Strategic Communications
Directorate
Financial Redress for
Maladministration
A GUIDE FOR
SPECIAL PAYMENT OFFICERS
Complaints, Redress and Stewardship Team
This guide replaces any previous guidance and will apply to all
special payment considerations being made on or after 15
January 2020
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Glossary of terms
Deciding on the balance of probabilities
Determining whether it is more likely than
not that an alleged event or incident
occurred, where there is little or no
evidence to support the customer’s view
Ex gratia payments
Sum of money paid voluntarily, without any
legal requirement to do so
Extra-statutory payments
Sum of money paid over and above that
covered by statute (but within the scope of
the legislation’s broad intent)
Financial Redress
Money paid as part of redress. This may
include sums to recompense for extra costs
incurred and/or sums to recognise the
impact of poor service on the customer.
Maladministration
The term used to describe when
government actions or inactions result in a
customer experiencing a service which
does not match our aims or commitments.
Redress
Remedy for a wrong or a grievance, which
can include any combination of an apology,
an explanation, putting things right and a
financial payment.
Third Party
For the purpose of this guidance, a third
party is an individual (usually a close friend
or family member) who personally incurs an
injustice or hardship due to DWP
maladministration when dealing with us on
a customer’s behalf.
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Executive summary
The Department’s position on providing customers
1 with financial redress for
maladministration is set out in the policy document:
“Financial Redress for
Maladministration: Special Payment Scheme – Policy and Guiding Principles” (published
April 2012).
In addition to the high level policy document, the Complaints, Redress and Stewardship
Team (CReST) who have responsibility for DWP’s special payment policy, has produced
this guidance to aid staff who are responsible for making special payment decisions. It
contains further information about the circumstances under which special payments can be
made to customers and provides advice on the process. The scheme is discretionary, so
this guide should not be read as a rigid set of rules or a
blueprint for every situation.
Each case must be considered on its own merits, having regard to the guiding principles of
the Department’s special payments scheme, and when necessary with advice and direction
from CReST on the interpretation of the policy and guidance.
Author’s contact details
Complaints, Redress and Stewardship Team
Strategic Communications Division
Email:
DWP Complaints Redress and Stewardship Team
1 Special payments and losses arising in non-customer cases (such as staff and members of the public) are
contained in the
Finance overview of special payments.
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A Guide for Special Payment Officers
Page
Introduction to special payments
5
The role of the Special Payment Officer
5
Considering the evidence
5
Decision making
7
What to pay - Special Payment Categories
20
Loss of statutory entitlement
21
Actual financial loss or costs
27
Consolatory payments
38
Unusual cases
43
Special Exercises
43
Taking account of overpayments or overprovision of benefit
44
Taking account of overpayments or arrears of child maintenance
45
Death of a customer
46
Special payments to next of kin and third parties
46
The Administrative Process
48
Preparing cases for submission to CReST
48
Special payment authorisations
49
Recording and accounting for special payments
52
Statistical returns
54
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Introduction to special payments
1.
The Department aims to provide a good level of service to its customers but
sometimes things do go wrong. When that happens, we should put matters right as quickly
as possible. As part of that process, we should consider redress. Redress might include
any of the following: a sincere apology; an explanation of what happened and what has
been done to rectify matters; corrective action. However, if our action/inaction was sufficient
to be considered maladministration and it had a negative impact on the customer we can
also consider financial redress (special payments).
The Role of the Special Payment Officer
Overview 2.
In the absence of any legal requirement to make special payments, the decision as
to whether to award a special payment rests with the Secretary of State. However, in
practice the Secretary of State does not make decisions personally. Instead, officials act on
the Secretary of State’s behalf. Throughout this guide these officials are called
special
payment officers. 3.
Special payment officers take all necessary actions on behalf of the Secretary of
State, including:
• ensuring they have sufficient information to inform the decision;
• using that information to make fair and justifiable decisions on individual cases;
and
• dealing with administrative matters such as arranging for their decisions to be
notified and implemented.
4.
In making decisions, special payment officers must consider all relevant/ available
evidence, and apply the Department’s policy and guiding principles (see paragraph 47) to
the facts of each case. Their role is to establish if the case was maladministered and if so,
what impact this had on the customer. If the impact was sufficient to warrant financial
redress, the special payment officer decides what to pay and how much the award should
be.
Considering the evidence
5.
In order to make a special payment decision which is consistent with the guiding
principles, the special payment officer must have regard to all the relevant facts. Typically
the information provided with the referral will include both the customer’s and the business’
view of what happened. As these views might differ considerably, supporting or objective
evidence can help the special payment officer reach their own conclusion about whether
the case was maladministered or not.
Types of evidence
6.
There are various types of evidence, for example:
•
direct – such as, a statement by a witness to an event / incident;
•
indirect - such as, a statement by someone who saw the customer immediately
after an incident;
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•
hearsay - such as, a statement from someone who was told about an incident.
7.
Evidence may take various forms, for example:
•
documentary – such as, contemporaneous notes or letters;
•
oral – such as, a statement given verbally (as in a telephone call).
8.
Special payment officers may use any type/form of evidence to inform their
considerations. Some types will carry more weight than others. As a general rule, direct
evidence is more significant than indirect or hearsay evidence. The weight given to each
piece of evidence needs to be carefully judged in light of the circumstances of the case.
9.
It is generally easier to recall details from a recent event than one that took place
many years ago. As memories can be unreliable, the sooner evidence of an alleged
incident or event can be gathered and considered the more weight can be given to it when
reaching a decision. The special payment decision form (SPEC1) should make it clear who
provided the evidence/information, what type of evidence it is, and when/how it was
provided.
Using an expert to help establish the facts
10.
The special payment officer may use the help of an expert in cases where a
question of fact needs special expertise. An expert is a person who appears to the special
payment officer to have knowledge or experience in determining a particular question of
fact. For example, a benefit expert’s help might be needed to confirm if the rules were
applied correctly/incorrectly in a case, or to establish whether or not benefit can be paid on
a statutory basis. The statutory route must be explored first. It would not be appropriate to
pay a special payment for loss of benefit if that benefit (or something similar) can be paid on
a statutory basis.
Corroboration of evidence
11.
The customer’s case records may hold information which corroborates their
allegations. For example, if the customer says they were given incorrect information in a
telephone call and there is a recording of the call, this should form part of the evidence. The
customer may have evidence which supports their version of events too. Where such
information is available, it should be provided. However, a special payment can be
considered even if there is no supporting evidence/information. In many cases, a statement
from the customer, whether oral or written may be the best/only evidence available, even
after enquiries. The role of the special payment officer is to weigh any such
evidence/information, in light of the circumstances of the case.
Contradictory or inherently improbable evidence
12.
The special payment officer may decide that evidence is contradictory or
improbable. Such evidence may contradict itself/other evidence, or the special payment
officer may consider that it is unlikely to be true. In such cases the special payment officer
may:
• request further evidence with a view to resolving the discrepancy;
• seek a further view, for example from his or her line manager;
• determine whether there is sufficient evidence to decide a particular point on the
balance of probabilities (see paragraph 18).
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Decision making
13.
Decisions made in accordance with the special payment scheme should, whenever
possible, restore the individual’s affairs to the position they would have been in, but for
Departmental maladministration. If this cannot be achieved, the individual should be
provided with reasonable and proportionate redress, in light of the circumstances of their
case. A special payment decision is based on the facts as they exist at the date of the
decision.
What constitutes maladministration?
14.
The term ‘maladministration’ is not defined but is sometimes used to describe when
our actions or inactions result in a customer experiencing a service which does not match
our aims or the commitments we have given. It applies to situations in which we have not
acted properly or fairly or have provided a poor service. For example, wrong advice,
discourtesy, mistakes, delays, faulty procedures, bias, or failing to inform a customer on
request of their rights/entitlements. Although lengthy, this list is not exhaustive. A special
payment can only be made if we have:
• maladministered the case; and
• disadvantaged the individual (caused an injustice or hardship) as a result of that
maladministration.
15.
It follows that the special payment officer must be satisfied that the evidence
confirms both these points. If there is doubt about the maladministration or the impact then
this must be settled before the officer can make their decision.
16.
Deciding whether a case has been maladministered is not always straightforward.
The following paragraphs look at some of the more common problems and provide advice
about how best to deal with such decisions.
Cases with little/no supporting evidence
17.
If there has been a significant delay between the date of the alleged
maladministration, the point at which its effect becomes apparent, and the date the
complaint was made there might be little or no documentary evidence available to support
or contradict the customer's assertion that maladministration occurred. Nevertheless, a fair
and defensible decision must be reached using whatever evidence is available.
Making a decision on the balance of probabilities
18.
Documentary or incontrovertible proof is not an essential requirement for the
authorisation of a special payment. The fact that documents may have been routinely and
correctly
destroyed, and there is little/no supporting evidence would not in itself justify a
refusal to make a payment.
19.
In cases where the process of gathering evidence has been exhausted, but it
remains unclear whether a particular event or incident occurred, or whether a particular
assertion is true, it falls to the special payment officer to decide matters on the balance of
probabilities. This must not be confused with the test of "beyond reasonable doubt" (the
standard test of proof in criminal trials).
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20.
The balance of probabilities involves the special payment officer deciding whether it
is more likely than not that an event/incident occurred, or that an assertion is true. This
does not mean that the customer should be given the benefit of the doubt: it is only fair to
recognise that it would be in their interest to recall events in a certain way if this might mean
they receive some financial redress. It is also true that on occasion, customers may
genuinely interpret facts or events differently from staff, and that this in turn may influence
their understanding of events.
21.
If the evidence is contradictory the special payment officer should decide whether
there is enough evidence in favour of one conclusion or another. If the special payment
officer is unable to decide the matter they should seek a view from a senior officer. A
decision must be reached. If there is insufficient information to support a payment then it
should be refused (which will allow the complainant the opportunity to escalate to ICE).
Example:
A customer is advised by friends that he should be entitled to extra state pension to reflect
the fact that he has a dependant wife below state pension age.
He subsequently makes a successful claim for additional dependency increase and says
that he would have claimed this sooner but for incorrect advice from DWP. He says he
asked if he could claim for his wife after he received his State Pension application pack and
was told he could not as she was too young.
The evidence shows that a standard application pack was issued to the complainant prior
to the date he became eligible to claim state pension, which included information about the
circumstances in which a claim could be made for a spouse below pension age. System
records also indicate that the complainant made a telephone call to The Pension Service
prior to the return of his pension application, although details of the discussion which took
place and any advice given have not been recorded/ retained.
Having regard to the available evidence, the decision maker needs to consider the
plausibility of the customer’s allegations and reach a decision, on the balance of
probabilities, as to whether the customer was given incorrect advice as alleged.
Misdirection
22.
Misdirection is accepted if we have provided the wrong information to a
customer/customers and this has resulted in them being disadvantaged.
Example:
A customer and his wife applied for Income Support in 2010 when their savings were just
under £2000. After the benefit was awarded, they made enquiries about the capital limit
and said it was their understanding that they could not claim until their savings were below
£2000. They requested backdating of the award to 2008, on the basis that they could have
claimed sooner than they did. The tribunal explained the statutory time limits for backdating
but suggested that they seek compensation for misdirection. The customer complained to
DWP and said that they had asked if they could claim Income Support in 2008 and were
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told that their capital was too high. They said that they were told that they could not claim
until their savings were less than £2,000 and that they had not claimed for a year and a half
as a result of this advice. They complained that the information was incorrect and that they
could have claimed from the outset. They asked for compensation on the basis that they
would have claimed sooner but for the misinformation. You would need to gather more
information about the alleged misdirection to see whether it was DWP’s fault they had not
claimed the benefit sooner.
23.
If a customer alleges misdirection, you should gather as much information as
possible about the misdirection event. Usually this is done by the business via an interview.
It is more helpful to ask the customer to recount everything they can remember about the
event rather than seek to direct the conversation by asking leading or closed questions.
This is the customer’s opportunity to provide their version of events. If there is no
supporting evidence in the customer’s records (for example, the misdirection occurred in a
telephone call and the call was not recorded or it has been deleted in line with data
retention policy) you should ask the customer for any supporting information they have. For
instance, in this example, they might have kept a note of the call detailing when they
telephoned and who they spoke to which might help to corroborate the allegation. If there is
no corroborative evidence/information you will need to consider the decision on a balance
of probabilities.
24.
Bear in mind that you are considering if it is more likely than not that the event took
place as the customer described and not whether it is feasible. It is not appropriate to
accept the customer’s account solely because there is no evidence or because there is no
evidence to the contrary. You might find it helpful to have the business’ view of how they
would have dealt with that type of enquiry at the time. DWP’s Library Services can also
provide invaluable insight to past procedures as they have access to a back catalogue of
information which includes customer leaflets. Remember too that DWP is not responsible
for prompting customers to claim. The onus is on the customer (with help from family,
friends, their representatives or advice centres if necessary) to research and claim any
benefit appropriate to their circumstances. If customers ask a general question about
benefits this is likely to produce a general response. However, a specific question should
result in a more detailed response.
Example:
A customer is awarded income based Employment and Support Allowance and Housing
Benefit. She cannot meet all her rent as the Housing Benefit is capped. A few years later
(after speaking with Welfare Rights) she claims Disability Living Allowance (DLA). It is
initially refused as her medical condition does not normally result in care/mobility needs but
subsequently allowed by a tribunal. The customer complains that she was not told about
this help in an earlier telephone call she made about her financial struggles with her rent.
There is no evidence of the call in her benefit records and the customer cannot recall when
it was, which office she telephoned or who she spoke to. She said her condition made it
difficult for her to find out about benefit entitlement on her own. In considering her
allegation, you would need to know what questions she asked to judge if the advice she
says she was given was incorrect. You would also need to know what details she divulged
about her circumstances to see whether the call operator could reasonably have been
expected to suggest she claim DLA.
Delays
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25.
There are a number of factors to take into account when deciding if a delay
constitutes maladministration:
• the time normally required to administer the relevant process;
• whether the case was complex;
• whether there were any other mitigating circumstances, such as an unusually high
volume of cases; and
• whether the customer’s actions/conduct contributed to the delay.
Allowing reasonable time for processing of claims and applications
26.
All dealings with the Department take time, whether or not errors occur, as officials
are required to make sure that they have sufficient information to determine any
entitlement. If they have insufficient information, any further details must be gathered before
entitlement to benefit can be established. Due to the different nature of individual benefits,
the time needed for this process varies from benefit to benefit. One possible indicator is the
actual average clearance times. If someone has complained about the time it took to
process their claim but it was processed promptly and within the normal timescale for that
benefit then redress will not be appropriate.
27.
In the majority of cases, the Department should process claims and applications
within a reasonable timescale. Where there has been a delay, it is necessary to assess
whether, and if so the extent to which, Departmental maladministration contributed to the
delay. For example, if the customer has contributed to the overall delay by not returning the
evidence needed to assess their case for months, this needs to be factored into the
consideration. In addition, some cases will legitimately take longer to process than others
because of the complex nature of the case, or an unanticipated and abnormal volume of
cases. In such cases, consideration will need to be given to the way in which the
Department managed delayed applications, and customers’ expectations in determining
whether its actions were maladministrative.
28.
Where payments are accepted as having been delayed as a result of
maladministration, a special payment can be considered for any impact caused, such as
losses or costs (for example, loss of value if the delay exceeds a year or overdraft charges
if the account became overdrawn due to our delay in paying benefit) or a consolatory
payment for any inconvenience caused.
Impact on linked benefits
29.
The award of certain benefits (linked benefits) is dependent on the customer being
in receipt of an associated benefit (qualifying benefit). For example, when the higher or
middle rate care component of Disability Living Allowance is payable, a customer’s carer
may be entitled to Carer’s Allowance.
30.
When maladministration results in delay determining entitlement to a qualifying
benefit or in the payment of a qualifying benefit, this can have a knock-on effect on the
award of any linked benefit. A special payment should be considered for the impact of the
delay in respect of both benefits.
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Delayed implementation of a disputed decision or appeal outcome
31.
If a decision is overturned during the dispute process or as the result of an appeal,
and the implementation of the new decision is delayed as a result of our maladministration
a payment in respect of the impact of the delay can be considered.
32.
For the purpose of determining the extent of any delay in implementing a new
decision, consideration should be given to the date on which the tribunal decision was
received from the Tribunal Service and the actions required following notification of the
decision.
Decisions overturned on review or appeal
33.
The fact that decisions on entitlement to benefit/child maintenance carry review and
appeal rights, demonstrates that Parliament clearly envisaged some decisions being open
to legitimate debate, for which it provided a degree of independent decision making to
resolve such issues.
34.
The expectation is that the vast majority of benefit/child maintenance decision
makers will have used their knowledge of the case, guidance and legislation to reach a
reasonable decision. Therefore the revision of a decision (whether by DWP officials or by a
tribunal) should not be regarded as proof that the original decision was maladministrative.
