Debt Management historic debt Department for Work Pensions

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Debt Management – historic debt Department for Work & Pensions 1

Debt Management – historic debt Department for Work & Pensions 1

Overpayments of benefit • Debt Management computer system launched August 2005. • Pre August

Overpayments of benefit • Debt Management computer system launched August 2005. • Pre August 2005 – All DWP overpayment information was issued clerically. Some information can be found on our system (migrated notes), full information held in offsite storage (clerical records). • Post August 2005/Pre October 2012 – All DWP Overpayment information held on our system including original decision/calculation and notification of the debt. • Post October 2012 – Basic DWP overpayment information held including period of overpayment and reason for overpayment. Any notifications for the debt are issued by the relevant benefit office. Note – Any appeal of an overpayment decision would be referred to the benefit office. Debt Management have no control over any overpayment decision. Department for Work & Pensions 2

Recovery of debt for other departments • Social Fund Loans – referred when a

Recovery of debt for other departments • Social Fund Loans – referred when a debtor is not in receipt of benefit or is in receipt of Universal Credit. • Local Authorities (LA) refer housing benefit overpayments when the debtor is in receipt of benefit. The LA will deal with any dispute/decision before referring a debt. • HMRC now refer Tax Credit debt to Debt Management for recovery when either: – The debtor is in receipt of Universal Credit – The debtor is not in receipt of benefit and does not have a payment arrangement directly with HMRC. • HMRC will issue a letter to the debtor when the tax credit debt is referred, they will deal with any dispute/decision before referring a debt. Department for Work & Pensions 3

Recovery from Universal Credit • Debt Management registers an interest marker. The marker indicates

Recovery from Universal Credit • Debt Management registers an interest marker. The marker indicates to Universal Credit that there are debts outstanding with Debt Management. • When calculating a claimants payment each month the UC system will communicate with the DM system to request the balance of all outstanding debts, their classification and any agreed repayment amounts or set deduction rates. This is then calculated automatically taking into account any other higher priority debt the claimant is repaying. • The debtor is notified of any deductions on their Universal Credit statement. • There are maximum deduction amounts for different debt types: – Overpayments classified as Fraud = 30% (Pre October 2019 - 40%). – Overpayments not classified as Fraud = 25%. – Social Fund loans = agreed weekly repayment rate converted into a monthly figure. Department for Work & Pensions 4

Claimant in financial hardship • A debtor or their representative can contact Debt management

Claimant in financial hardship • A debtor or their representative can contact Debt management to discuss reducing the rate of repayment. • Debt Management will then input this agreement onto their own system, with the information being taken into account for the customer’s next payment calculation. • If the debtor’s payment has already been calculated/paid, Debt Management do not have the facility to change this. We can, however, consider a refund if appropriate. • It is important to remember that Debt Management to not have any manual input into a debtor’s deductions until they are contacted. Department for Work & Pensions 5