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OVERPAYMENT RECOVERY WRITE OFF POLICY Ealing Council

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OVERPAYMENT RECOVERY WRITE OFF POLICY Ealing Council Powered By Docstoc
					                                                                     Appendix 3

                        OVERPAYMENT STRATEGY

The Council, as the custodian of public funds is accountable for demonstrating
sound financial management practices, which includes a clear strategy for
managing overpayments of Housing and Council Tax Benefit. Local authorities
have a statutory duty to decide if an overpayment is recoverable in law and are
expected to make serious attempts to recover all recoverable payments.

The Council’s policy objective is to avoid the creation of overpayments by the
effective administration of the statutory Housing Benefit and Council Tax Benefit
scheme. Where overpayments occur, the objective is to maximise recovery and
where necessary to write-off unrecoverable debt in a controlled and cost-effective
manner, to achieve targets set.

Overpayments will be avoided by:
 Verifying benefit claims to a high standard
 Educating customers and other stakeholders in their responsibilities
 Undertaking risk-based interventions (Performance Standards measure)
 Processing changes to claims quickly (BVPI and Performance Standards
  measure)

Overpayments created will be managed through:
 Clearly defined and documented processes and procedures
 Clear roles and responsibilities
 Effective recording systems
 Appropriate financial controls and reporting mechanisms
 Targets for the recovery of debt (two Best Value PIs and Performance
  Standards measures)

Overpayments will be recovered efficiently by:
 Calculating overpayments and making decisions on recoverability in a timely
  manner
 Identifying and classifying overpayments correctly
 Recovering from ongoing benefits in appropriate cases
 Sending invoices quickly
 Taking follow-up action in accordance with procedures
 Applying all relevant recovery techniques
 Using the legal process in appropriate cases
 Concentrating recovery effort on recoverable debt

Overpayments will be written off in a controlled and cost-effective manner by:
 Maintenance and regular review of the write off policy
 Adherence to the policy and agreed set of procedures
 Obtaining the appropriate level of authorisation
 Minimising the level of unrecoverable debt held and set targets for writing off
  debt (BVPI and Performance Standards measure)




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                   OVERPAYMENT RECOVERY POLICY

Scope

The Council’s overall objective is to avoid the creation of overpayments by the
effective administration of the statutory Housing Benefit and Council Tax Benefit
scheme; however where overpayments occur, the policy is to maximise recovery,
within the legal framework, to achieve targets set.

Prevention

The Council operates the Housing Benefit Verification Framework, which requires
local authorities to verify information in relation to new claims and changes to
claims and to have rigorous systems of claims monitoring and review. Priority
must be given to the processing of changes of circumstance to avoid
overpayment. Landlords and tenants are actively encouraged to report changes of
circumstances. All literature made available to landlords and tenants especially
application forms and decision notices must be written in clear concise language
to ensure that customers fully declare their circumstances. Periodic reviews of
literature must take place to ensure continuing clarity and to capture legislative
changes.

The authority's anti fraud initiatives include `do not redirect’ and regular training on
fraud awareness and legislative changes for staff responsible for identifying and
managing overpayments, analysis of trends to inform training needs and liaison
with internal and external agencies.

Identification

Staff working in the scanning team are trained to identify correspondence reporting
changes that may give rise to overpayments including Department of Work and
Pensions correspondence. A trained dedicated officer(s) deals with the
determination of fraudulent overpayments. Analysis of the cause of overpayments
is undertaken to provide feedback to improve the prevention of overpayments and
provide a secure gateway in to the benefits system.

Overpayment creation and classification

Staff within the claims processing teams must create overpayments by selecting
the correct effective date, as detailed within the procedure and work instructions.
Following the creation of an overpayment, the classification assigned to it must be
confirmed, to ensure that the correct levels of subsidy will be attributed to it and to
determine if the overpayment is recoverable or non-recoverable in law.

Recovery and notification

All affected parties must be notified in a written format compliant with schedule 6
of the Housing Benefit Regulations and schedule 6 of the Council Tax Benefit
Regulations.




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No attempt at recovering non-recoverable debt will be made as detailed within the
overpayment procedure.

The overpayment procedure illustrates which overpayments are recoverable and
those that are non-recoverable (see table at appendix A). Decisions from whom to
recover overpayments must be made on a case-by-case basis unless the statute
overrides this requirement; clarification is given in the procedure and work
instructions.

Recoverable overpayments

Overpayment recovery is approached corporately due to the interdependent
nature of the Benefits Service and the Council Tax and Housing services.
Procedures have been agreed in conjunction with them. Overpayments must not
be debited to the Housing rent account if this will lead to arrears or increase the
level of arrears when benefit has been paid after the end of tenancy date.
Recovery of overpaid Council Tax benefit would, in the majority of circumstances,
be made via the Council Tax account.

In keeping with the objectives of the Benefits service, challenging performance
targets are to be set for the recovery benefit overpayments. These need to be
SMART targets and revised on a regular basis to ensure the process is timely,
cost efficient and in accordance with the legislation. In order to maximise
overpayment recovery, a dedicated team of staff is employed to recover Housing
Benefit overpayments.

When calculating the value of the overpayment, deductions must be made in
respect of any underlying benefit entitlement for whole or part of the overpayment
period and in respect of any returned cheques or BACS (credit transfer) payments
relating to that period. Due consideration, subject to the provisions for dealing with
hardship, must be given to the deduction of returned cheques, BACS payments or
any outstanding arrears of benefit for periods that fall outside of the overpayment
period.