The decision may have been revised for a number of reasons. For example, the new
decision maker may have evidence before them that was not available at the time of the
original decision, or may choose to interpret the facts differently. Tribunals may also provide
a fresh interpretation of the law or provide clarity of thinking around a piece of legislation
that could be interpreted in several ways. In any of these circumstances the DWP
official/higher tier is not saying that the original decision was maladministrative, but is using
further information, further insight into the law or any discretion vested in them, to make a
different decision.
35.
Whilst the overturning of decisions by higher tiers was clearly envisaged by
Parliament, it made no provision for financial redress to be paid, over and above any
arrears that might be due on a statutory basis. As such, it is not normal practice to make a
special payment when benefit/child support is awarded/amended following the overturning
of a decision by a new decision maker/higher tier. This is the case even when large sums of
arrears become due unless the criteria described in paragraphs 36 to 38 applies.
36.
The exception to this general policy applies when the original decision was
wholly
unreasonable or
clearly incorrect based on the evidence available at the time, and the law
as it was then understood
.
What is a 'wholly unreasonable' or 'clearly incorrect' decision?
Wholly unreasonable
37.
The position that is to be adopted is similar to that used in Judicial Review. To be
regarded as wholly unreasonable, it is not sufficient for the decision to be one that another
person would not have made. Nor is it sufficient for the original decision to have been
wrong in law (given the complexity of the law and the degree of interpretation available to
decision-makers). Instead we use Lord Diplock’s definition:
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Lord Hailsham observed:
‘Two reasonable persons can perfectly reasonably come to opposite conclusions on the
same set of facts without forfeiting their title to be regarded as reasonable.'
So the mere fact that a different decision is later made by someone else does not make the
original decision wholly unreasonable.
Lord Diplock expanded on that principle by saying that to be
‘wholly unreasonable’ the
decision must be:
‘so outrageous in its defiance of logic or of accepted moral standards that no sensible
person who had applied his mind to the question to be decided could have arrived at it.'
Clearly incorrect
38.
Some benefit decisions are made without full off-line consideration. Rather they
involve the input of information onto the computer to reach a determination. Errors or
oversights in this type of decision are more likely to satisfy the definition of ‘clearly incorrect’
than ‘wholly unreasonable’ decisions. A decision may be regarded as ’clearly incorrect’ if it
is self-evident that it is wrong. Accidental or ’slip of the pen’ errors that have adversely
affected the customer could be considered under this category.
Example:
A decision maker may have intended to award a benefit or premium but due to a simple
inputting error, this was not implemented.
39.
In order to form a view on whether the original decision was wholly unreasonable
and/or clearly incorrect based on the (then) known facts/understanding of the law, it may be
necessary to seek an expert opinion. For benefit decisions try the
decision making and
appeals team or t
he decision making and appeals policy team. Both are in the corporate
centre. For child maintenance decisions, contact th
e advice and guidance team.
Determining the impact of the maladministration
40.
Once you have established that maladministration occurred, the next step is to see
how that affected the customer. There will be occasions where despite the poor service,
there was no discernible impact. In these situations, you should correct the case, explain to
the customer what happened, what has been done to rectify matters and apologise. If the
customer has benefited financially from the maladministration then you might decide that,
taken in the round, they have received sufficient financial redress.
41.
If the customer alleges they have been affected in a way that seems unreasonable
in the circumstances, you should record why you do not accept it. For example, a customer
complains solely by email but claims for printing, postage and recorded delivery costs.
There is no evidence to show the customer incurred these costs, so there would be no
justification to pay them.
Deciding whether the customer acted reasonably
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42.
In determining the extent to which Departmental maladministration has resulted in
a customer (or, exceptionally, a third party
2) experiencing an injustice or hardship, it may be
necessary to consider whether a customer acted reasonably in relation to their dealings
with the Department.
43.
In doing so, the special payments officer may, for example, wish to consider:
• the nature, quality and accuracy of any official information or advice provided to the
customer;
• the information available to the general public through Departmental publicity;
• the customer's age and/or health;
• whether the customer gave false, misleading or incomplete information which the
Department could not reasonably have been expected to challenge;
• the length of time before the customer acted, and the reasons why.
Making fair and justifiable decisions
44.
It has long been accepted that, for reasons of fairness and equity, similar case facts
should give rise to similar financial remedies, unless the circumstances of the case can
justify an alternative remedy. This remains the case.
45.
However, it is equally important that each case is considered on its own merits. All
special payment decisions should have specific regard to:
• any injustice and/or hardship experienced by the individual as a result of
Departmental maladministration;
• the length of time it has taken to resolve a complaint or provide redress in
response to Departmental maladministration;
• the time and trouble the individual has had to go to, in order to obtain appropriate
redress;
• the most appropriate financial redress (a payment in respect of one category does
not exclude consideration of a payment in respect of an additional, separate
category).
Example:
A Departmental error, which results in disruption of benefit payments to a number of
individuals, might affect each one differently. For example, the disruption might:
• have had a relatively limited impact on individuals who had other sources of income; but
• have caused others to experience severe hardship/distress.
Although each one had their benefit disrupted, a blanket approach to redress might not be
appropriate if they were affected differently by the error.
Making a discretionary decision
2 We can consider a special payment for an individual (usually a close friend or family member) who
personally incurs an injustice or hardship due to DWP maladministration when dealing with us on a
customer’s behalf.
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46.
There is no legislation governing special payments. They are discretionary
payments which means that deciding whether to make a payment, and if so, how much to
pay, is a matter of judgement. For this reason it is especially important to record the
rationale for paying/refusing a payment so that it is clear how a decision was reached. If
evidence was disregarded or given less/more weight the reasons for this should be
explained within the decision. If the customer subsequently asks ICE/PHSO to look at the
reasonableness of the special payment, they would look at whether the decision maker had
regard to all the instances of maladministration. Therefore it is helpful to document
everything that was considered so it is clear what information was taken into account. (See
paragraph 62 and the Administrative Process for details about recording your decisions.)
DWP’s guiding principles
Guiding Principles of the Department for Work and Pensions’ Special Payments
Scheme:
• Individuals should not be disadvantaged as a result of maladministration;
• Injustice and hardship resulting from maladministration should be addressed on a case
by case basis;
• Fair and justifiable decisions should be made in respect of individual cases; and
• Special payment decisions should culminate in timely and appropriate financial redress
for individuals.
47.
The guiding principles of the DWP special payment scheme are explained in the
policy document
“DWP’s Financial Redress for Maladministration”. These should be
considered in each special payment decision. They will help you ensure that your
decisions:
• consider each case on its own merits, taking account of the individual’s
circumstances;
• return the individual (where possible) to the position they would have been in but
for the maladministration, but do not advantage them;
• are fair and consistent and take into account the customer’s own actions;
• are made promptly or take into account any delay in considering redress.
PHSO’s Principles for Remedy
48.
Our principles draw on PHSO’s Principles for Remedy (which go beyond financial
redress). There are six principles which you might also want to consider when making your
decision.
Handling special payments in cases which have been accepted by the Independent
Case Examiner (ICE)
Resolution
49.
As part of the ICE process, an Investigation Case Manager may attempt to resolve
3
the case. If an opportunity is identified by ICE, the Focal Point or the business, ICE will
attempt to broker an agreement which satisfies all parties. If maladministration is accepted,
any proposed special payment should be considered, business as usual, by the appropriate
3 Resolution is where ICE will attempt to broker an agreement between the complainant and the
business without examining the evidence.
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part of the business, within their delegated limit
4 and in accordance with special payment
policy intent. If any of the following apply, the case should be referred to CReST to
consider:
• the limit exceeds the business delegated limit; or
• the case is one which CReST needs to see (see paragraph 186) irrespective of the
proposed amounts; or
• there are policy concerns about the proposed payment.
50.
There are two reasons the proposed payment could be refused: the first is that the
case for payment has not been made; the second, that the proposed payment is not in line
with policy intent. If payment can be agreed, the Focal Point should notify ICE that
resolution is feasible. If the business (including the special payment team and CReST) or
the complainant does not agree the resolution, the case proceeds to ICE investigation.
ICE Settlement / Investigation cases
51.
On receipt of the evidence, an Investigation Case Manager will complete a case
history outlining the facts of the case. It is the role of the Focal Point (with input from the
business, including special payment officers and CReST if they have had prior involvement
in the case) to check the accuracy of the facts which will be used by the ICE to inform their
findings about maladministration. If there are any gaps or errors with the facts, these should
be rectified at the case history stage so that the ICE has the full picture.
52.
If the Investigation Case Manager, the Focal Point or the business identifies a
settlement
5 opportunity, this should be explored using the process outlined above for
resolutions.
If payment can be agreed, the Focal Point should notify ICE that settlement is feasible. If
the business (including the special payment team and CReST) or the complainant does not
agree the settlement, the case proceeds to ICE investigation.
53.
ICE investigations involve a full review of the case evidence and the ICE will reach
their own conclusions about maladministration and the impact on the customer in line with
their findings. The ICE’s provisional findings are shared at draft report stage with the
relevant Focal Point. It is the role of the Focal Point (with input from the business, including
special payment officers and CReST as appropriate) to check that the facts have been
interpreted correctly and that the findings and recommendations can be agreed. If a special
payment is being proposed, the Focal Point should check first if the business accepts the
maladministration. If they do, the special payment should be considered by the appropriate
part of the business, within their delegated limit and in accordance with special payment
policy intent. This is to confirm whether the payment can be ‘agreed in principle’.
Consolatory payments are a judgement call for the ICE and the expectation is that the
specified amount should be accepted without challenge if the maladministration has been
articulated and accepted, having regard to the necessary delegations / authorisation route.
54.
If any of the following apply, the case should be referred to CReST to consider:
• the limit exceeds the business delegated limit; or
4 See paragraph 197 for details of cases that DWP cannot agree without Treasury approval
5 Settlement is where, after examining the evidence, ICE will attempt to broker an agreement
between the complainant and the business.
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• the case is one which CReST needs to see (see paragraph 187) irrespective of the
proposed amounts; or
• there are policy concerns about the proposed payment.
55.
The ICE draft report should provide sufficient details about the maladministration
and the impact on the customer to justify the payment they want DWP to make. If a
loss/costs or loss of statutory entitlement (LOSE) payment is being recommended, the
report should detail the evidence used to determine the amount. This is because, in ICE
investigation cases, special payment officers will use the ICE report rather than make their
own determination of the amount due. In effect, the report is the audit trail for the payment.
Open-ended recommendations, where the ICE has not determined the amount due, but left
that to the business to calculate, will be rare but in the event they occur, the special
payment officer should determine the amount in accordance with the policy and guidance
(and advice from CReST where appropriate). As it won’t be clear at draft stage if an open-
ended recommendation will need CReST approval, the draft report should be referred to
CReST to confirm there are no policy issues with the proposed payment. This will ensure
that the payment can be authorised should it ultimately exceed the business’ limit.
56.
If payment can be agreed, the Focal Point should notify ICE that the
recommendation is accepted in principle. If the business (including the special payment
team and CReST) does not agree, the Focal Point should explain the rationale to ICE. Any
special payment dispute at this stage will be policy related. Disputes are dealt with by the
relevant ICE Focal Point in accordance with agreed escalation routes. However, if the
dispute is solely from CReST, ICE and CReST can escalate any concerns through the
CReST escalation route. If DWP does not have the authority to agree the payment (for
example, a consolatory payment which requires Treasury approval) the Focal Point should
notify ICE that the special payment requires external approval before DWP can agree it.
57.
Once the final report is issued, the Focal Point will be responsible for ensuring that
the payment is made by the appropriate team in line with the delegated limits. Any
payments which exceed the businesses’ delegated limits should be referred to CReST for
authorisation.
Handling special payments in cases which have been accepted by the Parliamentary
Health Service Ombudsman (PHSO)
Resolution cases
58.
Whilst PHSO can resolve cases without completing an investigation, they are rare
in DWP cases because of ICE’s role. However, when they identify a resolution opportunity,
PHSO will approach the relevant Focal Point with their proposals. It is then for the Focal
Point to liaise with the business and the Corporate Parliamentary Ombudsman Liaison
Team (CPOLT) to check if the proposals can be agreed. Special Payments should be
considered in line with the business’ delegated limits and in accordance with special
payment policy intent. If any of the following apply, the case should be referred to CReST to
consider:
• the limit exceeds the business delegated limit; or
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• the case is one which CReST needs to see (see paragraph 187) irrespective of the
proposed amounts; or
• there are policy concerns about the proposed payment.
The Focal Point are responsible for informing PHSO of the outcome.
PHSO investigation cases
59.
When PHSO complete their investigation, they will share their draft report with the
CPOLT, the Focal Point and the customer. The draft report will outline their provisional
findings and recommendations. CPOLT, in liaison with the Focal Point, who will arrange for
a factual accuracy check and confirm whether the business agree the draft outcome and
recommendations. This includes checking whether any special payments are in line with
policy intent and seeking agreement in principle for the payment to be made once the final
report is issued. The process is similar to that described for ICE investigations. CPOLT
prepare the response to PHSO. This will cover any factual inaccuracies and will either
accept or challenge the findings/outcome and/or any proposed redress as appropriate.
60.
Once the final report is issued, the Focal Point will be responsible for ensuring that
the payment is made by the appropriate team in line with the delegated limits. Any
payments which exceed the businesses’ delegated limits should be referred to CReST for
authorisation.
Recording the special payment decision
61.
Whilst the operational businesses can adapt this for their own purposes, we
recommend keeping the titles used in Section C (summary of case) to prompt officers to
consider the information which is needed to reach a sound decision. The SPEC1 should be
a standalone document which clearly articulates the case for maladministration and
supports the payment decision. We do not recommend that you attach other documents to
explain what happened or what should have happened. The SPEC1 should provide all the
information about the case. In ICE and PHSO cases, you should populate the SPEC1 with
the information provided in the report (or, in ICE investigation cases, the ICE SPEC1). The
SPEC1 should clearly document:
•
What happened: this section should record the facts of the case (in chronological
order), making it clear which are actual facts (i.e. supported by evidence) and
which are not supported by evidence but provide the customer’s or the business’s
view of events.
•
What should have happened: this section should explain the normal
process/procedures for dealing with the matter in hand. These act as a benchmark
for what happened and should highlight whether we acted appropriately (i.e. in line
with procedures) or whether we did not follow the guidance/procedures in place at
that time. If we should have done something differently, what was it, and where
does it say so? If this is opinion rather than guidance or legislation this needs to be
made clear on the SPEC1. If you are not sure what should have happened, seek
advice from the benefit/child maintenance experts.
•
Has maladministration been identified? If so, how did this affect the individual
concerned? This section should explain if we got it wrong. If we did not
maladminister the case, there is no basis for a special payment and it should be
refused. If we did something wrong, what was the impact? Sometimes the impact
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the customer describes is not reasonable or there is no clear link between what
went wrong and the impact they describe. In these cases you should outline the
customer’s view and then explain why you do not accept that there is a link.
•
What financial redress is appropriate? This section is for recording your view about
how we can best put the customer back to the position they would have been in if
we had not maladministered their case. The redress should look to address the
impact caused by the maladministration. If the customer has expressed a view
about what redress they want, you should include this too. Ultimately what they
request may not be reasonable, but you should still show you have considered it
and why it isn’t appropriate.
62.
The SPEC1 is a living document until the special payment officer makes their
decision. If new facts emerge which are pertinent to the decision, or if advice from CReST
or benefit/child maintenance experts helps you reach a new conclusion, the SPEC1 needs
to reflect this. The new facts should be added to the section entitled ‘what happened?’ or
‘what should have happened?’ as appropriate and you should revise the other sections to
reflect the final decision as necessary. The SPEC1 should explain your final decision as
clearly and as fully as possible. If the customer is unhappy with the decision, then a
reviewing officer (and ultimately ICE or PHSO) will use this document to understand what
you considered and how you reached your decision.
Seeking advice from the Complaints, Redress and Stewardship Team
63.
If you have any queries about the special payment policy or you want help with a
complex case, you can ask the CReST for advice. You can either:
• call us with details of the case and your concerns; or
• email details of the case (for example, the referral/decision form SPEC1) and your
questions to us.
64.
There are further details about making a referral in paragraph 186 and onwards.
This also explains which cases must be referred to CReST for checking/authorisation.
Notification of a special payment decision
65.
Individuals should receive clear, comprehensive explanations for special payment
decisions, incorporating details of how they can progress any concerns they may have
about the special payment decision. The notification may be in writing, or explained by
telephone (for example, a straightforward decision by a complaint resolution manager).
66.
The letter accompanying the payment must be written in a sensitive and empathetic
way and include the following, where appropriate:
• provide a summary of the complaint and the outcome of any investigation;
• include, where an error has been made by DWP, an acknowledgement of that error and
an apology;
• provide a clear, concise and full explanation of why the payment is being made or
cannot be made;
• explain that a continuing award may be affected by future changes in circumstances;
• explain that an overpayment has been recovered from the special payment (give the
details of the overpayment);
• explain that some special payments are taxable (Loss of Statutory Entitlement payments
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in respect of NI based benefits);
• explain that the Department’s special payment scheme is discretionary and that whilst
special payment decisions do not carry a right of appeal, the decision can be looked at
again, for example, in the light of fresh evidence. Explain what they should do next if
they want to supply further information;
• provide details of how the customer can take matters further if dissatisfied with the
special payment decision. The escalation route is determined by the business but we
would advise including a review stage, where the decision can be considered afresh
before signposting to ICE.
