Press Release - Department for Work and
Pensions: Management of benefit overpayment
debt
1 May 2009
Today the National Audit Office has reported that 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.
Tim Burr, Head of the National Audit Office, said
today:
"The Department has improved the effectiveness of its
debt management operations. More benefit overpayments are being
identified and referred for recovery action. The amount of cash
recovered is increasing, but so is the amount tied up in debt, as
recoveries are not keeping pace with the growth in identified
overpayments. Helping more customers stay out of debt will need to
be an important part of the answer."
Notes for Editors
- Benefit payments are made by the DWP’s agencies – Jobcentre
Plus and The Pension, Disability and Carers Service. Jobcentre Plus
is directly responsible for administering some £22 billion of
payments. The Pension Disability and Carers Service is responsible
for some £84 billion of benefit expenditure.
- For debtors who are still claiming benefit DWP cannot claim
more than £9.15 per week and for those no longer on benefit an
average recovery of £8.38 per week is suggested.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Tim Burr, is the head of
the National Audit Office which employs some 850 staff. He and the
NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 27/09
All enquiries to Sarah Farndale, NAO Press
Office:
Tel: 020 7798 5350
Mobile: 077985 274 421