CCM8240 - Closing the Examination: Adjustment needed to the claim and Penalties appropriate - Who will meet the settlement?

You will normally have had this in mind whilst you were working the examination but you need only reach a firm conclusion when you reach the settlement stage. Where a couple claim NTC they are jointly and severally liable for any overpayments. This means that if a Mr & Mrs Green have been overpaid £1500 we can pursue either of them or both of them until we get all of our money. The legislation also allows us to decide that each of them should pay a specified amount.

In practice, in non-contract settlement cases demand notes will initially go to each of them requesting them to make a payment up to the total overpaid and it is for them to decide how they pay. We are not bothered how Mr & Mrs Green pay the £1500 as long as it is paid. If payment is not made then once the debt reaches the local recovery office we might decide to pursue each of them for a specified part of the debt. We might do this by reference to the elements of CTC and WTC that have been overpaid, or by their ability to pay or by any other reasonable method. We can even pursue 100% of the debt from one partner and nothing from the other one.

The legislation does not allow us to charge an innocent partner a penalty for fraudulently or negligently providing an incorrect claim or statement. If for example the examination into Mr & Mrs Green’s claim established child care costs had been overstated you might find out that Mr Green knew nothing about this. Perhaps he handed over the cash to his wife each week and expected her to pay the nursery but unknown to him the children went for less hours and his wife kept the spare cash. In these circumstances, if we believe he did not know about the incorrect claim and could not have been reasonably expected to have known, we cannot impose a penalty on him. We can only impose the penalty on Mrs Green for her fraud or neglect.

The legislation only refers to not pursuing penalties from an innocent partner but we will also not pursue an overpayment that arises out of fraud or neglect, from an ‘innocent’ partner.

Who you ask to meet the settlement will depend on the circumstances of the case. You will need to consider whether your case involves:

• a single claimant
• a couple who are no longer living together at the time you settle the examination
• a couple where they were both aware of the incorrect claim or could reasonably have been expected to be aware of it
• a couple where the only penalty relates to a failure to notify a change of circumstances
• a couple where one of the partners is considered to be innocent of any fraud or neglect.