Disputes about special payment decisions
67.
As special payment decisions are discretionary and are not based on a rigid set of
rules, people will from time to time have a different view about the same case. You can
resolve this in several ways. You can debate the case within your team, seek your
manager’s view or ask CReST for advice.
Disputes/escalations within DWP
68.
In most instances, the advice you receive from CReST should provide the way
forward. However, if you are unhappy with either the advice you have received from us or
our refusal to authorise a payment which is over your delegated limit, you can raise your
concerns as follows:
Action for the business:
• Discuss the matter with relevant senior managers and seek their agreement on the
need to escalate. You should articulate:
• The maladministration that occurred (specifically, what happened/what should
have happened/the service failure);
• How the maladministration impacted on the customer (specifically, how they
were financially disadvantaged and/or caused inconvenience, embarrassment
or severe distress);
• Any additional information or advice which you think is relevant in supporting
your position/argument.
• Ask CReST to reconsider their decision.
CReST Step 1:
In response CReST:
• will consider your representations;
• may suggest a telekit, to discuss the detail of the case;
• will issue a final decision within 5 working days -
any final decision issued by
CReST will have been cleared by CReST’s manager.
CReST Step 2:
If you remain dissatisfied with the final response from CReST you can ask your Senior
manager to approach CReST’s G6. In response, CReST’s G6 will:
• consider your representations;
• review the final response from CReST;
• provide direction on next steps within 5 working days (if this cannot be achieved we
will let you know when you can expect a response). This may include (a)
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agreement to authorise financial redress or (b) a recommendation to signpost the
complainant to ICE (business dispute) or PHSO (ICE dispute).
Disputes/escalation by the customer
69.
Once you have made a special payment decision you should notify the customer of
the outcome (unless it was refused and the customer was unaware it was being
considered). You can do this by telephone or in writing. Either way, you should advise the
customer what to do if they are unhappy with the decision. The customer might wish to
challenge a refusal to pay, or dispute the amount paid. In either case, they should be
advised to provide their reasons for requesting a review and any supporting
evidence/information they think is relevant.
70.
It is for the business to determine who should review the decision and how many
review tiers are appropriate. However, best practice suggests that a fresh pair of eyes can
be helpful in the process. The reviewing officer should look at the case afresh, and
complete a new SPEC1. The SPEC1 should include any fresh information from the
customer or gathered by the reviewing officer, and provide their view of the
maladministration/impact and redress. The customer should be notified of the new decision
(which may revise or support the previous decision) and advised what to do next if still
dissatisfied.
71.
Whilst there are no time limits for requesting a review, if the request is excessively
delayed and the original decision has been destroyed in line with data retention (see
paragraph 212) then you can't review it. You should refuse to review but signpost to the
next tier so ultimately ICE can consider if you were right to refuse in the circumstances.
The role of ICE/PHSO in disputed decisions
72.
The final business review should advise the customer how to complain to the ICE if
they remain dissatisfied with the special payment decision. You should also advise the
customer that any complaint should be made within 6 months of getting the final reply from
the business.
73.
If the customer remains dissatisfied after the ICE has concluded an investigation of
their complaint, they can ask an MP to take the matter to PHSO. ICE’s letter will provide
contact details for PHSO advising the customer what to do. It is also worth noting that
although PHSO generally do not take on cases unless ICE has looked at the complaint first,
they can make exceptions.
What to pay - special payment categories
74.
There are three main special payment categories:
• Loss of statutory entitlement
• Actual financial loss or costs
• Consolatory payments
75.
In legal terms these payments are all known as ex gratia payments because there
is no legal requirement to pay them. Finance make a further distinction: they term
losses/costs and consolatory payments as ex gratia payments, but categorise loss of
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statutory entitlement (and some other payments made outwith this scheme – paragraph
167 refers) as extra statutory payments which are recorded by benefit type.
76.
Customers can be awarded financial redress under more than one category. For
example, someone who incurred costs as well as being inconvenienced by our
maladministration can receive a consolatory payment as well as one for actual financial loss
(in practice one payment would be made covering both categories).
Loss of statutory entitlement
77.
If someone loses their statutory entitlement to a benefit solely because of our
maladministration, you can consider making good that loss by a payment for loss of
statutory entitlement (LOSE).
Example:
A customer asked us if they could claim any benefits following the death of their wife. They
were incorrectly advised that nothing was available because they were working. Years
later, after getting different advice from a friend, they claimed Bereavement Benefit and
found they were entitled after all. They asked if the benefit could be backdated and
explained they would have claimed three years earlier but for DWP giving them the wrong
advice. As a claim can only be backdated for a set period (prescribed in legislation), you
could consider a payment for LOSE covering the ‘lost benefit’ from the point of the mis-
advice to the point the benefit could be paid statutorily (provided misdirection is accepted).
Checking statutory entitlement
78.
In the first instance, you should check what statutory entitlement the customer does
have. It would not be appropriate to make a special payment in respect of a benefit which
cannot now be paid due to DWP maladministration if the customer could claim a different
benefit. For instance, they might not be entitled to contribution-based Employment and
Support Allowance but might be able to claim income-based Employment and Support
Allowance. If there is a difference between the two benefits, and the customer is now
receiving less than they might have but for the maladministration, you might decide to make
a payment for the difference between the two benefits. It would not be lawful to cancel a
current statutory benefit entitlement to make an on-going award for LOSE; however, a top-
up payment might be a suitable remedy.
79.
If the customer has no statutory entitlement to a benefit, but would have done but
for the maladministration, you can consider an on-going payment for the loss. However, if
they have lost entitlement because the rules have changed, then awarding them on-going
payments for a benefit that would not be available to anyone else claiming at that time
might be counter to ministerial intention. In effect, you would be putting them in a more
advantageous position than might be appropriate. HM Treasury guidance is clear on this
point
6: individuals should not be advantaged by the redress. They should be restored, as
6 I
n Managing Public Money: Annex 4.14, Paragraph A4.14.9 HM Treasury says: ‘Where financial remedies
are identified as the right approach to service failure, they should be fair, reasonable and proportionate to the
damage suffered by those complaining. Financial remedies should not, however, allow recipients to gain a
financial advantage compared to what would have happened with no service failure.’
.
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far as it is possible to do so, to the position they would have been in but for the
maladministration.
Example:
A customer would have had entitlement to benefit A on date 1, but didn't claim because of
our incorrect advice. Benefit A is then abolished and replaced by benefit B which the
person claims at date 2. Benefit B is worth less than benefit A. However people on Benefit
A at date 2 are given a transitional entitlement to continue on Benefit A for 12 months. In
this example, you can consider giving the person LOSE for Benefit A from date 1 to date 2,
and then on-going top-up payments for the extra amount they would have got by way of
transitional entitlement up until the date that entitlement would have ended.
Example:
A customer had entitlement to benefit A at date 1 because of transitional arrangements –
benefit A had already been abolished and replaced by benefit B. The customer decided to
start work but asked what would happen if the job didn’t work out. He was incorrectly told
that he would be able to go back onto benefit A. Actually that was not an option – anyone
claiming at date 1 or later would have to claim benefit B. He worked for a period then tried
to reclaim benefit A only to find out that it was no longer available. We accept that he was
given incorrect advice, but the reason he can’t have benefit A is because it has been
replaced by benefit B. Paying the equivalent of benefit A via LOSE, would put this
customer in a better position than anyone else claiming on that date and would be contrary
to Treasury advice.
Establishing the loss
80.
When establishing the loss, you need to take account of any other benefits being
paid. For example, someone who was misadvised about claiming Widowed Parent’s
Allowance (WPA) and claimed Income Support (IS) instead should only be awarded a
payment for loss if WPA exceeded the IS actually paid. Income based benefits provide
additional help (for example, help towards the mortgage) which is not available under
contribution based benefits. When considering shortfalls, it is worth remembering the
passported help which can be available in means tested benefits (housing benefit, council
tax benefit, free prescriptions etc).
Determining the period of loss
81.
If the loss relates to a past period, you would need to be sure that the customer
satisfied the criteria for the benefit during that period.
Example:
A customer said that he had delayed claiming Income Support (IS) because of misdirection
and provided the following details about the alleged misdirection:
• In 1994 he was receiving Incapacity Benefit (IB). He made a claim for Disability Living
Allowance (DLA) which was refused. He asked if he could claim IS and was told his IB
would exceed any IS entitlement (the IB rate was higher than the standard IS rate).
• He appealed the DLA refusal and the decision was overturned by a Tribunal in 1996.
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He said he asked about IS but was again advised his income would exceed any IS
entitlement. (This was no longer the case – the DLA gave him entitlement to a premium
in IS which would make his IS exceed his IB.)
• He claimed IS in 2004 and it was awarded (the DLA gave him entitlement to a severe
disability premium).
He said he would have claimed IS from 1994 but for the misdirection. You would need to
look at what happened then and whether the advice was appropriate given what was
known about his circumstances. You could also look at the second piece of advice (in
1996) and check whether the same conditions applied. In both instances, you would need
to be satisfied that the events occurred as the customer described.
PIP LOSE cases
82.
You may be
asked to consider LOSE for the difference between DLA and PIP when
the new benefit is higher, and the claimant either believes that PIP should be backdated, or
that we took too long to process the change. However, it is only possible to backdate PIP if
it is a new claim. Cases transitioning from DLA to PIP always have a future effective date
(28 days after the PIP decision) and this requirement is set in legislation. It is also worth
noting that: DLA remains in payment until PIP begins, so there is no gap in payment; there
will be winners and losers in cases migrating to PIP (i.e. in some cases PIP will be less than
DLA, in others it will be more); and there is no set timeframe for the transition.
83.
Given this, you need to give very careful consideration to making a LOSE payment
for PIP as the special payment will effectively backdate PIP which goes against PIP policy
intent. As such, LOSE will not be appropriate for cases which incurred general delays when
transitioning from DLA to PIP. However, there are some exceptions to this general rule. The
first concerns special rules cases. In these cases there is a timeframe (10 working days) for
us to complete the transition. In cases which took longer, and the delay was our fault, rather
than the customer’s, we can consider a payment for the period of delay, which tops up the
DLA to the level of the PIP payment (provided it is higher).
84.
The second exception concerns cases where the delays have been general, but the
period of time is deemed excessive and therefore maladministrative. In these cases the end
to end delay must exceed 12 months.
85.
The third exception concerns cases of DWP delay, where although the delay is not
deemed excessive (i.e. over 12 months) the customer has faced an additional and
significant delay, which goes beyond the general delays PIP customers encountered. This
has significantly delayed the start date for PIP and the PIP payment exceeds the DLA. For
example:
• Cases where a DWP error has significantly delayed a customer from entering the
migration process and therefore delayed the PIP start date;
• Cases where a DWP delay part way through the migration process has significantly
delayed the PIP start date;
• Cases where an error at the end of the process has significantly delayed the PIP
start date.
86.
However, if you have a case where you think LOSE may be appropriate, despite
not fitting one of the scenarios above, please refer it to CReST for consideration.
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Calculating the Period of LOSE in PIP cases
87.
There are various ways you can determine the period of loss:
1. use the Average Actual Clearance Times (AACT) migration figures published on
Gov.UK to determine the average processing time, and consider paying the
difference between the DLA and PIP for delays beyond this period; or
2. use the actual end to end processing time once the customer entered the system
and consider paying the difference between the DLA and PIP for delays beyond this
period; or
3. consider compensation purely for the identified period of maladministration.
88.
We would suggest using option 1 for cases which are rushed through as priority
cases once the maladministration is uncovered or cases where the delay took place during
the migration process.
89.
We would suggest using option 2 for cases which were delayed from entering the
process. This will ensure that a factual figure is used as opposed to an approximation
based on national averages which could vary throughout the country.
90.
We would suggest option 3 for cases where the maladministration occurred at the
very end of the process.
91.
Please note that the scenarios and suggested means of redress are not
prescriptive and the Special Payment Decision Maker can use their discretion whilst making
an award.
Example 1:
Mr F had entitlement to DLA and in January, he reported a change in his condition. As he
was living in a PIP postcode, he completed the PIP2 and attended the assessment. The
assessment report was returned to DWP in July, and it was incorrectly noted as a new PIP
claim. This resulted in the claim being sent to an incorrect Disability Benefit Centre. Three
months later, it was noted that there was an existing DLA claim, and the case was
reallocated to the centre responsible for transitional cases. The PIP decision was made in
December.
In this scenario you could consider paying LOSE, despite the end to end process being
completed within 52 weeks, because DWP maladministration caused additional delays
which directly impacted the date on which the customer became entitled to PIP. When
considering the period of loss, you may wish to apply the AACT to determine whether Mr F
suffered undue delay. Remember to take account of the DLA that has already been paid,
and the four week run-on period, when considering a payment for LOSE.
Example 2:
Mr A lives in a PIP postcode and receives an invitation to claim PIP when his DLA award
approaches renewal. He calls the PIP enquiry line and follows the process of making a new
claim. When the claim is referred to an Assessment Provider (AP), it encounters general
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delays. Once the case is referred back to DWP, a decision is made promptly and Mr A is
awarded PIP at a higher rate than his DLA award. The end to end process took 48 weeks
and he subsequently requests a Special Payment for the difference between his DLA and
PIP awards.
In this scenario, the period is not in excess of 52 weeks, and the delays were general in
nature.
Example 3:
Mr B calls DLA to report a change of circumstances in January and despite living in a PIP
postcode, the agent fails to identify this and issues a DLA change of circumstance form.
Some time after the form is returned, we recognise the error and invite the customer to
claim PIP in June. He does this and the end to process takes 16 weeks.
In this case the delay occurred at the outset and you can consider using the actual time
taken to complete the migration (16 weeks) to determine when PIP might have been
awarded had we taken correct action in January. Remember to take account of the DLA
that has already been paid, and the four week run-on period, when considering a payment
for LOSE.
Example 4:
Mrs P had entitlement to DLA and made a claim to PIP. Having completed the PIP2 and
attended the assessment, a case manager made the decision to award PIP but did not
submit the decision for approval, which is the final stage of the decision. The decision was
not submitted until three months later, despite the customer calling to chase up the
progress of her application. The decision was subsequently submitted and the end to end
process was completed within 52 weeks.
In this scenario you can consider paying LOSE despite the end to end process being
completed within 52 weeks because DWP maladministration has caused additional delay
which directly impacted the date on which the customer became entitled to PIP. When
considering the period of loss, it is clear that benefit could and should have been paid from
an earlier date. You should consider redress for the actual period of delay (i.e. the point it
should have been submitted up to the point it was). Remember to take account of the DLA
that has already been paid, and the four week run-on period, when considering a payment
for LOSE.
Example 5:
A DS1500 (form submitted when customer is terminally ill) was received in respect of Mr M
and the details were input on the Personal Independence Payment Computer System
(PIPCS). A task was generated the following day, however, this was closed with no further
action being taken. A number of internal tasks were subsequently created and sent
between work queues without any action being taken. When the task was actioned, three
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weeks after the DS1500 was received, the Case Manager registered the claim but failed to
refer the case to the Assessment Provider for them to consider if the customer met
provisions under Special Rules Terminally Ill (SRTI) rules. This action was completed two
weeks later. Once the case was returned from the Assessment Provider, a decision was
made to award PIP with effect from the next payment day.
In this case, you can consider paying LOSE as the 10 working day target for processing
SRTI cases has been missed. The period of loss should take into account the 10 day
processing target and when the award may have been effective from but for the
maladministration.
Alternatives to LOSE
92.
If the end to end process took less than 12 months and the case does not fit the
scenarios for significant additional delay, but there has been DWP maladministration, you
may wish to consider a consolatory payment.
93.
In responding to customers who state they have incurred a LOSE because they
expected any increase in benefit to be backdated, Special Payment Decision Makers
should explain that: there are no statutory processing times for PIP assessments; PIP is a
new benefit to which entitlement needs to be assessed on an individual basis; DLA is
payable until such time as PIP entitlement commences and provision for a future effective
date is set by legislation.
On-going payments for loss
94.
If the loss relates to a future period, and you plan to make on-going payments for
LOSE, you need to be sure that the customer will continue to satisfy the necessary benefit
criteria. For example, someone receiving special payments in lieu of Employment and
Support Allowance would need to undergo assessments to ensure they satisfy the
underlying medical conditions. This is an operational issue, and as such we don’t seek to
direct how you should ensure the payments remain appropriate. However, suitable case
checks should be considered for any on-going awards you implement. (In practice, the
special payment is paid clerically but the case is set up as a credits only case on the
system as this ensures the customer gets their NI credits and also sets case controls so
checks can be made as appropriate.)
