Forum Home → Discussion → Housing costs → Thread
OVERPAID COUNCIL TAX SUPPORT, OFFICIAL ERROR
There are two Council Tax Support / Reduction schemes. One is for working age…which is a local scheme that the LA can decide the rules and one for those of pension age. The latter is a prescribed national scheme and the local authority has no power to adjust it except to make it MORE generous.
So it will not affect your discretionary request. But just to be clear…you must first ask the Council to use its powers under the Act to award a discretionary (that is not limited in any way). If they consider such an application and refuse only then can you raise the matter with the VT.
What you cannot do is to ask a VT to consider the discretionary without it being raised first with the Council. Your request would be rejected by the VT. Unlike a First Tier Tribunal a VT cannot consider any issue raised by a decision….they can only look at individual issues that have already been considered and rejected by the Council. But there is nothing stopping you making such a request at any time on behalf of your client….even if other issues have already been raised before a VT. .
Incidentally there is no fund for discretion and no restriction on the amounts….as the President of the VT pointed out a discretionary is merely reducing the amount of liability. Unlike a DHP for instance, no cash is actually paid.
Here are the 16 points the President of the VT set out to help those dealing with a discretionary appeal:
25. The following points are designed to assist billing authorities, council tax payers
and Tribunal members and clerks in dealing with these appeals:
(1) The focus of an appeal as opposed to a review is fundamentally different: full
appeal reaches further and assesses the actual merits of the decision reached.
(2) Some deference should, however, be paid to the view of the original decisionmaker
and an effort made to understand how that decision was arrived at, but
that cannot prevent the Tribunal from substituting its view for that of the
authority provided that the Tribunal can articulate cogently why it is doing so
and how it has arrived at its conclusion.
(3) The authority’s decision does not have to be unreasonable in the Wednesbury
sense before it can be set aside, but the Tribunal should intervene only where
there are strong grounds for doing so.
(4) It may not be an exact parallel, but the Court of Appeal will allow an appeal
against sentence only where the sentence is wrong in principle. This suggests
that some restraint should be exhibited by the Tribunal before disturbing a
billing authority’s decision.
(5) Procedural defects may recede in importance, or be completely effaced, since
the Tribunal will be chiefly concerned with the actual merits of the decision.
Earlier defects in process may therefore be cured or superseded by the appeal,
and a decision may be adjudged correct despite defects in process.
(6) Although a scheme or policy is not required by statute, it is difficult to see
how such an open-ended discretion can be satisfactorily exercised in the
absence of one.
(7) Any such policy should be scrutinised by the authority’s lawyers before
promulgation.
(8) Compliance with a formal published policy or scheme, if there is one, cannot
preclude the Tribunal from allowing an appeal.
(9) Any such scheme is not immune from challenge in the Tribunal as, for
example, is a council tax reduction scheme (see para. 13 above). It is not the
Tribunal’s business to impugn any scheme as such but rather that its own
powers cannot be inhibited or circumscribed by a scheme.
(10) Failure to comply with a substantive element of a scheme to the detriment of
the applicant is likely to lead to the overturning of the decision unless there are
good reasons for having departed from it.
(11) However, compliance with a scheme or policy may help in persuading the
Tribunal that the original decision was correct.
(12) The Tribunal should be slow to interfere with a decision that properly flows
from a determination made under section 13A(7).
(13) An authority cannot as a matter of law fetter its discretion and must therefore
consider every application on its merits whatever the policy or scheme says.
(14) Suppose, for example, there is a provision that non-essential expenditure
should be disregarded when calculating legitimate outgoings and determining
disposable income. The Tribunal could conclude that the item was wrongly so
characterised and should be included. Or that on its specific facts it should be
included. Thus, mobile phones might normally be treated as a luxury but
might become a necessity if the appellant is a carer who might need to be
contacted urgently when not at home. Or a subscription to a satellite
television service might have to be accepted if the appellant is locked into a
contract that pre-dates his financial difficulties.
