DWP overpayment waiver scheme unlawful

The High Court upheld a judicial review claim by ‘K’, challenging the DWP’s decision not to waive an overpayment of Universal Credit, and the DWP’s waiver policy. This is an important decision which is likely to benefit a number of UC claimants with overpayments.

‘K’ is a single mother with a disabled son. She received an overpayment of UC in respect of her son, after he began an apprenticeship. K disclosed her son’s circumstances to the DWP, but was repeatedly told she was entitled to continue to claim UC for him. This turned out to be an error by the DWP. ‘K’ sought a waiver of the overpayment, but it was refused by the DWP. She brought this claim to challenge that refusal.

The High Court allowed the claim, holding:

1. The defendant unlawfully failed to publish the Decision Maker’s Guide to Waiver (‘DMGW’), an important policy on waiver of overpayments.

2. The refusals to waive were unlawful for two reasons. First, the refusals breached the claimant’s legitimate expectation that she was entitled to the money she had been overpaid. The defendant made a clear and unambiguous representation that she was entitled to it. It was not fair to breach that expectation, by requiring the claimant to pay the money back, primarily because she relied on the representation to her detriment. She did so both by spending the money on the understanding she was entitled to do so (and so she has changed her position), and also by foregoing the opportunity to organise her affairs differently.

3. Secondly, the defendant failed to have regard to relevant considerations. They included ‘public interest grounds’ that (i) the claimant acted in good faith; (ii) she timeously provided all the information required to the defendant; and (iii) she took all reasonable steps both to clarify her entitlement and to prevent any overpayment by actively querying her entitlement on at least four occasions. The defendant addressed these factors only to a very limited extent in her final decision. Had the relevant factors been taken into account, it is impossible to see how the claimant’s case could have been distinguished from one of the case studies in the DMGW (in which waiver was granted). In addition, the defendant failed to have regard to the fact that the claimant relied on the overpayment to her detriment.

4. In reformulating her policy in the Benefits Overpayment Recovery Guide (‘BORG’), the defendant breached the public sector equality duty in s.149 Equality Act 2010. The defendant had a duty to make reasonable enquiries into the impact of the policy, because there were reasonable grounds to suspect that the waiver policy might have an adverse effect on disabled people. There was evidence that the proportion of UC claimants having recoverable overpayments deducted who are disabled claimants is higher than those who are not disabled, and that the policy may have a more severe impact on those with disabilities. The defendant failed to meet the duty, as she failed to assess the risk and extent of any adverse impact and the ways in which such risk might be eliminated. A general equality analysis that the defendant had carried out about her deduction of overpayments policy was insufficient.

The court also gave helpful guidance, in §112, as to the circumstances in which waiver may be granted. The Defendant has, as a result of this claim, amended the published BORG three times, and it will need to do so again following this judgment.

Adam led Tom Royston, and was instructed by Emma Vincent-Miller at the Public Law Project.