Welfare Reform Bill (HL Bill 75)

(4) In any period after the coming into force of this section and before the
coming into force of section 62 of the Tribunals, Courts and
Enforcement Act 2007, subsection (1)(a) has effect as if it read “by
execution issued from the county court”.

71ZF 5Adjustment of benefit

Regulations may for the purpose of the recovery of amounts
recoverable under section 71ZB make provision—

(a) for treating any amount paid to a person under an award which
it is subsequently determined was not payable—

(i) 10as properly paid, or

(ii) as paid on account of a payment which it is determined
should be or should have been made,

and for reducing or withholding arrears payable by virtue of the
subsequent determination;

(b) 15for treating any amount paid to one person in respect of another
as properly paid for any period for which it is not payable in
cases where in consequence of a subsequent determination—

(i) the other person is entitled to a payment for that period,
or

(ii) 20a third person is entitled in priority to the payee to a
payment for that period in respect of the other person,

and by reducing or withholding any arrears payable for that
period by virtue of the subsequent determination.

71ZG Recovery of payments on account

(1) 25The Secretary of State may recover any amount paid under section
5(1)(r) (payments on account).

(2) An amount recoverable under this section is recoverable from—

(a) the person to whom it was paid, or

(b) such other person (in addition to or instead of the person to
30whom it was paid) as may be prescribed.

(3) Regulations may provide that amounts recoverable under this section
are to be calculated or estimated in a prescribed manner.

(4) In the case of a payment on account of a benefit which is awarded to
persons jointly, an amount paid to one of those persons may for the
35purposes of this section be regarded as paid to the other.

(5) Sections 71ZC, 71ZD and 71ZE apply in relation to amounts
recoverable under this section as to amounts recoverable under section
71ZB.

71ZH Recovery of hardship payments etc

(1) 40The Secretary of State may recover any amount paid by way of—

(a) a payment under section 28 of the Welfare Reform Act 2011
(universal credit hardship payments) which is recoverable
under that section,

(b) a payment under section 19C of the Jobseekers Act 1995
45(jobseeker’s allowance hardship payments) which is
recoverable under that section,

(c) a payment of a jobseeker’s allowance under paragraph 8 or 8A
of Schedule 1 to that Act (exemptions), where the allowance is
payable at a prescribed rate under paragraph 9 of that Schedule
and is recoverable under that paragraph,

(d) 5a payment of a jobseeker’s allowance under paragraph 10 of
that Schedule (claims yet to be determined etc) which is
recoverable under that paragraph, or

(e) a payment which is recoverable under section 6B(5A)(d) or
(7)(d), 7(2A)(d) or (4)(d), 8(3)(aa), (4)(d) or 9(2A)(d) or (4)(d) of
10the Social Security Fraud Act 2001.

(2) An amount recoverable under this section is recoverable from—

(a) the person to whom it was paid, or

(b) such other person (in addition to or instead of the person to
whom it was paid) as may be prescribed.

(3) 15Regulations 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
section be regarded as paid to the other.

(5) 20Sections 71ZC to 71ZF 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) In section 115A of that Act (penalty as alternative to prosecution), in subsection
25(1), after “71” there is inserted “71ZB”.

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

(a) for subsection (4) there is substituted—

“(4) If the recipient of a notice under subsection (3) above agrees, in
30the specified manner, to pay the penalty—

(a) the amount of the penalty shall be recoverable from the
recipient by the Secretary of State or authority; and

(b) no criminal proceedings shall be instituted against the
recipient in respect of the conduct to which the notice
35relates.

(4A) Sections 71ZC, 71ZD and 71ZE above apply in relation to
amounts recoverable under subsection (4)(a) above as to
amounts recoverable by the Secretary of State under section
71ZB above (and, where the notice is given by an authority
40administering housing benefit or council tax benefit, those
sections so apply as if references to the Secretary of State were
to that authority).”;

(b) in subsection (9), the definition of “relevant benefit” is repealed.

