Difference between revisions of "Welfare Overpayments and Fraud (21:VII)"

Latest revision as of 18:19, 12 September 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 1st, 2023.

A. What is a Welfare Overpayment?

If a person is not entitled to any form of welfare benefit or supplement they receive, those benefits are an overpayment. Overpayments can range from a few dollars to tens of thousands of dollars. Many overpayments arise not out of fraud by the welfare recipient but rather out of an honest error on the part of either the recipient or the Ministry.

When a person has received an overpayment from the Ministry for any form of benefit under the welfare legislation, the overpayment is a debt owed to the Crown. According to EAA, ss 27-28 and EAPWDA, ss 18-19, the government may recover the debt by deducting funds from subsequent payments of income assistance or pursuing a court action.

Where a person has received an overpayment of benefits due to Ministry error, Ministry policy has since February 1, 2019 recognized that the person may have an estoppel defence to the overpayment under section 89 of the Financial Administration Act RSBC 1996, c-138. Estoppel can arise where the person received benefits they were not entitled due to error by the Ministry, and the person can show detrimental reliance on the Ministry’s decision. The Ministry policy on estoppel defences is in the Ministry’s Policy and Procedures manual under the section called “Reasons not to Recover an Overpayment”, https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries.

NOTE: If a client faces a civil lawsuit for a welfare overpayment resulting from failure to provide complete or accurate information, refer them to a lawyer at the Community Legal Assistance Society.

B. Repayment Agreements and Notifications of Other Overpayments

The Ministry may ask people suspected of having received some welfare overpayments to sign a repayment agreement acknowledging the alleged debt. Before signing a repayment agreement, clients should ask to review the Ministry’s evidence and its reasons for the determination that there is an overpayment and, if possible, get legal advice or help from an advocate. The Ministry can often make errors in its overpayment determinations. See the Ministry’s policy on recoveries and overpayments at http://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries

In many situations, it is advisable to not sign an acknowledgment. However, if the client does choose to sign an acknowledgment and repay the overpayment, the monthly repayment rate for overpayments is $10. The Ministry is not presently charging interest on repayments.

C. Categories of Debt Repayment

Effective January 1, 2020, the Ministry has formulated three different monthly rates of debt repayment. $10 monthly payments will be made for overpayments, $20 monthly payments will be made for deposit debts including repayable security deposits, pet damage deposits and utility security deposits, and $100 monthly payments will be made for offence overpayments. Only one type of monthly payment can be collected at a time and the Ministry cannot heighten the repayment amount unless they obtain your consent (EAR, ss 89-89.2 and EAPDR ss 74-74.2).

Further, the Ministry now also has the discretion not to deduct debts from ongoing welfare benefits where the family unit is homeless or at risk of being homeless or where a deduction in welfare benefits would put the health of someone in the family unit in danger. In addition, no deductions will be made from someone in a special care facility for extended care, or for alcohol or drug treatment (EAR, s 89.1 and EAPDR s 74.1)

D. Appealing an Overpayment Decision

A welfare recipient can apply for reconsideration and appeal of a decision by the Ministry that they owe an overpayment. However, the Ministry’s decision about the amount of a person’s overpayment is not open to appeal (EAA, s 27(2) and EAPWDA, s 18(2)), although a person can apply for a reconsideration of the amount of an overpayment (for more on reconsiderations and appeals, see Section IX below).

As stated above in section A, where a person is notified that they have received an overpayment of benefits, and the overpayment was due to Ministry error, the person may have an estoppel defence to the alleged overpayment. That can be done at all stages of the process: i.e. when the Ministry is first investigating an overpayment allegation, on reconsideration, and on appeal. The Ministry policy on estoppel defences is in the Ministry’s Policy and Procedures manual under the section called “Reasons not to recover an Overpayment”, found at https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries.

E. Welfare Fraud

Some overpayments result not out of an honest error, but rather out of a recipient’s knowing failure to provide the Ministry with accurate information about their eligibility.

Section 31 of the EAA and s 22 of the EAPWDA set out when a person commits the statutory offence of welfare fraud. Welfare recipients can also receive charges of fraud under the Criminal Code.

Where the Ministry receives information regarding potential fraud or non-disclosure, it will investigate and may take one or more of the following steps:

refer to the Crown for charge approval under the Criminal Code, the EAA or the EAPWDA;
take civil action to recover the overpayment;
enter into a repayment agreement with the recipient;
Overpayment notification and deduction of established overpayment(s) from future benefits; or
Deduction for offence overpayments, where the person is convicted of a charge under the Criminal Code, EAA or EAPWDA

If a client has criminal welfare fraud charges (whether under the Criminal Code or for a statutory offence under the welfare legislation) this creates a potential “loss of livelihood” issue, so refer them to Legal Aid BC to see if they are eligible for a legal aid criminal lawyer. If the client is not eligible for Legal Aid, LSLAP may be able to assist them.

