On appeal from: [2010] EWCA Civ 1431.

The respondents, in receipt of social security benefits, had obtained Debt Relief Orders under the Insolvency Act 1986, Pt 7A staying enforcement of debts by creditors for a one year “moratorium” period and issued proceedings challenging the recoupment of Social Fund loans and overpayment of benefits by the Secretary of State during this period. The Supreme Court unanimously dismissed the Secretary of State’s appeal. The respondents had a statutory entitlement to the amount of benefit they were awarded. The liability to repay arose independently of entitlement to any benefit, from which the Secretary may later decide to recoup. The power to recover the debt by deduction from benefit was a “remedy in respect of a debt” which could not be exercised during the moratorium, according to s 251G(2) of the 1986 Act.

For judgment, please download: [2011] UKSC 60
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