11 March 2005
Law lords have overturned a landmark appeal court ruling that the government cannot reclaim benefit overpayments.
A test case brought by the Child Poverty Action Group in 2003 had established the right of benefit claimants to keep certain overpayments. But the lords have now ruled that the claimant in that case, Maureen Hinchy, must pay back £3,555 in income support to the Department for Work and Pensions.
The ruling could have major implications for both claimants and the DWP. Overpayments, either through error or fraud, cost around £3bn annually.
Hinchy had received a Disability Living Allowance that should have ended in 1998, but a mistake meant she continued to receive benefits of £96.15 per week, and not the £57.65 she should have been paid. The error was not corrected for two years.
At the Court of Appeal in 2003, judges rejected the DWP's argument that Hinchy should have informed her benefits office of the change in her circumstances, placing the onus on the department to make correct payments.
But, hearing an appeal, Lord Hoffman ruled that 'the primary onus of keeping the appropriate office informed rests upon the claimant'.
A DWP spokeswoman said: 'The department has a duty to the taxpayer.'
PFmar2005
