HB overpayments in TA due to not being on UC

I have a tenant who claimed HB while in temporary accommodation. Her partner is working and paid weekly and they have three children living with them - but are subject to the two child limit). They have a UC claim, and would almost always get some UC in their previous PRS property. HB started paying in full on the basis that they were “on UC”. Six months later, they looked at it again and realised there had been no UC entitlement in four of the last six APs, so they recalculated entitlement based on his earnings for the past five weeks (using payslips) - which meant there had in fact been no HB entitlement for a large part of the time. Quite correctly they have decided there has been overpayment.

My question is about recoverability. I am suggesting that the overpayments are not recoverable because they arose due to official error and weren’t caused or contributed to by the claimant. My reasoning is that the root cause of the overpayments was that HB made an assumption each week that the claimant was “on UC”. Their assumption subsequently turned out to be wrong in many of those weeks. The claimant didn’t cause or contribute to this because they did not, and could not, know whether they were “on” UC until at least the day after the end of each AP. By this time, all HB overpayments for that AP had already been made. If they had notified HB straight away that they weren’t entitled to any UC that month then it wouldn’t have made any difference - it was too late.

HB are arguing that this is somehow an overpayment where there has been no fault at all because it was caused simply by the fact that HB is paid weekly in advance and UC is paid monthly in arrears. So it’s not covered by Reg 100. I can’t see how there can be an overpayment if there has been no fault.

I would love to hear what anybody else thinks about this - am I missing something, am I just plain wrong?

I’d be inclined to see this as a no-fault overpayment, and therefore recoverable.

There are two ways the Council could avoid overpayments in cases like this (UC claimant with fluctuating earnings):

- suspend HB until the UC monthly statement is available, or
- calculate HB up front on the assumption that the claimant won’t be entitled to UC, then revise or supersede without time limit each time it turns out they are entitled to UC

I’m not sure it’s an official error to decline to do either of those things.  It’s a conscious choice about administrative efficiency.  There was a Commissioner’s decision once (I cannot track it down) which held that suspension of HB is a discretionary matter and the Council doesn’t have to do it - there would be no official error unless it was a perverse choice to make (eg claimant - “I’ve got all six numbers on the lottery - I’ll tell you the exact amount of capital when they pay me but I would expect it might well be more than £16,000”; council - “well let’s not be hasty, we’ll make a diary note to contact you again in a week or two”).

The basis for creating the overpayment is that there has been a change of circumstance (claimant no longer entitled to UC) which supports a superseding decision from the Monday after the last day of the previous AP.

Having said that, there is a UT decision pending about whether the claimant is actually “on UC” during such a month.  I cannot see it getting anywhere, but permission was granted

HB Anorak - 10 November 2023 05:30 PM

  There was a Commissioner’s decision once (I cannot track it down) which held that suspension of HB is a discretionary matter

R(H) 1/08?

Not the one I was thinking of.  R(H)  1/08 was about the person to whom HB is paid being a constituent determination embodied in the HB decision, and therefore the Council is allowed to suspend HB if an issue has arisen about whom to pay.

I’ve found the one I was after: it is the very short CH/2558/2007:

It appears to me to be a question of fact for the tribunal whether the relevant person or the council has made a mistake in failing to suspend benefit at any point of time. The fact that another person or council may have taken a different approach does not mean that one approach is right and the other approach is a mistake. This is an area where there is frequently room for more than one approach without either being categorised as a mistake. The claimant had explained with reasons how she has suffered a reduction of income. The tribunal was fully entitled to conclude that the council was entitled to investigate the position further without suspending benefit, and that there was no mistake in its doing so. Indeed, I find it hard to see how the tribunal could properly have come to any other conclusion on the facts of this case. It might have been different if the investigation had been unreasonably slow, or if proper enquiries had not been made as to the son’s earnings, but that was not the case here.

That’s interesting, thank you.

My starting point is that you can’t logically have an overpayment without a mistake of some sort. And my argument is that the mistake that caused the overpayment in my client’s case was the assumption that they were “on” UC. It is also true that the overpayment wouldn’t have happened if the benefit had been suspended but as you say, this could equally have been avoided by assuming there was no UC and then revising that decision at any time if it later turned out to be a mistake. The caselaw suggests not suspending wasn’t a mistake, so the only mistake we have left is the assumption about the claimant being “on” UC.

CH/2558/2007 was about a relatively minor change - a dependent child leaving school and a few weeks of partial overpayment. And I think it’s important to note that the appellant’s whole case was that the failure to suspend was a mistake. The tribunal considered this point and (I think correctly) decided it wasn’t a mistake. Following my first point; that would mean the mistake was the authority assuming that entitlement continued unchanged - official error. But it was recoverable because the claimant contributed to the mistake by not immediately providing all the information that was needed to make the decision on entitlement. I think pejorative terms like “fault” or “failure to disclose” are probably unhelpful because the claimant wasn’t doing anything “wrong” but they still contributed to the mistake (by their late reporting). If the claimant had gone to the authority and said their son had left school and was now working and earning £100 per week, the authority would have had enough information to avoid the overpayment.

EDIT: Having thought about this a bit more, another reason why the OP in CH/2558/2007 was recoverable might be that the claimant could reasonably be expected to realise they had been overpaid - which would presumably also cover Peter’s example of a lottery winner.

I think my client’s appeal is probably worth a shot.