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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: Child Benefit overpayments: overpayments recoverable from a third party

General

There are circumstances where an overpayment is recoverable from a third party. Statute says that overpayments are recoverable from the person who misrepresented the fact giving rise to the overpayment or who failed to disclose a material fact. So it is not necessarily the person to whom the benefit was paid who is responsible for an overpayment.

Types of third party overpayments

The types of third party overpayments are where a:

  • known third party has fraudulently cashed a payment cheque payable to a Child Benefit (CHB) customer; in these cases all correspondence will be issued to the third party debtor
  • debt has been raised against an alternative payee on a Child Benefit account; in these cases the customer and the third party debtor will be notified of the new outcome decision changing the award of Child Benefit but only the third party will receive the request and any subsequent demands for payment
  • payment has been made in into a third party’s bank or Post Office Card account.

Debt Management action

You should:

  • record the overpayment on the OPREC database for the family name of the third party, using the debtor’s NINo or CHB number
  • ensure payment of any CHB still payable to the customer is not interrupted
  • continue with normal recovery action.

Recovery complete

Additionally, for Post Office Card account cases (POCA), if recovery has been direct from Child Benefit payments, add a general note on CBOL to state “third party overpayment recovered from – to” as no entry can be made in the issues adjustment box.