(15) A factor which cannot have any relevance for the Tribunal is an overall budget
created by the authority for the totality of discretionary applications in a given
year so that any application will be considered in relation to the available
budget and once that sum is exhausted no further applications can be granted.
I do not see how in law this can be a cash-limited exercise. The merits of an
appeal cannot be affected by the existence of any such budget. A “budget” is
in any event a somewhat artificial concept in view of the fact that the authority
is forgoing income and not spending existing funds.
(16) Where the Tribunal is minded to allow the appeal and order a recalculation but
is unsure of the actual amount to substitute, the appeal may either be
adjourned for the parties to supply whatever further information is needed to
reach a decision or it may conclude the appeal by quashing the calculation and
ordering the authority to recalculate properly. The former is likely to be the
better course in most cases.
.
There are two Council Tax Support / Reduction schemes. One is for working age…which is a local scheme that the LA can decide the rules and one for those of pension age. The latter is a prescribed national scheme and the local authority has no power to adjust it except to make it MORE generous.
So it will not affect your discretionary request. But just to be clear…you must first ask the Council to use its powers under the Act to award a discretionary (that is not limited in any way). If they consider such an application and refuse only then can you raise the matter with the VT.
What you cannot do is to ask a VT to consider the discretionary without it being raised first with the Council. Your request would be rejected by the VT. Unlike a First Tier Tribunal a VT cannot consider any issue raised by a decision….they can only look at individual issues that have already been considered and rejected by the Council. But there is nothing stopping you making such a request at any time on behalf of your client….even if other issues have already been raised before a VT. .
Incidentally there is no fund for discretion and no restriction on the amounts….as the President of the VT pointed out a discretionary is merely reducing the amount of liability. Unlike a DHP for instance, no cash is actually paid.
Thank you for this information it is exactly what I wanted to know. With regard to raising the argument about 13A(1)(c)- does this have to be raised expressly? I came to this case late in the day. The VT is about 5 weeks away. The client asked for a reconsideration of the decision due to the Council’s errors which the Council then rejected. However as the client had no one to help him at this stage he did not expressly mention 13A(1)(c) because he knew nothing about it.
I am therefore unsure whether we have satisfied the requirement of raising 13A(1)(c) with the Council to the VT’s satisfaction. Advice on what I should do would be gratefully received. Would it be sufficient to put that in writing to the Council now? Or should I ask the VT for an adjournment?
Yes you must specially write in and request .....as soon as possible. Also ask the Council for a copy of their local policy on discretion in accordance with the President of the Valuation Tribunal’s guidelines set out above. If they don’t have one…...well they should and they should be clear on what the requirements are. CTS is no longer a new scheme after all.
Valuation tribunals tend to be very different from first tier tribunals. If the Billing Authority (Council) has not done as it should have ....then the VT will tend to find in favour of the appellant automatically.
Would I seek to adjourn? Not sure. If the Council agrees to a discretion then no need to continue with the hearing I guess. If the Council has not responded to the request then you are at liberty to raise it at the hearing. It might be that the VT will then decide to adjourn with directions to the Council.
Its good that you are taking this on….my view is that the Welfare sector has been somewhat remiss in this area. Rightsnet has often pointed to various reports from CAB and others about the huge numbers of Council Tax summons and growing debt…partly caused by working age claimants suddenly being asked to pay up to 30% of the annual liability.
Rather than just helping those in arrears try to restructure that debt I think many more requests for a discretionary should be made together with a request for the local policy. There is no cash limit as with DHP’s….every request for a discretionary can be met. VT members are almost itching to get stuck into this area now that we have clear caselaw. But requests for a discretionary are few and far between.
If your clients genuinely cannot afford to pay their Council Tax arrears then the Council almost certainly must reduce the liability / write the debt off…..and if they don’t or refuse a VT will almost certainly invite them to do so. In a sense this is far more of a mandatory requirement than say a DHP.
With full apologies to those that do help their clients apply for a discretion!
