CPAG have contacted us -

'We understand some local authorities continue to recover HB overpayments whilst an appeal against the overpayment decision is underway. We think this is unlawful and we are looking for a test case on it.

It would need to be an authority in England or Wales as unfortunately we can't do test cases in the Scottish courts.'

Whilst I have no HB cases that I can offer up, and I am not too sure if CPAG are interested in this specific issue, I offer this out as a general point to other advisors out there in the ether… and possibly to CPAG if they are interested…

Many LA’s (knowingly and unknowingly) continue to recover HB O/P’s until someone points out the potential illegality of such actions, when recovery is then normally suspended until the appeal is decided…

CTB overpayments are however, debited directly to the Ctax accounts, on the day they are created. This creates an interesting problem for many LA’s…

Ctax regulations require that a Ctax bill is paid in full, as billed, regardless of the reasons for delay/non-payment… however, where a bill is issued after the start of the financial year, some of that demand may well be attributable to an overpayment. The Ctax section will continue with the ‘we collect as billed’ routine, as only the HB overpayment is suspended from recovery.

Administratively, there is a substantial amount of work placed on the benefit section to ‘reverse’ the correct amount of overpayment from the Ctax account, because of the way CTB overpayments are calculated, (on a daily basis, and then only for the period from 1/4/?? to the point of creation, as ‘future’ overpayments (from point of creation to 31/3/??) do not count as actual O/P. LA’s do not therefore reverse overpayments from Ctax accounts, and besides which, they have no where to store them on their systems, and may incur the wrath of the D.W.P. in financial penalties for having what would cumulatively be vast sums of un-recovered ‘excess benefit’ on their systems.

However, that is not the point, many advisors (in my experience) are not challenging either the blanket policy of always recovering excess CTB, (as it is always posted to the Ctax account on the day the excess benefit is created on the computer system), and/or the recovery in individual circumstances where HB recovery has been disputed on that same case.

I have offered this as a problem rather than a solution, and for that I apologise, but I would like to know what others think???