I have a client who has been overpaid Council Tax Benefit for the period May 2006 - March 2008.

The overpayment has been caused by LA official error, and we are suggesting it should not be recovered as he could not have reasonably known that he was being overpaid.

My query is this: the Council Tax Regs say that excess benefit will not be recoverable if the claimant, at the time the benefit was allowed could not……

Does "allowed" mean at the time his 2007/8 council tax bill was reduced due to the award of CTB, so that if he did not realise at this time ie when the year's CTB was allowed, that the whole of the year's award cannot be recovered?

I'm sure it doesn't but I thought it was worth asking

hi glenys,

Commissioner Jacobs discusses the meaning of council tax benefit being 'allowed' in CH/602/2004
as well as the issues of 'official error' and 'reasonably expected to realise'.

The usual rules apply for the period May 2006 to the date on which the LA's o/p decision was made (not necessarily the date of notification).

However, for the period from the day after the date of the LA's o/p decision onwards, the o/p is always recoverable; irrespective of cause / fault etc. This is courtesy of CTBR 83(5). This provision is not discretionary.

In terms of the "allowed" argument, the "expected to realise" also applies to the time of ANY notice relating to the allowing of CTB. Notice will include notification letters for the new year uprating.

hi glenys

i don't know whether it will help or not to have a look at the following discussion, where Kevin and I get into it on overpayments calculated to the end of the tax year... : )

http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=102&topic_id=4846&mesg_id=4846&page=2

broadly speaking, i agree with kevin's advice, but not for the same reasons - although our disagreement may be largely semantic in most cases...

CTBR 83(5) says
"Where in consequence of an official error a person has been awarded excess benefit, upon the award being revised or superseded any excess benefit which remains credited to him by the relevant authority in respect of a period after the date of the revision or supersession, shall be recoverable."

in the normal run of cases, i don't see why after a revised decision and re-billing, any excess payment would remain credited to the council tax account to require the application of this provision.

the existence of the provision, imo, doesn't validate the inclusion of periods which are in the future, in periods of overpayments, which are past periods...


i accept that there is nothing new about awarding CTB for the complete tax year, but there is something new about including the complete tax year in the overpayment period.

i hadn't seen the above commissioner's decision at the time of the discussion unfortunately...

i don't think your question would have arisen if the overpayment period was calculated from the start date to the date it was discovered and the award revised rather than to the end of the tax year...

Hi jj,

"the existence of the provision, imo, doesn't validate the inclusion of periods which are in the future, in periods of overpayments, which are past periods...".

I'll have another go at trying to explain .

The "problem" starts at CTBR 82 which provides for the "Meaning Excess Benefit".

HBR 82: "In this Part "excess benefit" means any amount which has been allowed by way of council tax benefit and to which there was no entitlement under these Regulations (whether on the initial decision or as subsequently revised or superseded or further revised or superseded) and...........<snip>". Emphasis is mine.

The word "any" is the crux. If, say, in March 2007 a LA awards CTB for the period April 2007 to March 2008, there is no question that CTB has been "allowed" for the period. After all, it has in fact been credited to the CTAX account.

Later, it is found that the clmt did in fact have more than £16,000; (not PC(G)) AND the o/p resulted from an oversight or omission by LA. The LA spots it on 1st July 2007 and makes its decision on that day that there has been an o/p since April 07.

The starting point is that ANY excess benefit is recoverable (CTBR 83(1)); subject to CTBR 83(2). At this point, there is "excess benefit" for the whole period from April 07 to Mar 08 courtesy of CTBR 82; because it has originally been "allowed" for that period AND there is now no entitlement to it.

The LA next decides the o/p is irrecoverable under CTBR 83(2). But, CTBR 83(2) is itself subject to CTBR 83(5).

And, it is under CTBR 83(5) that excess benefit for the period 2nd July 2007 to 31 Mar 2008 remains recoverable, irrespective of "fault" or "blame".

