Child Poverty Action Group, R (on the application of) v Secretary of State for Work and Pensions

Section 71 of the Social Security Administration Act 1992 is exhaustive of the Secretary of State’s power to recover payments made pursuant to a social-security award. It applies where the award has been reversed, varied, revised or superseded and the statutory conditions for recovery are met. A common-law restitutionary claim cannot be used for an overpayment caused by a mistaken award, including one received knowingly, where the payment was made pursuant to that award. The tax-recovery authorities do not establish a contrary rule because tax paid to the state and benefits paid by the state arise in materially different statutory and constitutional contexts.

Child Poverty Action Group sought judicial review of the Secretary of State’s new practice of asking claimants to repay social-security overpayments which were outside section 71 of the Social Security Administration Act 1992. The Department asserted that such sums were recoverable under the common law, although its letters accepted that they were not recoverable under social-security legislation.

Mr M. Supperstone QC, sitting as a deputy judge of the Administrative Court, dismissed the claim for declaratory relief: [2009] EWHC 341 (Admin). The Court of Appeal considered whether, after retrospective revision or supersession of an award, the Secretary of State could pursue common-law recovery where the overpayment had not resulted from misrepresentation or non-disclosure.

1. Appeal allowed. Section 71 of the Social Security Administration Act 1992 forms part of a comprehensive statutory scheme governing the relevant benefits and the rights and remedies of claimant and state. It provides the only right to recover money paid pursuant to an award.
2. An award remains conclusive of entitlement and of the Secretary of State’s duty to pay in accordance with it while it stands, subject to appeal, revision and supersession. A retrospective revision may show that payments already made exceeded entitlement, but recovery is governed by section 71. Under subsection (5A), the relevant determination must first have been reversed, varied, revised or superseded.
3. Section 71 permits recovery of the difference between an original and corrected award where the statutory conditions are satisfied, including misrepresentation or non-disclosure. It does not permit recovery of an overpayment caused by a mistaken award alone, even where the claimant knowingly received the excess. The common law cannot supply an alternative route for payments made pursuant to the award.
4. The tax authorities did not assist the Secretary of State. Tax legislation concerns sums paid by a taxpayer to the state, whereas this case concerned benefits paid by the state to a claimant. That distinction was substantial and significant. Common-law recovery of tax wrongly paid did not establish a common-law right to recover social-security benefits paid pursuant to an award.
5. Lord Justice Sedley adopted Lord Justice Lloyd’s reasoning on the tax authorities. Lord Justice Lloyd agreed that section 71 supplied the only repayment right. Lord Justice Wilson agreed with both judgments. The Department’s repayment letters should not be resumed; any further powers were for Parliament to determine.

• Court of Appeal (Civil Division): appeal allowed, with Lord Justice Sedley delivering the principal judgment, Lord Justice Lloyd giving additional reasons, and Lord Justice Wilson agreeing with both.
• Administrative Court, Queen’s Bench Division: Mr M. Supperstone QC, sitting as a deputy judge, dismissed the claim for declaratory relief: [2009] EWHC 341 (Admin) .