• NHS worker overpaid more than £31,000 in injury allowance payments
  • NHS Business Services Authority assured her wrongly in writing and verbally
  • Pension Ombudsman ruled she acted in good faith and the money should not be repaid

An NHS worker has been told she can keep more than £31,000 in payments she was not entitled to after blunders by the NHS Business Services Authority

The Pensions Ombudsman has ordered the authority to write off £31,529.80 and repay the woman any money it has already recovered, plus interest.

Its ruling came after employees of a company called Equiniti, used by the BSA as a payment agent, wrongly told the woman, known as Mrs S, both verbally and in writing that receiving incapacity benefit would not affect her NHS injury payment allowance.

The woman relied on this advice and spent the £31,500 she was paid between 2002 and 2012. This included a hire purchase agreement on a car worth £20,000.

Anthony Arter, the ombudsman, said Mrs S “relied on the overpayments in good faith and she irreversibly changed her financial position as a result.

“I find that it would be inequitable for NHS BSA to recover the overpayments in question.”

This was not the first time the woman had been overpaid. She agreed a repayment plan for a total of £21,483 that was wrongly paid to her between 1996 and 2002, after the BSA learned she was receiving incapacity benefit.

In 2003, her state benefit was stopped pending an appeal during which time she asked for her NHS benefits be reinstated.

In 2005, her incapacity benefit was reinstated and backdated to 2003. She informed the BSA but was told this would not affect her NHS payments.

Mrs S wrote to the authority citing two telephone calls where she was told her NHS benefits would not be affected. She again queried this in writing: “I am writing to you so you can confirm or sort matters as I am not responsible for any overpayment and cannot afford to pay any monies back again.”

She received a letter from Equiniti confirming the NHS injury allowance payments would not be affected. The NHS injury scheme provides an annual income to an employee who suffers a loss of NHS earnings because of an injury or disease as a result of their NHS employment.

The series of errors only came to light in 2013. The BSA offered to write off half the outstanding amount but said Mrs S was liable for the rest.

The ombudsman said Mrs S had provided good evidence that she had spent any income she had received.

The ombudsman ruled: “I am persuaded that Mrs S received assurance from NHS BSA that she could rely on the income she was receiving from it going forward, and, I believe that she took out a hire purchase agreement with this in mind. I am also satisfied that her historic bank statements indicate that, throughout the overpayment period, she simply spent the income she received on daily living expenses.

“I also find it persuasive that Mrs S was already repaying a previous and substantial overpayment, when she made her enquiries in 2005 and 2006. Mrs S would have been even less likely than most to rely on what she was told about her NHS benefits, unless she was completely reassured that she could. This is because she knew full well the implications of receiving overpayments, and she had already agreed to one repayment plan.”

The ombudsman ordered the BSA not to attempt to recover any more money and to repay any overpayments recovered between 2002 and 2002 with interest.

Mr Arter said he would not ask the authority to award Mrs S any compensation. “Whilst I acknowledge that this matter has caused Mrs S a great deal of stress, I also have to consider that she has had the benefit of a substantial sum of money to which, under the rules of the scheme, she was not entitled. As I have decided that she does not have to repay this, I believe it is sufficient compensation in the circumstances.”

A spokesman for the BSA said it would not comment on individual cases, but “we can confirm that we will comply with the directions set out by the Pensions Ombudsman”.