Legislation – Public Authorities (Fraud, Error and Recovery) Act 2025

“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)

But subsection (2) is subject to section 71ZJ.

(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.”