The Social Protection Authority Demands the Return of Assistance: Is It Always Necessary to Return the Money
Receiving a notification from the social protection authority about the need to return overpaid state assistance often comes as a complete surprise. Sometimes it concerns several thousand hryvnias, and in some cases – tens or even hundreds of thousands, which, according to the state, were paid without sufficient legal grounds.
Such situations arise with assistance to internally displaced persons, low-income families, large families, state social assistance to persons with disabilities, temporary assistance to children whose parents evade alimony payments, as well as other social payments.
Legislation distinguishes between cases where overpaid amounts arose due to the wrongful actions of the individual and situations where errors were made by the state authority. This distinction determines whether the state can demand the return of budget funds. "Judicial-Legal Newspaper" examined when the recipient is automatically obliged to return funds and which decisions can be appealed.
What is considered an overpayment of social assistance?
An overpayment is considered to be budget funds paid to an individual without sufficient legal grounds or in an amount greater than provided by law. The reasons for such overpayments may vary. Most often, they are related to changes in circumstances affecting the right to receive assistance after it was assigned, or to mistakes made by the social protection authority during the assignment or continuation of payments.
At the same time, legislation adopts fundamentally different approaches to two categories of situations: when the overpayment arose due to the fault of the recipient and when it was caused by the actions or inaction of the authority itself.
When the State Has the Right to Demand the Return of Funds
Most regulatory acts governing the assignment of social payments adopt a consistent approach: overpaid funds must be returned if they were received due to the submission of false information or a failure to report circumstances affecting the right to assistance. This principle is enshrined, in particular, in the procedures for assigning state social assistance to families with children, individuals not entitled to a pension, and large families. It is also found in the Procedure for providing housing assistance to internally displaced persons, approved by the Cabinet of Ministers of Ukraine Resolution No. 332 of 20 March 2022.
For instance, funds may be demanded back if an individual: submitted false information about their income or property status; concealed employment or the receipt of other income; failed to report a change in family composition; lost the right to a specific type of assistance but continued to receive it; or provided documents that were not genuine.
In such cases, the social protection authority determines the overpayment amount, notifies the recipient of the need to return it, and sets a deadline for voluntary repayment. If the funds are not returned voluntarily, the matter may be resolved in court.
When Overpayment May Not Be Recovered: What the Law Says
Ukrainian legislation does not permit the automatic demand for the return of all overpaid social funds. The crucial factor is identifying who made the error that led to the overpayment.
The general rules for returning unjustly acquired property are defined in Chapter 83 of the Civil Code of Ukraine. Specifically, Article 1212 of the Civil Code of Ukraine stipulates that a person who acquired or retained property at the expense of another person without sufficient legal grounds is obliged to return such property. However, exceptions to this rule exist. For example, Article 1215 of the Civil Code of Ukraine explicitly states that wages, pensions, scholarships, alimony, assistance, and other monetary amounts provided to an individual as a means of subsistence are not subject to return if they were paid voluntarily, without accounting errors on the part of the payer and without bad faith on the part of the recipient.
In other words, if an individual received social assistance in good faith, did not conceal information, fulfilled all their obligations, and the overpayment arose exclusively due to an error by the state authority, the demand for the return of funds may be unlawful. This position has been repeatedly upheld by the Supreme Court, which has emphasised that the state cannot attribute its own mistakes to a citizen if the latter committed no wrongful acts or misled the authority.
The Most Common Overpayment Situations with IDP Assistance
Assistance for housing to internally displaced persons (IDPs) remains one of the most frequent subjects of disputes between citizens and social protection authorities. Following automatic information exchange between state registers, social protection authorities often discover instances where assistance continued to be paid after the right to receive it was lost. However, not every such overpayment automatically creates an obligation to return the funds.
Case one: the individual independently cancelled their IDP certificate. If an individual renounced their internally displaced person (IDP) status via the "Diia" app or other means, but payments continued for a period due to technical delays in information processing, the situation is assessed differently. In such instances, the individual was already aware they no longer held IDP status and, consequently, knew there were no legal grounds for receiving assistance. Therefore, the social protection authority may demand the return of overpaid funds.
