When someone dies the Department for Work and Pensions routinely sends out letters to relatives demanding they return money which the Department has paid after the person died.
It has no powers to enforce these payments.
After someone dies, the death has to be reported within five days (eight in Scotland) by a relative or someone present at the death. They are normally asked to use the official service called ‘Tell us Once’ which informs all government and local government offices about the death. That service will then cancel benefits, passports, driving licences, disabled badges, council tax and so on.
Although Tell us Once is run by the Department for Work and Pensions it still takes a
little while to stop state pension and benefit payments. So it is common for one or two payments to be credited after the death to the bank account of the person who has died.
The Department automatically writes to relatives and executors asking them to refund these after death payments. Often the letter will go to the relative who registered the death. These letters imply that the money has to be repaid.
"when public funds are incorrectly paid we are obliged to ask for them to be refunded…We recommend you use the Bank Giro Credit slip enclosed.”
"when public funds are incorrectly paid we are obliged to ask for them to be refunded…We recommend you use the Bank Giro Credit slip enclosed.”
Each year the Department sends letters to hundreds of thousands of relatives and they send back more tens of millions of pounds even though it has no power to force them to do so.
No power
When asked directly the Department is very clear that it has no power to enforce these repayments. So such letters can safely be ignored (but see DO NOT IGNORE below for when you should not ignore a letter).
Here is what the Department said in an official statement by email to me on 8 March 2019
"There is no legal obligation to repay a debt of this type."
And here is what the Department section that sends out the letters said to me personally when I asked for the legal provision under which it was asking me to refund pension payments made to my mother.
"We cannot however enforce recovery of overpaid benefit."
Only once
The Department also told me that only one letter seeking to recover this money is sent. If it is ignored then no others are sent. A Freedom of Information response of 23 April 2019 makes this procedure clear
"If payment is not received no further action is taken and the debts are automatically written off."
The Department also told me that only one letter seeking to recover this money is sent. If it is ignored then no others are sent. A Freedom of Information response of 23 April 2019 makes this procedure clear
"If payment is not received no further action is taken and the debts are automatically written off."
So the safest thing to do with such a letter is to ignore it.
If you are not happy doing that then write back asking what statutory power the DWP is relying on to recover the money. It will then respond to say it has no power. You can then confidently ignore the payment demand.
The Freedom of Information response reveals that in 2017/18 the Department sent 392,000 letters to 282,000 people (more than one benefit is often involved). And it recovered £53,295,000 from them even though it has no power to do so and they have no obligation to repay the money.
As the FoI says "we do ask for these funds to be repaid on a voluntary basis".
It is important to use the Tell Us Once service when the death is registered. In areas where that is not used, then inform the DWP directly of the death as soon as you can.
It is important to use the Tell Us Once service when the death is registered. In areas where that is not used, then inform the DWP directly of the death as soon as you can.
I must stress that this lack of recovery powers only applies to payments made after the death.
Common law
It is unfortunate that solicitors who act as executors seem to give in to the DWP and repay the sums demanded. Some seem to think that the DWP can recover the money using the common law power of restitution. However that was considered by the Supreme Court in a different case and on 8 December 2010 the Court held unanimously that common law could not be used to recover money paid by official error - which this is.
The case is [2010] UKSC54 and para.2 sets the context
"This question arises, for example, where a claimant has notified a change of circumstances...and by mistake the Department overlooks (or delays actioning) the notification and continues making benefit payments"
The judgement is in para.15
"For better or for worse those benefiting from official errors are not subject to recovery proceedings. I am persuaded that section 71 [of the Social Security Administration Act 1992] does indeed necessarily exclude whatever common law restitution rights the Secretary of State might otherwise have."
Since this case the Department has not claimed it has common law rights to such money.
If you use a solicitor as an executor it may be worth pointing this out to them before they send the Department money which it has no legal right to. And if they do repay it then you could ask the solicitor to pay that sum to the heirs.
DO NOT IGNORE
There are some benefit and pension payments that the DWP does have the power to recover.
It has powers to recover money that has been overpaid in the individual's lifetime which was not due to official error. Those letters should not be ignored but the money may still not have to be paid.
There are two common scenarios.
First, the deceased may already have a debt to pay to the DWP due to a benefit being overpaid while they were alive.
Second, information that emerges as part of the probate process may indicate that the deceased was not entitled to a benefit which they claimed and received while they were alive. For example, they may have more savings than they had informed the DWP about which would have reduced or wiped out their entitlement to means-tested pension credit.
In those cases the DWP will try to find the information about their savings going back many years.
These demands are always worth challenging initially. Ask the DWP under what legal powers it is asking for the information and under what legal powers it is seeking to recover the money. If the answer is it has no legal power then you can probably ignore the demands.
Even where the DWP has the power to recover money the debt can only be recovered from the estate of the deceased. If the individual has died with little and there is nothing left after funeral expenses have been paid then their estate is insolvent and the debt should be written off. It cannot be recovered from relatives.
However, if there was money in the estate then the DWP can still make a claim against the estate, even if it has been distributed to relatives. That claim should only be made against the executors, who may be relatives or who may be solicitors. If a solicitor or other executor has distributed the estate to the heirs before the DWP enquiry then they may be liable to pay the money.
Anyone in this position needs to get legal advice. If local solicitors are too expensive there may be a law centre nearby - use the Law Centres Network website to find one. If there is not one nearby the website also has useful links to other sources of free legal advice.
Other debts and overpayments
Requests for tax from HMRC or from a private or company pension provider should not be ignored. However, it is always worth writing to ask under what power the demand for repayment is made. And if necessary seeking legal advice.
Paul Lewis
6 May 2019
v. 1.50
