Welfare Reform Bill (HC Bill 197)

(3) Regulations may provide that amounts recoverable under this section

are to be calculated or estimated in a prescribed manner.

(4) Where universal credit or a jobseeker’s allowance is claimed by persons

jointly, an amount paid to one claimant may for the purposes of this

5section be regarded as paid to the other.

(5) Sections 71ZC to 71ZE apply in relation to amounts recoverable under

this section as to amounts recoverable under section 71ZB.”

(2) In section 71 of that Act (overpayments - general), in subsection (11)(ab), at the

end there is inserted “excluding housing credit (see section 71ZB)”.

(3) 10In section 115A of that Act (penalty as alternative to prosecution), in subsection

(1), after “71” there is inserted “71ZB”.

(4) In section 115B of that Act (penalty as alternative to prosecution: colluding

employers etc), in subsection (4), at the end there is inserted “and sections 71ZC

and 71ZD above apply in relation to an amount recoverable by virtue of

15paragraph (a) above as to amounts recoverable under section 71ZB above”.

(5) In Schedule 1 to the Jobseekers Act 1995 (supplementary provision)—

(a) in paragraph 9, at the end there is inserted—

“(c) as to whether the whole or part of any amount of a

jobseeker’s allowance which is payable as specified in

20paragraph (a) is recoverable.”;

(b) in paragraph 10, for sub-paragraph (5)(a) there is substituted—

“(a) as to whether the whole or part of any amount paid

by virtue of sub-paragraph (1) or (2) is recoverable;”.

(6) In section 12 of the Social Security Act 1998 (appeal to First-tier Tribunal), in

25subsection (4), after “71” there is inserted “, 71ZB, 71ZF, 71ZG,”.

(7) In Schedule 3 to that Act (decisions against which an appeal lies), after

paragraph 6 there is inserted—

“6A A decision as to whether payment of housing credit (within the

meaning of the State Pension Credit Act 2002) is recoverable under

30section 71ZB of the Administration Act.

6B A decision as to the amount of payment recoverable under section

71ZB, 71ZF or 71ZG of the Administration Act.”

103 Recovery of child benefit and guardian’s allowance

(1) In section 71(8) of the Social Security Administration Act 1992 (recovery of

35benefits by deduction from prescribed benefits), the words “, other than an

amount paid in respect of child benefit or guardian’s allowance,” are repealed.

(2) In section 69(8) of the Social Security Administration (Northern Ireland) Act

1992 (recovery of benefits by deduction from prescribed benefits), the words “,

other than an amount paid in respect of child benefit or guardian’s allowance,”

40are repealed.

(3) In the Tax Credits Act 2002, in Schedule 4, paragraphs 2 and 8 are repealed.

104 Application of Limitation Act 1980

(1) Section 38 of the Limitation Act 1980 (interpretation) is amended as follows.

(2) In subsection (1), in the definition of “action”, at the end there is inserted “(and

see subsection (11) below)”.

(3) 5At the end there is inserted—

“(11) References in this Act to an action do not include any method of

recovery of a sum recoverable under—

(a) Part 3 of the Social Security Administration Act 1992,

(b) section 127(c) of the Social Security Contributions and Benefits

10Act 1992, or

(c) Part 1 of the Tax Credits Act 2002,

other than a proceeding in a court of law.”

(4) The amendments made by this section have effect as if they had come into force

at the same time as section 38 of the Limitation Act 1980, except for the

15purposes of proceedings brought before the coming into force of this section.

Recovery of fines from benefit

105 Recovery of fines etc by deductions from employment and support allowance

(1) In section 24 of the Criminal Justice Act 1991 (recovery of fines etc by

deductions from benefits)—

(a) 20in subsections (1) and (2)(d) the words “income-related” are repealed;

(b) in subsection (4) the definition of “income-related employment and

support allowance” is repealed.

(2) In Schedule 3 to the Welfare Reform Act 2007 (consequential amendments

relating to Part 1), paragraph 8(b) is repealed.

