Overpaid DHP

I may be missing something here, and I am not sure if this helps you anyway, but why doesn’t the council just award a DHP to commence after the number of weeks in which he he got full HB? The D stands for Discretionary - I can’t see what would stop them doing this.

In terms of what they have done, I am not at all sure that they have the legal power to reduce a DHP to recover an overpaid DHP.

Here is the DHP Guidance Manual - http://www.dwp.gov.uk/docs/discretionary-housing-payments-guide.pdf

Looks like they have to invoice him - it does not mention recovering it from future award of DHP.

If the clients rent account was up to date prior to the DHP issue then surely his rent account is in credit because he has received money for the same period twice (once DHP and the other time underpayment of HB) so DHP could be held back for x weeks as the outcome is the same and his rent account won’t be behind??

I’ve quoted the DHP guidance at them…but their attitude was that it doesn’t say that they can’t recover from a subsequent DHP award.

He has only been awarded the DHP for the periods when he was not in reciept of full HB - and the overpaid DHP came from when he had a change of circs, which resulted in him being entitled to full HB for a short period but they had already paid the DHP for some of those weeks.

‘Holding back’ his current DHP to pay back the overpaid DHP is exactly what they are doing - which is the same as deducting the overpayment from his DHP.

Unfortunately there is no credit on his rent account - he’s very close to eviction for arrears, so receiving lower that expected payments could put him in breach of the court order.

I’m not sure that the overpayment is recoverable - no error made in awarding it, and no failure to disclose - just a change of circs that was declared…so I’m arguing it on this ground already…

The council say that the DWP have confirmed that ongoing DHP can be used to recover overpaid DHP.  Not sure how to proceed if they stick to this.  Is the recovery decision appealable?

In the absence of any specific legislative provision on the point, the common law arrangements apply.

So where the Council owes the applicant something and the applicant owes the Council something they can be offset.

As DHPs are by definition discretionery surely the LA can simply use their discretion to stop any current award.  They can say in effect, “we are not going to pay you any more DHP until you pay us back the money you owe us”. 
This would have the same effect as recovering the overpayment from the current award.

Well the LA have now accepted that the DHP is not recoverable from the claimant because it was not due to an error or a misrepresentation or a failure to disclose.

So they are now going to invoice the landlord.

Anyone got a brick wall so I can bang my head against it.

I think Andy’s point is quite powerful and I am not sure the authority in this case entirely understands it.

If the DHP is not recoverable but they feel in principle it would be fair to recover it, they can achieve the same result by saying “OK, keep it - don’t worry.  As it happens we were going to award you a DHP from now going forward, but in view of your windfall we won’t do that after all.  We might think about another DHP after you have had a chance to spend your windfall on the next few months’ rent”.

So they are no offsetting current DHP against past DHP, they are simply saying that the unrecoverable past DHP affects their attitude about whether to award any DHP now.

The circumstances in which overpaid DHP’s can be recovered is prescribed by DFA Regulation 8(2)

“(2) Without prejudice to the generality of paragraph (1) above, a relevant authority may, on any such review, cancel the making of further such payments and recover a payment already made where that authority has determined that–
(a) whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, a material fact and, as a consequence of that misrepresentation or failure to disclose, a payment has been made; or
(b) an error has been made when determining the application for a payment, and as a consequence of that error, a payment had been made which would not
have been made but for that error.”

DHP’s may have replaced the discretion under Regulation 69(8) of the 1987 Regulations to increase the amount of HB paid to a claimant, but the current DFA regime is to a large extent self contained, entitlement to Housing Benefit being nothing more than a condition of entitlement to be considered for a DHP award. Any error in this case would have been amde in determining the HB award, NOT in determining the application for the DHP

The Discretionary Fincancial Assistance Regulations were made under S69 of the Child Support Pensions and Social Security Act. The enabling legislation for HB is S134 of the Social Security Administation Act 1992 so DHP’s are clearly not awards of housing benefit.

There is no provision in the DFA regulations for treating retrospective payments of benefit or other income as a change of circumtances which has a retrospective effect on entitlement. There are such provisions in the HB Regs [CF HB Reg79(6) and (7)]. If there was such a provision in the DFA Regs a large proportion of DHP’s would effectively be paid as loans.

It is therefore arguable that the DHP’s were correctly paid at the time they were paid because the claimant needed extra help with housing costs at that time. In the absence of an equivalent to HB Reg 79(6) and (7) there are no grounds for a review to decide that the amount paid by DHP was overpaid.  I think the case R( Gargett) v LB Lambeth CA 18 Dec 2008 makes it clear that a DHP can in some circumstances still be awarded when full HB is in payment. I therefore don’t think there is any error under DFA Reg 4 if DHP’s were made and HB is retrospectively increased.

Income metamorpohses into capital if it has not been spent at the end of the period to which it pertains [R(IS)3/93 paragraph 22]. It is therefore arguable that any arrears of HB paid exempt will actually be capital rather than income when it they are eventually paid

What is more paragraph 9(1)(b) of Sch 6 of the HB Regulations provides:

SCHEDULE 6 Capital to be disregarded

9.—(1) Subject to sub-paragraph (2), any arrears of, or any concessionary payment made to compensate for arrears due to the non-payment of–

(b) an income-related benefit under Part 7 of the Act

Sub paragraph (2) provides:

(2) In a case where the total of any arrears and, if appropriate, any concessionary payment referred to in sub-paragraph (1) relating to one of the specified payments, benefits or allowances amounts to £5,000 or more (referred to in this sub-paragraph and in sub-paragraph (3) as “the relevant sum”) and is–
(a) paid in order to rectify or to compensate for, an official error as defined in regulation 1(2) of the Decisions and Appeals Regulations; and
(b) received by the claimant in full on or after 14th October 2001,n sub-paragraph (1) shall have effect in relation to such arrears or concessionary payment either for a period of 52 weeks from the date of receipt, or, if the relevant sum is received in its entirety during the award of housing benefit, for the remainder of that award if that is a longer period.

Housing Benefit is an income related benefit under part 7 of the Act, and the long and the short of it is that arrears of housing benefit is capital that falls to be disregarded for at least 52 weeks from the date of receipt.

The provision in Sch 6 would not be necessary if it were not for the deeming provisions in Regulation 79(6) and (7) to take arrears of income into account from the date the income would have been paid if paid on time.

Given that there is no equivalent to Regulation 79(6) and (7) in the DFA Regulations, the arrears of HB should therefore be considered to be capital without question. That capital is obviously something to be considered when determining whether the person needs ongoing further assistance with housing costs. That seems to me to be no more than common sense, but all the circumstances need to be taken into account, the capital is only one factor to be weighed in making the decision..