Here is an example of a test case decided by the President to highlight this:
2. Mr and Mrs W.
49. It very quickly became apparent during the course of the hearing that the authority’s
decision in this case was fatally and irretrievably flawed. Mr S for the Council
did not resist this conclusion but asked for the matter to be remitted to the Council for
fresh consideration.
50. Mr and Mrs W., both unemployed and in receipt of benefits, received full council tax
reduction, leaving 25 per cent of the council tax to be paid. This amounted to £289.54
or £5.55 pw. They have no savings and are deeply in debt, with arrangements with a
number of creditors to make modest regular payments to clear these debts, though the
rate of payment is such that it is unlikely they will be cleared in the foreseeable future.
There are also arrears of council tax prior to 2013/14. The Council itself calculated a
shortfall of £72.34 in their income to meet existing liabilities and outgoings.
51. Nevertheless, the Council rejected the application for discretionary relief. The officer
who took the first decision explained that discretionary relief was available only
where “an exceptional circumstance has caused . . . distress and/or severe financial
hardship”. It was acknowledged that the council tax bill “caused you some financial
issues, [but] I do not consider you have exceptional circumstances”. The second
officer was even more explicit:
“A discretionary council tax reduction can only be granted where the
council is satisfied that an exceptional circumstance has caused you distress
and/or severe financial hardship.”
52. Thus, to qualify for relief, there had to be some exceptional circumstance that had
caused severe financial hardship. Furthermore, in its submission to the Tribunal the
Council observes that the appellants’ hardship would not be resolved by an award,
given their inability to meet their other debts, and their situation was long-standing
and unlikely to be resolved in the short term.
53. I commend the Council for having a published scheme, though it would have
benefited from legal scrutiny and revision before publication. It is unnecessary to set
out a detailed analysis of the scheme, but suffice it to say that it offers no support to
the approach taken by the two decision-makers, still less to the extraordinary
statements in the submission. Mr S (who was not responsible for that
submission and had not at that stage been consulted) does not disagree.
54. The simple fact is that there is no surplus income to meet this bill. The respondent
accepts that. It is difficult to imagine a clearer case for discretionary assistance. To
deny help on the grounds that this situation owes nothing to exceptional
circumstances, or that absent an exceptional circumstance relief is unavailable, or that
their situation cannot be measurably improved by any relief granted strikes me as
perverse, irrational and unsustainable.
55. It is, in my judgment, as clear as it may be that the appellant is entitled to
discretionary relief; that there is no plausible or rational basis for limiting that relief to
12 weeks or any other period; and that only full remission of the residual council tax
for the year makes any sense in view of the absence of any funds to meet their
liability. I rule accordingly. No doubt the Council will revisit their scheme in the
light of this decision.
ORDER
The respondent Billing Authority is ordered, pursuant to reg. 38(1)(d) of SI 2009 No
2269, to quash its calculation in respect of the council tax liability for
2013/14 and to recalculate that liability under section 13A(1)(c) of the LGFA 1992 so
as to reduce that liability to nil.
Could you post the case reference for that unless I’ve missed it
It’s on page 10 of this: http://www.rightsnet.org.uk/?ACT=39&fid=8&aid=762_gLwY9kqCprHFT4LPy7tJ&board_id=1
It’s the same case from which the 16-point guidance cited above is taken.
The position we are left in by this case and Tom Royston’s case is:
- a “merits” appeal can be made to the VT concerning refusal of a discretionary reduction
- that discretionary reduction must be disputed with the Council before the VT can address it. The VT cannot introduce s13A(1)(c) discretion on its own initiative in appeal against a CTR decision under s13A(1)(a): the two are separate
- but, in the light of Tom’s case as I understand it, the procedure can be condensed a bit. When a Council decides that a CTR claimant has received too much CTR and slaps it back on the CT account as arrears, it is implied that the Council has elected not to make a discretionary reduction under s13A(1)(c) at the same time. The claimant may therefore dispute the failure to make a discretionary reduction without having to submit a separate free-standing application for one.
- if the Council rejects that grievance, the claimant may then appeal to the VT
This cuts out one layer at least.
