OVERPAYMENTS: ANNEX
OVERPAYMENTS ALGORITHM
A Was the payment of a type subject to later adjustment?
Yes - Recover automatically
No - Go to B
Where a payment is subject to later adjustment any overpayment should be recovered by means of a deduction or set-off from later payments. The recipient should be informed, in advance if possible, of any adjustment. If automatic adjustment is not appropriate or feasible, recovery by other means should be considered.
B Is it already clear that it would not be cost-effective to pursue recovery?
Yes - Waive recovery
No - Go to C
The presumption is that recovery action should be pursued in all cases. A decision at the outset not to pursue recovery should only be taken if the recovery action was not considered to be cost-effective.
C Does the recipient agree, albeit reluctantly, to repay the amount due?
Yes - Recover
No - Go to D
Where the recipient agrees to refund an overpayment the overpayment should be recovered applying set-off if necessary.
D Did the recipient receive the overpayment in bad faith?
Yes - Proceed with recovery action for the full amount and also consider whether prosecution or disciplinary action should be taken - go to G
No - Go to E
Where the recipient acted in bad faith all practicable efforts should be made to recover the full amount (including recovery from pension benefits, if relevant, or set off against other sums due to the recipient). Consideration should also be given whether the matter should be regarded as one of fraud, with prosecution or disciplinary action being taken as appropriate.
E Does the recipient allege a valid defence?
Yes - Take legal advice
No - Go to F
Where the recipient claims to have a valid defence then legal advice should be taken before proceeding. Note: it is possible that defences will only be raised at stage H below.
F Do the special circumstances for partial recovery of pay, allowances and pensions apply?
Yes - Calculate the proportion recoverable and go to G
No - Go to G
G Has hardship been claimed and would recovery cause genuine hardship to the recipient or to his/her family?
Yes - Waive recovery in whole or in part as appropriate
No - Go to H
Repayment may be waived in part or whole if genuine hardship would be caused.
H Is it now clear that it would not be cost-effective to pursue recovery?
Yes - Consider waiving recovery
No - Go to I
The presumption is that recovery action should be pursued in all cases. A decision not to further pursue recovery should only be taken if the further recovery action was not considered to be cost-effective.
I Make further attempts to recover, including, if necessary, legal action.
All feasible attempts should be made to recover the overpayment, including set-off against subsequent payments or other monies owed to the recipient of the overpayment.
Page Published/ Updated on: 4th November 2004