Social Security Scotland debt cases could move to FTT

Debt recovery powers in relation to the devolved social security system could be transferred from the sheriff court to the Social Security Chamber of the First-tier Tribunal, under Scottish Government proposals now out to consultation.

The Social Security (Scotland) Act 2018 allows Scottish Ministers to make regulations that would transfer to the tribunal some or all of the competence and jurisdiction of the sheriff court in this respect, and the consultation is to determine which, if any, powers should be transferred.

The paper explains that overpayments in the UK benefit system are currently around 2.4% of the benefit expenditure. Of this, 1.4% is fraud, 0.6% claimant or third party error and 0.4% official error. The Scottish Fiscal Commission Economic and Fiscal Forecasts report of August 2021 forecast that Social Security Scotland will be administering benefit expenditure in excess of £5.2bn in 2026-27, so a corresponding error percentage potentially amounts to around £125m in that year. 

In contrast to the Department for Work & Pensions, which has a wide range of powers of recovery, Scottish ministers have taken a different approach and the only power that Social Security Scotland has to recover overpayments is by deduction from future devolved benefits, taking into account the individual's financial circumstances.

Recourse through debt recovery procedures will only take place where an individual has no recurring entitlement to a devolved social security benefit, and a mutually acceptable agreement is not reached, or the individual fails to repay after repeated approaches.

Three options are presented for consideration: the status quo; transfer of all social security debt recovery cases currently within the jurisdiction of the sheriff court to the First-tier Tribunal; or all cases which would fall within the simple procedure in the sheriff court transferring to the First-tier Tribunal.

The paper also asks whether, as regards any jurisdiction transferred, the tribunal will require the powers to determine whether the overpayment is to be recovered, to make an order for payment, and to issue time to pay directions and time to pay orders.

Click here to access the consultation. The deadline for responses is 23 December 2021.