Just to update - I spoke to Tom Royston yesterday who advised as follows -
The case won on the substantive issue which was that a Valuation Tribunal accepts that a claimant can appeal if a LA has not used discretion (under s13A(1)(c) Local Government Finance Act 1992) not to recover an overpayment if it was caused by official error and the claimant could not reasonably have known they were being overpaid.
However, rather unfortunately, it also said that the claimant must specifically make a grievance that the LA has not expressly considered whether to use its discretion on those grounds. ...
Can anyone say if the VT will in practice be inclined to apply the old ‘official error’ type principles (on grounds of fairness), where there are no strong financial hardship grounds as well?
No. There is no such thing in CTS as an “overpayment”. There is merely a change to the total Council Tax liability, an adjustment to the bill. CTS is part of Council Tax legislation not of a benefit.
The Vice President of the VT has determined that all such appeals should be struck out. A person can still make a request for a discretionary later though.
No. There is no such thing in CTS as an “overpayment”. There is merely a change to the total Council Tax liability, an adjustment to the bill. CTS is part of Council Tax legislation not of a benefit.
The Vice President of the VT has determined that all such appeals should be struck out. A person can still make a request for a discretionary later though.
Yes, sorry if I wasn’t clear. Hypothetically:
a claimant is credited with too much CTR, due to an error by the council. S/he asks the council to write off the subsequent large bill, under 13A on grounds that the council was at fault, not the claimant. The council’s policy on 13A only refers to financial hardship, so they will refuse.
Are the VT then likely to be interested in arguments on whose fault this late bill was, or will they simply say “You should be able to afford to pay the bill, so there is no need for a discretionary write-off”.
In your example, I would certainly be tempted to make the argument and base it on the discretion. For instance, that your client was paid x amount in error, relied upon the decision and cannot now pay the bill without getting into other debt and so on. I would try to raise issues about estoppel etc and emphasize the very wide powers of discretion and point out that the VT can intervene or they can “invite” the Council to reconsider.
If the VT decided they could not in fact intervene as this was outside their jurisdiction, then it seems to me there is then the clear right to refer the matter to the Local Government Ombudsman.
In principle, it cannot be right for the local authority to get away with significant errors with no financial recompense. A few weeks delay in implementing a change is one thing but lets say they wrongly awarded the family premium to a person of pension age and in a years time realised their error and demanded the money back…...
LA’s were given more powers to raise funding a couple of years ago…..for instance the ability to charge extra on empty properties…..and some of this money was supposed to go towards this type of discretion (rather than just increasing Chief Exec pay ever higher).
I must say our LA takes a sympathetic and common-sense approach to this issue and where usual official error grounds are established, the additional CT due is either waived or a DHP is awarded to offset the additional amount.
We try to take a common-sense view on these too. If there has been a LA error HB overpayment on the same case (for the same reasons) that we have decided to write-off, then we do a simple note to our Council Tax colleagues alerting them to this fact, and that we are writing off the HB overpayment, giving our reasons, and asking them to consider writing-off too. We are not telling them to write-off, and are not asking them to, we are merely suggesting from a consistency and common-sense viewpoint they might want to think about it. So, it’s still their decision, but their decision is taken in possession of all the facts.
The same logic applies even when there is no ‘aligned’ HB LA error o/p; if it’s just a CTS o/p, and it was caused by us, then we tell them that so they can consider this when deciding whether or not to recover that part of the liability from the claimant.
Just to clarify that a DHP cannot be used to cover a Council Tax debt caused by the withdrawal of CTS (unlike a CTB overpayment under the previous scheme).
I like the idea of notifying Council Tax where there is a clear error; good practice.
Thanks all, this is interesting.
As I said, our LA’s policy is restricted to financial hardship grounds. For example, discretionary applications are not accepted from anyone not currently entitled to CTR (a bit like DHP and HB awards). If there is an accompanying non-recoverable HB overpayment, that doesn’t seem to be a factor they take into account.