SCOTTISH Borders Council last year paid out £1.2 million in housing benefit to which claimants were not entitled.

And they are now wanting it back.

The scale of the overpayments – due to “fraud and error” – was revealed in a report to yesterday’s council’s executive committee.

It was agreed that a stringent new policy – aimed at preventing the overpayments and clawing back the cash – should be introduced on April 1.

Customer services development officer Clare Easson explained that the council received a subsidy to pay out housing benefit for the Department of Work and Pensions (DWP).

“The money lost through reduced subsidy and the costs of recovering overpayments come from the council’s overall budget,” warned Ms Easson. “Therefore not limiting costs here means there are fewer funds available for other services.

“It is important to ensure that in addition to preventing overpayments occurring, every effort is made to recover them. The council has a duty to recover any housing benefit which has been overpaid.”

The report reveals that in 2015/16, the council received around 2,500 new applications from people on low incomes to help pay their rent. At any one time, the council has 9,000 housing benefit cases on its books.

“The council pays out in the region of £30m in housing benefit each year…during 2015/16 overpayments totalling approximately £1.2m were created as a result of fraud and error,” revealed Ms Easson.

The new policy – replacing one in place for the past 17 years – will see the council employ a range of recovery options.

These include cutting a claimant’s ongoing housing benefit entitlement, applying for deductions in other DWP benefits, ordering direct wage reductions and passing the cases to debt collection agents.

An overpayment will be recoverable if the claimant “could reasonably have been expected to know it was an overpayment”, if it is due to an error or fraud by the claimant or someone acting on his or her behalf or even if “it is no-one’s fault”.

The policy also states: “When a recoverable overpayment has occurred, a decision will be issued to any person from whom the overpayment is legally recoverable, even if the council has decided to recover from someone else, eg landlord/agent.

“The claimant can ask for a reconsideration or appeal against a decision.”