Social Security Experience Panels: change of circumstances and debt repayment - report

Recovering debt

Focus group participants in both the 'Fraud and Error' and the 'Changes of Circumstances' focus group sessions were asked questions about how Social Security Scotland should recover debt from clients.^[7]

Writing off debt

Most participants agreed that when a client had made an error or committed fraud, debt should not be written off entirely. Some made the point that recollecting overpayments was an important element of discouraging future fraud. Several also thought it was important for clients who made errors to learn how the system worked. These participants shared concerns that, without deterrents, the number of people trying to deceive the system would rise.

"No I don't think that fraud debts should be written off."

Some participants did comment that where an overpayment had occurred because of an error by Social Security Scotland rather than the client, there should be scope to write off the client's debt.

"When it's the fault of the government, then they should write the debt off."

Deciding when to collect debt

Across the two sets of focus groups, we asked participants what Social Security Scotland should take into account when deciding whether or not to pursue a client's debt. There was agreement across most participants that repayments should be fair and flexible.

Many expressed concerns about how any 'one size fits all' approach to recovering debt would work. Many felt that personal circumstances should be taken into account. Some thought that a household's financial position should be considered. Others thought that conditions – including mental health - should be taken into account also before recovering debt.

"You should consider the person's circumstances, dependents, other incomes. If they have no other income then repaying is hard – they can't do an extra shift at work if they are not working!"

"You need to look at the effect of it. If other social consequences occur, if a person then has to go to a food bank because of that repayment, then that is counterproductive. People's circumstances fall over edges sometimes. It cannot be one size fits all. The system should allow delays on repayments if needed."

Several participants also suggested that decisions should be made on the basis of whether it was cost-efficient for Social Security Scotland to carry out an investigation and get the money back. A number of participants were concerned that debt recovery processes often costed more in resources than the sums of an overpayment that authorities were attempting to get back.

"It's public money – don't write it off unless it'll cost more to get it back."

When asked about how Social Security Scotland should recover debt once it had decided to recover overpayments, many felt that flexible repayment options would be beneficial. Some suggested that the more flexibility Social Security Scotland were able to offer, the more they would be able to be sensitive to individual circumstances.

"Repayment rates need to be more relaxed. They can't be set in stone, especially if it is an error. You could say, 'if you are having difficulty we can slow it.'"

"You need to be understanding as you will be dealing with very vulnerable people anyways. The sort of stress that comes with sanctions and repayments could upset a condition."

However, a few participants voiced concerns about the impact of a flexible approach to debt recovery. In their view, having a more flexible approach may mean that some people may not take their repayments as seriously as they should do. Several suggested that there if there was to be flexibility, there also needed to be time limits too.

"Some people would probably think delaying it means they do not have to pay back the money."

"Recovering overpayments should be limited to the last year. The time period should not be too long."

A few participants also wondered whether in some cases there were alternative methods to repayment that might be more suitable. In particular, several thought that repayment through community service may be a better alternative for some clients.

"It doesn't always need to be paid back financially. There are more positive ways of payback by helping the community."

"There should be the choice of community service if it's just minor fraud. If it's organised crime though then that should be treated as criminal."

We also asked focus group participants how Social Security Scotland should treat clients whose repayments had been suspended due to hardship. In response, some participants suggested that regular reviews would be useful to keep in touch with the client while their repayments were suspended. However, these participants thought it was important that Social Security Scotland was able to communicate that they were on the client's side during this period. It was thought that the tone of these regular catch ups would be important so that they kept the wellbeing of the client in mind and didn't focus only on the finances.

"Don't be so formal. It could be called a catch up, not a review. It needs to be more personal and friendly. Don't call it process, feel like it will go on and on and will never see the light of day."

Other participants suggested that it was important that clients did not feel harassed if their repayments had been suspended.

Information sharing about debt

We then asked survey respondents how they would want Social Security Scotland to find out if a client who had been overpaid had pre-existing debt with DWP. In response, over three-quarters of survey respondents (77 per cent) said that they would want Social Security Scotland to speak to DWP about any debt that they may have. Over a tenth of respondents (14 per cent) indicated that they would want to be responsible for notifying Social Security Scotland themselves.

Table 7: How would you want Social Security Scotland to find out if you had a debt with DWP? (n=390)

	%
I want Social Security Scotland to speak to DWP	77
I want to be responsible for notifying Social Security Scotland	14
Don't know	9
Total	100

Respondents who said that they wanted Social Security Scotland to talk to DWP, gave numerous reasons for this. The main reason cited by respondents was that information sharing would not only make the administrative process quicker, but would also make it simpler and less stressful for clients. Respondents also felt that if debt information was shared between Social Security Scotland and DWP, there would be less margin of error, along with less duplication. A few respondents thought that there may be incentives for clients not to report any debt to Social Security Scotland.

"If the different agencies speak to each other it's less confusing and less likely mistakes will be made."

Respondents who indicated that they wanted to be responsible for notifying Social Security Scotland cited a number a reasons for this. Amongst these was a lack of trust for the DWP, along with wanting the onus of responsibility to be with the client to handle their own information.

Making repayments

We asked survey respondents how often they thought that repayments should be made. In response, almost two-thirds (62 per cent) of respondents thought that repayments should be made monthly. This was considerably higher than those who said fortnightly or weekly (20 per cent and 18 per cent respectively).

Table 8: How often do you think repayments should be made? (n=382)

	%
Weekly	18
Fortnightly	20
Monthly	62
Total	100

We also asked what the smallest percentage of a person's benefits should be used to make a repayment. In response, over three-quarters of respondents (78 per cent) said that the smallest percentage of a person's benefit that should be used to make a repayment should be 5%. A fifth of respondents (20 per cent) said that the smallest percentage should be 10%. Very few respondents felt that the smallest percentage should be 15% or 20% (only 1 per cent each respectively).

Table 9: What is the smallest percentage of a person's benefit that should be used to make a repayment? (n=387)

	%
5%	78
10%	20
15%	1
20%	1
Total	100

When asked about what the largest percentage of a person's benefit should be used to make a repayment, over two-thirds of respondents (69 per cent) said 10%. Just over a tenth of respondents said that the largest percentage should be either 15% or 20% (11 per cent and 14 per cent respectively). Very few respondents felt that the largest percentage should be anything over 25%.

Table 10: What is the largest percentage of a person's benefit that should be used to make a repayment? (n=385)

	%
10%	69
15%	11
20%	14
25%	4
30%	1
40%	1
Total	100

We then asked survey respondents whether a client should have the option to pay above the standard repayment amounts. In response, the vast majority of respondents (94 per cent) felt that a client should have the option to pay above the standard repayment amount if they wished to. Only a small number of respondents (6 per cent) felt that clients should not have the choice to pay above standard payment amounts.

Table 11: Should a client have the option to pay about the standard repayment amounts? (n=385)

	%
Yes	94
No	6
Total	100

In focus groups, we asked participants for further detail about how repayments of debt should be made. In response, some participants suggested that Social Security Scotland and clients should be able to work together to create repayment plans that are workable for both parties.

"I would want someone to let me know what the sum owed is and work together to pay it back."

"You should contact the client, talk it through with them, and arrange a payment plan that works for both."

Other focus group participants felt that it was important that Social Security Scotland avoided any harm when it approached clients following an overpayment.

"Should still be a discussion with client, need to find a way of dealing with it without harming the client."