Benefits Agency (Hansard, 30 April 1998)

§ Mr. Denham

We are transforming the Social Security system into an Active Modern Service that commands the support and confidence of those who fund it, those who use it, and those who administer it, and provides a better, simpler, more efficient service to clients. As part of this, we are introducing a new overpayment recovery strategy for the Benefits Agency which will ensure that:

causes of overpayments are identified and dealt with;failures in recovery of overpayment are minimised; andoverpayments are identified, calculated and recovery is effected as quickly as possible

The administration of debt recovery action is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to the hon. Member.

213W

Letter from Peter Mathison to Mr. Archy Kirkwood, dated 27 April 1998: The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions concerning the recovery of outstanding debts. Debt owning to the Benefits Agency (BA) falls into two main categories, recoverable overpayments of benefit and loans made through the Social Fund (SF). The estimated total debt currently outstanding is £691m, in benefit overpayments and £400m in SF loans. Resources available for recovery work for 1998/99 are estimated at £24.9m for overpayments of benefit and £1 Om for the SF. As far as overpayments of benefits are concerned, information relating to the age of debts is not available and could only be obtained at disproportionate cost. Information on the current age of debts owning to the SF is not available. However, the following information is held for the year ending in March 1997.

Age	Percentage of total
Less than 1 year	64.95
1-2	19.25
2-3	7.18
3-4	3.61
4-5	2.09
Over 5	2.82

The total volume of overpayments of benefit cleared for the fiscal year 1996/97, the most recent period for which figures are available, was 224.771, representing 22% of the total stock of overpayments. A total of 1,298,778 SF loans were recovered in 1996/97, representing 65% of the outstanding debt. As far as overpayments of benefit are concerned, the method of recovery depends on whether the debtor remains in receipt of benefit. If this is the case and the debtor is unable to repay immediately, recovery is made by deduction from ongoing benefit entitlement. The amount deducted can vary depending on the debtors circumstances and whether other deductions are being made from benefit, for example to clear arrears of housing or fuel costs. The maximum that can be deducted from Income Support and income based Job Seekers Allowance under current regulations is currently £7.65 per week, rising to £10.00 per week in cases of proven fraud. For other benefits, the rate is set at a maximum of one third of the personal allowance for that benefit. For those people no longer in receipt of benefit, voluntary arrangements for repayment are sought. Where these are not forthcoming, recovery is pursued through the civil courts if appropriate. The vast bulk of SF loans are recovered by deductions from benefit. When recovering both overpayments of benefit and SF loans, civil action is not taken against those still in receipt of benefit. For those not in receipt of benefit, litigation is pursued as a last resort. It was taken in approximately 7% of overpayment of benefit cases and approximately 14% of SF cases in 1996/97. The expenditure incurred by the Benefits Agency in the recovery of debts in 1996/97, the most recent period for which figures are available, was: £15.6m for overpayments of benefit. £22.1m for SF. The total amounts recovered for this period were: £102.6m for overpayments of benefit. £299m for SF. I hope that this is helpful.