HB Regulation 104A

I have a client who incurred a massive overpayment of Housing Benefit. This is because she did an unofficial swap with another tenant (who was working and continued to pay the rent for the property she moved into, without a HB claim).  The Local Authority continued to pay the rent for my client’s old property. We lost the appeal against the overpayment and I asked the Local Authority to use its discretion under Regulation 104A.  They have said that they cannot do this because my client was never liable for the rent in the property she moved to.  I think they may be correct in this, as (c) states:
“housing benefit is paid to the same person in respect of the claimant’s occupation of dwelling B as it was piad to in respect of dwelling A” 
My client never claimed housing benefit for “dwelling B” and could not have done so without a new tenancy agreement from her landlord. 
Am I missing anything that could be argued on her behalf?

Thanks Ruth

I’m more shocked that the housing dep’t as landlord didn’t notice that they were suddenly getting 2 lots of payments for one property, and a working tenant, assumedly with a history of regular payment suddenly stopped paying, to the extent that a large overpayment was able to accrue. 

The HB side is difficult to argue, but there does appear to be some housing management failure, appropriate arrears action on property B should have shown the swap up within 8 weeks or so at the outside, at which point they could have dealt with the situation.

I suppose there was nothing to have alerted the LA to what had happened though. Presumably, tenant A continued to recieve full HB for the property she had previously lived in and tenant B continued to make full rent payments for the property she had previously lived in (if you see what I mean). So, unless tenant B had specified that he or she was now paying the rent for property A the LA would have been unaware the tenants had swapped (unless someone had happened to home visit either of them).

Seems to me, a discretionary write-off would indeed be appropriate. The LA doesn’t appear to be out of pocket and had the tenants swapped via the proper proceedures, tenant A would have recieved full HB in respect of property B anyway. Or something like that.

The landlord was a Housing Association (ex Council).  So the Council was not paying itself.  However, they have not been out of pocket in that if my client had made a claim on her new home she would have been entitled to HB (but this presupposes that the landlord would have agreed to the swap).  I think Regulation 8 would come up against the test of whether it is reasonable to treat a person who chooses to swap in this way as liable. Possibly I will just have to request a general use of discretion Ruth

On the housing issue alone, as Tony indicates, they should both seek housing advice immediately.  What they have effectively done, because as a matter of law each has retained the head lease, is sub-let their respective properties to each other without, 1) permission from the landlord, which is probably in breach of their tenancy agreements, and 2) without having negotiated valid replacement tenancies with the landlord.  Thus they are both vulnerable to possession proceedings and require specialist legal advice.

The other tenant cannot necessarily rely on acceptance of rent as creating a new tenancy, even if it could be shown that the landlord was aware of the swap.  That is itself a complex area and fraught with difficulty in housing/contract law.