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Overpayment recovery from DHP

WHA
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Money Advice Officer, Warrington Housing Association, Warrington

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Can an overpayment of Housing Benefit be recovered from a Discretionary Housing Payment award? CPAG handbook p1247 says deductions can be made ‘from most of the benefits in this handbook’ but not sure if a DHP would count as a benefit in this context.

Thanks

HB Anorak
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Not as such: a DHP is not one of the prescribed benefits from which deductions may be taken under s75(4) of the Administration Act and HB Reg 105.  But since a DHP is a discretionary award, I suppose there is nothing to stop the Council from saying “we have decided not to award a DHP, or not as much as before; but to make up for this we will be writing off an equivalent amount from your overpayment each week”.  It’s not actually recovery because the Council won’t keep the saved DHP funding, they will use it for someone else.  Financially it is not something the Council gains from at all.  I have never actually seen this done in practice.

WHA
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It all seems very strange - a lump sum has been taken from a backdated DHP payment for exactly the same amount as an invoice we have received for a HB overpayment. Speaking with one of their reps, they confirmed they have recovered the overpayment by this method, stating the computer just does it automatically. I hadn’t even thought of the fact that they shouldn’t be keeping this money for themselves. Will have to see how things pan out.

Stainsby
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Given that a DHP cannot be awarded unless there is some entitlement to HB ,( Reg 2(1)(a) Discretionary Financial Assistance Regulations, Reg 5(2) DFA Regs )  and also that a DHP cannot be awarded on account of the reduction in HB due to recovery of an overpayment ( Reg 3(n) DFA Regs), it seems to me that any purported recovery of HB from a DHP could be held to be perverse or irrational . It will also be arguable that it would involve taking into account irrelevant considerations.

There could be a number of grounds for JR here

neilbateman
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HB Anorak - 15 August 2017 11:20 AM

.  Financially it is not something the Council gains from at all.  I have never actually seen this done in practice.

I think LAs get 40% subsidy on claimant error OPs, so wouldn’t they be better off writing off OPs rather than using DHPs in suitable cases?

As an aside, I’ve long thought it most unjust that councils can make a profit by recovering claimant error OPs in full plus they get another 40%.

stevemac
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Hi all raising this issue again

Specifically re: a HA client who was subject to ben cap - awarded DHP (which was paid with normal HB payment to HA) pending a PIP claim to cover all of the rent shortfall

Awarded PIP DLC removing ben cap - arrears of reduced HB paid to HA which put the rent account in credit. The LA then billed the HA for the amount of DHP paid - I understand the HA have paid this back to LA

I feel uncomfortable about all of this as client was given 100% DHP to cover the rent shortfall as mentioned above however she has asked if the LA were legally entitled to recover the DHP from the HA and if they were not is there scope to argue this should be refunded back to the HA?

Client added the reason why she is asking the above is that she is moving to another property and is faced with the costs of this so would benefit from having a rent credit which could be refunded to her! 

HB Anorak
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People disagree about the correct way to interpret Reg 8 of the Discretionary Financial Assistance Regs 2001.  This is what it says:

Reviews
8.—(1) A relevant authority may review any decision it has made with respect to the making, cancellation or recovery of discretionary housing payments in such circumstances as it thinks fit.

(2) Without prejudice to the generality of paragraph (1) above, a relevant authority may, on any such review, cancel the making of further such payments and recover a payment already made where that authority has determined that—
(a) whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, a material fact and, as a consequence of that misrepresentation or failure to disclose, a payment has been made; or
(b) an error has been made when determining the application for a payment, and as a consequence of that error, a payment had been made which would not have been made but for that error.

Some say that the Council has absolute discretion under para (1) to recover any DHP subject only to Wednesbury reasonableness.  Others say that recovery may only be made where there has been misrepresentation, failure to disclose or error as set out in para (2).  I am not convinced that para (2) is restrictive in that way: it opens with the words “without prejudice to the generality of paragraph (1)”.  Then again, if para (1) allows everything referred to in para (2) anyway, what is the point of para (2) if not to impose some kind of framework on para (1)?

Another possibility is that para (1) does not authorise recovery per se in “such circumstances as (the Council) thinks fit”: what para (1) authorises is the review of any decision the Council has already made “with respect to ... recovery”.  This view allows paras (1) and (2) to operate as a cohesive pair:

- para (1) allows the review of any DHP award, which might result in no further payments being made
- para (2) allows payments already made to be recovered if there has been error etc
- para (1) allows the Council to change its mind about recovery
- but a decision to recover at all may only be made in the first instance under para (2)

In all honesty I haven’t a clue which way is correct

Stainsby
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Paragraph 1 is similarly worded to Regulation 11 of the Social Security (Personal Independence Payment) Regulations 2013. SI2013/377. Reg 11 provides

Re-determination of ability to carry out activities
11. Where it has been determined that C has limited ability or severely limited ability to carry out either or both daily living activities or mobility activities, the Secretary of State may, for any reason and at any time, determine afresh in accordance with regulation 4 whether C continues to have such limited ability or severely limited ability.

