Welfare Overpayments and Fraud (21:VII)

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This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 1st, 2023.
LSLAP Manual
LSLAP Manual
This page is from the
Law Students' Legal
Advice Program Manual.
See the full contents.
LSLAP Manual
Introduction
Chapters
21. Welfare Law
 · I. Introduction

 · II. Governing Legislation and Resources
 · III. Eligibility
 · IV. Special Situations
 · V. Eligibility Factors
 · VI. Hardship Assistance
 · VII. Overpayments and Fraud
 · VIII. Rates and Payment Issues
 · IX. Additional Benefits
 · X. Health Supplements

 · XI. Appeals
v • d • e



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.


v • d • e
 
Introduction
 
Chapters 1-7
Criminal Law  · Youth Justice  · Family Law  · Victims  · Public Complaints · Human Rights  · Workers Compensation
Chapter One:
Criminal Law
Chapter Two:
Youth Justice
Chapter Three:
Family Law
Chapter Four:
Victims
Chapter Five:
Public Complaints
Chapter Six:
Human Rights
Chapter Seven:
Workers' Compensation
I. Introduction · II. Governing Legislation, Policy & Guidelines · III. Introduction to Compensation Claims for Injured Workers · IV. LSLAP's Role at the Initial Decision Level · V. Limitation Periods and Timing of Decisions · VI. Making a Claim · VII. The Claim Acceptance Process · VIII. Worker Status · IX. Disability and Causation · X. Time Limits and Procedures · XI. Claim Benefits · XII. Appeals · XIII. Health and Safety Regulations in the Workplace · XIV. Assessments of Employers · XV. The WCB Fair Practices Officer · Appendix A: Abbreviations · Appendix B: List of Cases · Appendix C: Referrals · Appendix D: Resources · Appendix E: Claims Process · Appendix F: Checklist for Interviews · Appendix G: Checklist for Appeals · Appendix H: Sample Authorization Form
 
Chapters 8-14
Employment Insurance  · Employment Law  · Creditors and Debtors  · Consumer Protection  · Auto Insurance (ICBC)  · Motor Vehicle Law  · Mental Health Law
Chapter Eight:
Employment Insurance
Chapter Nine:
Employment Law
Chapter Ten:
Creditors' Remedies and Debtors' Assistance
Chapter Eleven:
Consumer Protection
Chapter Twelve:
Auto Insurance (ICBC)
Chapter Thirteen:
Motor Vehicle Law
Chapter Fourteen:
Mental Health Law
 
Chapters 15-23
Adult Guardianship and Substitute Decision-Making · Wills and Estates  · Citizenship  · Immigration  · Landlord and Tenant Rights  · Small Claims  · Welfare Law  · Strata Law  · Referrals
Chapter Fifteen:
Adult Guardianship and Substitute Decision-Making
Chapter Sixteen:
Wills and Estate Administration
Chapter Seventeen:
Citizenship
Chapter Eighteen:
Immigration Law
Chapter Nineteen:
Landlord and Tenant Law
Chapter Twenty:
Small Claims and the CRT
I. Introduction · II. Governing Legislation and Resources · III. Do You Have a Claim? · IV. Choosing the Proper Forum · V. Starting a Claim · VI. Responding to a Claim · VII. Default Order · VIII. How a Claim Proceeds · IX. Pre-Trial · X. Mediation · XI. Settlement Conferences · XII. Trial/Pre-Trial Conferences · XIII. Trial Preparation · XIV. Trials · XV. Costs and Penalties · XVI. Appeals · XVII. Enforcement of a Judgement · Appendix A: Registries · Appendix B: Demand Letter · Appendix C: Notice of Claim · Appendix D: Reply to Claim · Appendix E: Glossary · Appendix F: Limitation Periods · Appendix G: Causes of Action · Appendix H: Court Fees · Appendix I: Tribunal Fees · Appendix J: Settlement Conference · Appendix K: Payment Hearing · Appendix L: Appeal · Appendix M: LSLAP File Administration Policy
Chapter Twenty One:
Welfare Law
Chapter Twenty Two:
Strata Law
Chapter Twenty Three:
Referrals
© Copyright 2023, The Greater Vancouver Law Students' Legal Advice Society.


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