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Housing benefit official error issue

LM2020
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Coventry Independent Advice Service

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Total Posts: 2

Joined: 6 January 2020

Hi
I am currently helping a client with housing benefit issue and it has now come to light the client has been underpaid LHA for past 4yrs. It relates to an extra bedroom entitlement for her disabled son.

HB have agreed it is an underpayment and are calculating figure poss 10/12,000 +compensation refund/payment, however cl has now been told they would need to recover from LL when paid. The cl has had 2 private LLs in this period and obviously does not want the refund to go to them.

There is no arrears because the cl made up the shortfall every week HB has always been paid direct to LL. The cl has 2 bedroom property currently and 3 children and is planning to move to 3 bedroom shortly. Cl also receives IS,CTC,CTS not sure how the payment would also effect these ?

Any advice much appreciated
Thanks

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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The starting point is Reg 94: by default, HB is paid to the person who is entitled to it.  There are exceptions in Regs 95 and 96 and the only one that might have applied in this case is Reg 96(1)(c):

96.—(1) Subject to paragraph 8(4) of Schedule A1 (treatment of claims for housing benefit by refugees), where regulation 95 (circumstances in which payment is to be made to a landlord) does not apply but subject to paragraphs (3) and (3A) of this regulation, a payment of a rent allowance may nevertheless be made to a person’s landlord where—

(a)the person has requested or consented to such payment;
(b)payment to the landlord is in the interest of the claimant and his family;
(c)the person has ceased to reside in the dwelling in respect of which the allowance was payable and there are outstanding payments of rent but any payment under this sub-paragraph shall be limited to an amount equal to the amount of rent outstanding.

If the rent has been paid in full, that reg cannot be relied on to pay the landlord.  While it shouldn’t be necessary, there is a right of appeal on the issue of to whom HB should be paid and the Council should suspend payment pending the outcome of any such appeal.

The HB arrears will be ignored as capital for as long as the claimant remains on any means-tested benefit that takes capital into account because the amount exceeds £5000 and the underpayment was an official error.  That doesn’t apply to any compensation, only the actual HB arrears.  See for example para 9(2) of Schedule 6 to the HB Regs which is replicated across all the means tested benefits.  The reference to “compensatory payment” in subpara (1) doesn’t mean compensation for maladministration, it means a payment made in place of the benefit arrears if for some reason they cannot be paid as actual benefit.

I don’t know whether the same principle applies in Coventry’s CTR scheme because it is impossible to find a copy of the scheme or even any information about the scheme on the Council’s website.  But if, like most authorities, they started with either the default scheme or David Airey’s version of the default scheme and made their own local adjustments, they would have had to make a special effort to remove that rule so chances are it is present in the scheme.

EJ
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Benefits advice line - Coventry City Council

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https://www.coventry.gov.uk/downloads/file/32610/council_tax_support_scheme_2020-21

I’m not sure whether this link will work, but this is the Council Tax Support scheme for Coventry. - not easy to find, I’m afraid.  I think you can copy and paste to get an access to download.
sorry - am rubbish at technology
Elaine

 

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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Thanks for that.  Yep, so it’s a regular David Airey scheme and the disregard for arrears of HB is present.  For claimants in receipt of legacy benefits the disregard is at page 132

LM2020
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Coventry Independent Advice Service

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Joined: 6 January 2020

Thanks for that

All very helpful replies and loads of useful info
Thanks