Legislation – Public Authorities (Fraud, Error and Recovery) Act 2025
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Part 2Social security etc
Chapter 4Overpayments: recovery and enforcement
93Enforcement of non-benefit payments
“Recovery of non-benefit payments
71ZIOverpayment of non-benefit payments: overview and recovery
(1)
For the purposes of this section and sections 71ZJ and 71ZK, an overpayment of a non-benefit payment occurs where—
(a)
a person (“P”) misrepresents, or fails to disclose, a material fact, and
(b)
in consequence of the misrepresentation or failure, P or another person receives a non-benefit payment, or an amount of a non-benefit payment, (whether directly or indirectly) that they would not otherwise have received,
and the “overpayment” is that payment or amount.
(2)
The overpayment is recoverable from P as if it were an amount recoverable under section 71(1) if, in relation to the misrepresentation or failure to disclose, P—
(a)
is convicted of an offence (under this Act or any other enactment), or
(b)
agrees to pay a penalty under section 115A.
(3)
(4)
The right to recover an overpayment under this section does not affect any other right that the Secretary of State may have to recover the overpayment (or any other amount in relation to the non-benefit payment).
(5)
In this section and sections 71ZJ and 71ZK, “non-benefit payment” has the meaning given by section 121DA(5).
71ZJOverpayment of non-benefit payments: overpayment decision and notice
(1)
Before exercising powers under this Act to recover an overpayment of a non-benefit payment from a person (“P”)—
(a)
the Secretary of State must give a notice (an “overpayment notice”) to P, and
(b)
the condition in subsection (5) must be met (opportunity for P to challenge the notice).
(2)
The Secretary of State may give P an overpayment notice only if—
(a)
P has been convicted of an offence (under this Act or any other enactment), or
(b)
it appears to the Secretary of State that there are grounds to institute proceedings against P for an offence (under this Act or any other enactment),
in relation to the overpayment.
(3)
An overpayment notice must—
(a)
state the amount that the Secretary of State regards as an overpayment,
(b)
provide the Secretary of State’s reasons for regarding that amount as an overpayment,
(c)
set out the effect of the giving of the overpayment notice, and
(d)
set out P’s right to seek a review of the notice and the right to appeal the outcome of that review (see section 71ZK).
(4)
In subsection (3)(c), the reference to the effect of the giving of the overpayment notice is a reference to the Secretary of State’s powers to—
(a)
invite P to agree to a penalty under section 115A in relation to the overpayment;
(b)
recover the overpayment (if P agrees to pay such a penalty, or is convicted of an offence, in relation to the overpayment).
(5)
The condition in this subsection is met where—
(a)
the time for P to seek a review of the overpayment notice has passed without P seeking a review, or
(b)
if P sought a review of the notice within the time allowed, the review has taken place and—
(i)
the period mentioned in section 71ZK(6)(a) for P to appeal against the outcome of the review has passed without P bringing an appeal, or
(ii)
P’s appeal (including any onward appeal) against the outcome of the review has been withdrawn, abandoned or finally determined.
71ZKOverpayment of non-benefit payments: reviews and appeals
(1)
A person (“P”) given an overpayment notice under section 71ZJ may apply to the Secretary of State for a review of the notice on the following grounds—
(a)
that there has been no overpayment of a non-benefit payment, or
(b)
that the amount stated in the notice is not correct.
(2)
An application under subsection (1) must be made before the end of the period of 1 month beginning with the day after the day on which P was given the notice.
(3)
On a review, the Secretary of State may—
(a)
uphold the notice,
(b)
amend the notice, or
(c)
revoke the notice.
(4)
The Secretary of State must notify P of the outcome of the review.
(5)
Where an overpayment notice is upheld or varied on a review, P may appeal to the First-tier Tribunal against the notice on the following grounds—
(a)
that there has been no overpayment, or
(b)
that the amount stated in the notice is not correct.
(6)
An appeal under subsection (5) may not be brought after the end of—
(a)
the period of 1 month beginning with the day after the day on which P is notified of the outcome of the review, or
(b)
such longer period (if any) as the Tribunal considers reasonable in all the circumstances.
(7)
The First-tier Tribunal may—
(a)
uphold the notice,
(b)
vary the notice, or
(c)
revoke the notice.”