Topping up statutory entitlement
95.
If the customer is getting benefit, but this isn’t the one he/she would have been
receiving but for our maladministration, you can consider making up the difference between
the two awards (assuming there is any shortfall) by top-up payments for LOSE. Such
cases will require details of both the current benefit and that to which he/she would have
been entitled to calculate the top-up. You will also need to periodically check the rates and
any underlying entitlement to the previous benefit as appropriate. You should also consider
whether the top-up payment should be eroded by annual up-rating of the benefit the
customer is entitled to. This will certainly apply in situations where the top-up is for a
benefit that no longer exists.
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Example:
A customer would have been entitled to benefit C (£109.50 a week) but for our
maladministration. However, he can statutorily receive benefit D which is for a lower
amount (£98.60 a week). The weekly top-up is for £10.90 initially. Following up-rating the
benefit rate for D changes but benefit C is not available. The new rate for benefit D is
£103.50. The top-up is the difference between £109.50 and £103.50 = £6. This will
continue to be eroded when benefit D is up-rated until a top-up payment is no longer
required.
Delegated limits
One-off payments
96. There are limits to what you can pay without seeking authorisation/ approval. The
special payment delegations are set by CReST and are separate to the financial
delegations about payment limits determined by staff grade. Any proposals to pay in excess
of this amount in LOSE should be referred to CReST for authorisation. (Please see the
section on the Administrative Process for details of how to make the submission.) Care
should be taken not to raise the customer’s expectations before payment has been
approved.
On-going payments
97.
All proposals to pay on-going payments in respect of LOSE which exceed this sum
should be referred to CReST for authorisation.
Tax and loss of statutory entitlement payments
98.
Payments for LOSE are made in respect of a specific benefit. If that benefit falls to
be taxed, so will any payments made in lieu of that benefit.
Actual financial loss or costs
Departmental approach to compensation for extra expenditure or lost income
99.
Actual financial loss/costs can be considered where maladministration has resulted
in a customer or exceptionally a third party incurring a financial loss (other than benefit), or
additional expenditure (costs). Payments are calculated by looking at how much the person
has demonstrably lost or what extra costs they have reasonably incurred.
Distinguishing between financial loss and financial disappointment
100.
It is important to distinguish between financial loss and financial disappointment.
Some customers may be disappointed not to receive something they believed, or had been
led to believe, they would be entitled to. However, if the customer had no entitlement in the
first instance, they cannot be said to have been financially disadvantaged by the law having
been properly applied.
Example:
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A male customer is advised that on his death his wife would be entitled to receive his State
Pension. The advice was incomplete because the customer did not say (and the DWP
officer did not ask) that his wife was considerably younger than him. She could only receive
his pension once she reached pension age herself. When the customer died his wife asked
for his pension to be paid to her. She was told that as she was aged 50 she could not
receive the pension yet and Bereavement Benefits were awarded instead. She complained
that this was considerably less than she had expected and wanted compensating for the
shortfall.
101.
In this instance, there was no statutory entitlement to the benefit so the customer’s
wife cannot be said to have incurred an actual financial loss. She has suffered a financial
disappointment. We can only pay compensation for actual financial loss. However, a
consolatory payment might be appropriate for the incomplete advice.
102.
There may be circumstances when a payment for actual financial loss is
appropriate. This would not be to replace the ‘lost’ benefit, but we could consider loss in the
following circumstances: the business has wrongly led a customer to expect benefit or to
expect benefit at a higher rate than that to which entitlement actually exists and he or she
has reasonably altered their finances to their detriment on the strength of the mis-advice
(see paragraph 132 for more details).
What can be treated as an actual financial loss/cost?
103.
Claims for actual financial loss/costs may include the following:
Additional costs
Letters, phone calls, faxes, fares and other travel costs
104.
If a customer incurs reasonable additional expenses as a result of DWP
maladministration, a special payment may be made to reimburse those additional costs.
(See paragraph 130 for the evidence needed to support a claim for additional expenses.)
105.
In deciding whether costs are reasonable, regard should also be had to such things
as when the customer's complaint was fully addressed. If the customer continues to make
further, unjustified representations after the point at which their complaint was fully
addressed, a special payment would not be made for any further additional costs. It is not
necessary for costs to have been incurred through dealing directly with the Department. It is
possible that they may have been incurred as a result of obtaining advice, for example
travelling to meet with a welfare rights advisor, or the cost of contacting them by telephone.
Bank charges/fees
106.
If Departmental maladministration results in the customer incurring bank charges,
reimbursement of the charges should be considered, to place the customer in the position
they would have been in had the maladministration not occurred. You would need to be
sure a charge has been levied and that it was only incurred because of our error/delay. For
example, if the account was already overdrawn prior to our involvement, then a charge
might have been made anyway.
Interest on credit cards
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107.
Similarly, when payment of benefit has been unreasonably delayed due to
Departmental maladministration, it may have been necessary for a customer to use a credit
card to secure funds. Whilst payment of the benefit arrears may provide full redress, a
special payment might be appropriate if the customer incurred charges because of the
benefit delay. You would need to see copies of the credit card statements to establish that
the interest has only been incurred due to DWP maladministration. If the account was
already in arrears or the items purchased were not those that you might reasonably expect
to be met from benefit, then you might decide that there is no direct link between the
maladministration and the costs. Where loss is established, the special payment should
reflect the amount of interest charged by the credit card company.
Accrued mortgage interest
108.
When payment of benefit has been delayed due to Departmental maladministration,
the customer may have fallen behind with mortgage payments. If the lender charges
additional interest or default charges as a result, a special payment may be considered
which reflects these charges. DWP operations have a standard mortgage interest calculator
for determining the interest in such cases. The calculator applies the standard rate for
mortgage interest which is used in means-tested benefits. The calculator should be used if
the business has maladministered the case and the customer has incurred additional
interest charges on their mortgage account as a result. You should ask to see verification of
the interest charge, as the lender might have levied a one-off default fee instead, or there
might have been no extra interest or charges levied because the mortgage was met by
someone else, such as a joint owner. Before determining the required level of redress, you
need to check how much of the interest relates to the DWP delay and how much relates to
the customer’s circumstances which are outwith the delay, e.g. existing mortgage arrears.
Loss
Loss of earnings
109.
Any cases in which a complaint of loss of earnings is judged to be justified should
be referred to CReST to consider. The expectation is that referrals of this nature will be
exceptional.
Example:
A self-employed person, who claimed that DWP’s pursuit of an overpayment caused a
stress related illness that prevented him from working, requested compensation for periods
of lost income.
Loss of child maintenance
Parent with care loss
110.
There are several ways in which a delay by the Child Maintenance Group (CMG)
might cause a parent with care (PWC) to incur a loss of child maintenance. If the CMG
delayed in setting the initial effective date of a case following a maintenance application, or
caused delay in the making of a maintenance application, this can delay the start date of
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the non-resident parent (NRP’s) liability to pay. The gap between when liability might have
started and when it did due to CMG delays, is the period of potential loss.
Establishing if a loss was actually incurred (payment pattern)
111.
To establish if a loss was actually incurred, the CMG must be satisfied that the non-
resident parent (NRP) would have paid their maintenance liability. In making this decision
you should consider the compliance behaviours of the NRP, such as any refusal to pay or
non-compliance in the information gathering process. You can use these behaviours to
determine whether you require a 6 month payment pattern, or whether something shorter
would suffice. For example the decision maker may be satisfied that a NRP has proved full
compliance after they have made 3 monthly payments because they provided their details
on time and made voluntary payments of maintenance. Whereas, with a NRP who was
uncooperative throughout the process, you may require a longer payment pattern, such as
6 months. If the NRP has never co-operated with CMG, this calls into question whether the
PWC has incurred an actual loss. Decisions should be made based on the circumstances
of that case. Payments can be made under any service type; if they are made under ‘direct
pay’, evidence will be required to show that payments have been made.
2012 Scheme Examples:
112.
Where an applicant has provided all required information in their application, the
effective date should be set within one month. The following examples explain more:
Example 1: Receiving Parent (RP) application Mrs C makes an application as a RP on 12 January 2016 providing all required information
to progress the application. The effective date should be set within one month, by 11
February 2016. The provisional calculation notification is not issued to the paying parent
until 29 March 2016; this sets the effective date as 4 April 2016. The period of loss has
occurred from 12 February 2016 to 3 April 2016 (day before the effective date). The daily
liability is calculated at £7 a day from 4 April 2016. The amount of loss is 52 days x £7 =
£364.00. This amount would reduce to take account of any voluntary payments of child
maintenance received by the RP during this period.
Example 2: Paying Parent (PP) application Mrs E makes an application as a PP on 17 May 2016, providing all required information to
progress the application. The effective date should be set within one month, by 16 June
2016. The required information is gathered and the initial maintenance calculation is
completed and initial notification letter issued on 28 June 2016. This letter sets the initial
effective date as 4 July 2016. The period of loss has occurred from 17 June 2016 to 3 July
2016. The daily liability is calculated at £7 a day from 4 July 2016. The amount of loss is 17
days x £7 = £119.00. This amount would reduce to take account of any voluntary payments
of child maintenance received by the RP during this period.
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113.
Where there is clear evidence that an effective date ‘would’ have been set sooner
than one month then the start date for the period of loss can be set from that date.
Example 3: Notification error causes delay
Mrs R makes an application as a RP on 4 February 2016; the ‘effective date’ should be set
by 3 March 2016. On 15 February a provisional letter is generated with the effective date of
21 February 2016, however, it is issued to an incorrect address or is not issued at all. This
means that an effective date has not been set. The letter is finally generated to the correct
address on 25 April 2016 setting the effective date as 1 May 2016. As CMG has clear
evidence that an effective date would have been set sooner had the notification been
correctly issued the period of delay is 21 February 2016 to 30 April 2016.
Example 4: Unreasonable delay in allowing an applicant to make an application
Mr P calls the CMG to make an application as a RP on 5 January 2016 as he now has
primary care of the qualifying child. He has not yet claimed Child Benefit. He is incorrectly
advised that he cannot make an application until he is awarded Child Benefit. Mr P contacts
the CMG on 21 March 2016 to advise he has received notification that day that Child
Benefit has been awarded to him from 4 January 2016 and makes an application for Child
Maintenance. On 29 March 2016 the provisional calculation notification is issued to the PP
setting the effective date as 4 April 2016. It took 8 days from the date of application to issue
the notification that set the effective date. Mr P contacted the CMG immediately upon being
notified that Child Benefit was awarded. Had the correct advice been provided on 5 January
2016, the earliest date that the provisional calculation notification could have been issued is
13 January 2016 (8 days later), which would have set the effective date as 19 January
2016. The period of potential loss is therefore 19 January 2016 to 3 April 2016.
1993 & 2003 Scheme Examples:
Example 1: Unreasonable delay in issue of the MAF
Mrs A requests a MAF on 12 May 2008. The Agency should have issued it/completed the
application by telephone by 11 June 2008, but did not do so until 9 July 2008.
The completed form was received on 16 July 2008; the Agency contacted the NRP to tell
him about the application on 21 July 2008, which sets the effective date for the
maintenance calculation.
It is reasonable to assume that had the Agency not delayed the NRP would have been
contacted sooner.
The Agency took 5 days to contact the NRP therefore the earliest possible effective date
would be 12 June 2008 (the date following the last day of the waiting period) plus 5 days =
17 June 2008. The period of potential loss to the PWC runs from this date to the day before
the actual effective date, 17 June 2008 to 20 July 2008 (34 days).
If the NRP’s first liability is assessed as £25 a week Mrs A could have expected to receive
£121.43 (£25/7 = 3.5714 x 34 days) from the NRP for the 34 days concerned. This amount
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would reduce to take account of any voluntary payments of child maintenance received by
the PWC during this period.
To establish if a loss was actually incurred, the Agency must be satisfied that the NRP
would have complied with the maintenance assessment.
Example 2: Unreasonable delay in the issue of a MEF to the NRP
The Agency received a MAF from Mrs D on 28 October 2007. There was no existing court
order for child maintenance and no further action was required on the MAF.
The Agency should have sent a MEF or contacted the NRP to inform him of the application
by 27 November 2007, but did not issue one until 19 December 2007, setting the effective
date for the maintenance calculation.
It is reasonable to assume that had the MEF been issued earlier, the NRP would have
become liable for child support maintenance from an earlier date. The period of loss runs
from the earliest date the Agency could have set the effective date, 28 November 2007, to
the day before the actual effective date, 18 December 2007 (21 days).
If the NRP’s first liability was assessed to be £30 a week a total sum of £90.00 (£30/7 =
4.2857 x 21 days) would have been due from the NRP in the 21 days concerned. This
amount would reduce to take account of any voluntary payments of child maintenance
received by the PWC during this period.
To establish if a loss was actually incurred, the Agency must be satisfied that the NRP
would have complied with the maintenance assessment.
Refunds/Reimbursement of maintenance
Non-resident parent loss
114.
Overpaid maintenance can be refunded to the NRP if CMG still have the funds. If
the money has been paid to the PWC, a reimbursement can be considered for the NRP.
Neither payment is made via a special payment; instead a finance transaction or
adjustment can be made. Refunds can be made from a central pot. In a reimbursement
case, CMG should consider whether the money can be recovered by reducing future
maintenance payments. Further information regarding reimbursements can be found
here.
CMG provides incorrect bank account details to the paying parent
115.
If CMG have given the paying parent incorrect bank account details for the
receiving parent and caused them a loss of maintenance, they can reimburse the receiving
parent via a finance transaction, rather than a special payment. In the first instance CMG
will pay the receiving parent the money they lost due to Departmental error and then seek
to recover the payment from the incorrect recipient using their Payment Error Recovery
Process. CMG’s replacement payment to the receiving parent will not be a Special
Payment under this scheme; instead it will be a financial transaction using CMG’s ‘non
standard payment process’ and registered under CMG’s main account code as ‘financial
redress’ for accounting purposes.
Interest losses
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Special payments to compensate for any erosion in the value of the money caused by a
delay in paying benefit/child maintenance
116.
In cases where DWP maladministration has caused a significant delay in paying
benefit (either on a statutory or ex gratia basis) or child maintenance, it may be appropriate
for the special payment to include an additional element in recognition that the value of the
money has been eroded because of the passage of time. For consistency in determining
how much to pay, we will calculate the additional element of the special payment as if it
were simple interest and reference HM Revenue and Custom's (HMRC)
repayment interest rate (http://www.hmrc.gov.uk/rates/interest-late-pay.htm ), as recommended in
Annex 4.14 paragraph 11 in the Treasury guidance ‘Managing Public Money’.
117.
Consideration of a special payment in respect of the loss in monetary value caused
by delay will only be triggered when:
• The delay in paying arrears was the result of DWP maladministration (see paragraphs
25 - 39 for help in deciding if a delay was maladministrative. Seek advice from CReST if
you are uncertain of whether this is the case);
and
• The delay in the customer receiving their benefit/maintenance is one calendar year or
more;
and
• The interest payment amounts to £10 or more.
Example:
A customer applies for benefit in April 2010. The application is registered but then mislaid.
The customer contacts us three months later and is advised to reapply. Again the form is
noted as received but is misfiled. It is found six months later and finally processed in May
2011. Benefit arrears of £3,459 are due from April 2010 to May 2011. As the delay was
DWP’s fault and it exceeds one calendar year, a special payment is calculated as if it were
simple interest, using HMRC’s repayment rate, as follows:
Year Amount
From To
Interest rate Interest
2010-2011 £3192.92 06/04/2010 05/04/2011 0.5%
£15.96
06/04/2011 05/04/2012 0.5% £ 1.13
2011-2012 £266.08 06/04/2011 01/05/2011 0.5% £ 0.09
Total amount £3459.00 Total interest £17.18
As the special payment amounts to £10 or more, payment can be made.
Example:
The Department is notified in May 2009 that a customer has been discharged from
hospital. They are out of hospital between May and August 2009. Arrears of benefit are
due but because of an oversight, they are not paid until 2012. Interest can be considered
because we were told about the change but failed to act upon it. The customer has lost the
use of the money for a period in excess of one year. As the delay was DWP’s fault and it
exceeds one calendar year, a special payment is calculated as if it were simple interest,
using HMRC’s repayment rate, as follows:
Year Amount
From To
Interest rate Interest
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2009-2010 £953.33
01/05/2009 28/09/2009 0%
£0.00
29/09/2009 05/04/2010 0.5% £2.47
06/04/2010 05/04/2011 0.5% £4.77
06/04/2011 05/04/2012 0.5% £4.78
06/04/2012 01/05/2012 0.5% £0.34
2010-2011 £0.00 06/04/2010 01/05/2012 0.5% £0.00
2011-2012 £0.00 06/04/2011 01/05/2012 0.5% £0.00
2012-2013 £0.00 06/04/2012 01/05/2012 0.5% £0.00
Total amount £953.33 Total interest £12.36
As the special payment amounts to £10 or more, payment can be made.
