Commentary on Sections Part 5: Social security: General Section 105: Recovery of benefit payments
513.Section 105(1) sets out provisions concerning the recovery of overpaid universal credit, JSA, ESA and the housing credit element of state pension credit (housing credit) that are inserted into the SSAA 1992.
514.New section 71ZB sets out the general provisions about the recovery of overpaid universal credit, JSA, ESA and the housing credit element of state pension credit.
515.Subsection (1) gives the Secretary of State the power to recover any amount of universal credit, JSA and ESA, which has been paid in excess of entitlement. It also gives the Secretary of State the power to recover any amount of the housing credit, which has been paid in excess of entitlement, except in circumstances that will be prescribed in regulations.
516.Subsections (2) to (4) make further provision about the deductions from benefits which can be made where an amount recoverable from a person under section 71ZB was paid to that person on behalf of another (for example where an amount is recoverable from a landlord).
517.Subsection (5) means that where another income or benefit that would affect the award of universal credit is paid late, any amount of universal credit which would not have been paid had the other income or benefit been paid on time, is treated as an overpayment and is recoverable from the universal credit recipient.
518.Subsection (6) allows for an amount paid to one member of an award which is made to persons jointly to be recovered from the other by any method (as listed in subsection (7)).
519.Subsection (7) provides that overpayments may be recovered by deducting from benefit, by deduction from earnings, through the courts, or by adjustment of subsequent payments of benefit.
520.New section 71ZC relates to recovery of overpayments under new section 71ZB by the method of deduction from benefit.
521.Subsection (1) provides that overpayments of universal credit, JSA, ESA and the housing credit can be recovered by making deductions from payments of prescribed benefits.
522.Subsection (2) provides that where universal credit, JSA, ESA or the housing credit is paid to a third party (for example a landlord) on the benefit claimant’s behalf, overpayments of those benefits may be recovered from:
	prescribed benefits to which the third party is entitled;
	ongoing payments of prescribed benefits to the third party being made on the benefit claimant’s behalf; or
	ongoing payments of prescribed benefits paid to the third party on other benefit claimants’ behalf (for example, if a landlord has other tenants who are in receipt of universal credit or housing credit).
523.Subsection (3) provides that in circumstances to be prescribed in regulations, where deductions are made from payments of prescribed benefits to the third party on the claimant’s behalf, the claimant’s obligations to the third party will be discharged, for example the landlord would not be able to put the claimant into arrears with their rent.
524.Subsection (4) provides that in all cases where deductions are made from payments of prescribed benefits to the third party on other benefit claimants’ behalf, the other claimants’ obligations to the third party will be discharged, for example the landlord would not be able to put the other claimants into arrears with their rent.
525.New section 71ZD relates to the recovery of overpayments under new section 71ZB by deduction from earnings.
526.Subsection (1) allows the Secretary of State to make regulations so as to allow amounts recoverable under new section 71ZB to be recovered by deduction from earnings.
527.Subsection (2) allows the Secretary of State to prescribe in regulations the definition of ‘earnings’ for the purpose of this section.
528.Subsection (3) describes the related issues for which the Secretary of State may prescribe in regulations under subsection (1). These include preventing an employer from making deductions from earnings where they would take earnings below a specified level, allowing for an employer to deduct a prescribed sum from earnings in respect of the employer’s administration costs, providing for a criminal offence for non-compliance with certain of the obligations under those regulations and legislating as to priorities of deductions from earnings made under these powers as against those made under other legislation.
529.New section 71ZE relates to recovery of overpayments under new section 71ZB through the courts.
530.Subsection (1) provides that overpayments are recoverable through the county court system for persons residing in England and Wales. Subsection (2) provides that overpayments are recoverable through the sheriff court system for persons residing in Scotland.
531.It is standard practice for the Secretary of State to seek to recover court costs when there is a court judgment in his favour. There is no mechanism at present however for the Secretary of State to recover any costs associated with civil recovery of overpayments in the same way as if they formed part of the overpayment debt, by deduction from benefits, or by adjustment of subsequent payments of benefit. Subsection (3) allows the Secretary of State to recover costs by the same method as the overpayment is recovered.
