How lump sum of arrears IS SDP affects HB

Hi All

My first post so hope all goes well….

Recently helped a client obtain arrears of IS SDP backdated nine years. Lump sum was over £23k. JCP say that they will disregard payment for the life of IS claim.

However LA state that unless a record is made by IS that this was an official error, for HB they will only disregard the payment for 12 months.

Am I right in saying that because the client is entitled to IS he is automatically entitled to full HB? Or would the £23k savings count?

I am just concerned having spoken to the LA that this payment may now cause problems with his HB. Any correspondence re HB suspension/overpayments would cause him distress.

Would appreciate the help

Yes, you are quite right: as long as your client is on IS, the LA doesn’t have to assess his capital at all.  The Council can “go behind” an IS award in some circumstances, but this isn’t one of them (it mainly happens in cases of suspected fraud where the relevant period predates DWP’s current records - no suggestion of anything like that here).

If your client should ever cease to be entitled to a DWP means-tested benefit and he still has this money at that time, then you can have a debate with the Council about whether or not there was any official error; but for the time being the issue should not arise.

Many thanks a weight lifted!

You may wish to see this extract from the DWP web; while this refers to Pension Credit the same rules have always applied to other benefits; and the minimum £5k quoted has to be paid in one lump payment, not a combination of say 2 different benefits arrears :-

Arrears and late payment of benefits

[Legislation 31]

Arrears of, and compensation for the late payment of, the following benefits are normally ignored for a year from when they are received:
Attendance Allowance
Disability Living Allowance
Housing Benefit
Council Tax Benefit
Income Support
income-based Jobseeker’s Allowance
income-related Employment and Support Allowance
Pension Credit
War Widow’s Supplementary Pension
Child Tax Credit
Child Benefit,
Social Fund payments (including Cold Weather Payments and Winter Fuel Payments).

Special rules

[Legislation 32]

There are special rules if the amount of arrears or compensation is £5,000 or more and is to put right an earlier official error:
if your customer received the payment less than a year before they started to get Pension Credit it will be ignored for a year from the date they received it
if they receive the payment while they are getting Pension Credit it will be ignored for as long as they continue to get Pension Credit,
if they were getting Income Support, Jobseeker’s Allowance or Employment and Support Allowance immediately before they started to get Pension Credit, and the payment was ignored in that benefit, it will be ignored for as long as they continue to get Pension Credit.

Thank you P P for your reply. This was also concerning me.

Seems that with benefits there is never a straightforward answer to an issue….