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Automated Credit Transfer System
Mr. Crausby: To ask the Secretary of State for Social Security (1) if he will make it his policy to ensure that recipients who collect their benefits on a weekly basis will be able to continue to do so when Automated Credit Transfer is introduced in 2003; [108418]
- (2) what recent representations he has received on the decision to pay benefits through Automated Credit Transfer. [108416]
Mr. Rooker: This is one of a number of issues to be considered on the move to payments by Automated Credit Transfer. No decisions have yet been taken, but we will ensure that the new arrangements from 2003 continue to meet people's needs.
On recent representations, I refer my hon. Friend to the written answer I gave the right hon. Member for Yeovil (Mr. Ashdown) on 28 January 2000, Official Report, column 372W.
Mr. Cotter:
To ask the Secretary of State for Social Security (1) what steps he has taken to ensure the accuracy of benefits payments made through the automated credit transfer system; and if he will make a statement; [107963]
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(3) what is the annual administrative cost of making benefit payments through the automated credit transfer system; and what proportion of that cost relates to the administrative cost of correcting payments made in error; [107962]
(4) how many people were (a) overpaid and (b) underpaid benefits in error by his Department using the automated credit transfer system in the last full year for which records are available. [107964]
Angela Eagle
[holding answer 2 February 2000]: The administrative cost of making benefit payments through automated credit transfer (ACT) is a small fraction of the cost of other methods. For example, it costs 49p every time an order book foil is presented, and 79p per giro cashed, against 1p for each ACT payment. We expect savings in administrative costs of £400 million a year when ACT becomes the norm.
Under and over-payment of benefit may occur for a number of reasons. I am aware of only one occasion (involving nearly 112,000 customers being overpaid a total of about £10.5 million) where the ACT process itself has been the cause of under or over-payment. The Benefits Agency is taking urgent steps to recover the money and to ensure it does not happen again.
Mr. Levitt:
To ask the Secretary of State for Social Security if he will review the rules governing payments for funeral expenses from the Social Fund to make them easier to understand and to implement. [108439]
Angela Eagle:
The Funeral Payment scheme was revised in April 1997 to make it easier to understand and to increase the level of help available to eligible people. The previous provision was complex, making it difficult for claimants to work out how much was allowable for individual items which were specified in regulations, and this led to inconsistent decision making. Further changes were made in November 1997 and again in January of this year. The latest revision has reduced the complexity of the scheme further by setting out more clearly the arrangements for meeting burial and cremation charges.
Under current legislation, therefore, where an eligible person is deemed to have good reason for taking responsibility for funeral expenses, the scheme allows for the fees levied by the burial authorities and crematoria (in so far as it is necessary to incur them), specified travel expenses and up to £600 for any other funeral expenses.
We do not plan any further reforms in the immediate future but will continue to review the policy periodically.
Mr. David Atkinson:
To ask the Secretary of State for Social Security if those in receipt of an armed services pension are entitled to unemployment and other benefits; and if he will make a statement. [108739]
Angela Eagle:
Armed services pensions are taken into account in the benefits system in the same way as any other occupational pension.
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Occupational pensions are taken fully into account in income-based Jobseeker's Allowance, Income Support, Housing Benefit and Council Tax Benefit. Working Families Tax Credit also takes occupational pensions fully into account.
Contribution-based Jobseeker's Allowance is reduced on a penny-for-penny basis for any amount of pension received in excess of £50 a week.
Incapacity Benefit is not currently affected by occupational pensions. However, from April 2001, any occupational pension above £85 a week will affect entitlement for new claimants. The amount of benefit payable will be reduced by 50p for each £1 of pension received above £85.
Mr. Burstow:
To ask the Secretary of State for Social Security (1) how many Benefits Agency claimants were overpaid (a) benefit and (b) income support in each of the last 12 months; and how many of these claimants have repaid that (i) benefit and (ii) income support in full; [108643]
(3) what estimate he has made of the annual administrative costs of recovering unpaid (a) benefit and (b) income support per claimant; and how much was spent by the Benefits Agency recovering overpaid (i) benefit and (ii) income support in each of the last 12 months; [108644]
(4) what is his policy in respect of recovering overpaid benefit from claimants overpaid by (a) over £5.00 and (b) under £5.00; [108645]
(5) what methods are used by the Benefits Agency to recover overpaid benefit from claimants who do not repay such benefit voluntarily; and in what percentage of overpayment cases these methods are used. [108646]
Angela Eagle:
Administration of benefits and recovery of overpayments is a matter for the Chief Executive of the Benefits Agency, Peter Mathison. He will write to the hon. Member.
