The DWP can impose administrative penalties up to £5,000 (Image: Getty)
The DWP has clarified the rules around penalties that can be imposed on claimants as new anti-fraud laws are coming in.
MPs have been scrutinising draft legislation that would allow administrative penalties to be imposed on a person who has wrongly received a “non-benefit payment”.
The penalties can currently be applied in cases of benefit payments, but the legislation would extend this to other social security payments “for the purposes of providing financial assistance to a person, whether directly or indirectly”.
minister, Andrew Western, provided more details about what range of overpayments would be in scope for the penalties.
He said: “An administrative penalty is capped at £5,000. It is worked out as 50% of the value of the overpayment, so the amount would always need to be below £10,000.”
He warned that anyone who has received about these amounts could be taken to court, saying: “For anything beyond that we would be looking at prosecution.”
Government guidance how administrative penalties work states: “No admission of guilt is required from the individual concerned before offering an administrative penalty, although there is a statutory requirement for investigators to ensure that there are grounds for instituting criminal proceedings for an offence and that the individual is provided with a written notice concerning the offer of the penalty and its operation.
“The individual has the option to accept the administrative penalty and a period of 14 days to reconsider their decision.”
However, Mr Western said there is some leeway in when people are expected to pay the penalty. He told the MPs: “How long a person has to pay back will depend on a range of factors.
“It is clearly dependent on their ability to pay the money back, and what their means of production is and so on. That would always be considered on a case-by-case basis.”
Mr Western was asked which non-benefit payments would be covered by the new laws and if future one-off payments would automatically be within scope for the powers.
The minister said in reply: “We will be able to prescribe in regulations which non-benefit payments will be within scope of the power.
Don’t miss…
“Access to Work will be one of the first programmes to be included, and we will consider others on a case-by-case basis, as new payments are introduced. We need to retain some flexibility over it.
“To support decisions on a case-by-case basis, the Department will always conduct a fraud impact assessment—a process that has recently been introduced—to assess the fraud and error risk in respect of any such non-benefit payment. There will always be a structure in place to see whether non-benefit payments would be suitable for the power.”
Access to Work is a scheme to help cover costs for extra support a person needs at work, if they have a health condition or disability.
The payments can also go towards communication support for job interviews, such as a British Sign Language interpreter or lipspeaker if you are deaf or hard of hearing.
The funds are not eligible for things that would be classed as reasonable adjustments, which are changes that your employer is legally bound to make to help you in your job.
Other powers in the legislation would allow investigators to directly deduct funds from a person’s bank account, where they owe an amount.
The individual must get at least 28 days’ notice that the funds will be deducted, to give them a chance to make any representations disputing the matter.
The legislation mandates that investigators have to request at least three months of bank statements, to ensure the person has the funds in their account to pay the amount.