caselaw needed- overpayment

Most overpayments are recoverable if the claimant fails to notify a change of circumstances that a reasonable person would be aware of. If she can prove that she has notified this change then I dont think it is recoverable.

There’s no contention over the issue of whether or not she disclosed. LA has already admitted official error. The issue hangs on whether she could reasonably have been aware the overpayment was occuring.

The one piece of case law that is consistently referred to by UTJs is CH/2554/2002 which contains a suggested 3-stage approach in determining whether the claimant could reasonably have been expected to realise etc.

The legislation itself is HBR 100 (working age).  In summary:

1)  the starting point is that all overpayments are recoverable UNLESS…

2)  the overpayment was caused by an error on the part of the LA / DWP / HMRC; AND

3) the clmt (and payee if different) didn’t contribute to the cause of the overpayment AND

4) the clmt (and payee if different) could not reasonably have been expected to realise s/he was being overpaid at EITHER
a) the time of the payment(s); or
b) the time of any notice relating to the payment(s)

“a” and “b” are the only two points in time that matter for “4”.

One other point to bear in mind is that a Tribunal may not necessarily agree that a delay in processing of two months constitutes an error.  There are several CDs/UTDs where the issue of whether a delay in processing is an error and the delays considered have ranged from 11 days to 11 weeks.

Note that the legal tests for HB/CTB are different compared to other Social Security benefits so the mere notification of a change doesn’t necessarily mean an overpayment of HB becomes irrecoverable.

Did the LA at any time say that there wouldn’t be a deduction and that the figure in payment was correct?

I had a case which I think is similar. As soon as my client realised that that he was overpaid and phoned the LA, he received a promise that his payments would be corrected. However, he did not realise that this did not happen until he received his following bank statement – and so on. When he saw me he had already appealed and lost. We appealed to the Commissioner (it was still ‘the Commissioner’) and had the old decision overturned by a Tribunal chairman. We won the new Tribunal appeal.

I used R(H)1/02 to ‘divide’ the whole period into parts, each new part triggered by a phone call from my client to the LA. 

I also used CH/2943/2007 (§19), where the Commissioner argues that it is not self-evident that a claimant could reasonably have been expected that the local authority would not have corrected any mistake after being given the correct information two times. I also found the ‘three stages approach’ in CH/609/2004 generally useful to ask the Tribunal to put themselves in my client’s boots and consider what my client knew and understood.

Kevin- the delay in reassessing was due to (unneccesary) confusion in the assessment team of exactly when the ND had moved in rather than reasonable delays due to LA workload. Rather that clarify, they basically sat on it for two months despite three statements from the client (it was only when her local counsellor intervened that the claim was reassesed).

Gareth- No, unfortunately. Indeed, there is a memo from client’s local LA outreach office to the assessment team chasing up the reassessment which states that client wants to know how her claim will be affected as they need to calculate what the ND’s contribution to the household will be.

The client was expecting there to be some effect on her ongoing entitlement (albeit she was not expecting the overpayment to be as large as it ultimately proved to be). This is where I’m thinking we’re on a hiding to nothing but on the other hand, short of holding the LA at gun point the client did all she could to prevent an overpayment occuring and to find out what difference it would make to her award.

Client did, by the way, go through the LA’s complaints procedure (maladministration) so a fall-back position could be the ombudsman, but I would like to find some way of succeeding with the appeal.

Thanks Josephina- that;s useful.

1964 - 24 October 2011 01:18 PM

The client was expecting there to be some effect on her ongoing entitlement (albeit she was not expecting the overpayment to be as large as it ultimately proved to be).

Ouch, that’s difficult on two counts.  The expectation that there would be at least “some” effect AND the repeated contact in that context makes it very much an uphill struggle.  There is significant case law involving these two points and, on those narrow points, the case law I can identify has all have gone in favour of the LA.

On the “repeated contact” point, see CH/3309/2006, CH/42/2008 & CH/2888/2002 - all went in favour of the LA.  Off the top of my head, I can’t recall any contrary authority.  On the “quantification of overpayment” point, see CH/1001/2006,  CH/2200/2008, CH/1497/2004 & CH/1671/2005.  Again, all in favour of the LA insofar as it was found that the appellant could not escape the “realise” arm just because they didn’t know the *amount* of any overpayment; it was sufficient that the appellant could reasonably be expected to realise there was at least some element of overpayment.

Too many CDs/UTDs to attach.  If you work at the same place as TB, I’d be happy to email the case law to him so that it can be forwarded (it’s likely to be tomorrow now).  Just repost to let me know.

Hi Kevin,

I do indeed work with TB- thanks for that- it’s appreciated.

