Overpayments: case 2

A couple of years after he retired Mr B was informed by the trustees that the lump sum he had received was more than the maximum he should have been given by about £13,000, but that his pension would have been higher if he had not had the extra cash.

The trustees wanted to recover the overpayment by keeping his pension at the lower, wrong, level without inflationary increases until the overpayment had been recovered, which was expected to be in about eight years’ time.

Mr B argued that he should not have to make any repayment. His case was that he had used the money (as well as other savings) to repay the mortgage on his partner’s property.

He said this was a gift to her and that as she was unable to return the money he should not be liable for the overpayment.

We decided that it was reasonable for Mr B to have to repay the money as the redemption of the mortgage was to his benefit as well.

He lived in the property, contributed to the outgoings (including to the mortgage when it existed) and had relieved his partner of a considerable liability.

It was also significant that the method of repayment would not unduly affect the level of the pension that he had always expected to receive. Mr B’s complaint was not upheld.