118.
If you identify a case which does not meet the criteria specified in paragraph 111,
but nevertheless merits a special payment for the delay, you can consider a consolatory
payment or a special payment for actual financial loss if a loss can be demonstrated. Other
types of interest losses are explored in the next two paragraphs.
Special payments to compensate for a loss of bank/building society interest due to a delay
in paying benefit/child maintenance
119.
If a customer can demonstrate that they have lost interest due to a delay in paying
benefit / child maintenance, you can consider a special payment to reimburse the loss. You
will need to consider if the payment is such that they could and would have set it to one
side to earn interest as well as request proof that they have an interest-bearing savings
account. If the delay was such that you had already awarded a payment in respect of any
loss in the value of the money you would need to take this into account. For example, if
£15.30 had been paid to compensate for any erosion in monetary value, but the customer
could demonstrate that he would have earned interest of £30.30 had benefit been paid into
his account at the appropriate time, you could consider a further payment of £15.00 for loss.
Special payments to compensate for a loss of bank/building society interest due to funds
being withdrawn from interest-bearing accounts
120.
If a customer has withdrawn funds from an interest-bearing account to meet living
expenses because of a delay in paying benefit (or more rarely, chid maintenance), you can
consider a special payment to compensate for their loss in interest. Again, you should ask
for evidence of the withdrawal and the interest rate which applied to that account. You
would also need to be satisfied that the withdrawal was made solely due to the delay in
paying the benefit and not to meet an un-associated expenditure. Similarly if the amount of
the withdrawal exceeded the amount of the benefit that should have been paid, you may
wish to restrict the loss. If the delay was such that you had already awarded a payment in
respect of any loss in the value of the money you would need to take this into account. See
paragraph 117 for an example.
Other losses / costs
Savings policies – early surrender
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121.
A customer suffering financial hardship as a result of Departmental
maladministration may find it necessary to surrender a savings policy (e.g. endowment or
an ISA) before the maturity date. A customer cashing in a savings policy receives the
market value at the time of surrender, and on this basis cannot be said to have suffered a
financial loss.
122.
Whilst the customer may have been put to the inconvenience of having to cash in
the policy as a result of Departmental maladministration, a special payment should
not be
made in respect of the difference between the surrender value paid to the customer and the
expected value of the policy at the maturity date. This is on the basis that there can be no
certainty that the customer would have maintained regular premium payments, or that the
policy would have continued to grow in accordance with forecasts.
123.
However, there may be other circumstances when the customer can demonstrate
that they have suffered a financial loss as a result of the early surrender and if this is as a
direct result of Departmental maladministration, that loss may be met by way of a special
payment. As with all special payment decisions, the objective features of the case should
be fully considered.
Professional fees
124.
The Department’s businesses have in place a free and accessible system for
resolving complaints, including provision for the complaint to be escalated to a senior
manager if necessary. If a customer remains dissatisfied with the response to their
complaint they can ask ICE (a free and independent complaints resolution and examination
service) to consider their complaint. Additionally, Parliament has provided for the Office of
the Parliamentary and Health Service Ombudsman, who can consider complaints referred
by Members of Parliament.
125.
Given the existence of a clear and structured process for the escalation of
complaints of maladministration, coupled with the existence of other sources of advice
which can be obtained free of charge, such as through a Citizens Advice Bureau (CAB) or
their MP, it should not be necessary for customers to engage professional help in order to
resolve complaints.
126.
Customers who choose to engage professional help (for example a solicitor to
assist in the progression of their complaint) should not do so with the expectation that such
fees will be met by the Department.
Circumstances in which professional fees may be met
127.
The reimbursement of professional fees is only considered where maladministration
has occurred and the engagement of such help was necessary in seeking to resolve a
justified complaint with DWP. Each application for reimbursement of professional fees
should be judged on its own merits, in the light of the circumstances of the case.
128.
When deciding whether to award a special payment in respect of professional fees,
consideration should be given to:
• the circumstances which led to the engagement of professional services;
• the complexity of the subject matter;
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• the relevance of the professional’s expertise in resolving the matter (for example, it
might be reasonable to engage a solicitor to help with a legal issue but an
accountant’s expertise would have less relevance/value);
• the experience of the customer in dealing with such matters;
• the availability of free advice (such as an MP or CAB);
• the availability of free complaint investigation services (ICE and PHSO);
• whether the matter would have been resolved within a reasonable time-scale, had
the customer not sought professional assistance.
Example of a case where professional fees can be paid:
Mrs G sells her home and moves into residential care. Her state pension payments cease
at this point, in error. Mrs G does not notice the shortfall and when she dies, she is owed a
substantial sum in arrears. Her executor (a solicitor) notices that she had no income and
queries this with the department. It takes nearly a year, and a considerable number of
letters/calls from the solicitor before the statutory arrears are paid to the estate. The estate
incurs additional costs from the solicitor for the effort involved in rectifying our
maladministration. As none of this should have been necessary had Mrs G’s case been
dealt with correctly, we could consider a request from the next of kin to reimburse the
additional fees caused by our maladministration.
Example of a case where professional fees will not be paid:
Mrs H has a complaint about the Child Support Agency because the non-resident parent
has not been meeting his child maintenance liability. She asks a family friend, an
accountant, to complain on her behalf. The accountant subsequently sends a bill to the
Agency for his services. There are no extenuating circumstances which prevented Mrs H
from making a complaint herself or from seeking free help. The accountant has charged for
the time he spent contacting the Agency at the same rate he would charge for his expertise
as an accountant. His expertise had no bearing on the complaint resolution.
129.
If a decision is made to reimburse professional fees, only an amount adjudged by
the Department to be reasonable will be allowed. In practice, CReST will provide that
overview, with input from Legal Group if necessary. If you have a case which you think
should be paid, please refer it to CReST to consider before payment is made. (Details
about how to make a referral are covered in The Administrative Process.)
Evidence to support a claim for additional expenses
130.
In considering the type and amount of evidence required to substantiate the claim,
regard will be had to the nature and size of the expense involved. Where expenses are
small and do not seem unreasonable, then it might be appropriate to accept the customer’s
account without supporting evidence. However, larger sums should be supported by
evidence and bank or credit card statements should be checked before making any
payment in respect of these fees / charges. Where the customer has no evidence of the
loss or cost, you will need to consider whether it is reasonable to expect them to acquire it,
or whether other forms of supporting evidence / information might suffice.
What to pay
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131.
The emphasis should be on trying to restore the customer to the position they
would have been in had the maladministration not occurred. In most cases of actual
financial loss, the amounts involved will be simple to identify and verify, for example bank
charges incurred due to a failure to make a timely payment of benefit into a customer's
bank or building society account.
Customer has altered his or her circumstances as a direct result of incorrect
Departmental advice
132.
If a customer alters his or her circumstances to their detriment as a direct result of
incorrect Departmental advice, a special payment can be considered for the resulting actual
financial loss. In doing so, it will be necessary first to consider whether, in the
circumstances, it was reasonable for the customer to have accepted in good faith and to
have acted upon, the incorrect information provided. If it was not reasonable then a special
payment may not be appropriate, as it will be the person’s failure to check first, that allowed
matters to progress in the way they did. The circumstances of the case should be carefully
examined to determine appropriate redress, based on the most cost effective means of
resolving the debt. The options for which include:
• making continuing payments if, for example, the customer has taken on a regular
financial commitment; or
• making a lump-sum payment to clear any debt incurred as a result of incorrect advice.
State Pension forecasts
133.
Care should be exercised when a request for a special payment is received in
respect of an incorrect (erroneous) State Pension forecast. A forecast is only a prediction
and is
not a guarantee of payment.
Forecast clearly incorrect in view of the information held at the time of its issue
134.
A special payment can only be considered in cases where:
• the state pension forecast made was clearly erroneous in view of information held
at the time; and
• the customer suffered a demonstrable financial loss by acting on the information.
Customer enters into a financial commitment as a result of an erroneous forecast
135.
When a customer has entered into a financial commitment as a result of an
erroneous state pension forecast, a special payment should be considered in accordance
with paragraph 132.
Customer stops work following receipt of an erroneous forecast
136.
Exceptionally, a special payment may be considered when a customer has stopped
work following receipt of an erroneous state pension forecast. If a special payment is
deemed appropriate, it should be calculated on the additional amount of pension that would
have been due had the customer continued to pay national insurance (NI) contributions on
the earnings which they have forgone. You will need to consider an appropriate end point if
the customer chose not to return to work, despite being aware of the impact on their
pension.
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Deciding individual cases
137.
An on-going special payment award must not be made to top-up the customer's
pension to the forecasted amount unless, in very exceptional circumstances, it is warranted
under the terms set out in paragraph 132 (c
ustomer has altered his or her circumstances as
a direct result of incorrect Departmental advice) and making an on-going top-up award
addresses the matter better than covering the financial commitment
.
Additional NI contributions paid
138.
If, following incorrect official advice, a customer paid additional NI contributions and
receives less benefit than they were led to expect, then consideration should be given to:
• seeking HMRC support in remedying the injustice by refunding the NI
contributions;
• a consolatory payment in respect of the impact caused (for example, any
inconvenience);
• a payment for any losses/costs they can demonstrate they incurred as a result of
the poor advice.
Additional NI contributions paid by the customer on own initiative, in expectation of a higher
rate of benefit than he or she eventually received
139.
It will not generally be appropriate to make an
ex gratia payment or a refund of NI
contributions, if the customer has, on their own initiative, paid additional contributions in
expectation of a higher rate of benefit than they eventually received. All such compensation
claims should be referred to the National Insurance Contributions Office of HMRC.
Delegated limits
One-off payments
140.
There are limits to what you can pay without seeking authorisation/ approval. The
special payment delegations are set by CReST and are separate to the financial
delegations about payment limits determined by staff grade. Any proposals to pay in excess
of this amount should be referred to CReST for authorisation. (Please see the section on
the Administrative Process for details of how to make the submission.) Care should be
taken not to raise the customer’s expectations before payment has been approved.
On-going payments
141.
All proposals to pay on-going payments in respect of actual financial loss which
exceed this sum should be referred to CReST for authorisation.
Tax and ex gratia payments for losses or costs
142.
Ex gratia payments in respect of losses or costs are not taxable.
Consolatory payments
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Overview
143.
It should be remembered that all dealings with the Department, regardless of
whether or not errors occur, can be frustrating, inconvenient and sometimes stressful. It is
also natural for customers to feel annoyed, angry or upset at mistakes, even relatively
minor ones. This background of general inconvenience and frustration is not the context in
which the Department would normally consider a consolatory payment. The Department's
policy is to make a consolatory payment where its maladministration has had a serious and
significant impact on the customer.
144.
Consolatory payments are made for non-financial impacts, which affect a
customer’s well-being. As this type of impact cannot always be proved with evidence, they
can be more difficult to determine. A consolatory payment can be considered regardless of
whether or not any other form of redress payment has been made.
145.
To decide whether a consolatory payment is merited, it is important to consider how
our maladministration affected the life of the customer. To aid this, we have detailed some
possible impacts, but this is not to exclude others which do not readily fit within these
headings. The impact may fall under more than one heading but you should not pay
separate amounts under each heading. It is the overall impact that you are seeking to
address. Three of the most likely impacts of the maladministration are:
•
gross inconvenience - that is, serious trouble, difficulty or stress (short of a
significant impact on their health) which goes beyond the general trouble and
annoyance expected when dealing with a mistake by a Government Department
(see paragraph 146);
•
gross embarrassment, humiliation or unnecessary personal intrusion (see
paragraph 147); and/or
• a significant impact on a customer's physical or mental health - referred to as
severe distress (see paragraph 148).
What constitutes gross inconvenience?
146.
As a
guide, the customer may have experienced:
• frequent and/or unnecessary disruptions to payments;
• lengthy delays;
• numerous mistakes/errors (some of which might have happened more than once);
• unwarranted and/or repetitive requests for the same information;
• loss of personal information;
• excessive use of their time (where there is no actual financial loss – as this comes
within its own separate category);
• mis-handling of their complaints (sometimes referred to as ‘botheration’) including
failing to consider redress at the earliest opportunity.
This list is not exhaustive.
What constitutes gross embarrassment?
147.
Gross embarrassment, humiliation or unnecessary personal intrusion is best
illustrated through some examples:
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Examples:
• wrongful arrest;
• wilful misuse of information or position by an officer of the Department;
• wrongful issue of a summons;
• disclosure of sensitive information;
• unnecessary gathering of personal information;
• insensitive information gathering.
This list is not exhaustive.
Example:
On 13 February 2009, the Child Maintenance Group (CMG) received a maintenance
application form from parent with care Mrs J. Mrs J provided personal details of the non-
resident parent. The CMG incorrectly matched these details to Mr R on the Customer
Information Service and sent him a maintenance enquiry form (MEF). On receipt of the
form Mr R disputed that he was the father of the child as he did not know Mrs J. The CMG
contacted Mrs J to obtain further details leading to the CMG tracing Mr X as the correct
father. Mr R suffered gross embarrassment after being wrongly identified as the non-
resident parent and a special payment of £100 was paid in recognition of this.
What constitutes severe distress?
148.
Severe distress should be distinguished from general stress, which is perhaps best
considered as gross inconvenience. Severe distress indicates a stronger impact and
therefore might lead to a higher consolatory payment. For example, a customer may claim
to be upset, angry or distressed as a result of maladministration but unless their health/well-
being has been seriously and demonstrably affected, you might decide that the impact was
no greater than inconvenience and award a lower amount.
149.
A payment which takes into account severe distress should only be considered
when there has been a significant deterioration in a customer’s physical or mental health as
a direct result of Departmental maladministration. In very rare cases, the severe distress
may be experienced by another person, for example, a spouse, as well as, or rather than
by, the customer.
Is there objective evidence of the impact?
150.
The customer should normally be asked to provide objective evidence of the impact
on their physical and/or mental health. This may, for example, take the form of a report
from a GP or evidence from an employer that the customer has been unable to work as a
direct result of health problems arising from Departmental maladministration. Please note
that other forms of objective evidence can also be accepted for consideration.
Cases where objective evidence may not be needed
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151.
In those cases where it is self-evident that Departmental maladministration would
have caused severe distress, it may not be necessary to obtain objective evidence.
Example:
DWP incorrectly informed a customer’s wife that he had died. The customer was away from
home at the time, and his wife believed the official.
152.
Nevertheless, it may be to the customer’s advantage to obtain evidence of the
impact of the maladministration to ensure that any award adequately reflects the
circumstances of their case.
What is the degree or impact of the maladministration?
153.
Poor service will impact upon the health of different people to different extents. For
special payment purposes, it is the degree and duration of the impact that is normally more
important than the scale of the error. The more serious the impact, the greater the payment
is likely to be, subject to the following paragraphs.
Are there factors, other than Departmental maladministration affecting the
customer’s health?
154.
There will be cases where the objective evidence indicates that there have been
other factors, such as personal problems, that have affected the customer’s health. It will
be necessary to decide the relative importance of these other factors when reaching a
decision on the special payment.
Is there a pre-existing health condition?
155.
In many cases the customer will have a pre-existing health condition. This does not
preclude consideration of payment as the condition may have been made worse by
Departmental maladministration or the maladministration may have caused a delay in
recovering from the illness. In such cases, it will be necessary to ascertain the extent to
which the maladministration has affected the pre-existing condition, when deciding whether
a special payment is due and if so, how much should be awarded. In doing so, the state of
the customer’s health prior to and immediately after the maladministration should be
established. Consideration should also be given to the likelihood of their health improving
once action has been taken to provide appropriate redress.
What is the likely duration of the impact?
156.
Consideration needs to be given to the duration of any impact arising from
maladministration, on a case by case basis.
Example:
An incident in which personal information is mistakenly disclosed to an unknown person as
a result of Departmental maladministration, but which is promptly discovered, and quickly
rectified, may be of limited duration in terms of impact. Alternatively, the disclosure of
personal information to a person who is known to the individual, may have an impact of far
greater duration.
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Delay in considering a special payment
157.
Redress should be considered at the earliest opportunity. As such, if we failed to
consider redress when things first went wrong, we should take account of our delay when
we do consider making an award.
Delegated limit
158.
Consolatory payments will usually range from £25 to £500, but bigger payments
may be made in appropriate circumstances. There are limits to what you can pay without
seeking authorisation/ approval. The special payment delegations are set by CReST and
are separate to the financial delegations about payment limits determined by staff grade.
Any proposals to pay in excess of this amount should be referred to CReST for
authorisation. (Please see the section on the Administrative Process for details of how to
make the submission.)
159.
HM Treasury deem consolatory payments over £500 (or £1,000 in an ICE case) –
including aggregated payments for the same maladministration which total over £500 (or
£1,000 in an ICE case) - to be novel and contentious. Novel and contentious payments
require Treasury approval. See the Administrative Process for more information about how
to seek HMT approval. Care should be taken not to raise the customer’s expectations
before payment has been approved.
Tax and consolatory payments
160.
