Aftercare Services refunded a large sum to one of their s.117 service users which exceeded the upper capital limit. It's caused a large overpayment because the same authority continued to pay his HB some months after the refund.

They've decided it's recoverable as they are not closely linked to Aftercare Services so couldn't be expected to know.

As a bit of history, my colleague was appointed Deputy only after the refund decision had been made but before it was paid. As soon as I became aware it was going to be paid I informed JCP. I didn't inform LA as assumed they'd already be aware. In any case as this client doesn't have mental capacity he's looked after by a national charitable organization who were appointees at the time.

I don't think this charity should be held responsible as they'd attended a multi agency meeting where this refund was discussed. They were told that the capital sum would be disregarded anyway because it was due to maladministration by the LA ie continuing to charge him when he was funded under s.117.

Although I've challenging it as an official error I fear it will be decided the benefit section and the Aftercare services are too remotely removed for it to be reasonable to expect them to inform the other. Then again IMO it was obvious to Aftercare Services he had been awarded HB so they should have disclosed it.

Anyone...please?

Sue

Can I just clarify that the maladmin referred to was the fact he was charged rent when he should have been accommodated for free under s.177 ?

If that is the case then the capital issue is a red herring, he should never have been entitled to HB and the whole of the HB is overpaid. That overpayment must have been "official error" and therefore recoverability will be down to whether the target could have known they were being overpaid.

In my view, on the basis of a requirement to be accommodated for free as explained by Julian, the HB o/p would only be an error on the part of the LA is the benefits section was aware of this fact OR if the LA's benefit functions was considered to have a sufficiently close relationship to the functions of other departments.

Of course you're right about the capital being a red herrig - it simply didn't register that he's never been entitled to HB because his care and accommodation should have been 'free'.

He couldn't have known about this so for me it still shouldn't be recoverable even though it can't be classed as an official error because there wasn't a close relationship between Aftercare and HB.

I am afraid that for HB and CTB the couldn't have reasonably have known argument only applies to Official Error overpayments.

If it's not official error it is recoverable full stop.

Dosn't mean the LA shopuld recover it, but that is their choice.

I keep going over and over this one. There are a few issues here, not least the fact that he has probably never signed a tenancy agreement never mind the HB application form because he lacks capacity but that's going down a different route...

If they do decide to recover from him at least he should be reimbursed anyway by the PCT which should have been funding his accommodation all along.

Wed 24-Feb-10 11:42 AM by Kevin D

I'm not an expert on such matters, but based on the content of the odd CD/UTD or two, my understanding is that if a person lacks sufficient capacity to enter into an agreement, such an agreement can be voided. In this case, there appears to be a doubt as to whether he actually entered in to an agreement at all.

CDs/UTDs where capacity has been looked at in various contexts:

CH/0663/2003 & CH/1096/2008 (same claimant)
CH/2121/2006 & CH/2122/2006 (related cases)
CH/2728/2008

R(IS) 14/96
R(IS) 11/98

Blimey Kevin, you've either got a vast library or a brilliant memory

I'm very grateful (not that I've had a chance to look at them yet)

I like Julian's answer.

Reg 100 HB regs defines 'official error' and the reference to the LA is to "the relevant authority" and "an officer or person acting for that authority".

Unless there has been a decision of a commissioner or UT judge that restricts that interpretation to the benefits section, then (assuming the s.117 responsibility can be pinned on the LA (social services?)) the cause of the overpayment is the 'relevant authority's' failure to properly implement aftercare services since it was that error which lead directly to the claim for and payment of housing benefit.

On the other hand, I'm finding it difficult to accept that there is not at least a moral obligation on the claimant to refund the housing benefit department. After all, he's been refunded for rent that he didn't have to fund from his own resources...

Sue: My memory is shot....

Tony,

There are now a couple of CDs/UTDs where a particular department of a LA has made an error, but it has been decided the functions of that department were not sufficiently close for it to be an error in relation to benefits. Unlike the other decisions cited earlier, I can't immediately locate the citations. If I can, I'll repost. I *think* one of the cases related to a mistake in the the award (or increase?) of a private pension by the LA which, in turn, resulted in a benefit o/p at the same LA. It was found that this was NOT an error for the purposes of HBR 100(3).

