Overpayment from ex employer

[Ypnos]

Hi all, first time poster and I'm hoping you might be able to help.

My wife was made redundant in November 2018 from her job at a local council. For 2 years prior to that event, she was on reduced hours working 4 days a week as we had a child in nursery. Since November there was obviously no further communication with the (now) ex employer.

Last week we received a worrying letter from them stating that they made an error in their calculation of her redundancy pay and that she owes them £1,130, as they had not calculated for her reduced hours.

Very shortly before she was made redundant 9 months ago, we bought a new house (which we were in the middle of buying when she was notified of the redundancy a year ago) and said house required some small renovations, which are still ongoing.

I mention this, because after 9 months that money has clearly been spent and we had absolutely no clue that there was an overpayment. My wife worked at the council for 12 years and we knew she was due a decent amount, so we never thought we needed to check.

I have Googled this issue already and I have come across a bit of legaslese called "estoppel" which applies if a) the claimant has accepted they made an error (true in this case) and b) the other party can reasonably show that the money has already been spent (true in this case as we have all the mortgage paperwork that coincides with the redundancy date and some receipts for renovation works carried out).

The question I have, what do we do? Do we write back and explain that we simply do not have this money any more? We both work full time now, but we do live from payday to payday and this amount of money is simply not available.

Thank you in advance

[2222]

The first point is that I assume that the extra amount did not stand out like a sore thumb? It wasn't obvious there was a miscalculation?

Also was there a letter from them saying this was the redundancy payment and asking her perhaps to sign that she accepted this in full satisfaction of her entitlement?

[Ypnos]

The first point is that I assume that the extra amount did not stand out like a sore thumb? It wasn't obvious there was a miscalculation?

Also was there a letter from them saying this was the redundancy payment and asking her perhaps to sign that she accepted this in full satisfaction of her entitlement?

It was not at all obvious.

To make matters worse, the payslips can only be accessed from a council computer and by the time payslips were produced, my wife had already left. The council never provided a final payslip.

In fact, she was provided no hard copies of anything at all.

[Ypnos]

Are there any suggestions about what we should do next?

Thanks

[jaguarsuk]

Okay, so in legal terms they will claim unjust enrichment and/or mistake of fact. The defence is simply that you had no cause to believe the money wasn't yours to spend, that it was spent in good faith and that any mistake should have been promptly communicated to you, 9 months is hardly prompt.

If you decide to offer to repay them by instalments then you should head the letter "Without Prejudice Except as to Costs."

You do not have to offer to repay the monies, but in either event you should warn them that should they decide to pursue the matter you will vigorously defend any claim and pursue them for any costs of and occasioned in dealing with a claim when successful in defence.

You need to strike a balance in your reply letter of informing them of your position, but also be authoritative enough that they understand they aren't going to push you around. If you want to draft something then post it here, I and others can take a look for you to advise any changes and if you do it'll be useful if you post their letter (with personal info covered) to see what they are saying at this stage.

If they have got an ounce of common sense that'll be the end of it, but just to warn you I have been in a similar position, they pursued me via letter tennis despite me offering to repay them in instalments for the full amount over the course of a year before filing a claim, which went on for a further nine months until just before the hearing fee was payable; at which point they discontinued the claim. The result they wasted their and my time, had been offered repayment in full by instalments and ended up having paid a court fee with £0.00 from me.

Some people seem to think the mere filing of a claim will scare you in to paying up or the closer you get to a hearing the thought of court will scare you no matter how much you tell them it doesn't, so spend good money after bad trying to scare you.

I had the advantage I have been to court many times previous though and so court may seem a different prospect to you.

[des8]

You could write back requesting the council substantiate their claim and back it up with hard copies of your wife's payslips and their detailed calculations.
Point out her records are only accessible through the councils website, to which she does not now have access, and because of this she never was actually provided with a final payslip.

Your correct about the doctrine of proprietary estoppel, but no need to start quoting it at them at the moment

[Ypnos]

Thank you, this was very helpful.

I have only been to court once, 25 years ago and that was as an eye witness to a crime!

I will draft a letter (without the estoppel line for now) and post results. I don't think we should be paying this due to the fact that 9 months is an unreasonable amount of time to wait before demanding the money and that repaying it would put us into some serious difficulty, even in instalments. We are already repaying £2500 to the HMRC because they incorrectly estimated our tax credit entitlement.

Thanks

[Ypnos]

Hi, I am attaching the letter from the council here:

[Ypnos]

And this is my draft response

[des8]

I would remove that last paragraph as being too confrontational at this stage.
Ask them instead, to show how they calculate the overpayment and substantiate it by sending copies of payslips etc

[Ypnos]

Thanks

Would asking that question not show them that we are willing to negotiate? (which we are not)

[des8]

No, it is just saying they have to prove there was an overpayment.

If and when they prove it, you claim change of position

[jaguarsuk]

No, it is just saying they have to prove there was an overpayment.

If and when they prove it, you claim change of position

Change of Position being the legal term for what I described in post #5

The defence is simply that you had no cause to believe the money wasn't yours to spend, that it was spent in good faith and that any mistake should have been promptly communicated to you, 9 months is hardly prompt.