The debt recovery officers must seek approval from the Team Manager before
accepting a percentage repayment from a debtor on a full and final settlement
basis. If the debt is in excess of £10,000 approval must be obtained from the
Assessment Manager or if in excess of £50,000 from the Benefit Services
Manager.

Methods of recovery

All methods of recovery available to the authority must be employed in order to
maximise recovery rates. The overpayment procedure details the range of
methods available and the appropriate circumstances in which they should be
used. For tenants who are still entitled to Housing Benefit following the creation of
an overpayment, recovery from ongoing benefit should be made in addition to any
other possible method e.g. from capital, other benefits etc.

There is only one method used for the recovery of overpaid council tax benefit,
overpayments are debited to the council tax account.


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It may be possible to recover a debt from more than one person and by more than
one method. The recovery procedures must provide guidance as to the most
appropriate option.

Overpayment recovery should not be made from landlords who have reported
suspected fraud, which results in the creation of a fraudulent overpayment(s).
Recovery of fraudulent overpayments originating from other information sources
must only be attempted from the landlord if no other recovery options are
available.

Hardship

The circumstances of any affected party who considers that recovery or the
proposed rate of recovery of overpaid housing benefit will cause them undue
hardship, must be reviewed and this will include consideration of writing off all or
part of the debt. The recovery procedure gives guidance on this. A request from
the affected party does not have to be made if sufficient details are already held by
the office to reach a decision.

Management of debt

Procedures must be in place to ensure that new debt is identified and recorded at
the earliest possible date and that decisions on repayments are made promptly
followed by timely and accurate notification to the debtor.

The reporting of debt must be accurate, comprehensive, relevant, timely, and
readily accessible. There must be an audit trail to verify all overpayment
transactions for both paper and electronically held data.

The methods of recovery employed for a case must be reviewed where recovery
has not commenced or has ceased.

A strategy for reviewing all procedures must be implemented to ensure a culture of
efficiency and continuous improvement.

The debt systems and processes used must comply with the requirements of the
Data Protection Act.

Training

All staff involved in the processing of and recovery of overpayments must be
trained to a sufficient standard such that they have a comprehensive
understanding of the relevant legislation governing the creation, classification, and
recoverability of Housing and Council Tax Benefit overpayments. The skill sets
required must include the ability to use the Housing Benefit online IT system,
document image processing system and debt recovery system.

Awareness and overpayment training must be given to all staff regarding the
causes of overpayments and how to flag suspected overpayments.



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The reason for Local Authority error overpayments must be fed back into
training/refresher courses to minimise their occurrence.

An analysis of the value, reason for, classification and length of overpayments
must be used to inform awareness training and prioritise the use of resources.




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                              WRITE OFF POLICY

Unrecoverable debt must be classified as such at the earliest opportunity and
accounted for under the appropriate legislation and procedures.

The debt recovery team will ensure at all times that effective, efficient and
economic procedures are employed to recover debt.

Only Housing Benefit overpayment debts that are created with no ongoing benefit
in payment should be considered for write off.

Debts must be considered for writing off in the following circumstances (see table
at appendix A):

      where it is uneconomic to pursue recovery

      where the debtor cannot be traced and there is no prospect of commencing
       recovery action within one year of the debt being created

      where, in the case of a deceased debtor, there are no funds available from
       the debtor’s estate

      where the debt arose more than six years ago

      where the debt cannot be recovered due to the insolvency or bankruptcy of
       the debtor

      where recovery would cause undue hardship to the debtor

In the case of an untraced debtor, recovery action should be considered if the
debtor’s whereabouts become known within six years of the creation of the
overpayment(s).

All write-offs must be authorised by the Corporate Finance Director or other
delegated officer.




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Appendix A

The following table sets out the minimum action required to be taken in attempting
to recover debts and before writing-off is considered. For recovery cases it should
be used as a guide to help prioritise debts. For write off it should be used to
remind those who have the power to write off the parameters that have been
agreed.


 Amount                Action                             Comments
 0 to £10              No action write off                De-minimis
 £10.01 to £100.00     Decision Notice                    If no payment then write off
                       Invoice
                       Reminder
                       Final Notice
 £100.01 to £250       Decision Notice                    If no payment then write off
                       Invoice
                       Reminder
                       Final Notice
                       Check RAT and other checks
 £250.01 to £500       Decision Notice                    If no payment then write off
                       Invoice
                       Reminder
                       Final Notice
                       Check RAT and other checks
                       Use tracing agents, proactive
                       telephone calls
 £500.01 to £4000      Decision Notice                    If no payment discuss case
                       Invoice                            with senior officer to consider
                       Reminder                           write off or pursue through
                       Final Notice                       County Court
                       Check RAT and other checks
                       Use tracing agents, proactive
                       telephone calls
                       Use collection agency
 £4000.01 and above    Decision Notice                    If no payment then consider
                       Invoice                            write off
                       Reminder
                       Final Notice
                       Check RAT and other checks
                       Use tracing agents, proactive
                       telephone calls
                       Use collection agency
                       Apply to County Court,
                       utilise Charging orders,
                       consider attachment of earnings,
                       instruct County Court Bailiffs,
                       consider insolvency




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