Given all of the CDs/UTDs as a whole in cases of "designated offices" and different departments, a broad "test" is effectively being developed; this being "Is the function of a non-HB/CTB LA department sufficiently close to the HB/CTB functions in order for any error by the non-HB/CTB dept to count as an error for the purposes of HBR 101(3)?" If I'm interpreting that correctly, it will inevitably mean each case on its own facts given the different organisational set-ups in different LAs.

Wed 24-Feb-10 01:10 PM by jmembery

The Pension case was CH/3826/2008


"Regulation 100(3) of the Housing Benefit Regulations 2006 and regulation 83(3) of the Council Tax Benefit Regulations 2006 in fact refers to the relevant authority or a person acting for that authority “acting as such”. “Relevant authority” means an authority administering housing benefit (see regulation 2 of the Housing Benefit Regulations) or council tax benefit (regulation 2 of the Council Tax Benefit Regulations). It appears to me, giving a purposive construction to these provisions, that the official error must have been in the context of the performance of the council’s duties in relation to the relevant benefit. It does not cover mistakes made as, for example, a pension provider or an employer."

and i would think looking at the law on mental capacity generally, particularly after the 2005 Act came into force, might prove useful. there's some good guidance as well.

i still think that Act helps where otherwise Re B would go against a claimant, bearing in mind that Re B was before the 2005 Act came in...

sue, your case has me confused, so apologies if what i have to say isn't relevant, and i am certainly no expert in the section 117 area, but my 2 cents worth...

the Court of Appeal and the Ombudsman have been involved in this issue, and you mention maladministration in your post.

if the payments are made to correct maladministration, the payment arrangements are administrative, and, because maladministration occured, attempts to disentangle the consequences by means of the benefit adjudication system are likely doomed to tie things up in knots.

probably worth mentioning that the commentary to HB 99 advises " It should be borne in mind that when determing whether a claimant has been overpaid, it is the legislation in force at the date of the payment that determines his/her eligibility and not the version effective at the time that the authority comes to consider whether he/she has been overpaid. The only exception to this is where amending legislation is expressed to have retrospective effect." From this, I can't see that any decision that he was overpaid can be made at all...and a social security law approach is futile. the fundamental problem as i understand it is that LA's were charging for aftercare services when they should not have. that was the fundamental maladministration.

i don't think there can be any question that the part of the LA that paid the refund, and the part of the LA that claims it should have had the refund, are part of the same authority, and the 'close connection' argument in the context of maladministration by the LA isn't relevant - the refund action was taken to correct maladministration, and in the circumstance, the LA is expected to get it right. If they have messed it up, it's more maladministration! i don't think they have any claim to the payments made to your client under housing benefit law.

i would take Tony's suggestion as a starting point - if the payment from the LA to your client refunded any payments he had made himself, (not through housing benefit) and any compensation element for maladministration, he should keep that amount. if the refund payment was made by the LA in error (and after the court of appeal and the Ombudman have sorted it out!!!) repayment to the LA is negotiable on a voluntary basis, or the LA may sue for it. I don't think the payment should be regarded as housing benefit (even if payments were originally made as housing benefit payments- because maladministration was involved), and i don't think the LA's claim can be based on reg. 100.

i hope this makes some sense. good luck! : )

correction - should have said - "From this, I can't see that any recoverable overpayment decision can be made at all" in this case.

If payment was made by way of HB to which it has subsequently been found there was no entitlement, it counts as an overpayment of HB - HBR 99. Therefore, HB legislation is engaged.

Taking all of the relevant legal authorities in the round (including the decision cited above by Jeff Membery), it is no longer open to argument that "relevant authority" in HBR 100(3) means the whole of that authority. It is clear that where one part of an LA is/was in error in a function unrelated and sufficiently distanced from the benefits section of the same LA, any resultant HB overpayment is not caused by an official error (assuming the HB section did not itself make a mistake in any case).

With reference to the commentary in CPAG as to which version of legislation applies when, Judge Jacobs has found that "Plewa" doesn't necessarily apply - see CH/3160/2007 in which HBR 101 was at issue.

Based on the info given, I can't see any way in which it can be properly argued that there is no overpayment of HB.

If there is no "official error", the overpayment is recoverable, irrespective of the circumstances - the only option would be to ask the LA to exercise discretion as to how much, if any, of the o/p will be recovered.