Case two: change in property status. Another common reason for overpayment is a change in circumstances affecting the right to receive assistance. For example, an individual may have purchased housing, received significant income, or other circumstances may have arisen which, according to the Procedure approved by Cabinet of Ministers of Ukraine Resolution No. 332, revoke the right to payments. If the recipient was obliged to report such changes but failed to do so, the overpaid funds may be recovered.
Case three: the authority itself made a mistake. There are situations where the overpayment arose not due to the individual's actions but due to improper fulfilment of duties by the social protection authority. For instance, assistance continued to be paid to an individual who moved from a locality that was excluded from the list of territories where hostilities are conducted or which are temporarily occupied. If the individual did not conceal any information, did not submit false data, and acted in good faith, the mere fact of inaction by the state authority does not mean that the individual must compensate budget expenses.
Overpayments of assistance to large families: when money must be returned
Separate rules apply to assistance for children raised in large families. The procedure for its assignment and payment is approved by the Cabinet of Ministers of Ukraine Resolution No. 250 of 13 March 2019. Legislation provides several cases when such assistance payments are terminated. In particular, this may happen if the status of a large family is lost, one of the parents is deprived of parental rights, the child is placed under full state care, the death of the recipient or the child, as well as other grounds defined by the government resolution.
At the same time, the termination of payments itself does not automatically imply an overpayment. The obligation to return funds arises only when the overpayment resulted from the recipient's actions. If the family concealed information or submitted false data that affected the right to assistance or its amount, the social protection authority determines the amount of overpayment, notifies the recipient of the need to return it, and sets deadlines for voluntary repayment of the debt.
Legislation also provides for the possibility of withholding overpayments from subsequent social payments. Usually, the amount of such withholding cannot exceed 20% of the monthly assistance amount, if the recipient agrees to this method of repayment or if it is directly provided by the relevant procedure. If funds are not returned voluntarily, the social protection authority has the right to go to court.
Assistance for Persons with Disabilities: When Overpayment Occurs
A similar approach applies to state social assistance for individuals not entitled to a pension and persons with disabilities, as defined by the Law of Ukraine "On State Social Assistance to Persons Not Entitled to a Pension and Persons with Disabilities." Overpaid funds may be recovered if they resulted from abuses by the recipient.
Such abuses include, but are not limited to, submitting documents with false information, failing to report employment, concealing changes in family composition, and other circumstances affecting the right to assistance. In these instances, the decision to recover overpayment is made by the authority that initially granted the state social assistance. Even after such a decision, the law limits the amount of deductions from future payments to no more than 20% of the monthly assistance amount. If it is impossible to withhold funds in this manner, the issue is resolved in court.
If a Child Received Temporary Assistance Instead of Alimony
A separate category of disputes concerns temporary state assistance for children whose parents evade alimony payments, the procedure for which is approved by Cabinet of Ministers of Ukraine Resolution No. 189 of 22 February 2006. After such assistance is granted, the recipient is obliged to notify the social protection authority within ten days about any circumstances affecting their right to receive it.
For example, this includes situations where the whereabouts of the alimony payer become known, they begin voluntarily complying with the court decision, or the child is adopted. If such changes are not reported in a timely manner, the social protection authority determines the amount of overpayment, notifies the recipient of the need to return it, and sets a deadline for voluntary repayment of the debt. If voluntary repayment does not occur, funds may also be recovered in court.
What to Do if the Social Protection Authority Demands the Return of Funds
Upon receiving a notification about the need to return overpaid social assistance, one should not rush to transfer funds. First, it is necessary to clarify the grounds on which the social protection authority concluded that an overpayment occurred and whether its decision complies with legal requirements. It should be noted that not every overpayment automatically implies an obligation for the citizen to compensate the state for received funds. The decisive question is whether the overpayment arose due to the recipient's actions or was the result of an error by the authority itself.
