CCM10740 - Penalties and Interest: Incorrect Claims - Meaning of Serious Error - Enquiries or Examinations
Serious error is defined as a repeat error, where there is insufficient evidence to categorise that repeat error as deliberate.
A repeat error is considered to have been made where, following an intervention and correction of an incorrectly claimed element, the claimant again incorrectly claims that element in spite of the education provided in the original intervention.
If an element is incorrectly claimed (for example childcare) and a subsequent error is made in respect of another risk for example income, this is not a repeat error.
Where an over-claim arose from an error which was the result of a Serious Error we will charge a penalty of 25% of the over-claim (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Serious Error includes circumstances when:
- there is a repetition of a Failure to Take Reasonable Care, see CCM10730, in a subsequent enquiry on the same issue
- the error was so careless that it deserves a higher penalty.
- the over-claim resulted from a substantial error in the information provided. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
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- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
See below for examples of Serious Error.
Example 1
Ravi entered his income as £10,000, but his income is £30,000. Ravi says that he mis-read his calculations and put down the wrong number. This is a Serious Error as Ravi failed to take reasonable care and a substantial over-claim is likely to result from understating income by £20,000. A claimant must know at least the rough level of his income: it is clearly a Serious Error to understate income by £20,000.
Example 2
Kimberley C’s child care costs were simple, but she still overestimated them by £20 per week. In completing her application Kimberley did not phone the Helpline or contact an external adviser for help.
Kimberley was careless in completing her claim, she did not seek help and still made a substantial error on a calculation which was simple in her case. This was a Serious Error.
Example 3
Assuming the same facts as Example 1 in CCM10735, where the resolution of that enquiry established that there was a Failure to Take Reasonable Care (whether or not a penalty was charged). Despite the warning to take more care with his claim in future, Ashley showed profits of £1,156 on the next year’s claim for tax credits when the correct figure should have been £11,560, giving rise to an over-claim of £2,345. You are satisfied this was a clerical error and there was no intent to over-claim credits. Ashley should have taken care to ensure all entries were correct, and he also ignored the previous warning to take more care in future, so this was a Serious Error