Special payments in the form of consolatory payments are not taxable.
Child Maintenance Group Payments
161.
In addition to losses / costs and consolatory payments, there are further categories
of special payment which are specific to the Child Maintenance Group.
Unusual Cases
Novel and contentious cases: alerting Ministers
162.
It may be appropriate for Ministers and senior officials to be alerted at an early
stage to any difficult or controversial case. By which we mean a case which is highly likely
to attract unwelcome publicity from the media or PHSO. Such cases are exceptional. It is
important, therefore, to let CReST have written details of such cases without delay so that
Ministers and appropriate officials can be briefed. Details on how to make a submission to
CReST can be found in the Administrative Process.
Threat of legal action
163.
There is bespoke guidance on how to deal with complaints or correspondence
which refer to legal issues or which threaten legal action can be found here.
Legal settlements
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164.
If a customer takes the Department to Court, lawyers in Government Legal Division
(GLD), who deal with litigation cases, may seek to settle the case. Settlement is considered
if lawyers confirm that DWP has maladministered and they think the case will not go in
DWP’s favour. When a legal settlement is proposed by GLD, this should be agreed by the
Manager instructing lawyers and their Finance Business Partner. HM Treasury require that
the payment represents a robust ‘value for money’ case. This is usually achieved by
comparing the proposed settlement figure with the amount the case might cost DWP (in
terms of damages and legal costs) should it go to Court. GLD will be asked for their opinion
regarding the likelihood of DWP’s success in winning the case, as part of the value for
money consideration. Cases of this nature are not determined using the customer special
payment scheme, but are processed by the National Special Payment Team. As such,
cases will still be referred to CReST to consider. Part of CReST’s consideration will be
whether there has been maladministration, whether the case is novel and contentious, and
whether the settlement represents value for money. HM Treasury has advised DWP not to
settle cases where there is no evidence of maladministration (even though it might be
possible to settle for less) as a matter of principle.
Special exercises
165.
Special exercises are set up to identify customers affected by a particular error and
provide a remedy. The following might result in a special exercise:
• A systemic failure which affects a number of similar cases;
• Administrative delays which affect a number of cases following the introduction of
new legislation;
• Defective legislation i.e. legislation which does not reflect the intentions of Ministers
and this adversely affects customers.
166.
The decision to set up a special exercise will fall to the Strategy / Operational team
with responsibility for the benefit affected. CReST is not responsible for setting up a special
exercise or seeking permission from Treasury (when that is necessary) to make payments
as part of that exercise. However, CReST can provide the following support:
• advice on policy in respect of special payments to help officials determine whether
maladministration has occurred;
• engaging in discussions to ensure that any proposals for redress are appropriate
and defensible (special payments under this scheme would only be appropriate if
maladministration is identified); and
• quality assuring documents prepared for Ministers/Treasury, when permission for a
special exercise is being sought.
Extra-statutory payments in cases where there has been no maladministration
167.
If there has been no departmental maladministration then payments under our
scheme would not be appropriate. However, officials can seek Treasury approval to make
extra-statutory payments. More information about Treasury consents is set out in Managing
Public Money (para 2.3). Generally these payments are made until corrective legislation
can be put in place and they cease when payments can be made statutorily. The Treasury
(Managing Public Money Annex A4.14.6) describes them as follows: ‘When a pattern
develops and a number of cases raising similar points need to be dealt with, it may make
sense to develop an extra-statutory scheme. If any such scheme seems likely to persist the
organisation concerned should consider whether to bring forward legislation to set it on a
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statutory footing.’ Even though such payments would not be in respect of maladministration,
for accounting purposes, CReST will need to know the total payments made and the total
amount paid each year. (See the section on The Administrative Process for details.)
168.
Payments of social security benefits are made by DWP under a statutory
framework which consists of Acts of Parliament, orders and regulations. "Extra-statutory
payments" are payments which are made outside this statutory framework. That is, there is
no legal entitlement to the benefit but Ministers/Treasury agree that payments can be
made. They therefore go beyond the social security benefits to which people are entitled.
However extra-statutory payments still have to be consistent with the broad intention of the
statutory framework if they are to be lawful.
Example of extra-statutory payments:
In making a change to the benefit legislation involving housing costs, one group of people
were inadvertently omitted and could not benefit from the change. The Strategy Team
made the decision that the omission was not maladministrative after consulting CReST.
Ministers agreed to amend the legislation and to make extra-statutory provision to put this
group of people on a par with others (subject to Treasury agreement) until the new
legislation was in place. A special exercise was set up to identify the cases and make the
extra-statutory payments on an on-going basis until the legislation could be amended to
include them statutorily. Once the new legislation came into force the extra-statutory
payments ceased and statutory benefit payments took their place.
Taking account of overpayments or overprovision of benefit when
making special payment decisions
• An overpayment of benefit results from a customer error or failure to disclose
information (the overpayment is recoverable).
• An overprovision of benefit results from a Departmental error, for example, a failure
to act upon information received (the overprovision is generally non-recoverable).
169.
In cases where there is a non-recoverable overprovision of benefit, you can decide
not to make a special payment (known as considering a case ‘in the round’). In cases
where there is a recoverable overpayment (or, more rarely, a recoverable overprovision) of
benefit, you can decide to offset the proposed special payment against money the customer
owes to the Department.
170.
Whilst the decision whether financial redress is appropriate should not be
influenced by the existence of an overpayment or overprovision of benefit
per se, if you are
considering a special payment for maladministration in a case where the customer has
been paid more benefit than they were due, you can take account of that in your decision.
You would first decide if a special payment is merited for the maladministration identified.
Where a special payment is warranted, you can decide not to make a special payment (by
considering the circumstances ‘in the round’ in a non-recoverable debt case) or you can
offset the special payment against the overpayment if the debt is recoverable.
link to page 45
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Example: Considering ‘in the round’
A customer has been overpaid benefit as a result of a Departmental error, which has
continued over a period of years. He had no reason to suspect that he was not receiving
the correct amount and after being advised that we need to reduce his benefit to the correct
amount he complains about the inconvenience and stress this has caused. A consolatory
payment can be considered but you might decide that it would be reasonable not to pay a
further sum on top of the £000s he has already received incorrectly (which will not be
recovered).
Considering the deduction of overpaid or overprovided benefit from a special
payment
171.
There are two basic guidelines that should be followed when considering offsetting
a special payment against a recoverable debt::
• any small recoverable overpayment or overprovision of benefit (currently set by
Debt Management at £65 or less) should be ignored;
• only recoverable overpayments or overprovisions that have been notified to the
customer
7 should be deducted from the special payment.
Taking account of overpayments of child maintenance, or arrears of
child maintenance when making special payment decisions
172.
If maladministration is identified in a child maintenance case, and a special
payment is merited, you can consider the case ‘in the round’ (see paragraph 170). If the
individual has benefited financially from the maladministration, you may decide not to make
a special payment on that basis. Alternatively, where arrears are owed by the non-resident
parent, you can decide to offset the special payment against those arrears provided:
• those arrears do not amount to less than £65; and
• the non-resident parent had previously been notified that arrears are owed.
You can also offset the Special Payment against an overpayment of child maintenance to
the parent with care provided:
• the overpayment cannot be recovered by other means;
• the overpayment balance is not less than £65, and
• the parent with care has been notified of the overpayment.
When a deduction should not be made
173.
An overpayment or overprovision of benefit/child maintenance should not be
deducted from a special payment where this would leave the person with an outstanding
debt that arose because of maladministration on the part of the Department.
7 Customers are notified of the overpayment/overprovision irrespective of the decision on recoverability.
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Example:
A customer has been overpaid benefit as a result of a Departmental error, which has
continued over a period of years. He had no reason to suspect that he was not receiving
the correct amount and made financial commitments based on his benefit amount. When
the error was discovered, and benefit was reduced back to the actual entitlement, the
customer advised that he was now left with a debt for a car loan which he could no longer
meet. As he had altered his circumstances as a result of our maladministration (see
paragraph 132) a special payment can be considered for the loan costs. If we were to
offset the overprovision with the special payment, the customer would still be left with the
debt.
Recovering an overpaid special payment
174.
If a special payment is overpaid in error, recovery should be requested from the
customer under a common law right of restitution. If you would like more information about
this, please contact DWP Finance.
Example:
The Department intended to pay a customer a £100 consolatory payment (and wrote to tell
her this) but inadvertently paid her £10,000. After seeking legal advice, we wrote to ask her
to repay the sum on the basis that she would have known it was an error. She agreed to
repay.
Death of a customer
Maladministration and need for redress identified prior to the death of the customer
175.
Special payments are intended to provide redress to the individual who
experienced the injustice or hardship arising from the maladministration. If the customer
has died, it is no longer possible to provide them with redress. However, exceptionally, in
the event that:
• we were aware of the maladministration; and
• the maladministration was such that a special payment was merited; and
• we had started the special payment process prior to the customer’s death,
we will
complete that process.
176.
If the circumstances in paragraph 175 apply, the special payment should be
processed in respect of the customer, then issued to the person dealing with the deceased
person’s affairs. The payment will reflect the impact of the maladministration on the
customer and can be made in respect of any of the special payment categories.
Maladministration and need for financial redress identified after the customer’s death
177.
If the maladministration and need for redress was not identified until after the
customer’s death a special payment cannot be made. This is because it was the customer
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who experienced the injustice/hardship and it is no longer possible to provide them with
redress.
Special payments to next of kin and third parties
Next of kin or a third party submits a request for a special payment in respect of
losses or costs
178.
If the next of kin or a third party (for example a friend of the deceased person)
submits a request for losses/costs in respect of the deceased customer’s case and the
criteria in paragraph 175 do not apply, a special payment should be refused. This is for the
same reason outlined in paragraph 177 above.
179.
If the next of kin or a third party submits a request for compensation
in their own
right a special payment for loss can be considered in the following circumstances:
• he or she has suffered an actual financial loss;
• that loss was incurred because he or she helped support the deceased person;
and
• such support was offered because benefit to which the deceased person was
entitled had not been paid because of maladministration.
180.
If you decide to make an award for loss in accordance with the circumstances in
paragraph 179 please refer the case to CReST where consideration will be given to the
individual circumstances of each case and to any objective evidence that has been
provided. Please take care not to raise the individual’s expectations before the team has
seen the case. Details of how to make a submission are set out in the Administrative
Process.
181.
If the next of kin submits a request for losses/costs
in their own right for any other
reason, please refer it to CReST to consider the individual circumstances. Redress in these
cases should always be based on the actual financial loss suffered by the next of kin or
third party, rather than that suffered by the deceased person.
Next of kin or a third party submits a request for a consolatory payment
182.
In addition, the next of kin or a third party may request a consolatory payment
because of their personal suffering (rather than that suffered by the deceased person) as a
result of the Department’s maladministration. Again, if you decide to make an award,
please refer the case to CReST to consider prior to payment. Please take care not to raise
the individual’s expectations before the team has seen the case. Details of how to make a
submission are set out in the Administrative Process.
Universal Credit Landlords
183.
Universal Credit (UC) seeks to make the transition into work smoother for claimants
by paying them monthly and paying them (and not their landlord) the UC housing element
so that they can take responsibility for paying their own rent. Where claimants fail to pay
their rent and fall into arrears, landlords can seek an Alternative Payment Arrangement
(APA). In such circumstances, when an individual landlord is requesting/receiving a service
from us, they may be considered a customer for special payment purposes.
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184.
You may receive requests for compensation for rent losses where the landlord
considers we have caused them a loss by not processing their APA application quickly
enough . In considering whether DWP is solely responsible for the rent arrears, it is
important to remember that we will have paid the UC housing element to the claimant and
that payment of rent is a contractual arrangement between a tenant and their landlord,
which DWP is never party to.Similarly, the landlord is responsible for pursuing any rent
arrearsin the normal way. Compensating the landlord would effectively absolve them (and
the claimant) of their responsibilities and drive the wrong behaviours. As such, if you are
considering paying a landlord loss in these circumstances, please check with CReST that
you are following policy intent. Remember too that the landlord may be able to pursue
unpaid rent by making an application to DWP for third party deductions from their tenant’s
UC standard allowance to repay arrears on an existing tenancy.
185.
If the landlord seeks recovery of the rent arrears via court action, and the arrears
are solely DWP’s fault, we can consider reimbursement of the court costs. That said, it is
unlikely that DWP will have caused all the arrears (given an APA is generally only
appropriate if the claimant was already in arrears) but in the event that you decide that our
actions (or inactions) have caused the individual to incur costs that would otherwise have
been avoidable, you can consider reimbursing all or part of any reasonable recovery costs.
We would require evidence of those costs and confirmation that they have been paid by the
landlord.
Universal Credit Landlords – consolatory payments
In cases where an individual landlord, who is:
• themselves personally engaged in the management of their property(ies) and in the
administration of their tenants’ rents, and
• who can reasonably be deemed to have personally experienced gross
inconvenience or serious trouble due to DWP maladministration
it may be appropriate to consider a consolatory payment.
Important
The special payment scheme is orientated around the principle of providing financial
redress to individuals or third parties
personally impacted by DWP maladministration.
Therefore, it would not be appropriate to award a consolatory payment to organisations
such as housing associations, letting agents or other private rented sector businesses,
which purposefully employ staff to manage their housing stock and rent arrears and whose
scale of operation limits the extent to which a case for personal impact on an individual can
be credibly made.
If you are considering a consolatory payment to a UC landlord, please check with CReST
that the proposal is appropriate in the particular circumstances of the case.
Administrative Process
Overview
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186.
Detailed below are the administrative procedures to be followed when processing
questions of redress, authorising payments and completing financial returns. Sample forms
and paragraphs for use in letters are included as appendices. The business may wish to
produce their own more detailed administrative instructions for staff handling special
payments for their customers, to enable them to fully satisfy the requirements of this
guidance.
Preparing cases for submission to the Complaints, Redress and
Stewardship Team
Advice cases
187.
If you would like some advice about a case, you can do this without a formal
submission, by telephoning the team or sending us a short email. However, our answer will
depend on what you tell us about the case as we have no access to business
records/systems. If you want a robust answer, based on the facts, you should make a
formal submission.
Optional referrals:
• Complex cases which need additional guidance;
• Difficult decisions (e.g. balance of probabilities) where you are unsure you are
applying the guidance correctly and would like our view.
Required referrals:
• Loss of earnings (if you intend paying);
• Professional fees (if you intend paying);
• Payments to next of kin (if you intend paying);
• Payments to Universal Credit landlords (if you intend paying);
• Cases likely to attract adverse publicity which might need ministerial briefing;
• Cases where the impact spreads beyond our Department or may be otherwise be
potentially novel/contentious and requiringTreasury involvement (see paragraph ***
- ‘seeking treasury approval’ for further information);
• Special exercise cases where maladministration needs to be determined;
• Any payment over the business delegated limit.
Copy to CReST for information:
• Cases requiring legal action/advice.
Presentation of the case
188.
It is important that information is clearly constructed and presented. This should
help CReST assimilate what are often complex issues and reduce the time needed to
prepare cases should referral to other units be necessary, for example, to Finance or
Treasury.
Cover document
189.
All requests for advice/authorisation should be covered by a referral proforma. Each
referral requires authorisation by the Team Leader.
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The submission 190.
Requests for advice/authorisation/escalation should include a copy of the SPEC1,
which should contain all the relevant information CReST needs. In the event that a SPEC1
has not been prepared, please provide:
• a summary of the events surrounding the case to date, including a description of
identified maladministration;
• details of any redress which has already been provided/offered;
• if appropriate, a copy of any draft PHSO or ICE report on the case (or other
relevant correspondence from PHSO or ICE where a draft report has not been
received);
• details of the specific advice being sought;
• your proposal for financial redress; or
• your reasons for believing payment should not be made;
• explanations for any jargon, technical terms or abbreviations common to your area
of work or to the administration of a particular benefit which have been used in the
submission;
• if appropriate, any information which supports the decision you want to make. For
example, relevant guidance, leaflets, a note of any relevant legislation or other
advisory documents referred to in the submission.
Cases involving a previous decision from CReST
191.
In cases where CReST has already offered a view/refused a payment, please
include details of that decision and your reasons for re-submitting the case, along with any
fresh information to support your request. For example, answers to any questions CReST
asked.
Insufficient information
192.
If we consider that there are gaps in the information and that it is not feasible to
offer a view until these are provided, we will write to you detailing what else we need to
know. If you do not have this information, you might have to approach an expert for the
answer. For example, if our query relates to a change in the benefit legislation, you might
need to approach the policy team with responsibility for that benefit to get a definitive view.
CReST’s reply
193.
CReST will reply to a formal submission in writing, and we will explain what
information we took into account in: providing the advice; deciding whether or not to
authorise the payment; or responding to the escalation. If you have any concerns about the
reply, please talk to us in the first instance, or if this does not resolve matters, use the
escalation process outlined in paragraph 68.
Special payment authorisations
194.
