Reasonable Belief Test: Specific Rules (Info)
Specific rules for the treatment of disputed
overpayments
This section provides you with more specific guidance on how to make a decision on some common reasons for overpayments that are the result of official error. These are
Contra errors
Jobseekers Allowance (Income Based and Contributions
based)
Manual payment
Paid direct and PVE
Check Function VIEW HOUSEHOLD NOTES for evidence of a Contra error. These errors only occurred during 2003 / 2004 and 2004 / 2005. If there was a Contra error, the claimant would have received additional payments, either into their bank account or by cashcheque. Overpayments of up to £300 00 that were caused by a Contra error were automatically remitted
Overpayments above £300.00 were considered a large enough amount to have been obvious to the claimant. However, you should consider carefully the impact of the payments on the claimant
Were the amounts of these payments small enough that it could be considered reasonable for a claimant not to realise that they had been paid twice?
Were there multiple incorrect payments? Smaller incorrect payments for the same award period will not be as easy to detect as large incorrect payments, which when added together have caused the £300.00 or more overpayment
Consider whether the claimant had any problems with their award notices, either because they did not receive any or because multiple notices were issued
Also consider if the claimant had difficulties contacting us to report this overpayment
Note: These are different from duplicate payments made when the original payment was delayed and an interim payment made in the meantime. For this type of case follow the guidance in Manual payment below
Jobseekers Allowance (Income Based and
Contributions based)
Treatment of cases from 2003 – 20/06/2007
Claimants in receipt of Income based Jobseeker’s Allowance are entitled to maximum Child Tax Credit (CTC), however, Contribution based Jobseeker’s Allowance does not grant entitlement to maximum CTC
If the claimant telephones the Contact Centre to confirm they are in receipt of Jobseeker’s Allowance and the adviser fails to ask which specific type of Jobseeker’s Allowance they are in receipt of and simply assume it is Income based, then this may generate an overpayment if the claimant is actually in receipt of Contribution based Jobseeker’s Allowance
In these circumstances we will remit the overpayment because at the time of reporting the change, the claimant was not asked to specify which type of Jobseeker’s Allowance they were in receipt of and could not be expected to understand that an incorrect recording could lead to an overpayment
Treatment of cases from 21/06/2007
From 21/06/2007 Contact Centre advisers will, when informed that the claimant has started to receive JobSeeker’s Allowance, ask the claimants which type, Income based or Contribution based, they are in receipt of. Therefore, it is very unlikely that a Contact Centre advisor would have incorrectly made an assumption on the type of JobSeeker’s Allowance being received by the claimant, and therefore be responsible for the overpayment. If the claimant states that they were not asked to specify which type of JobSeeker’s Allowance they were in receipt of when they reported their change, you should check their call records
In the rare scenario where the Contact Centre adviser still incorrectly records the type of JobSeeker’s Allowance, we would still expect the claimants to check their award notice and inform us the wrong type of JobSeeker’s Allowance has been recorded. Such overpayments should not therefore be remitted unless there is evidence of mis-advice
Note: This guidance should not be used for overpayments that result from claimants filing in a claim incorrectly. The claim form and its accompanying notes make clear the distinction between the two types of Jobseeker’s Allowance and we would expect claimants to ensure they are in receipt of income based Jobseekers allowance before stating as such on the claim form
Manual payments – Availability of award notices
Claimants receiving manual payments may, due to system problems, not receive a correct or up-to-date award notice. Therefore, we can not expect them to be able to check the personal circumstances that their award is based on. Nor can we expect them to be able to check the payments they receive against those that would be outlined on their award notice
The claimant should however, check that the amounts they are manually paid match what is shown in any letters we send them
If a claimant does this and it subsequently emerges that they have been overpaid as a result of official error, then you should accept that they could reasonably have believed that their payments were right
Manual payments – Re-profiling of awards
In the first two years of tax credits, because of the large numbers of manual payments being made, there were delays in posting manual payments
There may also have been a time delay between the issue of the payment and the date it was posted, and a time delay between the posting date and the first re-profiling that took place after the posting date
As such
-
If there was a new award version created between the issue date of the manual payment and the posting date of the first re-profiled award notice to take account of the manual posting
And
-
It was created more than one calendar month after the manual payment was issued
You should accept that it was reasonable for the claimant to expect us to have taken the manual payment into account when re-profiling their award and that their payments were right
Manual payments – Notification that the payment would be recovered
All claimants should receive a letter when manual payments are set up, telling them when manual payments are to be made, and how much they will get. The letter explains clearly that if any manual payment they receive is duplicated by a system generated payment when the problem with their claim is resolved, they will need to repay those duplicated amounts. Where manual payments are made at an Enquiry Centre, this was reinforced by introducing a requirement from 1 January 2004 for the claimant to sign a declaration that they understood that the payment would be recovered if they received a duplicate payment. Consider
If the claimant insists that they did not receive this explanation, it may be reasonable to expect that the claimant was not aware of the recovery process
Additional tax credits payments made in response to hardship claim – Notification that the payment would be recovered
All claimants should have received a letter when additional payments were set up, telling them when the payments were to be made, and how much they would get. The letter explained clearly that any such payment they received could lead to an overpayment by the end of the year and they will need to repay that overpayment. Consider
If the claimant insists that they did not receive this explanation, it may be reasonable to expect that the claimant was not aware of the recovery process
We would expect claimants to tell us if they were receiving duplicate payments. If the overpayment can not be remitted under the generic rules, there is no other reason why the overpayment should be remitted
Once you have made a decision
You must
-
Record the reasons for your decision on the overpayment worksheet
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Follow the guidance in Calculate And Remit An Overpayment to continue your action
Note: If you have arrived at this guidance from the Calculate And Remit An Overpayment guidance, continue to follow that guidance