94Recovery and enforcement mechanisms
(1)
The Social Security Administration Act 1992 is amended as follows.
(2)
“Further provision about recovery
80AFurther methods of recovery
(1)
This section applies in relation to—
(a)
section 80B (restrictions on use of further methods),
(b)
section 80C (and Schedule 3ZA) (recovery from a person’s bank accounts etc), and
(c)
section 80D (and Schedule 3ZB) (disqualification from driving).
(2)
References to a recoverable amount are to—
(a)
an amount which is recoverable by virtue of any provision of sections 71 to 78, and
(b)
a penalty which is payable by virtue of any provision of sections 115A to 115D,
other than an amount or a penalty relating to a devolved benefit.
(3)
For the purposes of this Part, a benefit is a devolved benefit if functions under this Part are exercisable in relation to the benefit by the Scottish Ministers by virtue of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016.
(4)
References to a “liable person” are to a person liable to pay a recoverable amount.
(5)
Nothing in Schedule 3ZA or Schedule 3ZB affects any other method of recovery or enforcement that is available in relation to a recoverable amount.
80BRestrictions relating to further methods
(1)
The Secretary of State may not exercise a power under Schedule 3ZA or Schedule 3ZB for the purpose of recovering an amount from a liable person unless the Secretary of State has—
(a)
given the liable person a reasonable opportunity to settle their liability in respect of the amount,
(b)
notified the liable person that the Secretary of State may exercise the power for the purpose of recovering the amount if the liable person does not settle their liability in respect of the amount, and
(c)
given the liable person a summary of how the power would be exercised.
(2)
The Secretary of State may not—
(a)
make a direct deduction order under Schedule 3ZA,
(b)
re-start a requirement to make deductions and payments that has been suspended under paragraph 16 of Schedule 3ZA, or
(c)
apply for a suspended or immediate DWP disqualification order under Schedule 3ZB,
in respect of a liable person if subsection (3) or (4) applies.
(3)
This subsection applies if it is reasonably possible to recover the amount from the liable person by way of deductions from earnings.
(4)
This subsection applies if the liable person is entitled to and in receipt of a relevant benefit.
(5)
The Secretary of State may not exercise the powers under Schedule 3ZB for the purpose of recovering an amount from a liable person unless satisfied that it is not reasonably possible to recover the amount by way of a direct deduction order under Schedule 3ZA.
(6)
Subsections (7) and (8) apply where a liable person becomes entitled to and in receipt of a relevant benefit at a time when—
(a)
a direct deduction order under Schedule 3ZA, or
(b)
an immediate DWP disqualification order under Schedule 3ZB,
has effect in relation to the liable person.
(7)
In a case within subsection (6)(a), the Secretary of State must revoke or suspend the direct deduction order.
(8)
In a case within subsection (6)(b)—
(a)
the Secretary of State must notify the court that made the immediate DWP disqualification order that the person to whom the order relates has become entitled to and in receipt of a relevant benefit, and
(b)
a court officer must make an order (without a hearing) revoking the immediate DWP disqualification order.
(9)
In this section—
“court officer” means a member of the staff of the court in question authorised by the court for the purposes of subsection (8)(b);
“deductions from earnings” means deductions from earnings under, or by virtue of, section 71 or 71ZD;
“relevant benefit” means a benefit that is—
(a)
administered by the Secretary of State with responsibility for social security, and
(b)
recoverable under section 71 or 71ZB.”
(3)
In section 111 (delay, obstruction etc of inspector), in subsection (1)(b), after “otherwise than” insert “under Schedule 3ZA, Schedule 3B or”
.
(4)
“direct deduction order” has the meaning given by paragraph 1 of Schedule 3ZA;;
“immediate DWP disqualification order” has the meaning given by paragraph 2(2) of Schedule 3ZB;;
“lump sum direct deduction order” has the meaning given by paragraph 1(5) of Schedule 3ZA;;
“regular direct deduction order” has the meaning given by paragraph 1(4) of Schedule 3ZA;;
““suspended DWP disqualification order” has the meaning given by paragraph 1(3) of Schedule 3ZB;.
95Recovery from bank accounts etc
(1)
The Social Security Administration Act 1992 is amended as follows.