The first step should be to obtain a full package of documents on which the decision to recover the overpayment was based. If such documents were not provided with the notification, the individual has the right to submit a written request to the social protection authority demanding a copy of the relevant decision, a calculation of the overpayment amount, information about the period of its occurrence, and references to specific legal provisions that served as the basis for the claim. After that, it is advisable to verify whether the individual was indeed obliged to report changes in certain circumstances and whether they fulfilled this obligation.
If all necessary information was submitted on time and the overpayment arose exclusively due to untimely processing of information by the state authority or a technical error, this may be grounds for cancelling the decision on its return.
Can the Decision of the Social Protection Authority Be Appealed?
If an individual disagrees with the demand to return funds, they have the right to utilise mechanisms to protect their rights. First, it is advisable to appeal to the social protection authority with written objections or a request to review the decision, stating their arguments and attaching documents confirming the absence of fault in the overpayment.
If the social protection authority maintains its decision or has already filed a lawsuit, the dispute is resolved in administrative proceedings according to the Code of Administrative Procedure of Ukraine. According to part two of Article 77 of the Code of Administrative Procedure of Ukraine, the public authority is obliged to prove the legality of its decision, actions, or inaction. In other words, the social protection authority must provide the court with evidence that the overpayment arose due to wrongful actions or inaction of the recipient. If such evidence is lacking, the court may side with the citizen.
What Courts Pay Attention To
Judicial practice indicates that when resolving disputes concerning overpayments, courts assess not only the fact of overpayment but also the conduct of the parties involved. Specifically, they determine whether the recipient reported changes in circumstances affecting their entitlement to assistance, whether they submitted false information, whether they could have realised they were receiving funds without legal grounds, and whether the overpayment arose exclusively due to an error by the state authority.
This explains why seemingly identical situations can result in vastly different court decisions.
A notable illustration is the Supreme Court ruling of 3 December 2019, in case No. 672/661/17. The social protection authority demanded the return of over UAH 73,000 in state social assistance, claiming the recipient failed to disclose the presence of real estate. However, the Supreme Court noted that the mere fact of non-disclosure is insufficient for recovering funds. It is necessary to prove that this information directly influenced the occurrence of the overpayment.
In another case, the recipient was compelled to return funds. In case No. 484/3052/16-c, the social protection authority filed a lawsuit to recover UAH 88,928.88 of state social assistance provided to a low-income family. The basis for this claim was that, during the assistance application, the woman provided false information regarding her husband's income and entrepreneurial activity, which impacted the determination of the right to receive payments.
During the case's consideration, courts established that not all payments were unjustified. Assistance assigned for one of the periods complied with legal requirements, but subsequent concealment of information became significant in determining the entitlement to social assistance.
The Supreme Court concurred that, concerning payments received through the submission of false information, the social protection authority had the right to demand their return. The court upheld the decision to recover UAH 88,928.88, noting that the law imposes on the applicant the obligation to report truthful information about family income and property status.
Recent practice demonstrates that social protection authorities are increasingly scrutinising the legality of state payment assignments and detecting cases of excessive budget fund transfers. However, an overpayment itself does not automatically obligate the citizen to return the received amounts. If the overpayment resulted from the submission of false information, the concealment of important circumstances, or other wrongful actions by the recipient, the law permits the state to demand the return of funds and, if necessary, to pursue legal action.
Conversely, when a person acted in good faith, fulfilled their legal obligations, and the overpayment arose due to an error or inaction by the authority, the demand for its return is not always lawful. In such cases, the recipient has the right to appeal the decision, referring, in particular, to Articles 1212 and 1215 of the Civil Code of Ukraine, provisions of the Code of Administrative Procedure of Ukraine, and established Supreme Court practice.
Therefore, upon receiving a demand to return social assistance, it is advisable not to rush into payment but to first verify the legality of such a decision, as this determines whether the citizen is truly obliged to return the received budget funds.
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