recoupments

Recoupment is a financial term referring to the act of recovering money that has been paid out. This typically occurs when a payment was made in error, under circumstances where a refund is due, or as part of a contractual agreement. For example, an employer might recoup overpaid wages from an employee's future salary, provided this is legally permissible and agreed upon.

In legal contexts, recoupment can be a defense in a lawsuit. If a defendant owes a plaintiff a debt, they might argue that they are entitled to recoup certain damages or costs incurred due to the plaintiff's actions related to the same transaction. This effectively reduces the amount the defendant owes. Insurance policies often include recoupment clauses, allowing an insurer to recover funds paid out for a claim if it's later determined the payout was improper or if the insured party receives compensation from a third party responsible for the loss.

Government agencies may also engage in recoupment. For instance, if benefits were overpaid due to administrative error or fraud, the agency will seek to recoup those funds. This process is generally subject to strict regulations and may involve payment plans or deductions from future benefits. The specific rules and procedures for recoupment vary significantly depending on the jurisdiction and the nature of the transaction.