(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
paragraph (a) is recoverable.”;

(b) 5in 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
subsection (4), after “71” there is inserted “, 71ZB, 71ZG, 71ZH,”.

(7) 10In 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
section 71ZB of the Administration Act.

6B 15A decision as to the amount of payment recoverable under section
71ZB, 71ZG or 71ZH of the Administration Act.”

103 Deduction from earnings: other cases

(1) In section 71 of the Social Security Administration Act 1992 (overpayments -
general), after subsection (9) there is inserted—

“(9A) 20Regulations may provide for amounts recoverable under the
provisions mentioned in subsection (8) above to be recovered by
deductions from earnings.

(9B) In subsection (9A) above “earnings” has such meaning as may be
prescribed.

(9C) 25Regulations under subsection (9A) above may include provision—

(a) requiring the person from whom an amount is recoverable (“the
beneficiary”) to disclose details of their employer, and any
change of employer, to the Secretary of State;

(b) requiring the employer, on being served with a notice by the
30Secretary of State, to make deductions from the earnings of the
beneficiary and to pay corresponding amounts to the Secretary
of State;

(c) as to the matters to be contained in such a notice and the period
for which a notice is to have effect;

(d) 35as to how payment is to be made to the Secretary of State;

(e) as to a level of earnings below which earnings must not be
reduced;

(f) allowing the employer, where the employer makes deductions,
to deduct a prescribed sum from the beneficiary’s earnings in
40respect of the employer’s administrative costs;

(g) requiring the employer to keep records of deductions;

(h) requiring the employer to notify the Secretary of State if the
beneficiary is not, or ceases to be, employed by the employer;

(i) creating a criminal offence for non-compliance with the
45regulations, punishable on summary conviction by a fine not
exceeding level 3 on the standard scale;

(j) with respect to the priority as between a requirement to deduct
from earnings under this section and—

(i) any other such requirement;

(ii) an order under any other enactment relating to England
5and Wales which requires deduction from the
beneficiary’s earnings;

(iii) any diligence against earnings.”

(2) In section 71ZA of that Act (overpayments out of social fund), before
subsection (3) there is inserted—

“(2A) 10Subsection (9A) of section 71 above as it so applies shall have effect as
if the reference to amounts recoverable under the provisions mentioned
in subsection (8) of that section were to amounts recoverable under
subsections (1) and (4) of that section by virtue of subsection (1) above.”

(3) In section 75 of that Act (overpayments of housing benefit), at the end there is
15inserted—

“(8) Regulations may provide for amounts recoverable under this section to
be recovered by deductions from earnings.

(9) In subsection (8) above “earnings” has such meaning as may be
prescribed.

(10) 20Regulations under subsection (8) above may include provision—

(a) requiring the person from whom an amount is recoverable (“the
beneficiary”) to disclose details of their employer, and any
change of employer, to the Secretary of State or the authority
which paid the benefit;

(b) 25requiring the employer, on being served with a notice by the
Secretary of State or the authority which paid the benefit, to
make deductions from the earnings of the beneficiary and to
pay corresponding amounts to the Secretary of State or that
authority;

(c) 30as to the matters to be contained in such a notice and the period
for which a notice is to have effect;

(d) as to how payment is to be made to the Secretary of State or the
authority which paid the benefit;

(e) as to a level of earnings below which earnings must not be
35reduced;

(f) allowing the employer, where the employer makes deductions,
to deduct a prescribed sum from the beneficiary’s earnings in
respect of the employer’s administrative costs;

(g) requiring the employer to keep records of deductions;

(h) 40requiring the employer to notify the Secretary of State or the
authority which paid the benefit if the beneficiary is not, or
ceases to be, employed by the employer;

(i) creating a criminal offence for non-compliance with the
regulations, punishable on summary conviction by a fine not
45exceeding level 3 on the standard scale;

(j) with respect to the priority as between a requirement to deduct
from earnings under this section and—

(i) any other such requirement;

(ii) an order under any other enactment relating to England
and Wales which requires deduction from the
beneficiary’s earnings;

(iii) any diligence against earnings.”

