UK

Benefits repayment case upheld by Supreme Court

The government has lost a legal battle to recover millions of pounds in overpaid benefits.

The Supreme Court ruled that it did not have the right to recoup money it had paid out in error to 65,000 people.

Letters were sent to claimants between March 2006 and February 2007 with the threat of legal action if they did not repay.

The government had challenged a lower court ruling in favour of Child Poverty Action Group.

The CPAG had fought the test case on behalf of claimants who were overpaid, but were, it argued, the "innocent victims" of an error.

The government had claimed it was allowed to ask for the money back and that it had a duty to recover public money paid out in error.

However, Supreme Court judges said that errors made by the authorities were not a sufficient reason to reclaim the money.

Judge Sir John Dyson said the statutory scheme for recovery of benefits was limited to misrepresentation or failure to disclose a material fact.

"Simple error on the part of the adjudicating authorities was excluded," he said.

CPAG chief executive Alison Garnham said it was an important decision.

"Even though the letters claimants were sent acknowledged it was the government's own errors and the debt was unrecoverable under its own social security law, explicit threats of court action were still made.

"We hope that the department will regret the anguish caused to many of the people who received the letters and will seek to improve its own administration to avoid overpayment problems."

A High Court judge ruled in favour of the Department of Work and Pensions in February 2009, when the action group first challenged it.

But lawyers for the group, which aims to influence policy to help low-income families, successfully appealed in October 2009.

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