | Lord Justice Sedley acknowledged that the DWP's letters sought "not to threaten and not to alarm unduly". |
However, he said the impact could be "devastating to a person already living in or close to penury". | However, he said the impact could be "devastating to a person already living in or close to penury". |
Billions overpaid | |
In examples quoted in court, the amounts involved £2,055 and £796. However, the judge noted no court action had yet been taken in cases which involved no fraud or misrepresentation. | In examples quoted in court, the amounts involved £2,055 and £796. However, the judge noted no court action had yet been taken in cases which involved no fraud or misrepresentation. |
A DWP spokesman said: "We will be considering today's judgement carefully. | |
"Where an overpayment has been made due to an error on our part, we have a duty to the taxpayer to ask for the money back. | |
"However, we do not enforce repayment as we know that many of our customers are in a vulnerable position and it may not be possible for them to do so." | |
The DWP estimates that in the last financial year about 2% of all national and local government benefits - about £2.7bn - were overpaid due to fraud and mistakes. | The DWP estimates that in the last financial year about 2% of all national and local government benefits - about £2.7bn - were overpaid due to fraud and mistakes. |
The government had previously been criticised for problems with overpayments of its tax credits. More than £6bn has been mistakenly paid since they were introduced in 2003. | The government had previously been criticised for problems with overpayments of its tax credits. More than £6bn has been mistakenly paid since they were introduced in 2003. |
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