DWP threatens court action against man who owes just 2p
We’ve heard the expression, “look after the pennies and the pounds will look after themselves”, but this is ridiculous.
It seems that a man whose sole contact with the benefit system was a week on Housing Benefit has been contacted by the Department for Work and Pensions about an overpayment – of just 2p.
The letter, which cost more than the alleged overpayment, threatens court action that would be even more expensive if Damien Dove, of West Rainton in Sunderland, fails to pay up.
It states – in all seriousness: “If you cannot pay this amount in full we can discuss terms for repayment… We recommend that payments are made by Direct Debit.”
Mr Dove, 53, has said he will pay but questioned whether the DWP was “having a laugh”.
The Department itself has pointed out that the debt is actually owed to local government, which administers Housing Benefit.
Apparently the DWP is required to collect such debts when requested, and the process is automated, meaning no human being was involved in the notification process.
That seems feasible – but it still isn’t good enough. If collection of a debt costs more than the debt itself, then it clearly isn’t worth the effort.
There is no reason this cannot be written into any automated debt collection process and it staggers the imagination that it was not anticipated before such a process was implemented.
What’s even more astonishing is that nobody has mentioned making these changes now.
Source: Department of Work and Pensions demands man repay 2p | Metro News
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It will cost them more in postage and prosecution costs than just simply deducting 2p from his next payment. Maybe they want to put something on his credit file so it becomes difficult for him to get credit or a mortgage in later years.
There is no next payment – he was only on HB for a short time.
Some years ago (In the late 80s I think) my then manager at work bought his council house (at a substantial discount). He received a letter saying that he owed 2p in rent. He went to the council office and offered the 2p in cash, to be told “we are not allowed to receive cash, we need a cheque”. (They wouldn’t accept a postage stamp either). Idiots. Businesses usually write off amounts under a certain amount as they have more financial sense than government departments.
Having worked for such a Civil Service Dept I can confirm that what happens in ALL cases is that one or two automated letters are sent (no human intervention) before being passed to a human. At this point tiny debts like this are written off. They COULD do it the other way round but to have EVERY debt looked at by a human first would involved a lot of extra work and a lot of extra staff.
Every so often this same thing comes up and it is the same reason in every single case – small debt less than price of stamp, cheaper to write off than collect. But in fact it is cheaper to do this than to check all debts before sending ANY letters. We all know this but I think the public actually likes reading about this whilst spitting their cornflakes out..
Except that clearly hasn’t happened in this case – the DWP was going to take the man to court over 2p.