Compensation for maladministration by DSS
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Compensation for maladministration by DSS
Existing arrangements
30. DSS operate a non-statutory scheme to offer financial redress for maladministration. Under the terms of the scheme, they may make a special payment to any person who has suffered a loss of statutory entitlement or an actual financial loss as a result of maladministration. Actual financial loss is distinguished from financial disappointment, for example when a person has been led by DSS to expect to receive a benefit at a higher rate than that to which he or she is entitled by statute. However, if a person has relied on incorrect information to alter his or her circumstances in a detrimental way, a special payment may be considered for financial loss actually suffered. Documentary or incontrovertible proof of misdirection is not necessarily a requirement for the authorisation of a special payment. The fact that documents might have been destroyed in the normal course of events, or that an officer cannot remember a particular case, will not in itself inevitably justify a refusal to make a special payment. Each case is decided on its individual merits.
Proposed redress arrangements
31. On 8 March 1999, in answer to an oral Parliamentary Question from Mr Rendel about financial provision for the bereaved (Official Report, Vol.327, col. 5), the then Minister of State acknowledged that DSS leaflets had not been updated in respect of the inheritable SERPS changes until 1996. He added that the Government would: "consider a claim for compensation from anyone who can establish that he or she received advice that did not reflect the change from April 2000 and, as a result, acted to their detriment". The then Minister of State said that the Government would announce further details shortly.
32. On 14 September 1999 I wrote to the Permanent Secretary, among other matters outlining my preliminary thinking about redress for the maladministration that on behalf of DSS she had already acknowledged. I said that individuals who claim to have been misled or misdirected by information given by a department are normally expected to provide some evidence that they have been misled into acting, or failing to act, in a way that has been to their disadvantage. Only then is compensation considered. However, I questioned whether that approach was tenable in the circumstances of the complaints being referred to me. As I saw it, anyone who had read the relevant DSS leaflets might reasonably claim to have been misled by them. Whatever such a person then did or did not do, it seemed to me that the burden of proof that he or she would not have acted differently had he or she not been misinformed rested on the department. I therefore considered that, whatever the approach the department decided upon in order to make good the effects of their maladministration, it would need to be capable of providing due redress on a global, rather than an individual, basis. I also felt that any evidential hurdles pertaining to eligibility for compensation should have regard to the principles concerning the burden of proof which I had set out.
33. During Parliamentary debates from the end of March 1999 onwards on the Welfare Reform and Pensions Bill 1999, amendments to the Bill were proposed in the House of Commons by Mr Rendel, and in the House of Lords by Lord Rix, Lord Higgins, and Earl Russell. The amendments were designed to reverse or mitigate the effects of the future halving of inheritable SERPS. The government itself proposed an amendment in November 1999. It became section 52 of the 1999 Act, which received Royal Assent on 11 November 1999. Section 52 provides for the Secretary of State to make regulations, subject to affirmative resolution, to do one or more of the following:
- to allow for specified categories of widows and widowers to receive more than 50 per cent of their spouses' additional pensions under SERPS;
- to postpone the reduction to 50 per cent from 6 April 2000 to a later year;
- to set up a scheme to determine who had been misled by incorrect or incomplete information about the reduction to 50 per cent, so as to ensure that the reduction was not applied in such cases.
Subsection (7) of section 52 provides that until regulations as mentioned above come into force, widows and widowers will continue to inherit the full amount of their spouses' additional pension under SERPS.
