§ Ms RuddockTo ask the Secretary of State for Social Security what checks are made to ensure that claimants, who are signing on as unemployed, do not overpay their(a) crisis loans or (b) social fund loans.
§ Mr. ScottThe administration of the social fund is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member.
Letter from Michael Bichard to Ms Joan Ruddock, dated 20 June 1994:
The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question about what checks are made to ensure that unemployed customers do not overpay their loans from the Social Fund (SF).I should explain that there are two categories of checks which are made to avoid unemployed customers overpaying their loans; these are automated and clerical.The automated checks are made via the Social Fund Computer System (SFCS), which replaced microcomputer equipment nearing the end of its potential life and is now fully operational. There are a range of in-built features in SFCS to prevent the over recovery of loans. At every stage of the recovery process case controls ensure that the correct recovery procedure is adhered to. When a date is entered for the commencement of deductions, a date for the cessation of those deductions is automatically set. If this is not done, daily reminders are generated.In addition to these automated checks there are also locally prescribed clerical checks to keep the system up to date and prevent incorrect levels of recovery. The recovery procedure confirms that the system is operating efficiently and compares the records held on the benefit sections with those on the system. Any discrepancy would be rectified as a result of this procedure.If, in spite of these procedures an overpayment is made, a refund will be made or, where there is another loan to be repaid, the amount overpaid will be offset against this loan.I am aware that in some Districts there have been problems where unemployed customers have had deductions made by the Employment Services (ES) and, despite the Benefits Agency being notified by the ES that deductions have ceased, they have continued resulting in an overpayment. The chances of this happening in future will be greatly reduced by a major change to the system, planned for April 1995, which is to automate the interface between SFCS and the Income Support Computer System.I hope you find this reply helpful.
§ Mr. WareingTo ask the Secretary of State for Social Security if he will provide details of the procedure by 141W which the social fund budget is allocated to each district; whether such procedure takes into account the demographic constitution of the area; how such procedure affects the allocation; and how a significant number of refugees affects the budget allocation for an area.
§ Mr. ScottThe administration of the social fund is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member.
Letter from Michael Bichard to Mr. Robert Wareing, dated 20 June 1994:
The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking for information concerning the procedures by which the Social Fund budget is allocated to individual Benefits Agency Districts.There are three main factors which are taken into account in deciding annual allocations to Districts. These are:the previous year's budget for the particular District:the value of awards made by individual Districts in the previous year, plus an estimated value for any application refused on priority grounds; andthe District's share of the national income Support caseload, weighted by client group.The combination of these three factors help to ensure that budgets reflect the individual circumstances of each District. Ministers decided that for 1994–95 all District budgets for grants and loans should be increased by 2% and this increase added to the underlying baseline budgets set previously by reference to the factors mentioned above.District Managers are asked to plan their budgets for the year ahead, and are encouraged to consider the possibility of unforeseen expenditure, such as an increase in applications from particular groups of customers. Aside from these local contingency arrangements, there are also national procedures to help Districts facing excessive budgetary pressures which could not have been anticipated by Managers' earlier planning.Since the Fund was introduced in 1988, these national contingency procedures have been used to provide additional help to Districts on a number of occasions.The most recent example of this was extra funding made available to the North Wales Coast District to help victims of flooding. Additional allocations have also been made to assist with a local increase in applications caused by, for example, an influx of refugees from other countries to individual Districts. Such allocations are based upon information provided by Districts.I hope you find this reply helpful.