(3) 25The repeals made by this section have effect as if they had come into force on

27 October 2008.

Investigation and prosecution of offences

106 Powers to require information relating to investigations

In section 109B of the Social Security Administration Act 1992 (power to

30require information), in subsection (2)—

(a) after paragraph (i) (but before the final “and”) there is inserted—

“(ia) a person of a prescribed description;”

(b) in paragraph (j), for “(i)” there is substituted “(ia)”.

107 Time limits for legal proceedings

35In section 116 of the Social Security Administration Act 1992 (legal

proceedings), in subsection (2)—

(a) in paragraph (a), for “other than an offence relating to housing benefit

or council tax benefit” there is substituted “(other than proceedings to

which paragraph (b) applies)”;

(b) in paragraph (b), after “proceedings” there is inserted “brought by the

appropriate authority”.

108 Prosecution powers of local authorities

(1) The Social Security Administration Act 1992 is amended as follows.

(2) 5After section 116 there is inserted—

“116ZA Local authority powers to prosecute housing benefit and council tax

benefit fraud

(1) This section applies to an authority administering housing benefit or

council tax benefit.

(2) 10The authority may not bring proceedings against a person for a benefit

offence relating to either of those benefits unless—

(a) the authority has already started an investigation in relation to

that person in respect of the offence,

(b) in a case where the proceedings relate to housing benefit, the

15authority has already started an investigation in relation to the

person in respect of a benefit offence relating to council tax

benefit, or has already brought proceedings against the person

in respect of such an offence,

(c) in a case where the proceedings relate to council tax benefit, the

20authority has already started an investigation in relation to the

person in respect of a benefit offence relating to housing benefit,

or has already brought proceedings against the person in

respect of such an offence,

(d) the proceedings arise in prescribed circumstances or are of a

25prescribed description, or

(e) the Secretary of State has directed that the authority may bring

the proceedings.

(3) The Secretary of State may direct that in prescribed circumstances, an

authority may not bring proceedings by virtue of subsection (2)(a), (b)

30or (c) despite the requirements in those provisions being met.

(4) A direction under subsection (2)(e) or (3) may relate to a particular

authority or description of authority or to particular proceedings or any

description of proceedings.

(5) If the Secretary of State prescribes conditions for the purposes of this

35section, an authority may bring proceedings in accordance with this

section only if any such condition is satisfied.

(6) The Secretary of State may continue proceedings which have been

brought by an authority in accordance with this section as if the

proceedings had been brought in his name or he may discontinue the

40proceedings if—

(a) the proceedings were brought by virtue of subsection (2)(a), (b)

or (c),

(b) he makes provision under subsection (2)(d) which has the effect

that the authority would no longer be entitled to bring the

45proceedings in accordance with this section,

(c) he withdraws a direction under subsection (2)(e) in relation to

the proceedings, or

(d) a condition prescribed under subsection (5) ceases to be

satisfied in relation to the proceedings.

(7) 5In exercising a power to bring proceedings in accordance with this

section, a local authority must have regard to the Code for Crown

Prosecutors issued by the Director of Public Prosecutions under section

10 of the Prosecution of Offences Act 1985—

(a) in determining whether the proceedings should be instituted;

(b) 10in determining what charges should be preferred;

(c) in considering what representations to make to a magistrates’

court about mode of trial;

(d) in determining whether to discontinue proceedings.

(8) Regulations shall define “an investigation in respect of a benefit

15offence” for the purposes of this section.

(9) This section does not apply to Scotland.”

(3) Section 116A (local authority powers to prosecute benefit fraud) is amended as

follows.

(4) In the heading, after “prosecute” there is inserted “other”.

(5) 20In subsection (2)—

(a) for “unless” there is substituted “only if”;

(b) in paragraph (b), for “must not”, there is substituted “may”.

(6) In subsection (4)(b), for “gives” there is substituted “withdraws”.

Penalties as alternative to prosecution

109 25Penalty in respect of benefit fraud not resulting in overpayment

(1) Section 115A of the Social Security Administration Act 1992 (penalty as

alternative to prosecution) is amended as follows.

