Liability to repay an overpayment

If an individual is paid Carer Support Payment in error, the individual is usually liable to repay that assistance (Social Security (Scotland) Act 2018, section 63). However, an individual is only liable to repay the assistance if the error is either:

• the individual’s fault
• the kind of error that an individual could reasonably be expected to notice (Social Security (Scotland) Act 2018, section 64(1))

An error is an individual’s fault if it is caused or contributed to by the individual through them:

• providing false or misleading information
• failing to notify Social Security Scotland of a change in their circumstances, or
• causing another person to do either of those things (Social Security (Scotland) Act 2018, section 64)

It is clear the error is not the individual’s fault when an overpayment has occurred as a result of official error. However, the individual may still be liable if they could reasonably be expected to have noticed the error.

This means deciding if a hypothetical person, acting reasonably, could be expected to have noticed the error. It is important to note that it does not mean deciding if the individual in the immediate case could reasonably be expected to notice the error (i.e. it is an objective test).

An overpayment error might need to be very large and/or very obvious to conclude that an individual could reasonably be expected to have noticed it.

Client advisors should refer cases to the Decision Support Team for a second opinion where they conclude that one of the following applies:

• the error was the individual’s fault
• the error was one that a person would reasonably have been expected to notice

If the Decision Support Team agrees with the client advisor, the client advisor should both:

• refer the case to the Client Experience Team
• make a determination without application to address the error

If the Decision Support Team and the client advisor conclude that an individual could not reasonably have been expected to notice the error, then the client advisor should:

• make a determination without application to correct the error
• classify the overpayment as an error and refer it to the Client Experience Team

In recovering money that has been paid out in error, the Debt Recovery Team will seek to come to a mutual agreement to the methods and the rate of recovery that best suits the clients circumstances, as far as they are known, to ensure that Social Security Scotland do not knowingly cause a client to be placed into undue hardship (Social Security (Scotland) Act 2018, section 65).

There are special arrangements for the recovery of overpayments when a cared for person has died. More information is in the decision making guidance on death of an individual.

Calculating the value of an overpayment

The overall value of the overpayment is the difference between the payment actually made and that which would have been made if there had not been an error (Social Security (Scotland) Act 2018, section 63)

The client advisor should:

• calculate the overall value of the overpayment
• calculate the part which is to be recovered [link to split liability to repay an overpayment section in this guidance]
• refer the case to the Interventions Team

Split liability to repay an overpayment

Due to the length of time it can take until a new determination is made, an overpayment may continue to increase after the point at which the individual provides the required information. 

However, Social Security Scotland will not seek to recover the part of the overpayment which came after the required information was provided.

Split liability happens where all of the following apply:

• an individual provides information which Social Security Scotland did not have before
• the information provided would reduce their award or end entitlement altogether
• this amounts to an error and generates an overpayment which the client is liable to repay to Social Security Scotland
• processing times mean a further overpayment accrues after the individual provides the information. This is due to time taken by Social Security Scotland to process the change

This means the overpayment must be broken down into two parts. Whilst the client is liable for the some of the overpayment, they will not be liable to repay all of it. This is known as a ‘split liability’.

The portion of the overpaid assistance which we will seek to recover:

• accrues from the day that the client should have notified Social Security Scotland of the change of circumstances
• ends on the day the individual provides the information required to make the new determination

The portion of the overpaid assistance which we will not seek to recover:

• accrues from the day after they provide the information required to make the new determination
• ends on the day the new determination is processed

The client advisor should record the date that the client provides the information needed to make the new determination. Social Security Scotland will:

• seek to recover any assistance overpaid as a result of the error before the date the individual provides the information
• not seek to recover any assistance that is overpaid as a result of the error after the date the individual provides the information

To calculate the amount to be recovered the client advisor should separate the overpayment into its two parts – the part the client is liable to repay and the part that will not be recovered. They do this by deducting from the overpayment any amount that accrued after the individual provides the information required to make the determination. What is left is the value of assistance that the individual must repay.