FAMILY INCOME SUPPLEMENTS BILL (Hansard, 18 November 1970)

§ Mr. O'Malley
I beg to move Amendment No. 49, in page 3, line 42, leave out from 'supplement' to end of line 45.
After that agreeable respite in our deliberations, if that is a way in which it 1362 may be regarded, I come to what is more than a probing Amendment.
The words which we propose to leave out are unprecedented in the law of National Insurance, pensions and other State payments. If anyone has been overpaid supplementary benefit, he may be required to repay either in a lump sum, or in weekly instalments, and, as a constituency Member, one comes across these cases from to time. However, as the law stands, no other kind of State benefit has a provision for money to be recovered in this manner.
Section 26(2,c) of the Administration of Justice Act 1970 specifically excludes from treatment as earnings: pensions, allowances or benefit payable under any of the enactments specified in Schedule 6 to this Act (being enactments relating to social security). That Schedule 6 provides that enactments providing benefits which are not to be treated as debtor's earnings are the National Insurance Act, 1965, the National Insurance (Industrial Injuries) Act, 1965, the Family Allowances Act, 1965, the Ministry of Social Security Act, 1966, and the Industrial Injuries and Diseases (Old Cases) Act, 1967.
It appears that the Secretary of State is taking unprecedented powers badly balanced in favour of the Executive rather than the individual claimant. Under this subsection, and perhaps under the Clause as a whole, there seems to be a complete absence of a procedure for payment if the individual recipient finds that he has been under paid. I thought hard to find reasons why the Government should have introduced these words. We can only assume that the Government have decided that, at least initially, there will be a substantial number of miscalculations by individual officers in the operation of the scheme, and they have felt justified in taking these extraordinary and unprecedented powers to obtain recovery of overpayments from benefits which, under the general law, are inalienable. We are most concerned, and we await the right hon. Gentleman's explanation.

§ Sir K. Joseph
Again, the bulk of the powers here are perfectly normal within the social security mechanism. There 1363 are provisions for recovery of excess payments of National Insurance benefit or of family allowance from national insurance benefits. There is a danger in the payment of this supplement of an over-payment due to an understatement of income being corrected by the cutting off of further family income supplement, with, therefore, no source of repayment to the taxpayer of money overpaid.
I am, therefore, on solid ground, and I assure the Committee that the hon. Gentleman the Member for Rotherham (Mr. O'Malley) who does his homework thoroughly, is for once wrong in his assertion that the powers are unprecedented.
There was, however, one point raised by the hon. Gentleman on which I am not quite so sure of my ground. The Bill as drafted gives power to recover an overpayment of family income supplement from future family allowances, and it was the Government's intention that that power would never be used if the family was in need of the money. We are dealing here with families who are bound to be poor, if not very poor, and, although there may have been overpayments of family income supplement it is highly unlikely that the family will be other than pretty poor. On reflection, therefore, after listening to the hon. Gentleman, I think that I ought to reconsider the new power which is covered by the Amendment, namely, the power to recover an overpayment from future family allowances.
I give the assurance that I shall look again at that element in the Clause. It would not be met by passing the Amendment. I assure the Committee that the hon. Member for Rotherham is technically wrong and that all the other powers of repayment from other national insurance benefits are perfectly precedented and not at all unusual in this case. I hope that the Committee on that assurance, which I shall honour on Report, will encourage the hon. Gentleman not to press the Amendment.

§ Mr. O'Malley
I am grateful to the Secretary of State for the undertaking which he has given as regards family allowances, which deals with part of the problem which concerns us.
The right hon. Gentleman has said that I am wrong, but I understand the 1364 position to be this. If someone has been overpaid in a particular kind of benefit paid under national insurance, the matter can be put right by deductions from similar kinds of National Insurance benefit, but not from different kinds. I believe that the right hon. Gentleman will confirm that, for example, one cannot claim overpayments of supplementary benefit from National Insurance payments. Is that not so?
Take the case of a pensioner who is getting a National Insurance retirement pension. She makes a claim and receives a weekly supplementary pension from the Supplementary Benefits Commission. It is discovered at a later date that there has been overpayment. There is a request from the Commission that there should be a repayment. Surely I am right in saying that the Commission has no power to require the repayment from the woman's National Insurance benefit. Therefore, to that extent, the Secretary of State will concede that a new principle is being invoked.
Perhaps the Secretary of State would, without commitment, consider the other matters which I raised. He says that I am wrong, but I am wrong in a very limited way. In the broader sense, I think that I am right. If the right hon. Gentleman will consider all the points that I have raised I shall be pleased to withdraw the Amendment.

§ Mr. Hugh D. Brown
I am sure that the Secretary of State is wrong because he is confusing a non-contributory benefit with a contributory benefit. Is he suggesting that an overpayment of family income supplement can be recovered from a widow? That is what he appears to be arguing.

§ Sir K. Joseph
I think that it would be prudent of me if I were to say that I shall look at the point again. I am advised that under Section 26(4) of the Ministry of Social Security Act, 1966, the propositions which I have indicated are correct. It would be most imprudent of me to give too many assurances without looking again at what the hon. Member for Rotherham (Mr. O'Malley) said. I am impressed by his self-confident mastery of the intricacies of the social security mechanism. I will report again to hon. Members at the next stage of the Bill.
1365 I am not happy about the implications of recovery of family allowances. That is on the substance. On the presentation point, I will tell the House either that I am right or that the hon. Gentleman is right. If the hon. Gentleman is right, I will see whether any Amendments need to be made.

§ Mr. O'Malley
In view of the Secretary of State's undertakings, I beg to ask leave to withdraw the Amendment.