Thematic Note G0136: Overpayment of social welfare – Allegations of Fraud under Section 302(a)

Years: 2009, 2021

Types of Social Welfare: Allegations of Fraud, Overpayment of social welfare

Deciding Bodies: Appeals Officer, Social Welfare Appeals Office

Theme: Overpayment of social welfare – Allegations of Fraud under Section 302(a)

Period of Analysis: SWAO Annual Reports 2009-2021

Keywords: Overpayments; Fraud; Appeals; Oral Hearing; Burden of Proof; Cohabitation; Review

Casebase No. Case G0136

Summary of the relevant law:

Overpayments of social welfare occur where a person gets a payment of an allowance, pension or any other benefit from the Department of Social Protection (the “Department”) that they are not entitled to. The Social Welfare (Consolidation) Act 2005 sets out the circumstances where an overpayment may arise and the liability of a person to repay an overpayment. 

An overpayment can arise where a person has been granted a payment but subsequently a revised decision is made by the Department under Section 302 or 325 of the Social Welfare (Consolidation) Act 2005 (the “Act”) to reduce a person’s entitlement to a social welfare payment retrospectively. In such circumstances, the Department will issue a letter informing the person of the revised decision.

A key question with overpayments is whether the Department allege fraud on the part of the recipient. Fraud occurs where the Department is told or led to believe something that the person receiving the payment knew was false or misleading or a key piece of information is withheld from the Department.

A revised decision that there has been an overpayment based on fraud is made under Section 302(a)/325(a)) of the Act.

If the overpayment arose as a result of fraud, the person may be criminally prosecuted even if the overpayment is repaid.

Where no fraud is alleged by the Department, they have some discretion to take into account the facts and circumstances that gave rise to the overpayment and this will be relevant in an appeal against such an overpayment. It is also possible to appeal the date when the overpayment is deemed to have arisen, which may result in the amount of the overpayment being reduced. A revised decision with no allegation of fraud is made under section 302(b).

It is therefore very important to know if fraud is alleged (ie, the decision was made based on section 302(a)) or no fraud is alleged (ie the decision is based on section 302(b).) A person can appeal the revised decision alleged fraud and if successful, the fact and circumstances that gave rise to the overpayment can also be considered in the appeal.

In scenarios where the Department claims that the overpayment arose due to an act of fraud on the part of the claimant, a high standard of proof is present and the decisions suggest there must be evidence, not just that the person gave false information or withheld relevant information but also that he/she did so deliberately. If the overpayment is based on evidence of fraud, there is no discretion to reduce the overpayment. whether the overpayment must be paid in full still depends on the circumstances.

An example of the overpayment being successfully appealed in evident in Case Study H2 2016/23 Job Seeker’s Allowance. A finding of fraud was reversed in Case Study H1 2016/17 Disability Allowance, but the overpayment was still payable in full.

Relevant Case Studies of the SWAO Annual Reports 2009-2021

D2.  2012/22 Survivor’s (Contributory) Pension

Decision under appeal: revised entitlement with overpayment assessed – reason(s) stated:-

My decision is based on the report received from the local Social Welfare Inspector, in which he stated that [person named], was cohabiting with you for the past 20 years, and prior to your application for a Widow’s Pension. Accordingly, I have decided that you had no entitlement to Widow’s Contributory and I am terminating your payment immediately from your date of award.

This decision has been made in accordance with Section 302 (a) of the Social Welfare (Consolidation) Act, 2005, on the grounds that you wilfully concealed a material fact from the Department. As a result of this decision, you have been assessed with an overpayment. In the circumstances of this case, it is the intention of the Department to recover the overpayment in full. Our Debt Management Section will be in contact with you shortly regarding repayment of this overpayment.

Overpayment assessed: €73,300.

Background: The appellant applied for a Widow’s (Non-Contributory) Pension in 2001, following the death of her husband. The case was investigated by a Social Welfare Inspector and, shortly afterwards, the appellant withdrew her claim and signed a statement to this effect as recorded by the Inspector at the time. No formal reason was given for the withdrawal. The appellant was issued with a letter which advised her that no further action would be taken as a result of her wish not to continue with the claim. Later in that same month, however, a Deciding Officer concluded that she had an entitlement to a Widow’s (Contributory) Pension based on her late husband’s PRSI contributions and a letter was issued to the appellant advising as to the date of award .

The appellant, at the time of her initial application, was in receipt of Unemployment Assistance from a [specified] Social Welfare Local Office. In 2009, the person named in the overpayment decision applied for Jobseeker’s Allowance at that office and advised that the appellant was his partner and that she was in receipt of a Widow’s Pension. He stated that he had been cohabiting with her for the previous 20 years. The Department of Social Protection commenced an investigation into the appellant’s circumstances. Ultimately, it was decided that she was not entitled to the Widow’s Contributory Pension with effect from a date in 2000. As a consequence of this decision, an overpayment of €73,300 was assessed.

The revised decision was made under Section 302 (a) of the Social Welfare (Consolidation) Act, 2005, which refers to wilful concealment of a material fact – taken to mean cohabitation with the person named for some 20 years without advising the Department.

At oral hearing: the appellant was accompanied by a constituency worker from the office of her local T.D. The Deciding Officer attended at the request of the Appeals Officer. She read the decision and outlined details of the case history, referring to the Social Welfare Inspector’s report and letters of natural justice which had been issued to the appellant inviting her to comment before a decision was made. On the issue of the overpayment, she advised that the appellant had been awarded a State (Non-Contributory) Pension with effect from her 66th birthday and that this had the effect of reducing the overpayment amount to €50,500. She confirmed that the person named had been deemed to be an adult dependent on the appellant’s pension.

The appellant outlined the background to her relationship with the person named. She accepted that they had been living together in the period at issue. She advised that when she was interviewed by the Social Welfare Inspector in 2001, in connection with her Widow’s (Non- Contributory) Pension claim, she told the Inspector that she was co-habiting and that this was the reason for her withdrawing the claim subsequently. She said that at the time of her application she was in receipt of Unemployment Assistance and when she got the pension book from the Department, she stopped that claim.

She went on to say that she had accepted the payment in good faith on the basis that she had withdrawn her non-contributory claim and had not applied for a contributory pension.

On behalf of the appellant, her advocate asked if an application for a contributory pension had ever been made and if so, was there an application form. She stated that the appellant was distraught at the prospect of having to repay such a large overpayment, and went on to say that the appellant genuinely did not understand that she not was entitled to Widow’s (Contributory) Pension.  The appellant stated that she did not deliberately set out to defraud the State.

Following a general discussion about the application, the Deciding Officer accepted that there had been no claim for a Widow’s (Contributory) Pension but she made the point that it was unclear as to why the Widow’s (Non- Contributory) Pension claim had been withdrawn. She said that, in any event, when the appellant got the award letter for the contributory pension she would have received a leaflet about the conditions for receipt of the payment. She accepted that no review had taken place after the pension was awarded and acknowledged that the only contact the Department had with the appellant was when she changed her address.