As to whether the o/p was caused by "official error", it will simply depend on what info was known by the benefits section at all relevant times AND how closely the functions of other sections / departments interact(ed) with the benefits section.

the overpayment can only be official error, and there was no way the claimant could have known he was being overpaid. heck, the LA didn't know they were overpaying - HB was paid to meet housing needs the claimant wasn't liable for...because he shouldn't have been charged for them by the LA in the first place.

"Taking all of the relevant legal authorities in the round (including the decision cited above by Jeff Membery), it is no longer open to argument that "relevant authority" in HBR 100(3) means the whole of that authority."

Kevin, i did say "in the context of maladministration by the local authority", and i think the LA would be hard pushed to evade resposibility for erroneous payments in the circumstances of course the parties involved in the maladministration fallout would be expected to liase with each other in the 'putting it right' process, not to do so, and to incur a loss to public funds as a result, would be further maladministration...

i'n not entirely clear on the facts of sue's case, but it very much looks as if the LA got the 'putting maladministration right' process wrong, and i expect the simplest, quickest and cheapest (to the taxpayer) solution now will be administrative and pragmatic. i'm sure sue can talk some sense into them...

"...it very much looks as if the LA got the 'putting maladministration right' process wrong, and i expect the simplest, quickest and cheapest (to the taxpayer) solution now will be administrative and pragmatic. i'm sure sue can talk some sense into them..."

Lol - don't know about me talking some sense into them jj !!

You're right though - let's hope it can resolved with some common sense and so much less of a drain on the public purse.

Bit like a appeal decision I got today. Another adjournment has been agreed for yet more info. This has been going on for 3 years now and the judge has urged all parties have an informal meeting which should hopefully result in a supersession thereby extinguishing this appeal with it's now "stale issues" (judge's words)

Lol! let's hope so, sue. the law isn't always the best solution to people's problems, and is sometimes part of the problem. good judges know this very well, i think...

"the overpayment can only be official error, and there was no way the claimant could have known he was being overpaid"

Just to pick up on a couple of points.

The claimant's knowledge is only relevant if the o/p was caused by an error on the part of the LA/DWP/HMRC. If there was no such error, the o/p is recoverable irrespective of any other consideration.

As for liability, if the HB section had information / evidence saying there WAS liability, I can't see how it was an error to pay HB. Even the lack of a signature on an agreement wouldn't necessarily mean the HB section was at fault in paying - there are authorities that have made it clear that tenancy documentation doesn't have to be in proper order for HB to be payable.

I fully appreciate the MORAL argument, but that's only relevant to recovery rather than whether the overpayment is recoverable. Also, if for the sake of argument (and I don't know) there is sufficient distinction between the HB section/ Dept from the error making section/ department, I also can't see that maladministration by the error making department can affect the overpayment being legally recoverable. Again, that maladministration (dependant upon distance) is a potential factor in the matter of recovery.

If I had a choice as to which party to represent at Tribunal, and my livelihood depended on a successful outcome, would I prefer to represent the claimant, or the LA? Based on the info given so far (and I appreciate there may by much more), on balance, I'd represent the LA, arguing the o/p was properly recoverable. HOWEVER, in the event of a FtT agreeing, I'd informally advise the LA to consider whether recovery should be sought, whether in part, whole, or not at all.

As time's gone on Kevin I've realised this and unless we can obtain more evidence to support an appeal then I concede there's probably little merit in proceeding.

As it stands hopefully the best resolution will come from liaising with all parties to try to ensure retrospective funding is paid by the PCT to cover the HB paid in error. If not I'll cling on to the hope that the LA will agree to use discretion to waive recovery.

Some might disagree with this because he's now got so much capital but this is simply made up of benefits which were legally his but not paid to him. He spent a very lengthy period in a previous care home having all his benefits paid towards his care and being left only with pocket money.

Thanks to you all for your fantastic input.

Please update us with the outcome Sue. GL!