(2)
“80CRecovery from bank accounts
Schedule 3ZA (recovery from bank accounts) makes provision for a recoverable amount to be recoverable directly from a person’s bank account.”
(3)
After Schedule 3 insert, as Schedule 3ZA, the Schedule in Schedule 5 to this Act.
(4)
“(ac)
regulations making provision in reliance on paragraph 25(3) of Schedule 3ZA; or”.
96Disqualification from driving
(1)
The Social Security Administration Act 1992 is amended in accordance with subsections (2) and (3).
(2)
“80DDisqualification from driving
Schedule 3ZB makes provision for a liable person to be disqualified from driving while some or all of a recoverable amount remains unrecovered.”
(3)
After Schedule 3ZA (inserted by section 95(3) of this Act) insert, as Schedule 3ZB, the Schedule in Schedule 6 to this Act.
(4)
(5)
In section 27 (production of licence), in subsection (3), after “Child Support Act 1991” insert “or paragraph 5 of Schedule 3ZB to the Social Security Administration Act 1992”
.
(6)
In section 37 (effect of order of disqualification), in subsection (1A), at the end of paragraph (a)—
(a)
omit the “or”, and
(b)
“(aa)
the disqualification is for a period shorter than 56 days under paragraph 2 of Schedule 3ZB to the Social Security Administration Act 1992, or”.
(7)
In section 42 (removal of disqualification), in subsection (6), after “Act” insert “or under paragraph 2 of Schedule 3ZB to the Social Security Administration Act 1992”
.
(8)
In the Road Traffic Act 1988, in section 164 (power of constables to require production of driving licence etc), in subsection (5), after “required under” insert “paragraph 5 of Schedule 3ZB to the Social Security Administration Act 1992,”
.
97Code of practice
“80ECode of practice
(1)
The Secretary of State must issue a code of practice about the exercise of the Secretary of State’s functions under Schedule 3ZA and Schedule 3ZB.
(2)
The code of practice must include provision about—
(a)
the giving of notices to banks requiring the provision of information under Schedule 3ZA;
(b)
the processing (within the meaning of section 3(4) of the Data Protection Act 2018) of information received in response;
(c)
the circumstances in which penalties may be issued to banks;
(d)
the circumstances in which the Secretary of State expects to exercise functions under Schedule 3ZB.
(3)
Before issuing the code of practice for the first time, the Secretary of State must carry out a public consultation on a draft of the code.
(4)
The requirement in subsection (3) may be satisfied by public consultation carried out before this section comes into force.
(5)
The Secretary of State may from time to time revise and re-issue the code of practice.
(6)
The Secretary of State must lay the code of practice, or any reissued code of practice, before Parliament.”
98Rights of audience
“80FRights of audience
(1)
An officer of the Secretary of State who is authorised by the Secretary of State for the purposes of this section has a right of audience and the right to conduct litigation in relation to proceedings for or in connection with the recovery of overpayments under a provision of this Part before—
(a)
a magistrates’ court,
(b)
the county court, and
(c)
the Crown Court.
(2)
In this section, “right of audience” and “right to conduct litigation” have the same meanings as in section 119 of the Courts and Legal Services Act 1990.”
99Recovery of costs
(1)
The Social Security Administration Act 1992 is amended as follows.
(2)
In section 71ZE, omit subsection (3).
(3)
“80GRecovery of costs
Any costs which the Secretary of State reasonably incurs in recovering an amount that is recoverable under any provision of sections 71 to 80, Schedule 3ZA or Schedule 3ZB may be recovered by the Secretary of State as if they were amounts recoverable under that provision.”
100Recovery: further provision
“80HRecovery: further provision
(1)
Subsection (2) applies in relation to any provision for the disclosure or obtaining of information made by or under this Part.
(2)
The provision does not require or authorise any disclosure of information that is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 to the Investigatory Powers Act 2016.
(3)
The disclosure of information in accordance with the provision (as read subject to subsection (2)) does not breach—
(a)
any obligation of confidence owed by the person making the disclosure, or
(b)
any other restriction on the disclosure of information (however imposed).
(4)
In this Part, references to giving a notice or other document (however expressed) include sending the notice or document by post.”