(2) After subsection (1) there is inserted—

“(1A) This section also applies where —

(a) 30it appears to the Secretary of State or an authority that there are

grounds for instituting proceedings against a person for an

offence (under this Act or any other enactment) relating to an

act or omission on the part of that person in relation to any

benefit, and

(b) 35if an overpayment attributable to the act or omission had been

made, the overpayment would have been recoverable from the

person by, or due from the person to, the Secretary of State or an

authority under or by virtue of section 71, 71ZB, 71A, 75 or 76

above.”

(3) 40In subsection (2)(a) for “such proceedings” there is substituted “proceedings

referred to in subsection (1) or (1A) above”.

(4) In subsection (4)—

(a) in paragraph (a), after “is” there is inserted “or would have been”;

(b) in paragraph (b), at the end there is inserted “or to the act or omission

referred to in subsection (1A)(a).”

(5) In subsections (6) and (7), at the beginning there is inserted “In a case referred

5to in subsection (1)”.

(6) In subsection (7B)(a), after “is”, in both places, there is inserted “or would have

been”.

(7) In subsection (8) after “subsection (1)(a)” there is inserted “or (1A)(b)”.

(8) In the Social Security Fraud Act 2001—

(a) 10in section 6B(1)(b), the words “by reference to any overpayment” are

repealed and for “the offence mentioned in subsection (1)(b) of the

appropriate penalty provision” there is substituted “the offence to

which the notice relates”;

(b) in sections 6C(2)(b) and (3), 8(7)(b) and (8) and 9(7)(b) and (8), for “the

15overpayment” there is substituted “any overpayment made”.

110 Amount of penalty

In section 115A of the Social Security Administration Act 1992 (penalty as

alternative to prosecution), for subsection (3) there is substituted—

“(3) The amount of the penalty in a case falling within subsection (1) is 50%

20of the amount of the overpayment (rounded down to the nearest whole

penny), subject to—

(a) a minimum amount of £350, and

(b) a maximum amount of £2000.

(3A) The amount of the penalty in a case falling within subsection (1A) is

25£350.

(3B) The Secretary of State may by order amend—

(a) the percentage for the time being specified in subsection (3);

(b) any figure for the time being specified in subsection (3)(a) or (b)

or (3A).”

111 30Period for withdrawal of agreement to pay penalty

(1) The Social Security Administration Act 1992 is amended as follows.

(2) In section 115A (penalty as alternative to prosecution), in subsection (5)

(cooling-off period), for “28” there is substituted “14”.

(3) In section 115B (penalty as alternative to prosecution: colluding employers etc),

35in subsection (6) (cooling-off period), for “28” there is substituted “14”.

Civil penalties

112 Civil penalties for incorrect statements and failures to disclose information

(1) After section 115B of the Social Security Administration Act 1992 there is

inserted—

“Civil penalties

115C Incorrect statements etc

(1) This section applies where—

(a) 5a person negligently makes an incorrect statement or

representation, or negligently gives incorrect information or

evidence—

(i) in or in connection with a claim for a relevant social

security benefit, or

(ii) 10in connection with an award of a relevant social security

benefit,

(b) the person fails to take reasonable steps to correct the error,

(c) the error results in the making of an overpayment, and

(d) the person has not been charged with an offence or cautioned,

15or been given a notice under section 115A, in respect of the

overpayment.

(2) A penalty of a prescribed amount may be imposed by the appropriate

authority—

(a) in any case, on the person;

(b) 20in a case where the person (“A”) is making, or has made, a claim

for the benefit for a period jointly with another (“B”), on B

instead of A.

(3) Subsection (2)(b) does not apply if B was not, and could not reasonably

be expected to have been, aware that A had negligently made the

25incorrect statement or representation or given the incorrect information

or evidence.

(4) The appropriate authority may recover a penalty imposed under

subsection (2) from the person on whom it is imposed.

(5) Sections 71ZC and 71ZD apply in relation to amounts recoverable by

30the appropriate authority under subsection (4) as to amounts

recoverable by the Secretary of State under section 71ZB.

(6) In this section and section 115D—

• “appropriate authority” means—

  (a)

  the Secretary of State, or

  (b)

  35an authority which administers housing benefit or
  
  council tax benefit;

• “overpayment” has the meaning given in section 115A(8), and the
  
  reference to the making of an overpayment is to be construed in
  
  accordance with that provision;

• 40“relevant social security benefit” has the meaning given in section
  
  121DA(7).

