I have a client who is joint owner of a property with her friend but the Local Authority didn’t know this fact for a number of years. The friend was the sole claimant for Council Tax Benefit throughout, but now the Local Authority has amended the Council Tax liability back through the years to 50/50. They have created overpayments for the Council Tax Benefit claimant for half the liability and have billed my client for the other half. My client now has a claim for Council Tax Benefit in her own right for her 50% but only starting a few months ago.

Does anyone have any thoughts as to whether the decision on the latest Council Tax Benefit claim for my client can be superseded back through the years to compensate for the retrospective amendment of liability? Otherwise this has had the effect of depriving my client of the ability to claim Council Tax Benefit to which she was entitled.

I have no doubt that the benefit can be superseded to reflect a change in the liability and that overpayments can be recovered, but something troubles me about this.

If the council are actually recovering an overpayment for 50% of the CT whilst seeking payment of the same 50% liability (it can only be the same - not "the other half") then they are having their cake and eating it!

Look at this way:

The friend gets £1000, for example, in CTB and pays that towards the £1000 liability. Now the CT section say the liability was wrong and so they refund £500 to the friend who in turn refunds the CTB section for the overpaid £500.

In practice this should be a paper exercise so the friend never gets the £500, it goes straight back to benefit clearing the overpayment. So, the overpayment has been recovered and the CT section now bill the £500 unpaid liability to your client. If there is any additional overpayment recovery this should be challenged.

But I'm also wondering if the council has the power to amend the liability in this way. Joint tenants are jointly and severally liable for the council tax (so it is not necessarily wrong for the friend to have assumed 100% of the liability. I wouldn’t wager on this but as far as I can tell for CTB the law only refers to the claimant being liable. Therefore I can’t actually see that there is anything for the CT section to go an actually change and anything for CTB section to supersede. I’m wondering if there was a single occupier discount. If not, then the CT section already believed there was more than one occupier and if so, CTB was underpaid for the claimant.

A most interesting dilemma… But here’s a more interesting question: Would the liability have been amended if CTB was not involved. Is there a financial incentive for the council to take this action – benefit subsidy - when perhaps it needn’t otherwise do so…?

More questions than answers I’m afraid, but an interesting question. Good luck, Steve.

Thu 01-Oct-09 02:23 PM by jmembery

I agree that, to use the same example, of the total liability was £1,000, then the overpayment of £500 is automatically recovered by becoming arrears of Council Tax so there is now only one lot of £500 left to pay.

Reg 57(3) deals with people who are jointly and severally liable and I am afraid the argument that the claimant could get benefit on the whole £1,000 wont fly.

I would have a couple of questions.

1) Did the Council know the friend was living in the property?
2) Did anybody ever tell the Council that the property was jointly owned?

Thanks for the responses.

The Coucil have always known both live in the property and indeed many of the bills are in joint names, but they allege they didn't know the porperty was jointly owned and this is why the accounts have been changed back a number of years. However, my client had regular visits from Council workers to assist with benefit claim forms and such like, so they should have been aware of this fact!

To clarify, the overpayments aren't actually being recovered - it's just a paper exercise - liability removed so no benefit payable.

The CTB paid over and above the maximum that ought to have been paid (50% of liability) is excess benefit and reg 83 applies. Reg 82 (a) and (b) don not apply because the liability to Ctax has not been reduced it is only the maximum under 57(3)that has been reduced.

The provisions of 83(2) must be considered and I think there is a very good argument that the excess benefit is unrecoverable if you can show the LA's errors. That would also include any errors made by the billing authority not just the benefit bods.