Applying ben cap retrospectively to UC

Hi,
My customer was happily getting t=his full rent in his Housing element until Nov 2019, when DWP decided that, as his ex wife was named on the tenancy, they would only pay 50% of the rent. Several months of tooing and froing and they have finally put it back to the full housing element from September 2020, but now he has ben cap applied to the award.

I have spoken to the vulnerable team and asked why the claim hasn’t been corrected back to November. the reply was that ” the ben cap is roughly the same amount,, so it wouldn’t make any difference” 
( actually, the ben cap is about £40 a month less than the other half of the rent would be, so it does make a difference!) .

I’m pretty sure that when HB applied the benefit cap, it couldn’t be applied retrospectively ( to avoid creating over payments ).

I have asked for clarification of why the claim hasn’t been corrected back to November, and then the cap applied to “reduce” the underpayment , but I’m not even sure DWP are allowed to do this.
We are being asked for a DHP for the arrears and ben cap - which I’m happy to do, but only once I’m happy the customer has got his correct award from UC.

Please can anyone advise whether DWP can apply benefit cap retrospectively?
its an error on their part that the HE was reduced in the first place….

Thanks in advance - Prisca

I think you need to re-frame the question slightly. What you are asking the DWP to do is to implement their re-attribution of the housing costs element from an earlier date, whether by revision or supersession of earlier decisions. Doing that increases the entitlement which results in the claimant running up against the benefit cap and therefore limits what can be paid to them. It isn’t really a retrospective application in that sense.

But on the broader point, lets say that the case was that the DWP had failed to apply the benefit cap for 6 months because they didn’t bring child benefit into consideration through pure official error. They would be able to revise the old entitlement decisions, create an overpayment and it would be recoverable (because UC overpayments always are). This happens fairly frequently and there is no legal impediment to it.

I’m not aware of anything that stops UC from applying the cap retrospectively.

I think the big difference between how HB apply the cap and how UC apply it is that HB are applying it based on an instruction from DWP. So it doesn’t really lend itself to OP recovery because they would mostly be down to official error anyway - i.e. there was an OP because DWP failed to tell HB to apply the cap. So they wouldn’t be recoverable, I suppose. UC is different because they don’t care whether it’s official error, they can recover it anyway.

Thanks for that, gentleman, much appreciated.

its not clear what prompted UC to suddenly apply a 50% “half share” on the rent.
I will ask them what prompted to do that and to reconsider it, and then work out what cap should have applied, if any.

presumably they would be able to work out what underpayment of HE was owed and then what cap should have applied, and pay out the difference as HE?

That leaves me able to cover the benefit cap part correctly from a DHP.

In my experience the most common “trigger” for them to start paying only half rent is a change of circumstances (e.g. rent increase) or a change in payment method (going over to APA). But who knows what makes them suddenly decide that it’s an “untidy” tenancy?

Yes, in theory they should recalculate the UC award using a HCE based on the whole rent (whether they do that based on Sch 2 or Sch 4) and any arrears of UC can then be paid to the tenant (or landlord if there has been an APA in place - so they’ve only been paying half of it). But I get the impression this is all down to manual recalculation - it doesn’t seem to be like Northgate (I’m sure other HB systems are available) where they just put in the changed circumstances and it pretty much does the work for them. For that reason I take more of an interest in checking that arrears have been calculated correctly - I’ve seen a couple where they looked way too generous, but my clients decided not to challenge them.

It shouldn’t be too hard to calculate if they’re capped; it’s just going to be £1666.67 minus monthly Child Benefit = max UC, no?