The government may have to refund overpayments of housing benefit it has already clawed back, following legal action. The Department for Work and Pensions faces shelling out after losing a legal case at the end of July. In that case, the administrative court ruled it was unlawful to use deductions from future payments of benefits as a means of recovering overpayments from people who had taken out debt relief orders.
Debt relief orders are fast track forms of insolvency for people who are in debt and have little disposable income. More than 20,000 have been issued since their introduction last year.
The case concerned two women, Gail Cooper and Eunice Payne, who had applied for debt relief orders which included an overpayment of incapacity benefit and an unpaid social fund loan respectively.
In both cases the department had refused to stop docking money from these women’s benefits after the debt relief order had been granted.
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