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Forum Home  →  Discussion  →  Housing costs  →  Thread

Overpayment of Wages

roecab
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Welfare benefits supervisor - Roehampton CAB

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Joined: 17 June 2010

Hi

My client was overpaid wages, approx £7,000 from October 2014 to March 2015, at the time he did not realise he was being overpaid and then the mistake was spotted. At the same time both HB and HMRC became aware and have issued overpayments of benefit.

Client is having to repay the overpaid wages

However, are the overpayments of HB and CTC correct as based on ‘actual income’?

Any help/clarification appreciated

roecab
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Welfare benefits supervisor - Roehampton CAB

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Total Posts: 465

Joined: 17 June 2010

A tribunal hearing is coming up about this case, so any ideas would be helpful. I cannot seem to find anything that confirms that the decisions are right, or wrong. My head tells me that it is correct, income although overpaid is income at the time it was paid.

Again any help is appreciated.

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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So the Council was using what it thought was the amount in payment - the official pay rate, while in fact the claimant was actually receiving more than this.  And now the employer wants the money back but at the same time the Council are saying there is an overpayment because the claimant was in fact getting more income than they knew about.  Is that the situation?

The old Leeves case (overpaid student income) is certainly authority for the money not to count as income as soon as the paying body wants it back.  But whether that has the effect of retrospectively making it not income for the period already gone is not terribly clear.  I think there was an assumption in Leeves that the demand for repayment was not retrospective - while the money was income it was income and the demand for repayment only changed things going forward.  So that doesn’t really help the claimant.

If the claimant is still on HB now, presumably the employer is clawing back the overpayment from future wages and that should be seen as reducing the claimant’s income now and eventually they will break even.  But if the claimant is no longer on HB, or no longer employed, they don’t have the advantage of current HB based on reduced earnings.

The long shot is to refer the Tribunal to the Quistclose case.  The facts are very different, but the Tribunal might accept that the principle extends to these circumstances.  The argument would be that the claimant held the excess wages on trust for the employer and so was never beneficially entitled to the income at all.

roecab
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Welfare benefits supervisor - Roehampton CAB

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Total Posts: 465

Joined: 17 June 2010

Thank you, that makes sense and is helpful!

Cheers Anorak