532.New section 71ZF relates to recovery of overpayments under new section 71ZB using the method of adjustment of subsequent payments of benefit.
533.It provides that the Secretary of State may prescribe in regulations that in certain circumstances, amounts paid but subsequently determined as not payable, can be treated as properly paid and be set against future payments of benefit or against certain payments to third parties.
534.New section 71ZG makes provision enabling the Secretary of State to recover any amount paid by way of payments on account.
535.Section 71ZG(2) provides that the payment on account is recoverable from the person to whom it was paid, or another prescribed person. This includes the benefit claimant and also the benefit claimant’s partner or an appointee who appropriates excess benefit for their own use.
536.Subsection (3) allows regulations to calculate or estimate, where appropriate, the amount of a payment on account to be recovered.
537.Subsection (4) allows for an amount paid to one member of an award which is made to persons jointly to be regarded as paid to the other. This will ensure that the payment on account can be recovered from either of them.
538.Subsection (5) enables the methods of recovery set out in new sections 71ZC to 71ZE of the SSAA 1992 to be applied to recover payments on account in the same way as they allow for the recovery of overpayments of benefit. While the Secretary of State may choose, in many cases, to recover payments on account from ongoing payments of benefit, there will be circumstances where other methods of recovery are necessary, for example, where a payment on account is made at the beginning of a benefit claim but the claimant ceases to receive benefit before the payment has been fully repaid to the Secretary of State.
539.New section 71ZH relates to the recovery of payments made to people in or facing hardship.
540.Subsection (1) provides that the new subsection applies to hardship payments which are recoverable. This may include payments made under section 28 of this Act to universal credit claimants who are subject to a sanction or under the equivalent provisions for JSA in section 19C of the JA 1995, inserted by section 55 of this Act. It may also apply to payments made to JSA claimants in cases where they are entitled to a prescribed rate of benefit despite not meeting the jobseeking conditions, or where their claim is yet to be determined. Any hardship payments made to claimants subject to a sanction for fraud under the listed sections of SSFA 2001 may also be covered by these provisions.
541.The amount recoverable may be determined in regulations, and may be recovered from the person the payment was made to or any other person specified in regulations. Subsection (4) provides that for the purposes of universal credit or joint-claim JSA a hardship payment paid to one member of a couple may be considered as paid to the other.
542.Subsection (5) enables the methods of recovery set out in sections 71ZC to 71ZF to be applied to hardship payments in the same way as overpayments of universal credit, JSA, ESA or the housing credit.
543.As overpayments of the housing credit will be recoverable in accordance with section 71ZB instead of section 71, section 105(2) makes the required consequential amendment to section 71.
544.Section 105(3) and (4) respectively make consequential amendments to sections 115A and 115B SSAA 1992 to ensure that the provisions relating to civil penalties apply where sums are recoverable under new section 71ZB.
545.Paragraph 9 of Schedule 1 to JA 1995 provides that regulations may provide for an income-based JSA to be payable at a prescribed rate and for a prescribed period in relation to cases where regulations under paragraph 8 provide for entitlement to JSA despite a claimant not meeting all of the jobseeking conditions, or regulations under paragraph 8A provide for a joint-claim couple to be entitled to a joint-claim JSA without both members of the couple meeting all of the conditions of entitlement in section 1(2B) of the Act, or in some circumstances without both members having to have made the claim. Section 105(5) amends paragraph 9 to allow the regulations to provide for the whole or part of such payments of JSA to be recoverable in prescribed circumstances.
546.Section 105(6) and (7) amend the SSA 1998 in two respects. Firstly, to ensure that any person from whom it is determined that an overpayment is recoverable under new sections 71ZB, 71ZG or 71ZH, has the same right of appeal against that determination as a claimant. Secondly, to provide that in respect of overpayments under section 71ZB (other than overpayments of the housing credit) and amounts recoverable under sections 71ZG and 71ZH, appeals lie only in relation to decisions as to the amount of the payment recoverable under those sections. In respect of overpayments of the housing credit, the amendments provide that appeals lie both in respect of the decision on whether the overpayment is recoverable and the amount recoverable.