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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

Overpayment recovery

SarahJBatty
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Can anyone help to clarify what happens to recovery of a UC overpayment while a Managed Payment of ‘housing costs element’ is being paid to social landlord? 

Presumably recovered from the UC paid to claimant because its actually just an overpayment of UC itself as housing costs element is not a separate benefit?  Any circumstance where, if the overpayment relates to housing costs element, it could be deducted from the housing costs element being paid as a Managed Payment?

I’m not thinking of a ‘recovery from landlord’ situations but a ‘recovery from claimant’ like the common situations in current HB system, which often relate to things like non-dependents , and where deduction made from ongoing HB whether paid to landlord or not.

Daphne
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Reg 11 of the Social Security (Overpayments and Recovery) Regs 2013 - http://www.legislation.gov.uk/uksi/2013/384/made - covers deductions from UC - the only thing it says it that recovery of overpayment of housing costs is not subject to a limitation in the way that other deductions are.

I think because alternative payment arrangements are discretionary there is no ‘right’ for the housing costs to be paid to the landlord. So I think the deduction is made from the UC award and, if DWP agree to make an alternative payment arrangement to the landlord, then they will just pay the full amount of housing costs - the whole point of the APAs is to avoid rent arrears after all. And so long as they’re recovering the overpayment they probably don’t care.

But I am speculating - do you want me to send a question through to the UC team?

FIT Advisor
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Good question, my guess it would be from the UC paid to customer,I assumed that APAs when arrears were at 2 months there was a ‘right’ in respect of agreement. Might be good to get some clarification.  At least this shows we are starting to really think about how UC will work and the differences between what happens with HB in same situations. Of course I am assuming there is some ‘personal’ UC due and it is not only the housing element, full or partial that is due. In this case we may find the APA is affected.

[ Edited: 3 Feb 2015 at 07:24 am by FIT Advisor ]
SarahJBatty
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I thought so too Daphne, but yes clarification would be helpful, as I have read that landlords in North West have already found expected payments of APA are ‘short’, so we need to know that this is or isn’t a potential reason.

Daphne
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will chase it up and see if i get anywhere

Daphne
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This is the reply I received from operational stakeholders -


Whether a managed payment is made depends on whether there is sufficient UC in payment to do so.  This is because UC is a single payment (not various amounts for means-tested out of work and in-work benefits plus housing benefit), and we make any deductions that are needed from the whole sum. So we add up the sums of money that are attached to the various UC elements the adults and relevant child dependents are entitled to, then

- make any necessary reductions in light of the capital, income and earnings available to the assessment unit, and in light of the benefit cap
- make any reductions necessary for conditionality sanctions attributed to the benefit unit
- take account of any fraud sanctions, and then any deductions, Managed Payment to landlord, third party deductions (this could include rent arrears), sums for overpayment recovery and repayments of any short-term/ budgeting advances etc.

(in that order) and what’s left is the actual amount of that will be paid to the claimant.

The managed payment of rent to the landlord (equivalent to the housing element) will be made if there is sufficient UC in payment. This may not be the full rent charged if the claimant has other income which in turn has reduced the UC award and Housing Cost Element of that award.

As long as the amount of the UC award was high enough to cover both of the deductions, the two would run simultaneously. If the amount to be deducted exceeds the available remaining UC , then the Managed Payment to the Landlord (rent paid direct)  would be paid first as it is a priority deduction.

SarahJBatty
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Thank you for getting this reply Daphne and posting it. 

I think this makes it clear that the Managed Payment to landlord (or ‘APA’ as they seem to be known) will be an amount equivalent to the housing costs element included in the UC calculation (an amount which may fall short of full rent for reasons of HCC, ineligible service charges and bedroom tax).  Any overpayment recoverable from claimant is recovered from what’s left of the claimant’s UC.

Daphne
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yes - that’s how I understand it too Sarah

FIT Advisor
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Good that they are clear that UC is seen as a ‘whole’ and they include sanctions, so depending on what is left they could impact on APAs.