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Last Updated: Saturday, 11 March 2006, 14:31 GMT
DWP 'sharp practice', says lawyer
By Paul Lewis
BBC Radio 4's Money Box

Pensions Minister Stephen Timms
The pensions minister said letters had been sent out to some people

The government has been accused of "sharp practice" over letters to some pensioners asking that they return benefits which have been overpaid because of errors by officials.

Under the law, the Department for Work and Pensions (DWP) cannot make people return money if it has been wrongly paid due to what is called "official error".

But ministers have admitted officials have written to some pensioners asking for the money back.

Barrister Paul Stagg told BBC Radio 4's Money Box it was "almost inevitable" that some would mistake such a request for a demand.

"I'd regard it as extremely sharp practice. A lot of the recipients are going to be extremely elderly claimants, many of whom won't understand the rules of Pension Credit.

"I'd imagine many of them would be extremely alarmed to receive such letters."

The Conservatives have been very irresponsible... scaremongering over the last couple of days
Pensions Minister Stephen Timms

But Pensions Minister Stephen Timms defended the practice.

"I don't think it is inappropriate to draw people's attention to the fact that a mistake has been made and if they want to repay the money we'd welcome that," he said.

He accused Conservative MP David Ruffley, who revealed that 130 million had been overpaid due to official error in 2004/05, of "scaremongering".

"I feel very concerned that the Conservatives have been very irresponsible about this, the scaremongering over the last couple of days. One paper on Friday talks about millions of cases.

"We actually only know of some 6,000 individual cases last year in which there was an overpayment of Pension Credit as a result of an error by the department. And of those 6,000 we only in fact wrote to 76."

Detailed rules

The fact that so few letters were actually sent does not change Mr Stagg's view of the department's action.

"Parliament has set down detailed rules as to the circumstances in which overpayments are recoverable. It's open to parliament to change those rules," he told the programme.

"It does seem to me that the department is undermining the balance that parliament has set in the legislation."

Mervyn Kohler of Help the Aged
We are dealing with people who are poor, pretty close to poverty line
Mervyn Kohler, Help the Aged
Mervyn Kohler of Help the Aged told the programme that the government should have written off all the money and sent out no letters at all.

"I think it would be proper for the government to take that view. We are dealing with people who are poor, pretty close to the poverty line," he said.

"They are not people who are sitting around with wads of money waiting to write out a cheque to the DWP."

And the Conservatives said the minister has only made things worse. A spokeswoman told the programme:

"It is difficult to see how the Conservatives can be accused of scaremongering when all we revealed was information gleaned from the government.

"Ministers are just adding to the confusion. The minister should have given earlier assurance that he wouldn't claw back the 130 million in overpayment."

BBC Radio 4's Money Box was broadcast on Saturday, 11 March, 2006, at 1204 GMT.

The programme was repeated on Sunday, 12 March, 2006, at 2102 GMT.

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