Tony

kevin, we seem fated to always be talking at cross purposes, and i suspect you have entirely misunderstood me. i wish i could express myself more clearly.

the payments were erroneous in law law, period. who is or is not to blame is immaterial. the payments were erroneous in law, fact.
they were awarded (unless i am assuming too much) _after_ the maladministration ruling, and after the Court of Appeal ruling.
how is the error in law not an official error?

second point.
how can a local authority (a relevant authority), which is authorising a substantial payment to correct a complex maladministration situation, keep the head of the benefit administration service out of the loop, resulting in a loss to public funds, without this being a) further maladministration: b) an official error for the purposes of reg 100.? If he was included in the loop, how can failing to act on information in the authority's possession, not be an official error?

the more the authority seeks to split hairs about who was to blame on this (and i suspect the subsidy arrangements have a lot to answer for regarding case law development costs) the more they risk further maladministration, with regard to the prolonged stress placed on the blameless claimant, who is, after all said and done, owed several duties of care.

methinks the really sensible advice for the LA is to talk nice to Sue!
we won't hold our breath though... <w>



.

Hi JJ ,

I don't think there is any problem with the way in which your points are expressed. In summary, you're suggesting there *should* have been more interaction between the LA's HB functions and the other functions. I'm suggesting it isn't necessarily that straight forward and the original post suggests the LA has considered the "separation of functions" argument when making the decision that a) there is an overpayment and b) it is recoverable.

The crux revolves around that single point. If the functions were sufficiently distant, the HB section had no reason to be aware of the OTHER department's maladministration / refund etc. Therefore, the LA, in its HB function, did not pay HB in error. I reiterate, the "whole authority" argument has been been somewhat qualified by CDs/UTDs (including the one cited by Jeff Membery).

It might be helpful to see what issues were taken into account in the "maladministration" investigation - was there a report? If so, it can be easily obtained - DPA request if necessary.

Without seeing all the papers, it's impossible to judge whether the HB o/p (and, surely, it was HB), was caused by the LA in the undertaking of its HB activities (or sufficiently closely related). If the functions are close enough, it's an error and, based on the info given, irrecoverable. If the functions were sufficiently distanced, the HB payment was not caused by official error and, therefore, is recoverable in law.

I've also just picked up a point made by Tony Bowman. The clmt appears to have received a "refund" of monies which he did fund from his own direct resources in the first instance. That, in itself, is irrelevant to whether or not the o/p is recoverable in law. But, it's definitely a matter I'd take into account when considering actual recovery in the event that the o/p remains recoverable following appeal etc.

hai kevin - this is starting to feel like my favourite chapter of Peter Pan, the one with the argument with the Neverbird, which never fails to reduce me to gales of laughter...i think i might have posted a link before....

ok - i see there is a certain amount of difficulty... i even read differently to you...
i picked up on Tony's last paragraph, you picked up on the second para...maybe i'll get back to you on that, but i have to point out to you that you made assumptions about the moral argument...

"<<<I'm suggesting it isn't necessarily that straight forward and the original post suggests the LA has considered the "separation of functions" argument when making the decision that a) there is an overpayment and b) it is recoverable.

The crux revolves around that single point. If the functions were sufficiently distant, the HB section had no reason to be aware of the OTHER department's maladministration / refund etc. Therefore, the LA, in its HB function, did not pay HB in error.">>>

they may have considered it, but did they reach the right conclusion?
that is not a hostile question by the way <just thought i should mention in case reasonable adjustments are called for>.
if they got it wrong, it could cost suge amounts to put it right. one wrong decision and the knock - on effects can spiral... i'm suggesting any number of bright ideas, but humbly suggesting a reflection and re-think, and in the meantime, the LA do the decent thing for sue's client, accepting that the facts of this case will speak more loudly than the arguments, and may well distinguish them... i certainly don't think they can be ignored. i wonder how long it's been since this thing started for Sue's person... there has to be a limit to the length of time a relevant authority can intrude upon the circumstances of a person's life before making a decision about whether the decision that there is a recoverable overpayment was correct or not and he has to repay it. especially when that person has vulnerable mental health,..

and is very vulnerable indeed, in the sense of bad *stuff* 'really' does happen to them, it's not just a meaningless stock phrase or a 'categorisation' box.

i'd suggest there is a clear need for decisions affecting vulnerable persons like Sue's client to be made correctly at first tier level and it seems that effective mechanisms aren't in place or embedded in thinking.. the onus of proof in overpayment decisions is a significant one,and i don't see it being greatly recognized. the facts of Sue's client's experience are relevant - and sound like they are stacking up. his interests have to be considered by the authorities, and i can't see how anyone considering the impact of maladministration upon him could conclude other than it must be brought to a close pronto, even if the principles remain in contention.

