Commentary on Provisions Part 4 – Assistance Given in Error Section 11: Liability for assistance given in error
40.Under the 2018 Act, an individual has a statutory liability to repay any overpayment of assistance made in error, except where they did not cause or contribute to that error, or if it was the sort of error an individual could not reasonably be expected to have noticed.
41.Where Social Security Scotland determines that an overpayment has occurred, it makes a new determination on a client’s entitlement to benefit. Although this new determination will bring re-determination and appeal rights if the client wants to challenge the decision, there is not currently any formal right to challenge the decision that an individual is liable to repay the overpayment.
42.There was also no provision in the 2018 Act for circumstances in which a representative is acting for an individual.
43.Section 11 therefore modifies section 63 of the 2018 Act in two ways: firstly, to provide for an individual’s representative to be liable to repay assistance given in error in certain circumstances, and secondly, so that rather than arising automatically, liability flows from a decision by the Scottish Ministers that an individual or an individual’s representative is liable to repay assistance given in error. In particular, section 63(1) refers to assistance given “to or for the benefit of the individual” to make clear that in the case of a representative, what is being referred to is assistance given to the representative for the benefit of the individual.
44.Section 11 inserts a new section 63(1A) into the 2018 Act setting out the test for Scottish Ministers to decide when a person is liable to repay an overpayment. Previously, section 64(1) set out the circumstances in which an individual would not be liable.
45.New section 63(1A)(a) reframes that test in positive terms, requiring the error to be the fault of the individual or representative, or the kind of error that an individual could reasonably be expected to notice.
46.Section 63(1A)(b) then sets out a further requirement that for an individual to be found liable, the individual must have benefitted from the overpaid assistance. For a representative to be found liable, the individual must not have benefitted from the assistance. Section 63(9) provides that it is assumed that the individual has benefitted from the assistance unless the Scottish Ministers are aware that that is not the case. Therefore, where it is unclear whether or not the individual has benefitted, the presumption will be that that is the case. This provides protection from liability for representatives.
47.New section 63(5) to (8) describes when an error is the fault of the individual or individual’s representative, replicating what was previously set out in section 64(2) to (4) of the 2018 Act but adding reference to the representative.
48.The effect of section 63(1) to (9), as modified by the Act, is that where an individual or individual’s representative has caused or contributed to an error which has led to an overpayment of assistance (for example, by providing false information or failing to notify a change of circumstances), or should have noticed the error (for example, because a system error has given them thousands of pounds more than the entitlement) then the Scottish Ministers may decide to recover that assistance. If the individual has benefitted from the assistance, then it is the individual who will be liable, even if the error is the fault of their representative. But if the individual has not benefitted from the assistance, for example, because the representative has misappropriated it, then it is the representative who will be liable.
49.Section 63(10) and (11) applies if a person has died since the overpayment was made. Section 63(10) allows the Scottish Ministers to make a liability decision if they would have been entitled to do so had the person not died. This is distinct from section 69 of the 2018 Act, which allows any assistance given in respect of a period after death to be recovered, whether or not there has been an error. Section 63(10) applies instead to overpayments made while the person was alive. It is required because liability now flows from a decision by the Scottish Ministers rather than arising automatically. Therefore, unless a decision has been made before death, there is no automatic liability which would transmit to the person’s estate. Section 63(10) therefore preserves the ability for the Scottish Ministers to recover these overpayments.
50.Inserted section 63(12) allows the Scottish Ministers to make regulations specifying the persons or categories of persons who are included within the meaning of “individual’s representative”. For example, this might include legal representatives of children, people appointed under section 85A or 85B of the 2018 Act (which allow the Scottish Ministers to appoint people to act on behalf of children and other individuals in certain circumstances) and guardians under the Adults with Incapacity (Scotland) Act 2000, amongst others.
51.Section 11(3) inserts two new sections into the 2018 Act.
52.Inserted section 63A replicates what was section 63(2) and (3) of the 2018 Act.
53.Inserted section 63B provides that having made a decision that a person is liable under section 63, the Scottish Ministers must inform the person of the decision, the reasons for it, the right to request a review of the decision and the right to appeal to the First-tier Tribunal for Scotland (Social Security Chamber) if that review is not completed within the period allowed. The processes for reviews and appeals are set out in new sections 69A to 69L inserted by section 13. The further review and appeal provisions in part 6 of the Tribunals (Scotland) Act 2014 will also be available.
54.Section 11(4) repeals section 64 of the 2018 Act, because it is no longer required following the restructuring of the provisions in section 11(2) and (3).
55.Section 11(5) modifies section 65 of the 2018 Act, which requires the Scottish Ministers to consider the financial circumstances of someone who is liable under section 63 when deciding whether and how to recover the overpayment, so that it applies to both an individual and an individual’s representative.
56.Section 12: Liability of individual’s estate
57.Section 12 modifies section 69 of the 2018 Act, which deals with the liability of an individual’s estate for assistance which is paid after their death.
58.Subsection (2) changes the reference to assistance being given “under section 24” to assistance being given “in the performance of a function conferred by virtue of this Part”. Section 24 requires the Scottish Ministers to give the assistance the individual is entitled to be given, so assistance which fell outwith that duty (because it was given in error) would not necessarily be caught by that reference. The replacement wording is consistent with other references in the 2018 Act.