115D Failure to disclose information

(1) A penalty of a prescribed amount may be imposed on a person by the

appropriate authority where—

(a) the person, without reasonable excuse, fails to provide

information or evidence in accordance with requirements

imposed on the person by the appropriate authority in

connection with a claim for, or an award of, a relevant social

5security benefit,

(b) the failure results in the making of an overpayment, and

(c) the person has not been charged with an offence or cautioned,

or been given a notice under section 115A, in respect of the

overpayment.

(2) 10A penalty of a prescribed amount may be imposed on a person by the

appropriate authority where—

(a) the person, without reasonable excuse, fails to notify the

appropriate authority of a relevant change of circumstances in

accordance with requirements imposed on the person under

15relevant social security legislation,

(b) the failure results in the making of an overpayment, and

(c) the person has not been charged with an offence or cautioned,

or been given a notice under section 115A, in respect of the

overpayment.

(3) 20Where a person is making, or has made, a claim for a benefit for a

period jointly with another, and both of them fail as mentioned in

subsection (1) or (2), only one penalty may be imposed in respect of the

same overpayment.

(4) The Secretary of State may recover a penalty imposed under subsection

25(1) or (2) from the person on whom it is imposed.

(5) Sections 71ZC and 71ZD apply in relation to amounts recoverable

under subsection (4) as to amounts recoverable under section 71ZB.

(6) In this section “relevant change of circumstances”, in relation to a

person, means a change of circumstances which affects any entitlement

30of the person to any benefit or other payment or advantage under any

provision of the relevant social security legislation.”

Loss of benefit

113 Benefit offences: disqualifying and sanctionable benefits

(1) In the Social Security Fraud Act 2001, section 6A (meaning of “disqualifying

35benefit” and “sanctionable benefit”) is amended as follows.

(2) In subsection (1), in the definition of “disqualifying benefit”, after paragraph

(e) there is inserted—

• “( f)

  child tax credit;

  (ii)

  working tax credit;”.

(3) 40In that subsection, in the definition of “sanctionable benefit”, after paragraph

(f) there is inserted—

• “( fa)

  child tax credit;

  (fb)

  working tax credit;”.

114 Benefit offences: period of sanction

(1) The Social Security Fraud Act 2001 is amended as follows.

(2) Section 6B (loss of benefit in case of conviction, penalty or caution for benefit

offence) is amended as follows.

(3) 5In subsection (11), for “the period of four weeks” there is substituted “the

relevant period”.

(4) After subsection (11) there is inserted—

“(11A) For the purposes of subsection (11) the relevant period is—

(a) in a case falling within subsection (1)(a) where the benefit

10offence, or one of them, is a relevant offence, the period of three

years,

(b) in a case falling within subsection (1)(a) (but not within

paragraph (a) above)), the period of 13 weeks, or

(c) in a case falling with subsection (1)(b) or (c), the period of four

15weeks.”

(5) After subsection (13) there is inserted—

“(14) In this section and section 7 “relevant offence” means—

(a) in England and Wales, the common law offence of conspiracy to

defraud, or

(b) 20a prescribed offence which, in the offender’s case, is committed

in such circumstances as may be prescribed, and which, on

conviction—

(i) is found by the court to relate to an overpayment (as

defined in section 115A(8) of the Administration Act) of

25at least £50,000,

(ii) is punished by a custodial sentence of at least one year

(including a suspended sentence as defined in section

189(7)(b) of the Criminal Justice Act 2003), or

(iii) is found by the court to have been committed over a

30period of at least two years.”

(6) After subsection (14) (inserted by subsection (5) above) there is inserted—

“(15) The Secretary of State may by order amend subsection (11A)(a), (b) or

(c), or (14)(b)(i), (ii) or (iii) to substitute a different period or amount for

that for the time being specified there.”

(7) 35In section 7 (loss of benefit for second or subsequent conviction of benefit

offence), after subsection (1) there is inserted—

“(1A) The following restrictions do not apply if the benefit offence referred to

in subsection (1)(a), or any of them, is a relevant offence.”

