overpayment of benefit via esa official error

I have a client who was migrated from IB to ESA earlier on in the year (yep, we still have a few)

DWP has made a mistake. Gave her trans protection on her award, paying £105 a week

They also, on top of this, paid the work related component of £29.05 a week

This extra income generated a higher council tax bill, as applicable amount is 102, yet she got 134 as DWP messed up.

She has mistakenly paid back the money to DWP (i know, she didnt need to) however LA are saying thats irrelevant : her council tax bill for that period still stands as she received the extra income, regardless of wether she paid it back or not.

Thoughts? She has been told she has to pay extra 6 quid a week for this period, and they want it all within 21 days.

My understanding is they’re correct. I don’t think Regulations don’t allow for official error overpayments to be written off for localised Council Tax Reduction schemes in the same way that they do for say an official error overpayment of HB. Your LA might have a discretionary fund the client can apply to which is set aside for exactly these situations, may be worth enquiring about…

I was going to say the same as Samiam.

Also you could try a complaint to ESA and a request that it is considered for an extra statutory payment to the value of the CTR entitlement lost. It does sound like it is ESA’s mistake that caused the loss of CTR and left her out of pocket and they can pay compensation for specific expenses caused by their mistakes. Worth a letter anyway.

Your LA might have a discretionary fund the client can apply to which is set aside for exactly these situations

Whether or not there is such a fund, the council must always have discretion to reduce or write off a debt, under s13A(1)(c) of the Local Government Finance Act 1992. Previously:
http://www.rightsnet.org.uk/forums/viewthread/9187/

They are not generally quick to exercise this discretion, of course. E.g. the end of this Sunderland council document says that Sunderland City council have never used this power.

I woud guess that Jane OP’s answer is probably more likely to succeed.

The arguments about “excess” CTR and official error don’t apply here - this claimant is saying that she received too little CTR originally, not too much.  The income that was taken into account was incorrectly paid and has now been repaid.  The old Leeves case concerning overpaid student finance is relevant here: it is correct to take into account income that a person is not entitled to unless and until there is a crystallised obligation to repay it.  What I find slightly unsatisfactory about Leeves is that it seems the income is not removed retrospectively even if it has to be repaid retrospectively- so you end up worse off than you would have been if everything had been correct in the first place.  The facts in Leeves were:

- abandoned course 27 April
- asked to repay grant 24 May - all grant paid for period from 28 April onwards was to be repaid

The Court of Appeal decided the grant no longer counted as income from 24 May, but apparently did count as income before that date even though the grant received for the four weeks leading up to 24 May had to be repaid to the awarding body.

http://www.bailii.org/uk/cases/UKSSCSC/1998/CIS_12263_1996.html

Applying Leeves to the OP’s client, she has repaid the overpaid income but her CTR assessment for that period still includes the income.  This makes her worse off by (assuming a conventional CTR scheme) 20% of the incorrectly paid ESA - just under £6 a week - but it seems to be correct in accordance with Leeves.

She could always appeal and see if the VTE takes a different view about retrospectively clawed back income; she could combine that appeal with a request for discretionary reduction which the VTE could deal with at the same time.  As long as the initial grievance to the Council is presented as a challenge to the income assessment or, in the alternative, a request for discretionary assistance equal to the amount of “lost” CTR, the VTE has jurisdiction to hear an appeal about both matters.