Source · Select Committees · Public Accounts Committee
Recommendation 30
30
Fraud and error have an impact on people’s lives; when the Department recovers overpayments, this...
Conclusion
Fraud and error have an impact on people’s lives; when the Department recovers overpayments, this can lead to problems for claimants who face deductions from their income, whereas underpayments mean that households do not get the support they are entitled to.61 The Department informed us that it ‘carefully considers’ whether there are 54 DWP ARAC 2019–20, page 224 55 C&AG’s Report, Departmental Overview 2019–20: Department for Work & Pensions, 13 October 2020, page 16 56 DWP ARAC 2019–20, pages 24, 76–77, 218 57 Qq 33, 34 58 DWP ARAC 2019–20, page 175 59 Q 33 60 DWP ARAC 2019–20, pages 72, 225 61 DWP ARAC 2019–20, page 186 16 Department for Work and Pensions Accounts 2019–20 cases of hardship, in which case it might recover at a much lower rate or pause recovery. It added that it will be starting a new initiative next year called ‘Breathing Space’; to make sure that where it has vulnerable people, it is looking at whether they are able to payback when the Department needs to make a deduction.62 The Department’s approach to vulnerable claimants continues to be a concern and is an area where the previous Committee also made recommendations for improvement.63
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the Committee’s recommendation. Target implementation date: Spring 2021 7.2 The department agrees that it needs to recover money efficiently without disadvantaging customers. As part of the response to the COVID-19 pandemic, debt recovery was paused for three months from April 20 20. Recovery recommenced from July 2020 but the department continues to apply a flexible approach. 7.3 All customers or their representatives can contact Debt Management if they are experiencing financial hardship in order to request a reduction in their rate of repayment or a temporary suspension of repayment, depending on their financial circumstances. The department’s analysts are currently looking at how the department can use financial data to help identify vulnerable customers at source so that deductions can be tailored, and collection strategies refined. 7.4 The department remains committed to delivering Breathing Space. This Treasury-led policy, due to take effect in 2021, will allow people with problem debt to obtain protection from creditor action and time to access debt advice, enabling them to arrange a suitable solution to their debts. 7.5 The Cabinet Office recently conducted a public call for evidence on the issue of ‘Fairness in debt management’. The department will be working with government colleagues in order to consider the key findings. 7.6 A key priority for our work is to get benefit payments correct at the outset. Part of this is about helping claimants to report their circumstances correctly. The increased use of data will help the department check entitlement and correct any over or underpayment at the earliest opportunity. Verify Earnings and Pensions alerts are very much part of this approach. 7.7 At a strategic level, the department will continue to analyse the root causes of fraud and error so that future initiatives can target the causes of underpayments. Where underpayments are identified as a result of official error, the department will pay arrears in full at the earliest opportunity. 7.8 The department will write to the Committee with an update on its progress in Spring 2021.