The authority to make special payments has been delegated to the Department by
the Treasury. CReST has delegated authority to the business to make special payments
subject to the delegated limits. If you want to make a payment which will exceed the
delegated limits, you must submit the case to us for authorisation. CReST will consider
whether the payment accords with policy intent, and whether the information in the SPEC1
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provides a robust case for payment. If there are any issues, CReST will return the SPEC1
for further action by the business. If payment is agreed, CReST will provide the necessary
authorisation (unless the case requires Finance/HMT approval – see paragraph 197 for
details). Staff cases where a consolatory payment is proposed must also be referred to
CReST for authorisation. CReST do not own the guidance for special payments to staff
(which is covered in the guidance provided by Finance) but the team has greater
experience of consolatory payments and for that reason has agreed to check these cases.
CReST will consider whether the information in the SPEC1 provides a robust case for
payment. If there are any issues, CReST will return the SPEC1 for further action by the
business. If payment is agreed, CReST will provide the necessary approval.
Test checks
195.
We do not specify who (what grade of officer) should authorise special payments
within the business or what percentage of cases should be test checked as we consider
these to be business/Finance decisions. From time to time CReST will ask the business to
supply a sample of decisions for checking so we can see that the special payment policy is
being applied appropriately.
Finance controls
196.
CReST will notify Finance on a quarterly basis regarding any payments which
exceed £5,000. This is for Finance’s overview. Any special payment which requires
Treasury approval must be referred to Finance. CReST will act as conduit for these cases
and will:
• check a robust case for payment has been made and that the proposed payment is
in line with policy intent;
• check the request is being made in the right format;
• act as conduit should the Finance Controls team have any questions about the
payment.
Seeking Treasury approval
197.
The Treasury has delegated responsibility to DWP for its own special payment
scheme. However, where DWP wishes to make a payment which exceeds our authority, it
must be referred to Treasury for agreement. DWP must consult Treasury about any case
which:
• is novel or contentious;
• involves important questions of principle;
• raises doubts about the effectiveness of existing systems;
• contains lessons which might be of wider interest;
• might create a precedent for other departments;
• may have repercussions beyond the Department’s individual business areas, or the
Department as a whole;
• arises because of obscure or ambiguous instructions issued centrally;
• involves a Government Minister seeking a special payment that would not ordinarily be
authorised; or
• relates to a claim for a special payment, which is the result of, or may be affected by, a
period of industrial action. This will normally be limited to industrial action within the
Department or its businesses.
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198.
Any consolatory payment over £500 (£1,000 for ICE cases) is deemed novel and
contentious by Treasury. DWP does not have delegated authority to make novel and
contentious payments, which must be referred to Treasury for approval. Please note, the
payment may exceed £500 (or £1,000 respectively) as a one-off or when treated
cumulatively throughout the complaint journey. For example, the customer was awarded
£350 at tier 1 of the complaints process. At tier 2, the customer provides further information
about impact, and the special payment team decide a further £200 is merited. Cumulatively,
the payments now exceed £500 and require Finance and HM Treasury approval.
Business Referral
199.
All proposed payments identified by the business which exceed the £500
consolatory payment limit should be referred to CReST on special payment referral form
(SPEC1) for their consideration. If a payment is deemed appropriate, CReST will refer the
case back to the business to prepare a business case using the Treasury template and
utilising the information contained in the SPEC1.
200.
Once the completed business case is received, CReST will ensure that all of the
relevant information is contained and refer it to Finance for their approval before the case is
referred to Treasury. CReST will act as liaison point should Finance (or Treasury, via
Finance) require more information.
201.
Upon receipt of Treasury approval, CReST will refer the case back the Special
Payment team to process the payment as usual.
ICE Referral
202.
If the ICE deems a consolatory payment in excess of £1,000 to be merited, they will
issue a draft report to the Focal Point for business and CReST action. It is for the business
to confirm the maladministration, and for CReST to check the proposed payment is in line
with policy. Once this is agreed, it is for the Focal Point to make the case for
Finance/Treasury approval.
203.
The Focal Point should use the SPEC1 drafted by ICE or the ICE report to prepare
a business case on the Treasury template and then forward this to CReST.
204.
Once the completed business case is received, CReST will ensure that all of the
relevant information is contained and refer it to Finance for their approval before the case is
referred to Treasury. CReST will act as liaison point should Finance (or Treasury, via
Finance) require more information.
205.
Upon receipt of Treasury approval, CReST will refer the case back the business
Focal Point who should notify ICE that the payment has been agreed.
Escalations
206.
If we refuse to authorise the payment and you disagree with our reasoning you can
follow the escalation process outlined in paragraph 68.
Recording and accounting for special payments
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207.
The Treasury (Managing Public Money Annex A4.13.7) says that special payments
need to be properly justified with particular emphasis on value for money since there is no
legal liability for making them. Our justification for making a payment in a customer case is
recorded on the SPEC1. In addition to this requirement, there are finance/accounting
requirements. Treasury stipulate that special payment expenditure is brought to
Parliament’s attention through a note in the organisation’s Resource Accounts (Managing
Public Money Annex A4.13.16 refers). A separate note is needed if an individual payment
or a group of payments exceed £300,000. Annex A4.14.7 also asks departments to include
summary information about special payments arising from maladministration in their Annual
Reports.
Special Payment Officers role
208.
To meet these requirements, special payment officers must ensure that:
• Decisions are appropriately and fully recorded on the SPEC1;
• Payments are recorded on SOP under the appropriate account/benefit code;
• Accurate statistical returns are collated each quarter and sent to CReST;
• Documents/records are retained in line with Finance retention policy and special
payment retention policy (see paragraph 212).
Finance role
209.
Finance is responsible for reporting special payment expenditure in the Resource
Accounts. Special payments include: extra-contractual payments; extra-statutory or extra-
regulatory payments; compensatory payments (e.g. personal injuries to civil servants);
special severance payments; and ex gratia payments. Most customer special payments will
be recorded under ex gratia payments but some might fall under the extra-statutory
payments. Finance derive the information from SOP, provided the correct account codes
are used. Special Exercise teams report expenditure on their individual exercise to Finance
separately. Finance will include details of the exercise and the payments made if they total
£300,000. Finance also use the SOP data to inform HMRC’s White Paper about National
Insurance expenditure as the account codes show which payments were made in relation
to contribution based benefits.
CReST role
210.
CReST report the annual special payment expenditure for customers from the
statistics collated / provided by the business. Those that relate to maladministration are
reported each year in the Departmental Report. This information is used in PQ and FOI
responses and for briefing purposes.
211.
For accounting purposes, expenditure on special payments is charged to the
appropriate Departmental Vote(s) as follows:
Annually Managed Expenditure (AME)
• all special payments made in respect of loss of statutory entitlement are charged to
annually managed expenditure (AME), provided to cover the Department’s
programmed benefit expenditure.
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Departmental Expenditure Limit (DEL)
• all special payments in respect of actual financial loss (including payments in
respect of interest) or costs and consolatory payments are charged to the
departmental expenditure limit (DEL), provided for administering the DWP work
programmes. Expenditure should be posted to the appropriate business area cost
centre on SOP.
Document retention periods
212.
There are two sets of guidance which relate to the retention of special payment
documentation. Finance requires you to keep details of special payment expenditure to
support any payments made via SOP. The retention period is listed in the Finance
Managers Guide under SOP forms – it is currently 6 years from the date of payment.
Finance asks that you keep the special payment decision and the relevant SOP form. Any
supporting documents are covered by CReST’s guidance.
213.
CReST guidance applies to the supporting documents in payment cases and the
decision and supporting documents in cases where a payment was refused. You should
keep these documents for 14 months from the date of the decision. If the decision is
subsequently reviewed, or is the subject of a complaint or overpayment, the file should be
treated as an exception case. This means it must not be marked for destruction until 14
months after the specialist action has ceased. This is to ensure the papers are retained for
ICE and PHSO investigations. The Records Management Policy provides more details.
Liaison between special payments teams
214.
Financial redress for maladministration is a corporate issue and its operation should
be transparent to the customer. Customers should expect to receive a seamless service,
which provides them with a swift, reasoned response to any request/referral for
consideration of financial redress. Complaints which cut across several business areas (for
example, Debt Management and Working Age benefits) should be considered in their
entirety when determining redress. In such cases, it is important that the National Special
Payments Team and Debt Management Special Payment Team work collaboratively to
produce a single decision which considers financial redress in full.
215.
Where misdirection is alleged, the matter must be considered and determined by
the business area which stands accused of misleading the customer, as only they can say
whether the allegation is well founded, based on their knowledge of procedures adopted
nationally and/or in the locality and the staff concerned.
Handling complaints involving more than one special payment team
216.
The team that receives the complaint may either:
• take the corporate lead and make the special payment (after consulting with
colleagues to establish the effect of the error and a suitable remedy); or
• separate payments may be made by each of the special payments teams involved,
to avoid blurring the lines of accountability.
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217.
In either case, teams must liaise with each other so they have a shared
understanding of the decisions which have been reached and of any special payments
which have been awarded. This should avoid any possible duplication of work and/or
payment.
Accounting transfers
218.
If business areas are in agreement regarding the source of funding for
compensation
and the sum involved justifies the administrative costs involved, an
accounting transfer may be made.
Tax Credits 219.
Where maladministration on the part of a DWP business causes a loss of Working
Tax Credits or Child Tax Credits (benefits administered by HMRC), the national special
payment team can consider a special payment to make good that loss. HMRC should be
asked to use their expertise to calculate the loss of benefit to establish the amount to be
paid for loss of statutory entitlement. This figure will need to be kept under regular review.
For more advice about contacting HMRC see the Protocol for Cross Department
Complaints.
Statistical returns
220.
Special payments activity should be recorded by the business throughout the year
and reported to CReST on a quarterly basis. Reporting requirements are outlined below.
Quarterly returns 221.
At the end of each financial quarter (June, September, December and March),
details of the special payments considered/authorised/refused by the business special
payments teams should be recorded on the spreadsheet provided by the National Special
Payment Team
222.
These returns must be accurate as they are used to collate the annual special
payment figure. Cross referencing against Finance records on SOP provides useful
assurance. Each quarterly return should be signed off by the special payment team
manager (or other designated officer) in the relevant business area by completing the blank
Certificate of Accuracy we provide at the beginning of the year. The returns should be
emailed to the shared email box: DWP Complaints Redress and Stewardship Team using
an electronic signature on the Certificate of Accuracy.
Annual statistics
223.
At the end of the financial year the relevant business SCS should check the annual
return and sign off the statistics using the Certificate of Accuracy before the information is
returned to CReST. The information is used to form the annual special payment statistics
for DWP. This information is held by CReST and used for informing the Departmental
Report, high level briefing, PQ replies and responses to FOIs. (There is separate guidance
about the use of special payment statistics in PQs and FOIs which can be found on this
link: PQ and FOI requests about financial redress.)
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Annex A
SPECIAL PAYMENT DECISION (PAY) – SPEC 1
Section A—Customer details
Special Payments Unit:
SP Ref:
Customer's name/
Address
NI/Reference
Appointee (if applicable)
number
Type of benefit in payment (if applicable)
Section B – Special Payment details
Category of payment
R
Account
Gross
Recovery (if
Net payment
Code
applicable)
Loss of statutory
entitlement
(one-off)
Loss of statutory
entitlement
(continuing)
Actual financial loss/costs
(one-off)
Actual financial loss/costs
(continuing)
Consolatory payments
Extra-statutory
(one-off)
Extra-statutory
(continuing)
R = Award refused under this category
Section C
Summary of case
What happened?
What should have
happened?
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Has maladministration
been identified? If so,
how did this affect the
individual concerned?
What redress is
appropriate?
Section D – SPEC 1 completed by:
Signed
Date
Name
Grade
Branch/location
Telephone
number
If the amount of compensation exceeds the DWP business delegated limits:
• £5,000 for a single payment (loss of statutory entitlement)
• £80 for a continuing weekly payment (loss of statutory entitlement or actual financial loss/costs)
• £750 for actual financial loss/costs (including child maintenance loss)
• £500 for a consolatory payment
Please refer to DWP Complaints, Redress and Stewardship Team for authorisation at Section E
prior to payment.
Section E
AUTHORISATION WHERE SPECIAL PAYMENT IS ABOVE THE DELEGATED DWP BUSINESS
OR AGENCY LIMITS
Authorisation is hereby given for the special payment shown at Section A to be made in respect of
______(name).
Signed
Date
Name
Grade
Branch/location
Telephone
number
Section F
AUTHORISATION TO PAY
To:
District/Paying Office
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A special payment is authorised in accordance with the category shown in Section B. The reasons
for the decision to make this payment are shown at section C. Please make the following
payment(s) under:
Benefit Code (if appropriate) ___________
Account code_________________
Cost centre code ________________
Single payment
A single payment of £ [enter amount] is authorised
Continuing payment
A continuing payment of £ [enter amount] per week/month/quarter is
authorised for the period _/_/_ to _/_/_
Signed
Date
Name
Grade
Branch/location
Telephone
number
Section G - Payment (to be completed by the paying office) To: [enter SP Unit]
Single Payment
A single payment of £ as authorised in Section F above was made on / / .
Cost Centre charged
Continuing Payment
* Arrears paid as above and weekly / monthly / quarterly payments started from / / .
* The cessation date of / / has been noted.
* Quarterly returns will be made from / / .
* Casepaper / GBU /Computer annotations made: Initials:
Date: / / .
Cost Centre charged
Signed:
(On behalf of the District / Paying Office Manager)
Name:
(Block Capitals)
Date: / / .
Office: Phone No:
Voucher number____________
* Delete as necessary
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Annex B
PHSO’s Principles for Remedy
Good practice on remedies means:
1. Getting it right
• Quickly acknowledging and putting right cases of maladministration or poor service that
have led to injustice or hardship.
• Considering all relevant factors when deciding the appropriate remedy, ensuring fairness
for the complainant and, where appropriate, for others who have suffered injustice or
hardship as a result of the same maladministration or poor service.
2. Being customer focused
• Apologising for and explaining the maladministration or poor service.
• Understanding and managing people’s expectations and needs.
• Dealing with people professionally and sensitively.
• Providing remedies that take account of people’s individual circumstances.
3. Being open and accountable
• Being open and clear about how public bodies decide remedies.
• Operating a proper system of accountability and delegation in providing remedies.
• Keeping a clear record of what public bodies have decided on remedies and why.
4. Acting fairly and proportionately
• Offering remedies that are fair and proportionate to the complainant’s injustice or
hardship.
• Providing remedies to others who have suffered injustice or hardship as a result of the
same maladministration or poor service, where appropriate.
• Treating people without bias, unlawful discrimination or prejudice.
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5. Putting things right
• If possible, returning the complainant and, where appropriate, others who have suffered
similar injustice or hardship to the position they would have been in if the maladministration
or poor service had not occurred.
• If that is not possible, compensating the complainant and such others appropriately.
• Considering fully and seriously all forms of remedy (such as an apology, an explanation,
remedial action or financial compensation).
• Providing the appropriate remedy in each case.
6. Seeking continuous improvement
• Using the lessons learned from complaints to ensure that maladministration or poor
service is not repeated.
• Recording and using information on the outcome of complaints to improve services.
These Principles are not a checklist to be applied mechanically. Public bodies should use
their judgment in applying the Principles to produce reasonable, fair, and proportionate
remedies in the circumstances. PHSO will adopt a similar approach in recommending
remedies.
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Annex C
Contact details
Independent Case Examiner (ICE) PO Box 209
Bootle
L20 7WA
Tel: 0345 606 0777 (local call rate)
E-mail: xxx@xxx.xxx.xxx.xx
Website: The Independent Case Examiner Website - Home Page
The Independent Case Examiner’s Office provides a free complaint resolution and
investigation service for DWP customers who, having exhausted the relevant businesses or
providers complaints procedure (in the preceding six months), remain dissatisfied with the
response/outcome to their complaint(s).
Full details of the service provided by the ICE Office can be found on their website, or
obtained on request.
Parliamentary and Health Service Ombudsman (PHSO)
Tel: 0345 015 4033
Website www.ombudsman.org.uk
E-mail: xxxx.xxxxxxxxx@xxxxxxxxx.xxx.xx
The Parliamentary and Health Service Ombudsman deals with complaints from members of
the public, that they have suffered injustice because of maladministration by government
departments. A person wishing to have their DWP complaint investigated by PHSO should
approach a Member of Parliament (MP), as PHSO can only accept complaints referred by
an MP.
Customers may put their complaint to PHSO at any stage, however, in practice there is
normally an expectation that the complaint will have been seen by the Department and
pursued through internal complaints procedures and the ICE before being referred to
PHSO.
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ANNEX D
Delegated limits
Local payment limits These were set by Operations for Complaint Resolution Teams, Focal Points and other
local payments. Only the following types of payment can be made:
Consolatory payments
£100 Tier 1 / local
Consolatory payments
£200 Tier 2
Straightforward losses/costs/charges
£250 all
Any payments which exceed these limits, or require a payment for LOSE, interest or more
complex and/or contentious loss/costs payments should be referred to your centralised
Special Payment Team.
