The principles of recovery

It is important that the individual circumstances of the client and the reasons and circumstances surrounding the overpayment are not assumed. In most cases it will be distressing for the client to discover that they have been overpaid and that they may/will be the subject of recovery action.  Delegates should be aware of this and handle overpayment cases in a sensitive manner. 

What action will be appropriate and reasonable will depend on the circumstances, such as whether the overpayment is the result of inadvertence, departmental error or fraud and the known state of the client’s physical and mental health.

Early engagement is important and notification of the overpayment must be provided to the affected client, including the details and circumstances of why the overpayment occurred. 

Recovery should be made with regard to the following principles.

When deciding whether this is the case, the following factors should be taken into account:

• the amount of the overpayment;
• the course of action needed to pursue recovery and the likely outcome;
• the person who was overpaid can be located and appropriate communication can be made; and
• the administrative costs already incurred and potential future administrative costs.

If a delegate determines that it is not economically viable to pursue the recovery of a debt, they should then consider whether it would be appropriate to defer or write-off the debt.  

It is important that at this stage, enquiries are made with the affected client about their financial circumstances (including income, other debts, assets and significant outgoings) if such information is not already held by DVA.

When seeking to recover, it is important to take into account whether ‘hardship’ will be caused. Generally, delegates should find that a person will suffer 'hardship', if:

• the total annual asset-tested service pension or income support supplement plus all other income does not exceed the maximum annual rate of pension;
• the amount of readily available funds does not exceed the single or partnered limits;
• there is no other course of action the person could reasonably be expected to take to improve their financial position; and
• having reasonable regard to the unavoidable or reasonable expenditure of the person in relation to the maximum annual rate of pension.

Under the Protocol for Dealing with Clients at Risk, a client is considered potentially at risk if they are seriously ill, vulnerable or at risk of self-harm or harm to others. The protocol outlines the steps to be taken when delivering advice to existing DVA clients considered at risk.