Session 2010 - 12
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Other Bills before Parliament

Welfare Reform Bill


Welfare Reform Bill
Part 5 — Social security: general

75

 

(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)   

requiring the employer to notify the Secretary of State or the

5

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

exceeding level 3 on the standard scale;

10

(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

15

beneficiary’s earnings;

(iii)   

any diligence against earnings.”

(4)   

In 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)

20

above from a person specified in subsection (3) above to be recovered

by deductions from earnings.

(3D)   

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

prescribed.

(3E)   

Regulations under subsection (3C) above may include provision

25

referred to in section 71(9C) above.”

105     

Recovery of child benefit and guardian’s allowance

(1)   

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amount paid in respect of child benefit or guardian’s allowance,” are repealed.

30

(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,”

are repealed.

(3)   

In the Tax Credits Act 2002, in Schedule 4, paragraphs 2 and 8 are repealed.

35

106     

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)   

At the end there is inserted—

40

“(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,

 
 

Welfare Reform Bill
Part 5 — Social security: general

76

 

(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)   

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

5

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

107     

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

10

deductions from benefits)—

(a)   

in 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

15

relating to Part 1), paragraph 8(b) is repealed.

(3)   

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

27 October 2008.

Investigation and prosecution of offences

108     

Powers to require information relating to investigations

20

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

require 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)”.

25

109     

Time limits for legal proceedings

In 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

30

which paragraph (b) applies)”;

(b)   

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

appropriate authority”.

110     

Prosecution powers of local authorities

(1)   

The Social Security Administration Act 1992 is amended as follows.

35

 
 

Welfare Reform Bill
Part 5 — Social security: general

77

 

(2)   

After 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.

5

(2)   

The 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

10

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

15

authority 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

20

prescribed 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)

25

or (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

30

section, 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

35

proceedings 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

40

proceedings 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.

45

(7)   

In exercising a power to bring proceedings in accordance with this

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

 
 

Welfare Reform Bill
Part 5 — Social security: general

78

 

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)   

in determining what charges should be preferred;

(c)   

in considering what representations to make to a magistrates’

5

court about mode of trial;

(d)   

in determining whether to discontinue proceedings.

(8)   

Regulations shall define “an investigation in respect of a benefit

offence” for the purposes of this section.

(9)   

This section does not apply to Scotland.”

10

(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”;

15

(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

111     

Penalty in respect of benefit fraud not resulting in overpayment

(1)   

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

20

alternative to prosecution) is amended as follows.

(2)   

After 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

25

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)   

if an overpayment attributable to the act or omission had been

made, the overpayment would have been recoverable from the

30

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)   

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

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

35

(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

40

to in subsection (1)”.

 
 

Welfare Reform Bill
Part 5 — Social security: general

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(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)   

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

5

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

overpayment” there is substituted “any overpayment made”.

10

112     

Amount of penalty

(1)   

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

15

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

£350.

20

(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).”

(2)   

In section 190 of that Act (parliamentary control of orders and regulations), in

25

subsection (1), before paragraph (za) there is inserted—

“(zza)   

an order under section 115A(3B);”.

113     

Period 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)

30

(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

114     

Civil penalties for incorrect statements and failures to disclose information

35

(1)   

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

 
 

Welfare Reform Bill
Part 5 — Social security: general

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inserted—

“Civil penalties

115C    

Incorrect statements etc

(1)   

This section applies where—

(a)   

a person negligently makes an incorrect statement or

5

representation, or negligently gives incorrect information or

evidence—

(i)   

in or in connection with a claim for a relevant social

security benefit, or

(ii)   

in connection with an award of a relevant social security

10

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,

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

15

overpayment.

(2)   

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

authority—

(a)   

in any case, on the person;

(b)   

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

20

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

incorrect statement or representation or given the incorrect information

25

or evidence.

(4)   

A penalty imposed under subsection (2) is recoverable by the

appropriate authority from the person on whom it is imposed.

(5)   

Sections 71ZC, 71ZD and 71ZE apply in relation to amounts

recoverable by the appropriate authority under subsection (4) as to

30

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

authority).

(6)   

In this section and section 115D—

35

“appropriate authority” means—

(a)   

the Secretary of State, or

(b)   

an authority which administers housing benefit or

council tax benefit;

“overpayment” has the meaning given in section 115A(8), and the

40

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

121DA(7).

 
 

 
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Revised 29 November 2011