Section 115A — Social Security Administration Act 1992: Penalty as alternative to prosecution

Penalty as alternative to prosecution 115A 1 This section applies where an overpayment is recoverable from a person by, or due from a person to, the Secretary of State or an authority under or by virtue of section 71, 71ZB 71A, 75 or 76 above and it appears to the Secretary of State or authority that—

a the making of the overpayment was attributable to an act or omission on the part of that person;

and b there are grounds for instituting against him proceedings for an offence (under this Act or any other enactment) relating to the overpayment. 1A This section also applies where —

a it appears to the Secretary of State or an authority that there are grounds for instituting proceedings against a person for an offence (under this Act or any other enactment) relating to an act or omission on the part of that person in relation to any benefit, and b if an overpayment attributable to the act or omission had been made, the overpayment would have been recoverable from the person by, or due from the person to, the Secretary of State or an authority under or by virtue of section 71, 71ZB, 71A, 75 or 76 above. 1B This section also applies where—

a an overpayment notice has been given to a person (“ P ”) under section 71ZJ (overpayment notice in relation to non-benefit payment),

and b in relation to the overpayment notice, the condition in subsection (1C) is met. 1C The condition in this subsection is met where—

a the time for P to seek a review of the overpayment notice under section 71ZK has passed without P seeking a review, or b if P sought a review of the notice within the time allowed, the review has taken place, and—

i the period mentioned in section 71ZK(6)(a) for P to appeal against the outcome of the review has passed without P bringing an appeal, or ii P’s appeal (including any onward appeal) against the outcome of the review has been withdrawn, abandoned or finally determined.

2 The Secretary of State or authority may give the person a written notice—

a stating that he may be invited to agree to pay a penalty and that, if he does so in the manner specified by the Secretary of State or authority , no proceedings referred to in subsection (1) or (1A) above , or in relation to the overpayment notice referred to in subsection (1B), will be instituted against him;

and b containing such information relating to the operation of this section as may be prescribed.

3 The amount of the penalty in a case falling within subsection (1) or (1B) is 50% of the amount of the overpayment (rounded down to the nearest whole penny), subject to—

a a minimum amount of £350, and b a maximum amount of £5000 . 3A The amount of the penalty in a case falling within subsection (1A) is £350. 3B The Secretary of State may by order amend—

a the percentage for the time being specified in subsection (3);

b any figure for the time being specified in subsection (3)(a) or (b) or (3A).

4 If the person agrees in the specified manner to pay the penalty—

a the amount of the penalty shall be recoverable by the same methods as those by which the overpayment is or would have been recoverable;

and b no proceedings will be instituted against him for an offence (under this Act or any other enactment) relating to the overpayment or to the act or omission referred to in subsection (1A)(a).

5 The person may withdraw his agreement to pay the penalty by notifying the Secretary of State or authority in the manner specified by the Secretary of State or authority , at any time during the period of 14 days beginning with the day on which he agrees to pay it;

and if he does so—

a so much of the penalty as has already been recovered shall be repaid;

and b subsection (4)(b) above shall not apply.

6 In a case referred to in subsection (1) where, after the person has agreed to pay the penalty, it is decided on a review or appeal or in accordance with regulations that the overpayment is not recoverable or due so much of the penalty as has already been recovered shall be repaid.

7 In a case referred to in subsection (1) where, after the person has agreed to pay the penalty, the amount of the overpayment is revised on a review or appeal or in accordance with regulations—

a so much of the penalty as has already been recovered shall be repaid;

and b subsection (4)(b) above shall no longer apply by reason of the agreement; but if a new agreement is made under this section in relation to the revised overpayment, the amount already recovered by way of penalty, to the extent that it does not exceed the amount of the new penalty, may be treated as recovered under the new agreement instead of being repaid. 7A Subject to subsection (7B) below, the Secretary of State and an authority which administers housing benefit or council tax benefit may agree that, to the extent determined by the agreement, one may carry out on the other's behalf, or may join in the carrying out of, any of the other's functions under this section. 7B Subsection (7A) above shall not authorise any delegation of—

a the function of the person by whom any overpayment is or would have been recoverable, or to whom it is or would have been due, of determining whether or not a notice should be given under subsection (2) above in respect of that overpayment; or b the Secretary of State's power to make regulations for the purposes of paragraph (b) of that subsection.

8 In this section , except in relation to a case referred to in subsection (1B), “ overpayment ” means—

a a payment which should not have been made;

b a sum which the Secretary of State should have received;

c an amount of benefit paid in excess of entitlement; or d an amount equal to an excess of benefit allowed; and the reference in subsection (1)(a) or (1A)(b) above to the making of the overpayment is to the making of the payment, the failure to receive the sum, the payment of benefit in excess of entitlement or the allowing of an excess of benefit. 8A In relation to a case referred to in subsection (1B), “ overpayment ” has the meaning given in section 71ZI(1).