Special Payment Team limits
Loss of statutory entitlement – one-off payment
£5,000
Loss of statutory entitlement – ongoing weekly amount
£80
Actual financial loss/costs, including loss of child
maintenance – one-off payment
£750
Actual financial loss/costs – ongoing weekly amount
£80
Consolatory payments
£500
Any cases which exceed these limits should be referred to CReST to authorise.
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Annex E
Helpful paragraphs
General paragraph regarding special payments scheme
The Department has a discretionary special payment scheme, and we can consider
financial redress if a customer has suffered an injustice or hardship as a result of our
maladministration.
There is no legal requirement for the Department to make special payments. Each case is
considered on its own merits, before a discretionary decision is made on whether to make
an award. There is no right of appeal against special payment decisions but if you think we
have not considered all the relevant facts, or you can provide further information or
evidence to support your case, we will look at the decision again.
Request for further information to inform a request for a special payment for severe
distress
The Department can consider making a special payment in cases where Departmental
maladministration has had a significant impact on a person’s physical or mental health.
Each case is given careful consideration.
In support of your request for a special payment, it would be helpful if you could describe
exactly how the Department’s actions affected you, including as much objective evidence
as possible (for example medical evidence). Such information should include details of:
• your health prior to this period in question
• your health during the period in question
• your state of health since that period/any current prognosis.
Draft paragraph for insertion in award letter
In recognition of … (briefly describe maladministration which has given rise to the award),
a decision has been made to award you a …………(insert details of the type of special
payment) of £ …. . The payment … (include details of how/when the customer can expect
to receive the special payment).
Request for a special payment rejected
Your request for a special payment has been carefully considered but a payment is not
considered appropriate, because … (enter clear, concise and full reasons for the decision).
Response to a review request
We decided on [date] that a special payment could/could not be made to you. You
contacted us again on [date] to ask us to re-consider that decision. You said …..(enter
description of alleged maladministration and the effect on the customer).
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• We have considered the further (evidence/representations) you have supplied, but
have decided not to make a payment because … (enter reason for rejection); OR
• We have considered the further (evidence/representations) you have supplied, and
have decided to make a payment/make an additional payment because … (enter
reason for payment);
OR
• We have considered your request but decided not to review the decision because
you have not supplied any new information or evidence for consideration.
Signposting the customer on how they can take matters further
Initial decision letter
If you are dissatisfied with the special payment decision you can ask us to look at it again. If
you think we have not considered all the information you provided, please tell us what you
think we have missed. If you did not give us all the information/evidence and would like to
tell us about some fresh information or send us some new evidence, please do so when
you ask us to review the decision. You should send your request to: [add contact details]
Initial review letter [for use where there is more than one review tier]
If you are dissatisfied with the outcome of my review of your special payment decision, you
can ask for it to be looked at again. You should send your request, along with any further
information/evidence that you wish us to consider to : [add contact details]
Final review letter
We have now completed a full review of your special payment decision and taken account
of any new information/evidence you were able to provide. As this is our final response, if
you are dissatisfied with the outcome of the review, you can ask the Independent Case
Examiner (ICE) to examine your concerns. Details of the service offered by ICE can be
obtained by calling ICE on 0345 606 0777 or from the ICE Website
(https://www.gov.uk/government/organisations/independent-case-examiner ).
Alternatively, you can ask a Member of Parliament to ask the Parliamentary and Health
Service Ombudsman to look at your case, although the Ombudsman will ordinarily expect
you to have pursued your complaint through the Department’s complaints resolution
process (including ICE) before he will intervene.
You can obtain further details about the role of the Parliamentary and Health Service
Ombudsman by calling their office on 0345 015 4033 or by visiting their website at
www.ombudsman.org.uk
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Annex F
Escalation proforma to DWP Complaints, Redress and Stewardship
Team
CUSTOMER DETAILS
Name of customer
Reference number
Maladministration
Please detail what happened,
what should have happened
and any service gap.
Impact
Please detail how the
customer was financially
disadvantaged or otherwise
impacted by the
maladministration.
Additional
information/evidence/advice
Please explain why you are
escalating the case and
provide any additional details
which support your
position/argument
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AUTHORITY FOR REFERRAL TO DWP Complaints, Redress and
Stewardship Team
I confirm that I have personally reviewed this case and that it is appropriate to send it to:
1) the Complaints, Redress and Stewardship Team; or
2) the G6 Head of CReST
for review in line with the escalation procedures at paragraph 68 of the Special Payment Officers
Guide.
Name:
Position:
Date sent to the Complaints, Redress and Stewardship Team:
Please attach this form to the file/email.
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Annex G
Account codes
Special
Actual Financial
Actual
Consolatory
Extra Statutory
Loss of Statutory
Payment
Loss
Financial
Payments
Payments
Entitlement
account
Loss
codes
(interest)
Contributory benefits
Bereaveme
5913102905
5913102906
5913102904
1816902932
1816902932
nt benefits
Incapacity
5913102905
5913102906
5913102904
1816902932
1816902932
benefit
Contributory
5913102905
5913102906
5913102904
1816902932
1816902932
JSA
Contributory
5913102905
5913102906
5913102904
1816902932
1816902932
ESA
Maternity
5913102905
5913102906
5913102904
1816902932
1816902932
allowance
State
5913102905
5913102906
5913102904
1816902932
1816902932
Pension
Statutory
5913102905
5913102906
5913102904
1816902932
1816902932
Maternity
Pay
Statutory
5913102905
5913102906
5913102904
1816902932
1816902932
Sick Pay
Non-contributory benefits
Attendance
5913102901
5913102902
5913102900
1816902931
1816902931
Allowance
Disability
5913102901
5913102902
5913102900
1816902931
1816902931
Living
Allowance
Carers
5913102901
5913102902
5913102900
1816902931
1816902931
Allowance
Extended
5913102901
5913102902
5913102900
1816902931
1816902931
housing /
council tax
benefits
Industrial
5913102901
5913102902
5913102900
1816902931
1816902931
death
benefit
Industrial
5913102901
5913102902
5913102900
1816902931
1816902931
injuries
benefit
Income
5913102901
5913102902
5913102900
1816902931
1816902931
Support
Non-
5913102901
5913102902
5913102900
1816902931
1816902931
contributory
JSA
Non-
5913102901
5913102902
5913102900
1816902931
1816902931
contributory
ESA
In work
5913102901
5913102902
5913102900
1816902931
1816902931
credit
Minimum
5913102901
5913102902
5913102900
1816902931
1816902931
income
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guarantee
Pension
5913102901
5913102902
5913102900
1816902931
1816902931
credit
Reduced
5913102901
5913102902
5913102900
1816902931
1816902931
earnings
allowance
Severe
5913102901
5913102902
5913102900
1816902931
1816902931
disablement
allowance
Social Fund
5913102901
5913102902
5913102900
1816902931
1816902931
Winter Fuel
5913102901
5913102902
5913102900
1816902931
1816902931
Payments
Universal
5913102901
5913102902
5913102900
1816902931
1816902931
Credit (UC)
Personal
5913102901
5913102902
5913102900
1816902931
1816902931
Independen
ce
Payments
(PIP)
Access to
5913102901
5913102902
5913102900
n/a
n/a
Work
Account codes used by CMG
Special payment
Account code
Consolatory
5913102900
Actual Financial losses/costs 5913102901
Interest
5913102902
Paternity costs
5224102908
Account code used for staff consolatory payments
Special payment
Account code
Consolatory payment (staff) 5913102903
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Annex H - Child Maintenance Group Payments
Payments specific to Child Maintenance Group
The following payments are specific to customers of the Child Maintenance Group. The
annex covers two of the payment types but there are others which are less frequently used
which are not detailed here. For more information please contact Child Maintenance
Group’s Advice and Guidance Team.
IMA GAP
Imposition of defective or invalid interim maintenance assessment (IMA)
(extra-statutory payment)
Since 16 February 1995, there has been provision under Child Support legislation to correct
an IMA that is found to be defective. However, where a defective IMA was in place before
that date it can only be corrected from 16 February 1995. In such cases the period during
which defective IMA has to remain in place is known as an IMA gap. Although the IMA
cannot be replaced for that period it cannot be enforced.
The Child Support Agency will consider making an extra-statutory payment in IMA gap
cases providing:
• the maintenance is due to be paid to the PWC and not the Secretary of State;
• the NRP is complying or has complied with the maintenance assessment (either a Full
Maintenance Assessment or an IMA) sufficient to have established a payment pattern or
there are good reasons to believe he would have done so, if the Child Support Agency on
had taken steps to collect maintenance.
Any special payment made is equivalent to the amount of child maintenance that would
otherwise have been paid, less any payments (e.g. benefits or voluntary payments)
received by the client that they would otherwise not have received. This ensures the client
is restored to the position they would have been, but for the error.
Note: Financial redress, in the form of interest, is also considered on amounts paid under
these circumstances.
Delegated limits
Whilst the special payment scheme allows for discretionary decisions, there are limits to
what you can pay. These are set by CReST. The current limit for an IMA gap payment is
set out in annex D. Any proposals to pay in excess of this amount should be referred to
CReST for authorisation. (Please see the section on the Administrative Process for details
of how to make the submission.) Care should be taken not to raise the customer’s
expectations before payment has been approved.
2012 Manual Process 217
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This Manual Process covers dual liabilities created when a 2012 application is made, and
the NRP has an open legacy case which is not identified in the 2012 application process.
The result of this error is that the NRP will have a liability on both legacy and 2012 systems
at the same time, which it has been accepted is unreasonable.
This occurs because legislatively there is no direct link between the effective start date on
2012, and the closure of the legacy case.
When an existing legacy case is correctly identified, the 2012 application would be paused
to allow for the reactive closure of the legacy case so that they can both start on 2012 from
the same date.
When an existing legacy case is not identified, the effective date on 2012 is set, creating an
ongoing lawful liability to the PWC on 2012, whilst at the same time the reactive closure of
the legacy case is still outstanding (a process which takes 38 days at a minimum).
The agreed solution was to minimise the impact on the 2012 case, and to manage the
impact on the legacy side.
In essence, the NRP is not required to meet his legacy liability for the overlap period (which
is from the initial effective date of the 2012 application to the T date of the legacy case).
A special payment can be considered to the PWC (if the liability for that period has not
already been met), or the NRP (if the NRP has already made payments for the period), or a
combination of both. The special payment should always be equal to the full liability due for
the overlap period.
As these cases can be identified by CSA or CMS staff, there is a single point of contact
(SPOC) for all caseworkers to refer any cases to. This SPOC will confirm that the case is in
fact a dual liability case, and provide instruction as to the corrective action needed. Any
complex cases are reviewed by stakeholders in the Case Closure Enhanced Support
process.
Example
Mr A is an NRP in a legacy case with Ms B, in respect of QC Charlie. His liability is £40 per
week. Ms D makes an application to 2012 naming Mr A as the NRP in respect of QC Eric.
The existence of the legacy case is not identified, so notifications are sent setting the
effective date of Ms D’s application as 01/03/16. On 10/03/16, Mr A queries with 2012 why
he has both a legacy case and a 2012 case. The case is referred to the dual liability SPOC
who arranges for the closure of the legacy case. The T date of the legacy case is set as
20/04/16. The dual liability period is therefore 01/03/16 to 20/04/16 Mr A is advised to make
all his payments under the 2012 liability, but to stop making any more payments on the
legacy case.
The total liability for the overlap is 51 days (inclusive) multiplied by £40/7 = £291.43, so this
is the compensation payment due. It is identified that Mr A had no arrears on his legacy
case, and had made payments of £120 before being advised to stop paying the legacy
liability in the overlap period. The compensation therefore would be £120 to Mr A (as he is
not required to make payments for the overlap), and £171.43 to Ms B. This amount, along
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with the money she has already received from Mr A for the period means she has not been
financially disadvantaged by our error. The legacy system will still think that Mr A owes
£171.43, so this amount will have to be manually adjusted from legacy to bring the account
balance to nil.
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Annex I
Proforma for referring a case to the DWP Complaints, Redress and
Stewardship Team
CUSTOMER DETAILS
Name of customer
Reference number
Reason why case is being
referred (e.g. for advice, for
information or for authorisation
as the proposed payment
exceeds the business’
delegated limits).
Pass to your team leader to authorise before forwarding case to the Complaints, Redress and
Stewardship Team.
AUTHORITY FOR REFERRAL TO DWP Complaints, Redress and
Stewardship Team
Please ensure that the referral incorporates the following:
•
SPEC1 (or summary of the case if a SPEC1 has not been completed)
•
The action recommended by the Business
•
Scanned copies of any relevant documents (in date order)
I confirm that I have personally reviewed this case, that it is appropriate to forward this case to the Complaints,
Redress and Stewardship Team for advice/authorisation in line with guidance, and that I agree with the proposed
course of action.
Name:
Position:
Special Payment Team:
Date sent to the Complaints, Redress and Stewardship Team:
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Annex J
Template for HM Treasury approval for consolatory payments
Please read Managing Public Money Annex A4.13 before completing the proforma.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/45419
1/Managing_Public_Money_AA_v2_-jan15.pdf
This template has been prepared to request HMT approval for customer consolatory
payments exceeding £500 (business level) or £1,000 (ICE level) with the exception of
PHSO cases (no limit) or legal settlements where a robust legal assessment confirms
settling is the most appropriate and cost-effective route.
Name of organisation: DWP
Contact points in
Carron Godden DWP special payment policy 0151 221 6591
DWP:
DWP Financial Control and Policy Team -
xxxxxxxxx.xxxxxxxxxxxxxxxxxxxx@xxx.xxx.xxx.xx
Customer name and
reference:
Date case is submitted
by Finance:
Date decision is
needed and why:
Case history & details:
Please provide a
brief case history, with dates, summarising how the situation has come about.
Management procedures:
Explain what procedures have been followed; or why relevant procedures have not been
followed.
Proposed ways of proceeding:
Why do you propose to make a special payment? What other options have been considered?
Value for money consideration underlying the proposed settlement:
Set out break-down of costs, including legal costs and potential tribunal awards. Provide
rationale for proposed settlement, including level of proposed settlement; costs of alternative
options, and why proposed settlement offers best (incl best value for money) solution. When
considering vfm, non-financial costs (i.e. effect on staff morale, achievement of business
objectives) can also be taken into account.
N/A
Please confirm that your Accounting Office is aware of and satisfied with the proposed
settlement.
Wider impact and potential precedents:
Explain whether this case might have an impact on or set a precedent for other existing or
future cases, both within own organisation, or for other public sector bodies.
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Other useful information:
Lessons learnt from this case:
Explain what lessons have been learned and how management systems have been/will be
improved to avoid future occurrences of similar cases.
FOR HMT USE:
Approval given Y/N
Decision made by:
Date:
Details of advice taken:
Rationale for decision and any conditions:
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Annex K
SPECIAL PAYMENTS: QUARTERLY/ANNUAL STATISTICAL RETURNS
Certificate of accuracy of data
Background
1.
Special payments statistics are produced on a quarterly basis using the
relevant spreadsheet provided by the National Special Payment Team.
2.
The spreadsheet records the number of special payments: considered;
rejected; authorised; and the amount paid in each of the following categories:
(a)
extra-statutory
(b)
loss of statutory entitlement
(c)
losses & costs (not including ‘interest’)
(d)
losses & costs – ‘interest’
(e)
consolatory payments
Certificate
3.
I confirm that the data provided in the quarterly return for [Q1, Q2 etc]
[year] is an accurate record of the number and amount of special
payments authorised by [business area] during that period.
Name of completing officer:______________________________________
[block capitals]
Signature:
Date:
Certificate of countersigning officer
4.
I have checked and verified the accuracy of the data provided by [insert
name of completing officer] in the return for [Q1, Q2 etc] [year].
Name of countersigning officer:___________________________________
[block capitals]
Signature:
Date:
Exception report
5.
If the number of payments and/or the amounts authorised are unusually high
or low compared with preceding quarters or with a similar period in preceding
years please explain the reasons for that (for example, if a significant
reduction in payments has resulted from a period of high staff absence). If an
increase in payments results from a special exercise that has not previously
been reported to CReST, please provide full details (see the Administrative
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Process of the
Financial Redress for Maladministration: A Guide for Special
Payment Officers). If any non-benefit special payments have been made,
please explain what they were for.
Action after completion
6.
This form should be returned to the shared in-box ‘ Complaints Redress and
Stewardship Team’ accompanied by an electronic copy of the relevant
spreadsheet for the quarter.
7.
CReST recommends that each business unit retains a copy of both this form
and the relevant spreadsheet for reference in the event of any queries.
8.
The quarterly stats returns are used by CReST for monitoring expenditure and
trend analysis. The quarterly stats returns should be signed by a designated officer
or the special payment team manager. The annual stats are used to inform the
Departmental Report and form the basis of any briefing or PQ/FOI replies.
Annual
stats must be signed off by a Senior Civil Servant.
Document Outline