the law can be brought into disrepute. no housing benefit should ever have been paid to this gentleman - he had no liability for the charges, which the local authority imposed in error. the award was therefore erroneous in law and he had no legal entitlement to the payments, which should have been met by the PCT. i'm surprised you'd want to argue that an error in law is not an official error, when carried out by a local authority in its HB function, and that it has no REASON to be aware of other Deprtment's maladministration. do you think you can make that stick? srsly?

you're going for a separation of a relevant authority's equality duties, duties of care and human rights obligations from an LA's HB function? i'll say this for you, you love-god... you have some balls...woo-hoo! : )

Fri 26-Feb-10 07:40 AM by Kevin D

Hi JJ,

From the outset, I'm very aware that the arguments between us may *appear* less than amicable in cold harsh text than they would in a face to face discussion. However, I'm not sure the latter part of your last paragraph was called for... If I've misinterpreted, then I apologise for being "tetchy" .

It's not about "cojones". It's about applying the law to the facts and the facts to the law. I have readily acknowledged in my earlier posts that there is very likely to be more to this that may affect my responses. I thought I had distinguished very clearly between the legal status of the overpayment being recoverable and the subsequent consideration of recovery of such an overpayment.

I also made it reasonably clear (at least I think so) that the determination of recoverability depends on "ifs" / "buts"; I haven't made an "absolute" argument. Without seeing all of the paperwork, I can't, one way or the other.

I make three further points, a couple of which are essentially reiterations of earlier points.

1). The onus will not often be at issue, but whilst the onus is on the LA in the first instance to establish there has been an overpayment, the onus then switches to the claimant to show s/he falls within the "official error" exception. However, the "onus" argument only matters on finely balanced cases.

2) If the HB section/dept had sufficient info / evidence indicating there WAS a rent liability, even if there shouldn't have been, HB was not necessarily paid erroneously. As I've set out before, whether it counts as an "official error" for the purposes of HBR 100(3) depends on the functions of the error making department. That's not me expressing a personal view; CDs/UTDs now make it clear that that is the correct approach.

3) The amount of time (and this isn't clear) the events have taken to sort things out will only matter in this case if a Tribunal decides the functions of the different sections / departments were sufficiently related.

I agree with you on one thing JJ. We will continue to disagree .

Hi

Has the overpayment arisen solely due to the capital or was there an issue of the liability to pay rent as the accommodation was considered as an after care service under section 117?

Shaun

Just capital Shaun.

of course amicable kevin, disagreement isn't really a problem, and can be fun even! dialogue is important. the last bit in my last post just popped into my head, with some sort of intention to make you laugh...even though i know quips don't translate well on paper, and i'm turrble at jokes anyway. no offence was intended, i'm sure you know...and somebody has to give the good folks of rightsnet their Friday entertainment... : ) sooo...

thanks to shaun's perceptive question, and sue's answer that it is a capital issue only, i now have to confess myself thoroughly confused about the facts of the case ...and don't know enough of them. oh what a goose i am!

am i getting closer with this ...? there is now an HB liability whereas before the PCT should have met the charges, but the LA charged and paid HB in error. The refund of charges has put capital over the limit so the newly created HB liability has to be met out of the capital refunded for the iearlier ncorrect charges, (which has no ring-fence protection) until such time as they are sufficiently depleted (only in this case, there was an overpayment oopsie!), whereupon HB will meet the charges?

it will take some sorting out, and it looks like Sue's client can be called a loser!

who knew!, and who should have known, as you say, the crux of the matter?
sometimes it's wise to stop digging, so i will take my own advice and go and hush for now...

but yes, i expect we'll dance the tango again, kevin... : )

have a good weekend, all.

only sorry I didn't come back to this sooner !

Is part of the problem here that only part of the solution has been put in place.

Lets assume that he was charged £150 per week for 5 years (£39,000)
and that he should have been charged £0.00.

The court decides that he has been overcharged, further investigation reveals that he paid £50 per week cash and the LA's HB dept paid £100 per week to the L/L by way of a transfer.

He will have paid £13,000 over the period.

HB paid £23,000 over the period.