(4) 5In section 78 of that Act (recovery of social fund awards), after subsection (3B)
there is inserted—

“(3C) Regulations may provide for amounts recoverable under subsection (1)
above from a person specified in subsection (3) above to be recovered
by deductions from earnings.

(3D) 10In subsection (3C) above “earnings” has such meaning as may be
prescribed.

(3E) Regulations under subsection (3C) above may include provision
referred to in section 71(9C) above.”

104 Recovery of child benefit and guardian’s allowance

(1) 15In section 71(8) of the Social Security Administration 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,” 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 “,
20other than an amount paid in respect of child benefit or guardian’s allowance,”
are repealed.

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

105 Application of Limitation Act 1980

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

(2) 25In subsection (1), in the definition of “action”, at the end there is inserted “(and
see subsection (11) below)”.

(3) At 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) 30Part 3 of the Social Security Administration Act 1992,

(b) section 127(c) of the Social Security Contributions and Benefits
Act 1992, or

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

other than a proceeding in a court of law.”

(4) 35The 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
purposes of proceedings brought before the coming into force of this section.

Recovery of fines from benefit

106 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) 5in 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) 10The repeals made by this section have effect as if they had come into force on
27 October 2008.

Investigation and prosecution of offences

107 Powers to require information relating to investigations

In section 109B of the Social Security Administration Act 1992 (power to
15require 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)”.

108 Time limits for legal proceedings

20In 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) 25in paragraph (b), after “proceedings” there is inserted “brought by the
appropriate authority”.

109 Prosecution powers of local authorities

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

(2) After section 116 there is inserted—

“116ZA 30Local 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) The authority may not bring proceedings against a person for a benefit
35offence 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
authority 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
5authority 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
10prescribed 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)
15or (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
20section, 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
25proceedings 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
30proceedings 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) 35In 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) 40in 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
45offence” 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) In subsection (2)—

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

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

(6) 5In subsection (4)(b), for “gives” there is substituted “withdraws”.

Penalties as alternative to prosecution

110 Penalty 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) 10After subsection (1) there is inserted—

“(1A) This section also applies where —

(a) it 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
15act or omission on the part of that person in relation to any
benefit, and

(b) if 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
20authority under or by virtue of section 71, 71ZB, 71A, 75 or 76
above.”

(3) In subsection (2)(a) for “such proceedings” there is substituted “proceedings
referred to in subsection (1) or (1A) above”.

(4) In subsection (4)—

(a) 25in 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
to in subsection (1)”.

(6) 30In 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) in section 6B(1)(b), the words “by reference to any overpayment” are
35repealed 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
overpayment” there is substituted “any overpayment made”.

111 40Amount 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%
of the amount of the overpayment (rounded down to the nearest whole
penny), subject to—

(a) 5a 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
£350.

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

(a) 10the 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).”

112 Period for withdrawal of agreement to pay penalty

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

(2) 15In 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),
in subsection (6) (cooling-off period), for “28” there is substituted “14”.

Civil penalties

113 20Civil 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) 25This section applies where—

(a) a 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
30security benefit, or

(ii) in 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) 35the person has not been charged with an offence or cautioned,
or 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) 40in any case, on the person;

(b) in 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
5be expected to have been, aware that A had negligently made the
incorrect 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) 10Sections 71ZC, 71ZD and 71ZE apply in relation to amounts
recoverable by the appropriate authority under subsection (4) as to
amounts recoverable by the Secretary of State under section 71ZB (and,
where the appropriate authority is not the Secretary of State, those
sections so apply as if references to the Secretary of State were to that
15authority).

(6) In this section and section 115D—

• “appropriate authority” means—

  (a)

  the Secretary of State, or

  (b)

  an authority which administers housing benefit or
  20council 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;

• “relevant social security benefit” has the meaning given in section
  25121DA(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
30information 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
security benefit,

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