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+{{REVIEWED LSLAP | date= August 1st, 2023}}
 {{LSLAP Manual TOC|expanded = welfare}}
 == A. What is a Welfare Overpayment? ==
-If a person receives any form of welfare benefit or supplement that he or she is not entitled to, those benefits are considered to be an overpayment. Overpayments can range from a few dollars to tens of thousands of dollars. '''Many overpayments arise not out of fraud by the  welfare recipient but rather out of an honest error on the part of either the recipient or MSDSI.'''
+If a person is not entitled to any form of welfare benefit or supplement they receive, those benefits are an overpayment.  Overpayments can range from a few dollars to tens of thousands of dollars. '''Many overpayments arise not out of fraud by the welfare recipient but rather out of an honest error on the part of either the recipient or the Ministry.'''
-When a person has received an overpayment from MSDSI for any form of benefit under the welfare legislation, the overpayment is a debt owed to  the Crown. According to EAA, ss 27-28 andEAPWDA, ss 18-19, the government may recover the debt by deducting funds from subsequent payments of income assistance or pursuing a court action.
+When a person has received an overpayment from the Ministry for any form of benefit under the welfare legislation, the overpayment is a debt owed to the Crown. According to [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/bc-employment-and-assistance-act-263-2002#section27 EAA, ss 27-28] and [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/employment-and-assistance-for-persons-with-disabilities-act#section18 EAPWDA, ss 18-19], the government may recover the debt by deducting funds from subsequent payments of income assistance or pursuing a court action.
-:'''NOTE:''' If a client faces a civil lawsuit for a welfare overpayment resulting from failure to provide complete or accurate information,  refer him or her to a lawyer at the Community Legal Assistance Society.
+Where a person has received an overpayment of benefits due to Ministry error, Ministry policy has since February 1, 2019 recognized that the person may have an estoppel defence to the overpayment under section 89 of the Financial Administration Act RSBC 1996, c-138.   Estoppel can arise where the person received benefits they were not entitled due to error by the Ministry, and the person can show detrimental reliance on the Ministry’s decision.   The Ministry policy on estoppel defences is in the Ministry’s Policy and Procedures manual under the section called “Reasons not to Recover an Overpayment”, https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries.
-== B. Repayment Agreements and notifications of other Overpayments ==
+:'''NOTE:''' If a client faces a civil lawsuit for a welfare overpayment resulting from failure to provide complete or accurate information,  refer them to a lawyer at the Community Legal Assistance Society.
-MSDSI often asks people suspected of having received a welfare overpayment to sign a repayment agreement acknowledging the alleged debt.  Before signing a repayment agreement, clients should ask to review MSDSI’s evidence and its reasons for the determination that there is an overpayment and, if possible, get legal advice or help from an advocate. MSDSI can often make errors in its overpayment determinations. See MSDSI's policy on recoveries and overpayments at http://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries
+== B. Repayment Agreements and Notifications of Other Overpayments ==
-In many situations, it is advisable to '''not''' sign an acknowledgment. However, if the client does choose to sign an acknowledgment and repay the overpayment, repayment schedules can be negotiated for as low as $10 each month. The MSDSI is not presently charging interest on repayments.
+The Ministry may ask people suspected of having received some welfare overpayments to sign a repayment agreement acknowledging the alleged debt.  Before signing a repayment agreement, clients should ask to review the Ministry’s evidence and its reasons for the determination that there is an overpayment and, if possible, get legal advice or help from an advocate.  The Ministry can often make errors in its overpayment determinations. See the Ministry’s policy on recoveries and overpayments at http://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries
-== C. Appealing an Overpayment Decision ==
+'''''In many situations, it is advisable to not sign an acknowledgment. However, if the client does choose to sign an acknowledgment and repay the overpayment, the monthly repayment rate for overpayments is $10. The Ministry is not presently charging interest on repayments.'''''
-A welfare recipient can appeal a decision by MSDSI that he or she owes an overpayment. However, MSDSI’s decision about the '''amount''' of a person’s overpayment is '''not open to appeal''' (EAA, s 27(2) and EAPWDA, s 18(2)), although a person can apply for a reconsideration of the  amount of an overpayment (for more on reconsiderations, see [[Welfare_and_Health_Supplements_(21:IX) | section IX]] below).
+== C. Categories of Debt Repayment ==
-In ''Newfoundland (Social Services Appeal Board) v Butler'', [1996] NJ No 91, the court held that the Ministry could not recover the monies paid out to Ms. Butler by mistake. Ms. Butler successfully used the defence of change of circumstance. The court held that because Ms. Butler had made expenditures that she would not otherwise have made without the overpayment, it would be unjust to force her to pay the Ministry back. Therefore, it may be that in similar situations, recipients of overpayments will not be obligated to repay social assistance for monies paid under a mistake of fact. Please note that in this case, Ms. Butler reported the income to the Ministry and the Ministry erred in not deducting it.
