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Forum Home  →  Discussion  →  Housing costs  →  Thread

HB overpayment and proper construction of reg. 100(4)?

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Welfare Rights Adviser - Southwark Law Centre, Peckham

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Have to confess I am struggling somewhat with this….

reg. 100(4)  Where in consequence of an official error, a person has been awarded rent rebate to which he was not entitled or which exceeded the benefit to which he was entitled, upon the award being revised or superseded any overpayment of benefit, which remains credited to him by the relevant authority in respect of a period after the date on which the revision or supersession took place, shall be recoverable.

It is the “...any overpayment, which remains credited to him by the relevant authority in respect of a period after the date on which the revision or supersession took place…..” bit that I am struggling with. In particular, how does one relate a credit on the rent account to a particular period? I’m finding the wording of the commentary in the latest Findlay less than helpful;

paragraph 4. This provides that certain overpayments of rent rebate are always recoverable. There are four conditions for its operation;

(1) There has been a revision of the award. It does not appear to apply if the award is correct but, for example, the claimant is credited twice on her/his account due to clerical error.

(2) It also appears that the claimant’s rent account must be in credit for the paragraph to come into effect. So, if a claimant is wrongly awarded £100 rather than £50 rent rebate for four weeks, but incurs an annual service charge on the rent account of £500, the account will be £300 in the red and so the paragraph does not apply.

(3) The credit is in respect of a period after the revision. In respect of past periods, the exception does not apply and the three criteria can be considered.**

(4) Even if there is a credit after the date of the revision, that credit must be the overpayment and not the subsequent payments of rent rebate or made by the claimant.. If the latter is the case, then the surplus ought to be presumed to relate to the latest of the payments made into the rent account: Clayton’s case 1861 1 Mer 572. For example, a claimant wrongly awarded £100 rather than £80 for four weeks then has her/his rent rebate suspended for two weeks. After one week, the £80 credit has gone; after two, the claimant is £80 in the red. However, at the end of the two weeks, before a revision is carried out, the claimant pays £160 into the rent account. There is an £80 credit on the account when the review is carried out, but that represents the claimant’s voluntary payment rather than the overpayment.

** - poorly worded, but it’s clear that ‘the other three criteria can be considered’ means the other three criteria in paras. (1) - (3) of reg. 100.

What I really could have done with is an illustration/example of where para. 4 will actually apply.

To put this in context, the issue has come up in an overpayment appeal referred to me by a local housing solicitor. The solicitor dealt with the housing aspect of the case (i.e. under legal aid) but doesn’t have the funding to deal with the benefits aspect.

1. client is an LA tenant who was forced to vacate her home due to a flood 17/1/2013.

2. offered temp. accommodation but preferred instead to stay with her daughter until the May. At which point she did move into temp. accommodation.

3. I have the HB file, passed to me by the solicitor - it’s clear the authority were aware of her being unable to occupy. In fact there is a 13/7/2013 letter from HB on file confirming the authority will continue to pay HB for up to 52 weeks during the temporary absence so long as she intended to return (wrong, obviously, but it shows the authority was aware of the absence).

4. The decision to revise entitlement - and to create the recoverable overpayment - was made 31/1/2014. The decision was made on the basis of the housing/rent section’s decision to charge ‘nil’ rent for the period 17/1/2013 onward in consequence of the accommodation being uninhabitable. In other words, as there was no liability for rent, there was consequently no entitlement to HB. The overpayment was then recovered from the credit on the rent account that was created as a consequence of the ‘nil’ rent charge.

5. I think the solicitor has got the bit between his teeth because of a belief that the decision to ‘nil’ the rent was made on the basis of compensating the client. However, whilst I can see from the file that the client requested this, there’s nothing to indicate the decision was made on that basis. Even if it was, I assume it would have been a decision to reimburse what the client herself had paid (i.e. the ineligible service charges) rather than to put the HB in her pocket.