Have I managed to clear the fog this time?

not really kevin. : ) although... i don't think it's fog, more a straight disagreement in interpretation...and we might have to agree to disagree until the matter is conclusively resolved...it could just be that i'm stubborn... : )

at a risk of confusing glenys, which i wouldn't want to do, and she has walked into this dispute in all innocence : ), i still think it's wrong to calculate the overpayment to include up to the end of the tax year, and believe the overpayment period should go up to the date of the revised decision.

the revised decision would AMEND the amount of council tax benefit awarded in the tax year, generate a revised council tax bill, and i would expect, result in an accounting adjustment on the amount credited to the council tax account in the coming period.

in other words, using your July example - the period April to July would be subject to the decision on overpayment recovery, and the period from July to end of March would be covered by the revised decision, which one assumes awards the correct or nil amount of council tax benefit for that period - so normally, i wouldn't expect there to be _any_ excess payment remaining after the revised decision.

now - i'm not saying that CTBR 83(5) has no application, but i am questioning that it would apply to most overpayment cases - simply because i can't see why there would be an excess payment _remaining_ after revision; and thinking of timeous c/o/c reports which result in a reduction- if the amendment to the CTB award had no effect because the original award was for the complete tax year,as your argument seems to imply, this would result in overpayments being raised from the date of the coc to the end of the tax year, and possibly inner city riots... : ) this doesn't happen. why? because you just revise the award, amend the CT account and issue a revised bill. i don't see any difference...

there are always exceptional cases, and CT legislation being what it is, i would expect them to be covered. the commentary in Findlay suggests that para (5) is the equivalent of HB reg 100(4), which applies to rent rebate cases... i don't pretend to understand it, but the analysis commentary to para (4) sets out 4 conditions - the first one - that there has been a revision of the award - suggests that it doesn't appear to apply if the award is correct, but for example, the claimant is credited twice on the account due to official error...granted there is some ambiguity here, but i take it to mean that the revised award is correct, unable to make sense of it otherwise...condition 3 refers to a credit in respect of a period after the date of revision... etc

so although i struggle to imagine what sort of case would trigger CTBR85(5), i accept that there may be such cases, i just don't think it would apply to most overpayment cases ...where the revised decision wil normally take care of the period after the date of the revised decision to the end of the tax year, leaving the overpayment period to be a past period when the award was incorrect, up to the date the award was corrected.

the law can make things seem very complicated. my starting point really is that an overpayment, once identified, is necessarily a past event and as soon as all the relevant facts are in the possession of and recognized by the authority, future payments are entirely in the control of the authority. in practice, this would not really be an issue, except for the fact that there is a huge efficiency gap between benefit/dispute processing, and recovery and enforcement. the man on the clapham omnibus, i suggest, would struggle to understand how an authority could fairly maintain that he _had been_ overpaid in a period not yet arrived, when it is in the authority's power not to overpay him in that future period.

the only reason i see for calculating an overpayment period to the end of the tax year instead of the date the decision was revised, is a computer software reason, not a legal reason... :-0

jj:

Well, you managed to motivate me to go digging .

Maybe we will still have to agree to disagree, but, I've now managed to unearth a couple of CDs that are of interest (cited at the end).

The crux *appears* to be whether an overpayment can be in the future. In my view, the combination of CTBR 82 and CTBR 83 provides for exactly that.

To move it on one stage.....

If, for the sake of argument, your suggestion is correct and the "future" amendment has nothing to do with CTB, then any change relating to CTAX would fall outside the remit of the CTB regs. At first glance, so what? But there are a couple of consequences that would potentially disadvantage a clmt such as:

1) there would be no right of appeal as to the calculation of the "future" adjustment (as it wouldn't be CTB);

2) there would be no possiblity of subsequently applying underlying entitlement to excess benefit for the "future" period.


The underlying entitlement scenario is an odd one. But, it's conceivable that a clmt could become "entitled" again for a period before the end of the tax year. If so, the clmt may not necessarily need to make a new claim - the clmt *may* be able to simply request that the LA applies underlying entitlement on the previously identified "future" excess benefit (caution: all sorts of provisos here.....!).

As indicated above, there are a couple of CDs where CTBR 83(5) has been at issue.

In CH/4227/2004 & CH/2879/2006, Cmmrs found that "future" CTB was recoverable; specifically relying on CTBR 83(5) <84(5) as it was pre-consolidation>. There was no suggestion that "future" CTB counted only as an amendment to CTAX liability.

I pity the Cmmr that ever needs to consider the arguments in this thread .

Regards

hi kevin

i've only just spotted your reply - it's been one of _those_ days... : )

whether this particular point will ever reach the commissioner remains to be seen but yes, he or she will need a supply of aspirins, i think...: )

i'll have a look at those decisions when i get a moment.

i am now in a bit of a fog : ) - you've lost me, i'm afraid, and i suspect we are somehow talking at cross purposes, like peter pan and the neverbird... : )

i don't see anything that i've said which would lead to your interpretation above - and i'm puzzled by why you think i've suggested anything taking this outside the remit of CTB???

anyway, i'll get back on this when i've looked at the decisions...

have a good weekend

jan

hi kevin

i couldn't find the decisions on the Commissioner's website or rightsnet...i hesitate to ask...i'm not even sure i want to see them...: ) and i'm on leave next week...(my home internet connection is up the swanee so i can promise you i'll shut up for a whole week! : ))i do want to see CH48/2006, which i also haven't yet located, regarding the need for assumed non-dep deductions to be grounded in reality...which applies to the case which started me off on this...

i'll try to clarify my approach -

supposing a person is awarded £10 a week CTB at the start of 2006/07 for the complete tax year, the decision will be promulgated by the relevant administrators, and as i understand it this will include a credit of the annual amount of CTB - £520.

suppose on first of July, the person reports a change in circumstances from the first of July which reduces his weekly entitlement to £5 - the award is superseded and promulgated from 1/7/06.

