Welfare Reform Bill (HL Bill 114)

71ZE Court action etc

(1) Where an amount is recoverable under section 71ZB from a person
residing in England and Wales, the amount is, if a county court so
orders, recoverable—

(a) 5under section 85 of the County Courts Act 1984, or

(b) otherwise as if it were payable under an order of the court.

(2) Where an amount is recoverable under section 71ZB from a person
residing in Scotland, the amount recoverable may be enforced as if it
were payable under an extract registered decree arbitral bearing a
10warrant for execution issued by the sheriff court of any sheriffdom in
Scotland.

(3) Any costs of the Secretary of State in recovering an amount of benefit
under this section may be recovered by him as if they were amounts
recoverable under section 71ZB.

(4) 15In 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 Adjustment of benefit

20Regulations 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) as properly paid, or

(ii) 25as 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) for treating any amount paid to one person in respect of another
30as 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) a third person is entitled in priority to the payee to a
35payment 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) The Secretary of State may recover any amount paid under section
405(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
whom it was paid) as may be prescribed.

(3) 45Regulations 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
purposes of this section be regarded as paid to the other.

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

71ZH Recovery of hardship payments etc

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

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

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

(c) 15a 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) a payment of a jobseeker’s allowance under paragraph 10 of
20that 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
the Social Security Fraud Act 2001.

(2) 25An 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) Regulations may provide that amounts recoverable under this section
30are 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) Sections 71ZC to 71ZF apply in relation to amounts recoverable under
35this 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
(1), after “71” there is inserted “71ZB”.

(4) 40In 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
the specified manner, to pay the penalty—

(a) 45the 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
relates.

(4A) Sections 71ZC, 71ZD and 71ZE above apply in relation to
5amounts 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
administering housing benefit or council tax benefit, those
sections so apply as if references to the Secretary of State were
10to 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
15jobseeker’s allowance which is payable as specified in
paragraph (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) 20In 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) 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
25meaning of the State Pension Credit Act 2002) is recoverable under
section 71ZB of the Administration Act.

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

104 Deduction from earnings: other cases

(1) 30In section 71 of the Social Security Administration Act 1992 (overpayments -
general), after subsection (9) there is inserted—

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

(9B) 35In subsection (9A) above “earnings” has such meaning as may be
prescribed.

(9C) Regulations 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
40change of employer, to the Secretary of State;

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

(c) 45as 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;

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

(f) allowing the employer, where the employer makes deductions,
5to 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 if the
beneficiary is not, or ceases to be, employed by the employer;

(i) 10creating a criminal offence for non-compliance with the
regulations, 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) 15any 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.”

(2) 20In section 71ZA of that Act (overpayments out of social fund), before
subsection (3) there is inserted—

“(2A) Subsection (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
25subsections (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
inserted—

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

(9) 30In subsection (8) above “earnings” has such meaning as may be
prescribed.

(10) Regulations 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
35change of employer, to the Secretary of State or the authority
which paid the benefit;

(b) requiring 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
40pay corresponding amounts to the Secretary of State or that
authority;

(c) as 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
45authority which paid the benefit;

(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
respect of the employer’s administrative costs;

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

(h) 5requiring 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
10exceeding 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
15and Wales which requires deduction from the
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) 20Regulations 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) In subsection (3C) above “earnings” has such meaning as may be
prescribed.

(3E) 25Regulations under subsection (3C) above may include provision
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
30amount 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,”
are repealed.

(3) 35In the Tax Credits Act 2002, in Schedule 4, paragraphs 2 and 8 are repealed.

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) 40At 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
Act 1992, or

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

other than a proceeding in a court of law.”

(4) 5The 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

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

(1) 10In section 24 of the Criminal Justice Act 1991 (recovery of fines etc by
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) 15In Schedule 3 to the Welfare Reform Act 2007 (consequential amendments
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 20Powers to require information relating to investigations

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) 25in paragraph (j), for “(i)” there is substituted “(ia)”.

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
30or 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”.

110 Prosecution powers of local authorities

(1) 35The Social Security Administration Act 1992 is amended as follows.

(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
5council tax benefit.

(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) 10in 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) 15in a case where the proceedings relate to council tax benefit, the
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) 20the proceedings arise in prescribed circumstances or are of a
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
25authority may not bring proceedings by virtue of subsection (2)(a), (b)
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) 30If the Secretary of State prescribes conditions for the purposes of this
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
35proceedings had been brought in his name or he may discontinue the
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
40that the authority would no longer be entitled to bring the
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
45satisfied in relation to the proceedings.

(7) In 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) in determining what charges should be preferred;

(c) 5in 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
offence” for the purposes of this section.

(9) 10This 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) 15for “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

111 Penalty in respect of benefit fraud not resulting in overpayment

(1) 20Section 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) it appears to the Secretary of State or an authority that there are
25grounds 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) if an overpayment attributable to the act or omission had been
30made, 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) In subsection (2)(a) for “such proceedings” there is substituted “proceedings
35referred 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) 40In subsections (6) and (7), at the beginning there is inserted “In a case referred
to 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) 5in 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
10overpayment” there is substituted “any overpayment made”.

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%
15of 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
20£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).”

(2) 25In section 190 of that Act (parliamentary control of orders and regulations), in
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) 30In 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

114 35Civil 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) 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
30recoverable 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
authority).

(6) 35In this section and section 115D—

• “appropriate authority” means—

  (a)

  the Secretary of State, or

  (b)

  an authority which administers housing benefit or
  council tax benefit;

• 40“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
  121DA(7).

115D 45Failure 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
50imposed 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

(c) the person has not been charged with an offence or cautioned,
55or been given a notice under section 115A, in respect of the
overpayment.

(2) 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 notify the
60appropriate authority of a relevant change of circumstances in
accordance with requirements imposed on the person under
relevant 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,
65or been given a notice under section 115A, in respect of the
overpayment.

(3) Where 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
70same overpayment.

(4) A penalty imposed under subsection (1) or (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
75amounts 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 “relevant change of circumstances”, in relation to a
80person, means a change of circumstances which affects any entitlement
of the person to any benefit or other payment or advantage under any
provision of the relevant social security legislation.”