6. The HB file contains an email exchange between the officer who made the revision/overpayment decision and the rent/housing officer - the HB officer rightly refuses to make the revision/overpayment decision without the rent first being nilled. But the HB file does not contain a copy of the decision to nil the rent.

7. The appeals officer’s response argues reg. 100 (4) applies but also says that the credit was credited to the rent account on 2/2/2014 - prior to that and therefore at the date of the 31/1/2014 revision/overpayment decision - the account was in arrears.

8. Despite my conceptual difficulty with grasping exactly what is meant by “”...any overpayment, which remains credited to him by the relevant authority in respect of a period after the date on which the revision or supersession took place…..” maybe the answer is in what I’ve just said above in point 7 - there was no credit on the rent account at the time of the 31/1/2014 decision and so reg. 100 (4) cannot apply? Unless a decision to credit the account (assuming the authority could produce this) could count for this purpose, even if this wasn’t implemented/didn’t put the account in credit until 2/2/2014?

HB Anorak
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Reg 100(4) is aimed at a case where the claimant has reported a change of circumstance and started paying more/full rent in anticipation of HB ending/reducing.  The Council delays in dealing with the case, so the rent continues to be reduced by HB for one or more rent payment periods after the change was reported.  This means a credit is building up on the rent account.  When the Council catches up and processes the change of circs, it is allowed to claw back the credit on the rent account - it is an efficient way of dealing with an overpayment.

Your case is a different issue.  This is what is referred to as a “technical” overpayment for subsidy purposes - it attracts no subsidy.  As far as Reg 100 is concerned, I take the view that we don’t get that far - there has not been an overpayment at all.  HB in the form of a rent rebate reduces the amount that the claimant is liable to pay; the claimant is not liable to pay any rent for the period in question, so there is nothing to reduce by way of rebate, so there is no HB to pay and no overpayment.  The HB award has become null and void.  There can be no question of refunding the credit on the account to the claimant - there is no credit to refund, the account simply does not exist.

The fundamental nature of a rent rebate is that it does not take the form of a payment of some money by the Council to the claimant - the rent account is not being credited in that sense.  It is a reduction in the amount payable by the claimant to the Council - on any date when rent falls due, it has been reduced by the amount of HB awarded by way of rebate.

If you want case law endorsing exactly the same principle in relation to CTB, have a look at CH/3991/2014.  I did the Council’s submission in that case and the UT Judge has pretty much adopted it lock stock and barrel.  Unfortunately my copy weighs in at 7MB so I cannot upload and it isn’t on the UT public database.  If you want me to email it, let me know your email address.

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Welfare Rights Adviser - Southwark Law Centre, Peckham

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Thanks.

Out of the HB game for 5 years up until 6 months back (LA welfare rights that wouldn’t allow me to get involved in HB). That and the muddying of the waters by the LA appeals officer (reg. 100(4) is decisive for him) and the referring solicitor has helped create a wood and trees situation. Solicitor believes there was somehow an agreement to ‘compensate’ the tenant via the reduction of eligible rent to nil - but I’ve already pointed out that this would be an entirely novel way of compensating and something which I can’t accept happened without correspondence from the authority to confirm it. Even if that was the case, remedy wouldn’t be via a HB appeal anyway. What I think happened was a decision that the tenant should not have had to pay rent (ineligible service charges and HB shortfall) for a home she was unable to occupy. Reducing the eligible rent to nil had the effect (and was intended to have the effect) of refunding that money - but it wasn’t compensation in any proper sense and there was no intention she should be able to retain or pocket the HB paid during the period.

It would be handy to have a copy of CH/3991/2014 please.
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Bump. Peter - any chance of that decision? I’d message you but your inbox is full. Many thanks.

HB Anorak
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I thought I had emailed it.  I’ll try again.  I removed one of the dots from the email address - is that right?

Let me know if it hasn’t arrived in the next five minutes

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Welfare Rights Adviser - Southwark Law Centre, Peckham

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Ahhhh - sorry. My idiocy - one dot missing and one too many somewhere else….

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