Civil penalty or prosecution?
Civil penalties
A civil penalty may apply if you are overpaid a benefit and:
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you have negligently given incorrect information or evidence, and
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you fail to take steps to rectify the error, and
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the error causes an overpayment, or
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you fail to provide information or evidence or fail to notify a change in your circumstances without a reasonable excuse.
You may be invited to pay a civil penalty as an alternative to criminal prosecution. This may apply if:
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you have been overpaid benefit and this is recoverable from you, and
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you caused the overpayment, and
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there are grounds for prosecuting you for the offence.
How much is the penalty?
The minimum penalty is the greater of 50% of the amount overpaid or £350, with a maximum penalty of £2,000.
If I agree to the penalty, can I still be prosecuted?
No. The penalty is an alternative to prosecution. If you agree to the penalty, you must be allowed a short ‘cooling-off’ period to change your mind. You cannot avoid the penalty after that time. The cooling-off period is 14 days.
If I pay the penalty, do I still have to repay the overpayment?
Yes. If the overpayment was recoverable, it remains recoverable from you even if you pay the penalty.
If I do not agree to the penalty, will I be prosecuted?
Not necessarily. Although there must be grounds to prosecute before you can be offered a penalty, you will not necessarily be prosecuted if you do not agree. You should always seek specialist advice.