The withholding provision in the old Reg 95 isn’t needed any more because it has been replaced by a more coherent suspension and termination mechanism in the D&A Regs.
The principle is no different really: if the Council spots something that should make any sensible person worry whether the award of IS/JSA/ESA is correct, they can and should suspend HB under D&A Reg 11 - the expression “an issue arises” is broad enough to cover it, so there is no longer any need for a specific power to suspend HB where it looks like the issue immediately impacts on a DWP benefit.
It will be an official error not to suspend HB only where the discrepancy is staring the Council in the face - the thing about R(H) 1/04 (and CH/1908/2003 which is very similar) was that there was no obvious alarm bell - the Council was entitled to accept the passporting IS award at face value in those decisions. It would have taken a bit of digging by someone with a reasonable awareness of IS to establish for sure that something was wrong.
Even if an error is proved, the claimant faces the additional task of persuading a Tribunal that the Council’s error was a bigger cause of the overpayment than anything s/he had done him/herself, and that s/he did not contribute to the Council’s error by letting them think s/he was legitimately receiving the DWP benefit.