However we already know from sues post that Hb continued to pay for several months after the liability ended (lets say its 26 weeks).

HB have now identified an OP of £2,600 and say it is recoverable but put this down to capital.

At this stage HB have not created an OP for the whole period because they haven't realised the implications of the maladmin stuff. He had no liability and so no HB should have been paid.

The current position is:

He has received £39,000 by way of repayment of rent paid because he had no rental liability.

He owes £2,600 not because HB know he had no rent liability but his payout from the compensation.

The simple answer is this.

HB should create a recoverable OP right back to "tenancy" start (£26,000 + £2,600).

LA should pay compensation of £39,000

Depending upon who received the HB payments the LA should decide whether they are recoverable and who to recover from, and decide whether to recover.

At this point some common sense might prevail.

If the client ends up "better off" then great but he might not be as well off as might have been thought in the first place. Unfortunately whoever set the level of "compensation" wasn't fully apraised of the facts because if they were they might have ensured that the client was sufficiently "better off" when they set it.

I hadn't given this the consideration it needed at the very outset when I first posted but have done since and my thoughts are as yours Julian so let's hope good sense does prevail.

Just a few thoughts on an issue hinted at at various times during this thread - they may be more valuable as discussion points than of direct relevance to the particulars of this case, but the implications for benefit entitlements whenever there's an s117 aftercare package in place aren't always either clear or widely understood.

There seems to have been an assumption at certain points in the thread that a person lacking mental capacity cannot enter into a valid tenancy agreement (despite the guidance and provisions of the MCA and the case law Kevin quotes), and also that a s117 aftercare package nullifies any liability to pay rent for the service user. I'd challenge both of those assumptions.

Where a package of support identified in an aftercare plan is necessary for safe discharge into the community and is inextricably linked to particular accommodation, you'd probably expect the PCT/LA to pick up the tab for both accommodation and services. Appropriate services may only be available at a limited range of sites, and if those sites offer supported tenancies and the support is a condition of tenancy then even where the accommodation and support are provided by two (or more) separate organisations you'd be hard pushed to say that the package is not one and the same (despite the theoretical separations).

However, many people enter hospital under Section 3 of the Mental Health Act and are then discharged after a suitable period of treatment to exactly the same address that they previously occupied. What changes, other than the need for a package of support to maintain the person's stability at that address?

Those support services wouldn't be chargeable, and any charges paid by the service user would be rightly refundable, but I wouldn't expect an LA or PCT to pay for an accommodation need that simply isn't there.Just as the service user would be expected to pay for their own food and personal expenses, if the accommodation isn't central to their aftercare treatment (which can take the form of domicilliary support in a person's own home), you wouldn't expect them to pay for that either.

Equally, if a person was an owner occupier and home support services were arranged under s117 on their return home, would a PCT or LA to pick up any outstanding mortgage or loan repayments?

During the Care Planning process statutory duties may extend to providing accommodation, but that won't always be necessary. Where a suitable address already exists, or the services identified can theoretically be delivered at any address, it is surely only the domicilliary care/support services that are non-chargeable. In all cases I'd go back to the aftercare plan to establish where the liability for accommodation costs actually lies.

None of this might be of any help to this particular claimant, but if there's a bona fide liability to pay rent then the sum refunded may need to be recalculated (thus reducing the capital, and either reducing or removing the overpayment).

this has turned into a fascinating, and classic illuminating rightsnet, discussion thread. i too have only just found the opportunity to look back here. wonderful!
...
on sue's case, we await its unfolding (twice around the mobius strip) for client, sooo...
<silly and bad taste joke warning, look away now>

if the LA is claiming an overpayment under the statutory scheme, could sue's client claim that a question of contrived tenancy in order to take advantage of the housing benefit scheme arises, and claim that the local authority should prosecute itself for fraud, and recover from the landlord (itself)?

aaannyway....


sue...how goes it? any joy for your client yet?

No joy yet jj,

I'd lodged an appeal some time ago but since then fear it has little merit.

There's somewhat of a crossover but my colleague's speciality is community care law so he's liasing with LA about the accommodation which should have been s117 funded anyway.

Yeeeees !

LA accepted it was an official error and it was unreasonable to expect my client to have realised he was being ovepaid.

Many many thanks to you all for your helpful input

ditto smileys! : - )