(i know it's an old-fashioned word, but as far as i can see, the award is a legal decision, putting the decision into effect is a matter for the administrators, and it doesn't really matter how they do that, as long as the result complies with the law. i mention this because i think this is where the language problem lies).

i would expect that the person will receive a new benefit award notice, a revised CT bill, and somebody at the LA will go into the computer system and change the amount of credit awarded so that it comes out at £325 for the year instead of £520 - ie 13 weeks @ £10 and 39 weeks @ £5.00. I can't see any difficulty with the amount originally credited being amended from the period after 1/7/06, because after all, it is a future period, it is covered by a legal decision, and it isn't the same as a payment which has already been made.
although the person was originally credited with £520 and is now entitled to £325, there is no excess payment, because the award has been amended by a supersession, and the credit amount has been amended by administrative action. i've no idea of how the IT is set up, but it correctly doesn't throw up an overpayment in these cases.

suppose now, instead the report on 1/7/06 is of a c/c from 1/4/06 - the decision is revised on 1/7/06 from 1/4/06. From 1/4/06 to 1/7/06 the person was credited with £10 a week and was only entitled to £5 a week. He has been overpaid £65. Again, i see no problem with an administrative amendment to the credit due _after_ 1/7/06 - it remains a future period, and is covered by a legal decision - in this, i can't see any difference between him and the supersession person...

but from April to 1/7/06 is a different matter. the period is past, and the amount of credit awarded for the past period can't simply be altered administratively...

what i can't understand, is why the LA would say that he has been overpaid £195 from April 06 to March 07 instead of £65 from 1/4/06 - 1/7/06 (ish : )) there is nothing as far as i can see which stops them from administratively amending the amount of credit awarded to him in the period after 1/7/06 to the correct amount - it is not a past period and it is covered by a revised decision, and the LA is expected to pay/credit the correct amount when it is in its power to do so. why can this be done for supersessions and not revisions? why is it that the LA used to calculate the overpayment period 'correctly' as i would say, but now calculates it as the whole tax year?

added to which para 16 of schedule 8 (Notice where there is a recoverable excess payment)(e) the benefit weeks to which the excess benefit relates...and (b) the reason why there is an overpayment...

which as far as i can see, for £130 worth of the overpayment, is something like " we have decided to overpay you from July to next March and we want you to pay it back to us now!"

time i went home...

Hi kevin

don't know whether you've seen this?

http://www.rightsnet.org.uk/cgi-bin/sub_client/search.cgi?template1=briefcase/detail.htm&briefcase.ID_option=1&briefcase.ID=927144221348

haven't had time for a good read of it yet, but it looks very much like a slam-dunk for you! lol! i think this means that if our paths meet, i'm buying the beer! : )

have a good weekend, one and all.


jan

Fri 12-Oct-07 02:23 PM by shawn

(Edited to fix reference number)

I'm not a subscriber to the News section, but I'm assuming you're looking at CH/3076/2006.

On the face of it, it's very much in favour of LAs. BUT, I am struggling with the idea that the "future" credit is not by way of CTB. And, that aspect is contrary to previous CDs. Doesn't mean it's wrong of course, but there are now two differing views (see for example CH/1780/2005). From the clmt's viewpoint, it makes no difference - they still have to pay CTAX. But, if the "future" credit is not CTB, there is no right of appeal under benefits legislation in respect of the period covered by a "future" adjustment.

At the moment, I'm not sure which authorities I'll be following....

Good, innit?

jj's link goes to summary of CH/1384/2007

Perfect. Compare the two CDs, and the contradiction becomes clear as to how "future" "CTB" should be treated.

But, bottom line appears to be that the clmt has to pay CTAX.

hi Kevin - i still haven't caught up with this properly, and have only just found CH3076/06, so we have been talking at cross purposes (again)...!!! having a very hectic phase at the mo...can only suggest we buy two rounds of cyber drinks all round... : )

jan