Not looking good is it? It just seems so blatently unfair. I’ve always felt that about HB/CTB overpayments. If the client had been less on the ball we would probably have had a better case.

Ah well- as I say, if all else fails we’ll try the ombudsman for maladministration.

1964 - 24 October 2011 02:39 PM

It just seems so blatently unfair. I’ve always felt that about HB/CTB overpayments. If the client had been less on the ball we would probably have had a better case.

I’m offering an LA perspective here, please don’t bite!

Sometimes the correct decision can be perceived as being unfair. However I don’t see how the present case is unfair. Your client informed the LA of a change, she knew it would affect her benefit, she just didn’t realise the extent to which it would affect her entitlement. She continued to receive the same amount of benefit for a relatively short period - it sounds like she knew she was receiving too much. All that is being asked of her is that she returns some money she should never have received.

CH/0866/2006 may be relevant: “it is important to remember that no penalty is being imposed on the claimant; she is merely being required to repay a considerable sum that she should never have had. She presumably derived some advantage from that overpayment at the time and that muyst be set against the undoubted, and unfortunately unexpected, disadvantage she now suffers while repaying it.”

Yes it can be perceived as unfair, but no more unfair than, say, underpaying tax in one financial year and having to pay some extra the following year. Its just a question of balancing the books.

I would say it would be more unfair to taxpayers, and other benefit recipients, to allow the claimant to keep the overpayment. The recent Court of Appeal judgement in the CPAG case made it clear that HB is a balancing act between the needs of those who use the scheme and the needs of those who pay for it.

You may well get lucky with a judge, but I would suggest the best course of action would be to ask for a discretionary partial write-off.

We need to get back to facts here because whether or not the person concerned could reasonably be expected to realise (ie to fully understand) at the time the payment was made that it was an overpayment is what is at issue. That is essentially a determination of fact. Morality does not come into and and It may not always be helpful to extrapolate from various Commissioners and Upper Tribunal decisions because they are all determined on their own particular facts.

The test is both objective and subjective.  It depends on what information the claimant had at the time (CH/2554/2002…probabably the lead case in this area, I dont know of a decision that has departed from it ).  That is the objective part of the test. The test is also subjective in that a particular claimant may for exemple be an ex LA benefits assessor who is well versed in the niceites , but another claimant may be barely literate and could not be expected to be as well versed as the ex assessor..

What is also commonly misunderstood is that many if not most overpayment cases involve not just one overpayment, but a series of overpayments.  This is what R(H)1/02 addresses.  It is also worth bearing in mind that if the benefit is paid direct to the landlord, the claimant may not receive an advice notice from the LA and in those circumstances, it will be arguable that the claimant might not reasonably be expected to realise that a payment had been made and that it was an overpayment (CH/0939/2004)

Tony Bowman - 25 October 2011 12:59 PM

.... there was a court decision many years ago (made under the old review board system) that said in essence that a claimant can’t know he’s being underpaid if he doesn’t know how the benefit is calculated.

On that single point, the difficulty is that the case law I’ve been able to identify expressly finds differently.  In CH/22002008, the UTJ addressed that very point and made the distinction between the ability of a clmt to accurately calculate entitlement and being reasonably expected to realise there was an (any) overpayment.  I’ve just stumbled across yet another case, CH/4217/2003, where the Cmmr again found an overpayment was recoverable if the clmt could reasonably be expected to know there was at least an element of overpayment; it wasn’t necessary to find the clmt must know the amount of overpayment.

In the case cited by “1964”, the info given so far plainly says the clmt expected some change to benefit.  Applying the test of “which case would I want to represent at Tribunal if “winning” was everything”, I have to say the LA’s case looks mighty strong on this occasion (legally, if not morally).

I think the old court case is R v Liverpool City Council ex p Griffiths QBD (1990).  Mr Commisioner Jacobs refers to it at paragraph 10 of CH/2554/2002.

“10.  The tribunal directed itself correctly on these points. The points emerge from the words of the legislation itself. The decision of Mr Justice Nolan in R v Liverpool City Council, ex parte Griffiths (1990) 22 Housing Law Reports 312 at page 317 is regularly cited. Citation of that decision is unnecessary and can be unhelpful. The facts were very different from any that will come before appeal tribunals - they concerned the estimates of entitlement to benefit that were used in the transition to the housing benefit scheme from April 1988. Also, the point for which the decision is quoted is actually the argument of counsel recorded by Mr Justice Nolan. “

I still think that what a partiular claimanat can resonably be expected to realise is essentially detemination of fact, not of law, and citing various Commissioners and Upper Tribunal decisions can lead to getting off the point

I have attached a copy of Griffitihs for historical interest