+Effective January 1, 2020, the Ministry has formulated three different monthly rates of debt repayment. $10 monthly payments will be made for overpayments, $20 monthly payments will be made for deposit debts including repayable security deposits, pet damage deposits and utility security deposits, and $100 monthly payments will be made for offence overpayments. Only one type of monthly payment can be collected at a time and the Ministry cannot heighten the repayment amount unless they obtain your consent ([https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/263_2002#section89 EAR, ss 89-89.2] and [https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/265_2002#section74 EAPDR ss 74-74.2]).
-== D. Welfare Fraud ==
+Further, the Ministry now also has the discretion not to deduct debts from ongoing welfare benefits where the family unit is homeless or at risk of being homeless or where a deduction in welfare benefits would put the health of someone in the family unit in danger. In addition, no deductions will be made from someone in a special care facility for extended care, or for alcohol or drug treatment ([https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/263_2002#section89.1 EAR, s 89.1] and [https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/265_2002#section74.1 EAPDR s 74.1])
-Some overpayments result not out of an honest error, but rather out of a recipient’s knowing failure to provide MSDSI with accurate information about his or her eligibility.
+== D. Appealing an Overpayment Decision ==
-Section 31 of the EAA and s 22 of the EAPWDA set out when a person is considered to have committed a statutory offence of welfare fraud.   Welfare recipients can also be charged with fraud under the Criminal Code.
+A welfare recipient can apply for reconsideration and appeal of a decision by the Ministry that they owe an overpayment.  However, the Ministry’s decision about the amount of a person’s overpayment is '''not open to appeal''' ([https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/bc-employment-and-assistance-act-263-2002#section27 EAA, s 27(2)] and [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/employment-and-assistance-for-persons-with-disabilities-act#section18 EAPWDA, s 18(2)]), although a person can apply for a reconsideration of the amount of an overpayment (for more on reconsiderations and appeals, see Section IX below).
-Where the MSDSI receives information regarding potential fraud or non-disclosure, it will investigate and may take one or more of the following steps:
+As stated above in section A, where a person is notified that they have received an overpayment of benefits, and the overpayment was due to Ministry error, the person may have an estoppel defence to the alleged overpayment.   That can be done at all stages of the process: i.e. when the Ministry is first investigating an overpayment allegation, on reconsideration, and on appeal.   The Ministry policy on estoppel defences is in the Ministry’s Policy and Procedures manual under the section called “Reasons not to recover an Overpayment”, found at https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/compliance-and-debt-management/recoveries.
-*refer to the Crown for charge approval under the ''Criminal Code'', the EAA or the EAPWDA;
+== E. Welfare Fraud ==
+Some overpayments result not out of an honest error, but rather out of a recipient’s knowing failure to provide the Ministry with accurate information about their eligibility.
+[https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/bc-employment-and-assistance-act-263-2002#section31 Section 31 of the EAA] and [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/employment-and-assistance-for-persons-with-disabilities-act#section22 s 22 of the EAPWDA] set out when a person commits the statutory offence of welfare fraud.  Welfare recipients can also receive charges of fraud under the Criminal Code.
+Where the Ministry receives information regarding potential fraud or non-disclosure, it will investigate and may take one or more of the following steps:
+*refer to the Crown for charge approval under the ''Criminal Code'', the [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/bc-employment-and-assistance-act-263-2002 EAA] or the [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/employment-and-assistance-for-persons-with-disabilities-act EAPWDA];
 *take civil action to recover the overpayment;
 *enter into a repayment agreement with the recipient;
-*deduct the overpayment(s) from future benefits;
+*Overpayment notification and deduction of established overpayment(s) from future benefits; or
-*or declare the person ineligible for assistance for three benefit months.
+*Deduction for offence overpayments, where the person is convicted of a charge under the Criminal Code, [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/bc-employment-and-assistance-act-263-2002 EAA] or [https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/bc-laws/employment-and-assistance-for-persons-with-disabilities-act EAPWDA]
-:'''NOTE:''' If a client has been charged criminally with welfare fraud, refer him or her to the Legal Services Society to apply for a legal aid criminal lawyer.
+'''If a client has criminal welfare fraud charges''' (whether under the Criminal Code or for a statutory offence under the welfare legislation) this creates a potential “loss of livelihood” issue, so '''refer them to Legal Aid BC''' to see if they are eligible for a legal aid criminal lawyer. If the client is not eligible for Legal Aid, LSLAP may be able to assist them.
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