Letter from Mark Fisher to Mr. Paul Burstow, dated 4 February 2000:
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(2) what is the total amount by which benefits have been (a) overpaid and (b) underpaid in error using the automated credit transfer system in the last full year for which records are available; [108056]
(2) how much (a) benefit and (b) income support was overpaid in each of the last 12 months; and how much of this (i) benefit and (ii) income support was recovered from claimants; [108642]
The Secretary of State has asked Peter Mathison to respond to your recent questions about overpaid benefits. As he is unavailable I am replying on his behalf.
The Benefits Agency (BA) aims to obtain the recovery of overpayments as quickly and efficiently as possible by the most cost-effective method, without causing hardship, and in accordance with Government Accounting and Departmental Policy.
The BA spent £44m on recovering overpayments in the period April to December 1999. A monthly breakdown of this figure is set out in the attached appendix. Some of the information is not available in the format requested. For example, the BA does not break this down by benefit or by the number of overpayments recovered. Prior to April 1999, the BA did not separately identify costs relating purely to overpayment recovery across the whole BA.
The BA captures information on the value of recoveries made. The number of overpayments arising during 1998/99 totalled just over one million, and 707,000 have been raised so far this year. A
monthly breakdown of the recovery figures for the last 12 months is attached, they also provide a breakdown showing Income Support (IS) and all benefits (including IS) as you have requested.
The BA does not normally seek repayment of overpayments less than £25. This is based on cost-effectiveness and in line with Government Accounting. However, there may be occasions when this is not adhered to, for example, when the overpayment has been quickly identified and the sum to be recovered is still likely to be held by the claimant and easily recoverable.
The BA recovers overpayments by deductions from ongoing benefits, instalments, by a lump sum, or by civil proceedings. Typically, the BA will firstly invite repayment and in the vast majority of cases, recovery is implemented by mutual agreement between the debtor and the BA.
Where the debtor remains in receipt of benefit and is not in a position to repay the overpayment immediately, recovery is normally pursued by deduction from ongoing benefit entitlement. This deduction can also be imposed compulsorily if no offer of repayment is forthcoming. Deductions from benefit, whether voluntary or compulsory, account for 74% of the overpayments currently being recovered.
Where customers are not in receipt of any benefit, repayments will be expected. A person's failure to respond to an invitation to repay (or making an unreasonable offer) could lead the BA to
consider seeking recovery through a civil action. The threshold for acceptance for civil action is currently £150. There is a six year time limit on proceedings.
6.5% of overpayments currently being recovered have been subject to civil proceedings. The remaining are being recovered by other voluntary arrangements.
Policy on civil proceedings to recover overpayments is that litigation is not pursued where the debtor remains in receipt of benefit. For those not in receipt of benefit, litigation is pursued as a last resort where voluntary arrangements are unsuccessful or break down.
Recovery procedures follow guidance as provided in Government Accounting, where the recovery is likely to be detrimental to the health and/or welfare of the debtor or a member of their family, the Secretary of State has the power to exercise discretion and abandon recovery.
Recovery of an overpayment arising as a result of an official error is pursued if the overpayment is identified quickly and it is reasonable to expect the customer to have been aware of the overpayment. Duplicate payments are classed as over provisions of benefit and are recoverable under common law. The Secretary of State has a duty to seek recovery of such overpayments where it is cost effective to do so.
I hope this is helpful.
Appendix A January 1999 February 1999 March 1999 April 1999 May 1999 June 1999 July 1999
Total number new recovery OPs in month (IS) 27,123 26,630 30,777 18,567 18,281 21,877 22,266
Total number new recovery OPs in month (All Benefits) 56,966 58,612 65,771 45,059 43,379 51,070 49,601
Value of new recovery OPs in month (IS) £18,795,578 £18,737,449 £22,131,924 £13,447,701 £12,600,292 £14,728,335 £14,754,107
Value of new recovery OPs in month (All Benefits) £33,294,104 £33,589,813 £37,199,443 £23,982,129 £22,195,461 £25,180,629 £25,467,597
Total number new non-recovery OPs in month (IS) 20,339 22,045 24,800 17,554 19,761 23,760 19,561
Total number new non-recovery OPs in month (All Benefits) 26,778 28,099 29,198 22,047 22,408 24,825 21,004
Value of new non-recovery OPs in month (IS) £5,591,023 £6,182,900 £6,961,243 £4,986,998 £5,457,898 £6,464,630 £5,488,999
Value of new non-recovery OPs in month (All Benefits) £5,734,980 £5,672,743 £5,181,333 £4,356,669 £4,303,023 £4,946,916 £4,881,638
Value of Recoveries (IS) £10,398,441 £11,310,508 £12,936,673 £11,604,654 £11,371,316 £13,273,713 £11,978,626
Total Value of Recoveries (All Benefits) £13,497,835 £14,757,275 £16,479,909 £15,475,968 £14,825,677 £16,818,919 £15,315,710
Overpayment Recovery Costs (All Benefits) n/a n/a n/a £4,721,919 £4,684,713 £4,847,579 £4,787,460
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