The principles of recovery

It is important that the individual circumstances of the client and relevant reasons and circumstances surrounding the overpayment are not assumed. In most circumstances it is likely to be distressing for a 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.

Principle 1: an overpayment should be recovered only if it is economically viable for DVA to pursue the recovery of this debt.

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
  • 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 write-off or waive the debt. 

Principle 2: an overpayment should be recovered as soon as feasible, having regard to principles 3 and 4.
Principle 3: the method and timing of recovery should be established with reference to the client's capacity to pay.

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 for vulnerable clients. There are no specific criteria for judging hardship and each case must be assessed on its own merits.

The aim of debt recovery is not to cause the client financial hardship and the recovery process should be a cooperative one in which a reasonable rate of recovery can be negotiated and agreed with the client and recorded in a Recovery Plan.

Principle 4: when recovering an overpayment, reference should be made to the DVA Protocols for dealing with clients at risk.

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.