CBM130600 - Overpayments: non recoverable / official error

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice.

Reasons not to follow this guidance
Introduction
Guidance

{#Reasonsnottofollow}Reasons not to follow this guidance

You do not need to follow this guidance if you have not

  • calculated the amount overpaid
  • established the recoverability of the overpayment.

Note: For more information on the initial action of an overpayment, follow the guidance in CBM130200.

{#Introduction}Introduction

Non recoverable overpayments can be caused by a customer informing of a change in circumstance that the Child Benefit Office failed to act on before another payment credited the customer’s account.

An official error overpayment is the result of an error made by HMRC which no person outside of HMRC caused or materially contributed to.

Where as a result of an official error, payment is continuing and is causing a customer to be overpaid, the customer remains under a continuing duty to disclose to HM Revenue and Customs that this is happening. A customer is failing to disclose when knowingly withholding information of an overpayment. Where evidence supports there is knowledge of an overpayment this ceases to be an official error and can become recoverable. A considerative decision will have to be made to determine on a balance of probabilities:

  • that it is reasonable to assume the customer had knowledge of being overpaid
  • when it is reasonable to assume the customer would have become aware of the overpayment.

While there is no question of recoverability when an official error occurs, a question can be asked whether the full amount overpaid is solely an official error.

Note: For examples of considering recoverability, follow the guidance in CBM130100.

{#Guidance}Guidance

Note: Should the customer offer to repay when we bring the overpayment to their attention, follow guidance for ‘voluntary offers to repay’ in CBM130500.

Note: While the circumstances that create a non recoverable overpayment and an official error overpayments are different, they are both identified the same as ‘NON-REC’ on the system and as official error on the OP1.

Proceed as follows:

  • open the correspondence indicator
  • apply any change of circumstance that is not already shown
  • input details of the overpayment using code 24 as follows:
    • the overpayment is non recoverable, pay code ‘C’ and recoverable indicator ‘N’
  • input any required notes such as:
    • DMS reference
  • update the award as needed
  • fully clear the case
  • update the OP1
  • take no further action.

Note: if you are yet to action a part recoverable overpayment, follow the recoverable guidance in CBM130700.