Social Security Benefits: Overpayments

Work and Pensions written question – answered on 19th March 2012.

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Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

The Supreme Court held that the Secretary of State cannot recover an overpayment or Social Fund debt contained within a debt relief order by any means, including by deduction from benefit, during the moratorium period of a debt relief order.

The Department is currently undertaking to offset or refund deductions made in respect of debts included within a debt relief order. These debts will be written-off after the moratorium period where they have not been incurred by fraud.

While the full implication of the judgment relating to bankruptcy orders is being considered, we have stopped deductions where we know someone is subject to a bankruptcy order.

The Insolvency Rules will however be amended from 19 March 2012 to exclude Social Fund debt from the scope of debt relief and bankruptcy orders. This is because the Social Fund is cash limited and relies on loan repayments to be available for others in need.

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