Queen’s Bench Divisional Court

Published May 1, 2007

Regina (Balding) v Secretary of State for Work and Pensions

Liability to repay overpaid social security benefit occurring prior to a bankruptcy was a bankruptcy debt. Discharge from bankruptcy released the debtor from liability for recovery of the overpaid benefit.

The Queen’s Bench Divisional Court (Lord Justice Latham and Mr Justice Davis) so held on April 3, 2007 on the claim of Mr John Balding for judicial review of the decision of the Secretary of State for Work and Pensions that an overpayment of income support, found to be recoverable before he was declared bankrupt, remained to be paid by deduction from his ongoing entitlement to social security benefits after he had been discharged from bankruptcy.

MR JUSTICE DAVIS said that the claimant’s liability to repay benefit arose under section 71(1) of the Social Security Administration Act 1992. As such, he was liable to pay money under an enactment for the purposes of section 382(4) of the Insolvency Act 1986 and the liability was therefore a bankruptcy debt.

Under section 281 of the 1986 Act, upon discharge, a bankrupt was released from all the bankruptcy debts. The claimant had therefore been released from liability to repay the overpaid benefit upon being discharged from his bankruptcy.

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