The DWP have for some time been acting as if Reg 11 gave them authority to carry out what they termed ” planned reviews” and subsequently terminate awards, but they have been reined in by a number of Upper Tribunal decisions.  For example In SF v SSWP (PIP) [2016] UKUT 0481 (AAC) CPIP/1693/2016 Judge Wikeley held [at 22]

22. Thus the principles and guidance set out by Mr Commissioner Howell QC in R(M) 1/96 are not rendered redundant by the simple fact that the Secretary of State has instigated a Planned Review, obtained a fresh HCP report and concluded that there is now no longer any ongoing entitlement to PIP, making a supersession decision to that effect. The extent to which reasons have to be given in such a case will obviously be context-dependent. However, in a case such as the present, where there was such a stark contrast between the two decisions, the FTT could not simply pretend that the award the previous year was simply a matter of ancient history and of no current potential relevance. It was incumbent on the FTT at least to express a view e.g. that there had been a significant improvement in the Appellant’s condition and functioning in the intervening 15 months. That may well have been the situation in the present case, but the FTT did not say so and certainly did not make the necessary findings of fact to support such a conclusion. I therefore allow the appeal on this ground too.

Reg 11 is therefore a general power of review in the sense of reconsideration, it is not a general power to revise or supersede in the technical sense of revision and supersession as defined in the Social Security and Child Support (Decisions and Appeals) Regulations.

Reg 8(1) of the Discretionary Financial Assistance Regulations is similarly a general power to reconsider awards , but just as Reg 11 of the PIP Regulations does not determine the outcome of any so called” planned review” Reg 8(1) of the DFA Regulations does not determine the outcome of any such review.  The outcome is constrained by Reg 8(2) and recovery of any payment already made ( there is no concept of overpayment in the DFA Regs)  is similarly constrained by the circumstances outlined in sub paragraphs (a) and (b) of Reg 8(2)

I note that this is the analysis in Findlay, and if Findlay is correct, there will be no grounds to recover a DHP that has already been paid just because any benefit (including HB)  is awarded retrospectively. 

There are no provisions in the DFA Regulations that mirror HB Regulation 79(6)-8 (date change of circumstances takes effect)  or Regulation 4, 7 8 or 9 of the Decisions and Appeals Regulations.

This means that a one off payment representing arrears of income must be treated as capital which is of course subject to certain disregards as far as a person’s HB award is concerned.

There may be no reason not to take that windfall into account in determining any on going DHP award, but it cannot be taken into account when considering any payment already made , otherwise DHP’s could effectively be paid as loans

[ Edited: 6 Sep 2017 at 05:21 pm by Stainsby ]
stevemac
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Many thanks HB/Stainsby

Stainsby
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The capped claimant in this case could well have a case against the HA if they do not refund the credit on the rent account, particularly since Regulation 6(3) confers a right to a review of a decision.

HA’s are hybrid bodies and this raises a number of human right arguments here, not least Article 1 Article 6 and Article 8.

zoeycorker
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I’VE READ THE THREAD BUT JUST WANT TO CLARIFY - IN MY CASE THE CLIENT RECEIVED A DHP FOR BEDROOM TAX FOLLWOING THE DEATH OF HER MOTHER WHOM SHE LIVED WITH - AND WAS SUBJECT TO THE 25% REDUCTION
HB HAVE NOW REALISED SHE SHOULD HAVE BEEN EXEMPT FOR 52 WEEKS FOLLOWING THE DEATH OF A FAMILY MEMBER AND HAD FAILED TO APPLY THE EXEMPTION
DHP ARE NOW SEEKING TO RECOVER £900 FROM THE AWARD DESPITE ADMITTING IT IS OFFICIAL ERROR.
IF THE CLIENT WAS ACTUALLY IN CREDIT BY £900 I WOULDNT HAVE AN ISSUE BUT SHE ACTUALLY ISN’T
SO WHERE DOES THE CLIENT STAND - SHOULD SHE CHALLENGE THE RECOVERY?

Stainsby
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As I argue above Reg 8(1) of the DFA Regs provides a mechanism for the LA to review DHP awards ( in the sense of looking at the situation again not in the technical sense of revision and supersession)

Reg 8(2) provides
2) Without prejudice to the generality of paragraph (1) above, a relevant authority may, on any such review, cancel the making of further such payments and recover a payment already made where that authority has determined that—
(a) whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, a material fact and, as a consequence of that misrepresentation or failure to disclose, a payment has been made; or
(b) an error has been made when determining the application for a payment, and as a consequence of that error, a payment had been made which would not have been made but for that error.

In your case we are specifically looking at Reg 8(2)(b)

It is strongly arguable that in all cases where a DHP is awarded and then HB is retrospectively increased, Reg 8(2)(b) does not provide grounds for recovering the payment already made, because there was no error in determining “the application for payment”  (i.e. the DHP), any error was in determining the HB award.

The retrospective payment of HB is a payment of arrears of income.  There is no provision in the DFA Regs that is the equivalent of HB Regs 79(6)-(8) which deems the date from which the change of circumstances on account of the change of income is to take effect.

It is therefore arguable that for the purposes of determining a DHP, the effective date of change of circumstances is simply the date the HB award was revised .

Any arrears of HB must count as capital. (Which for purposes the purposes of determining the on-going HB award is disregarded for 52 weeks from the date of payment under Sch6 (9)(1)(b) of the HB Regs)

There are thus no grounds for recovering the DHP..So yes you should challenge the Council’s attempt to recover the DHP

What the Council may do is to reconsider any on-going DHP and maybe take the windfall into account in determining what (on-going) further assistance the claimant requires in order to meet housing costs, but that is another matter entirely from seeking to recover a DHP already made

[ Edited: 21 Feb 2018 at 01:04 pm by Stainsby ]