Management of Benefit Overpayment Debt
The Department for Work and Pensions increased recoveries of benefit overpayments from 180 million in 2005-06 to 272 million in 2007-08, and preliminary results suggest that the Department has achieved its recovery target of 279 million for 2008-09. But recoveries are not keeping pace with the rate of increase in identified overpayments. In 2007-08, 106 billion of benefit payments were made directly by the Department to customers. In the same period 1.3 million overpayments were identified totalling 558 million, exceeding recoveries made of 272 million. The stock of debt therefore increased by some seven per cent from 1.67 billion to 1.8 billion. The NAO report also found that the Department recovers about 3 for every 1 spent on debt recovery operations, though recoveries in 2007-08 represent only some 15 per cent of the identified debt outstanding by the end of the year. The Department's ability to accelerate recovery is restricted by a number of factors, including limitations on the amount which can be deducted weekly from customers' benefits payments under Social Security legislation, and difficulties in tracing some customers who are no longer on benefits. The NAO recommends that the Department pilot increased use of customer contact methods, such as texting, to encourage prompter notification of changes in circumstances which affect benefit entitlement; and that it use risk profiles for customer groups to better target debt collection activities. It should seek more information, for example proof of earnings, when negotiating repayment plans with 'off benefit' debtors; and should enhance performance indicators to monitor the performance of debt collection operations.
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272 million 31 March Analysis excludes Social analysis of Departmental assess Audit Office analysis benefit overpayments Carers Service change in circumstance civil litigation claimants Client Referral Centres Contact Centres cost data matching Data NOTE Analysis debt collection Debt Management Process Debt Manager system debt recovery Department is unable Department's ability Department's Debt Management Disability and Carers example financial circumstances fraud and error Incapacity Benefit Income Support interviews Jobcentre Jobseeker's Allowance Key Performance Indicators managing debt measure monitor Multiple debts National Audit Office NOTE Analysis excludes off-benefit customers off-benefit debtors Official Error organisations overpaid overpayment debts overpayments arising paying agencies Pension Credit Porth private sector collection private sector firms process identifying recover debts recoverability decision recovery action refer overpayments referral and recovery respect of benefits sample sector collection agencies September 2008 small overpayments Social Security legislation Source staff Stornoway total debt value for money value of debt write-off