A new UTD has recently been issued - CH/0653/2009. A copy is being sent to Rightsnet.

I've mulled on this for a while and have decided to share some thoughts. Just for transparency, I have also posted on HBinfo, although in a different context.

In light of this latest UTD, I'm wondering if it now at least arguable that Tax Credits should not be taken into account as income in respect of a period for which there is no entitlement AND where recovery of any TC overpayment is being sought.

On the face of it, HBR 32 (& its CTB equivalent) appear to make it "clear" that Tax Credits income must be assessed over the period specified within that regulation. Indeed, this would be consistent with CH/1450/2005 & CH/4371/2006.

However, in CH/0653/2009, Deputy Judge Rowley dealt with a case where a payment of tax credits was taken into account for a period before entitlement commenced. The LA argued this was correct under HBR 32. However, it was argued for the clmt that HBR 79 set the date for changes of circs; not HBR 32. The clmt was successful.

Having looked at HBR 79, I can't see anything that allows changes in circs for Tax Credits to be treated differently from other income. In other words, it appears HBR 79 "trumps" HBR 32. If that is correct, it seems to be at least open to argument CH/1450/2005 etc were wrongly decided (because the HBR 79 argument was not considered).

If HBR 79 does indeed "trump" HBR 32, it must surely be arguable that any overpaid Tax Credits (where recovery is being sought) do not count as income for HB/CTB purposes.

Anyone else any thoughts?

here it is !

http://www.rightsnet.org.uk/pdfs/CH_653_09.doc

The final part of your post says it all for me.

Before CH/0653/2009 a claimant had nothing to lose by appealing but previous caselaw indicated that they were unlikely to be succesful at Tribunal as long as correct procedure was followed by the La with regard to notification etc.

Deputy Judge Rowley seems to have given claimants in similar circumstance a great deal more hope than before; they now have nothing to lose but a great deal, benefit wise to gain.

Now Im going to go through that one again...

Well just 1 thought really.

I have had cases a few years ago in the merseyside area, were HB confirmed they would not count any TC as income for a past period, if and when TCO confirmed recovery of the overpaid TC for that period.

This case should be treated with caution as turning on its own very particular facts. In this case, the only period in dispute was a period of 2 weeks immediately before the claimant actually started work. It is about the period for which the local authority mistakenly thought he had been paid WTC. They appear to have believed that the payments were made 4 weeks in arrears beginning two weeks before he actually started work. This was never substantiated.

The evidence suggested that the correct interpretation of the number of days in the tax credit award could only lead to conclusion that the start date was intended to be the date on which he actually began work, not two weeks earlier. He had possibly not in fact been paid tax credits for the two week period in question, and therefore there was arguably no overpayment of housing benefit attributable to the receipt of tax credits in those weeks. If there had been an overpayment, it was caused by an official error by HRMC in miscalculating the start date of the award and the claimant could not have been expected to be aware of this.

It would be risky to extrapolate from this case to any general principle. Not all CDs/UTDs decide legal principles that can be of relevance to other cases. This one is entirely about the facts. It is mainly a reminder to LAs that HMRC official errors can make an OP irrecoverable equally as much as their own or DWP's. There's nothing new about that - it's in the regulations.

I take on board all the observations ariadne. But, I think it is at least arguable that HBR 79 has the effect of determining the date of the change in circumstances; not HBR 32. I suspect, it will indeed be argued and it will take another UTD to sort it out for certain.

Tue 15-Dec-09 03:32 PM by Grahame

It is not about that the la 'mistakenly' thought he was being paid tax credits but more about the fact that the inclusion of tax credits on a housing benefit claim relates to the date the customer receives the payments.This doesn't sit well with HB regs buit I think we all know that sometimes different legislations don't sit well together

I agree with Ariadne’s analysis but also with Kevin’s view that reg 79 has relevance but it will take more case law to decide the matter as, strictly speaking, the UTD’s view that reg 79 applies, is obiter.