(8) In section 11 (loss of benefit regulations)—

(a) 40in the heading, after “benefit” there is inserted “orders and”;

(b) in subsection (3) at the end there is inserted—

“(e) regulations under section 6B(14) or an order under

section 6B(15), or”;

(c) in subsection (4) after “make”, in both places, there is inserted “an order

45or”.

115 Benefit offences: sanctions for repeated benefit fraud

(1) The Social Security Fraud Act 2001 is amended as follows.

(2) In section 6B (loss of benefit in case of conviction, penalty or caution for benefit

offence), in subsection (3) for “later” there is substituted “current”.

(3) 5Section 7 (loss of benefit for second or subsequent conviction of benefit offence)

is amended as follows.

(4) In the heading, for “second or subsequent conviction of benefit offence” there

is substituted “repeated benefit fraud”.

(5) For subsection (1)(a) to (e) there is substituted—

“(a) 10a person (“the offender”) is convicted of one or more benefit

offences in a set of proceedings (“the current set of

proceedings”),

(b) within the period of five years ending on the date on which the

benefit offence was, or any of them were, committed, one or

15more disqualifying events occurred in relation to the offender

(the event, or the most recent of them, being referred to in this

section as “the earlier disqualifying event”),

(c) the current set of proceedings has not been taken into account

for the purposes of any previous application of this section or

20section 8 or 9 in relation to the offender or any person who was

then a member of his family,

(d) the earlier disqualifying event has not been taken into account

as an earlier disqualifying event for the purposes of any

previous application of this section or either of those sections in

25relation to the offender or any person who was then a member

of his family, and

(e) the offender is a person with respect to whom the conditions for

an entitlement to a sanctionable benefit are or become satisfied

at any time within the disqualification period,”.

(6) 30In subsection (6), for the words from “in relation to” to the end, there is

substituted “in an offender’s case, means the relevant period beginning with a

prescribed date falling after the date of the conviction in the current set of

proceedings”.

(7) After that subsection there is inserted—

“(6A) 35For the purposes of subsection (6) the relevant period is—

(a) in a case where, within the period of five years ending on the

date on which the earlier disqualifying event occurred, a

previous disqualifying event occurred in relation to the

offender, the period of three years;

(b) 40in any other case, 26 weeks.”

(8) After subsection (7) there is inserted—

“(7A) Subsection (7B) applies where, after the agreement of any person (“P”)

to pay a penalty under the appropriate penalty provision is taken into

account for the purposes of the application of this section in relation to

45that person—

(a) P’s agreement to pay the penalty is withdrawn under

subsection (5) of the appropriate penalty provision,

(b) it is decided on an appeal or in accordance with regulations

under the Social Security Act 1998 or the Social Security

(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)S.I. 1998/1506 (N.I. 10)) that any

overpayment to which the agreement relates is not recoverable

5or due, or

(c) the amount of any overpayment to which the penalty relates is

revised on an appeal or in accordance with regulations under

the Social Security Act 1998 or the Social Security (Northern

Ireland) Order 1998 and there is no new agreement by P to pay

10a penalty under the appropriate penalty provision in relation to

the revised overpayment.

(7B) In those circumstances, all such payments and other adjustments shall

be made as would be necessary if no restriction had been imposed by

or under this section that could not have been imposed if P had not

15agreed to pay the penalty.”

(9) In subsection (8), the following definitions are inserted at the appropriate

places—

• ““appropriate penalty provision” has the meaning given in section
  
  6B(2)(a);”

• 20“disqualifying event” has the meaning given in section 6B(13).”

(10) After that subsection there is inserted—

“(8A) Where a person is convicted of more than one benefit offence in the

same set of proceedings, there is to be only one disqualifying event in

respect of that set of proceedings for the purposes of this section and—

(a) 25subsection (1)(b) is satisfied if any of the convictions take place

in the five year periods mentioned there;

(b) the event is taken into account for the purposes of subsection

(1)(d) if any of the convictions have been taken into account as

mentioned there;

(c) 30in the case of the earlier disqualifying event mentioned in

subsection (6A)(a), the reference there to the date on which the

earlier disqualifying event occurred is a reference to the date on

which any of the convictions take place;