CCM10795 - Penalties and interest: incorrect claims - pre-award or early challenges - enquiries or examinations

The penalty will be calculated in the same way regardless of the stage at which you challenge the claim. This could be pre-award (Section 14), in-year (Section 16) or at the year-end (Section 19). In pre-award cases you will need to consider what the amount of the award would have been had the claim been accepted without challenge and compare this to what is actually due.

The customer is entitled to withdraw their claim at any time, up to the point that a decision is made under S14. After this decision is made the claim can no longer be withdrawn. However, even if the claim is withdrawn a penalty may be considered if the claim submitted was incorrect.

For pre-award cases, the penalty should be calculated in the normal way - see CCM10790. This balances the need for a deterrent against the fact that the customer has not received any overpayment as a result of their error.

If the incorrect claim resulted from fraudulent/non fraudulent behaviour then any penalty can be charged up to £3,000. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)