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HB decisions
Hi all,
Struggling with this one - hoping for help (or someone to tell me it’s hopeless).
I’ve recently had a couple of people look for help regarding Housing Benefit overpayments which arose more than 5 years ago. For both people the overpayments occurred due to them moving home and all notifications were sent to their previous addresses. Both of them have only now been sent letters to their current addresses regarding these overpayments despite one of them receiving HB at the current address for 5 years and the other for 2 years.
Is there anything I can do regarding these?
My thoughts so far have been whether they can still be recovered at all - I thought I’d read something about the possibility of debt recovery for benefit overpayments becoming subject to the usual debt recovery rules (so if no recovery action being taken within 5 years (Scotland) the debt is not able to be recovered). Of course I now can’t find what I thought I’d remembered reading!
Also whether it would be possible to appeal on the basis that no effective notifications were sent as both lots of notifications were sent to addresses where it was known the person no longer lived and therefore the appeal ‘clock’ starts from the recent letters.
I’m aware I’m clutching at straws but any thoughts would be helpful - even if it’s a ‘nae chance’ response, as I can then at least tell the tenants involved they’ll have to pay the overpayments.
Mairi
Notifications of this nature must be notified in accordance with HBR 90 (“working age” cited). For notifications issued under the HB regs 2006, they must be successfully communicated - it is strongly arguable the LA cannot rely on reg 2 of the HB/CTB (Decisions & Appeals) Regulations 2001 (see CH/1764/2008).
Further, do the latest “notifications” contain appeal rights? If not, the time limit hasn’t yet started (several authorities on this point).
Alternatively, ask for a statement of reasons in relation to the decisions that gave rise to the alleged overpayments - there is currently no time limit under HB/CTB legislation. An “in-time” appeal can properly be made within 14 days of a SoR - even if the appeal would otherwise be years out of time. The “14-day” appeal rule following SoRs is within Schedule 1 of The Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008.
Based on the info given so far, I don’t think you can argue any protection under the Limitations Act at this time.
[ Edited: 3 Aug 2010 at 12:16 pm by Kevin D ]Thank you so much Kevin.
Mairi
I’m not so sure you can’t use the Limitations Act. Under English law the period is 6 years, but I believe it is 5 years in Scotland. If Scottish law is otherwise the same as English (needs checking!) then the 5 years runs from the time the debt was last acknowledged or a payment was made on it. If it has never been acknowledged & no payments have been made (which is what your post implies) then the 5 years starts from the time the decision was made that there was an overpayment & the period for any appeal has expired (or an appeal was unsuccessful).
I’m sure Kevin is right in saying the you can argue that appeal rights still remain, but wonder whether as an alternative you could possibly succeed in arguing that the original notifications to the wrong addresses (which the LA is now relying on) meant that the appeal rights had been exhausted. However, if you want to go down this route you need to be absolutely sure of the facts & of the Scottish Limitations law. If you do try this approach & the LA rebuts it, they would presumably have to do so by admitting that appeal rights still remained, in which case you could follow the route Kevin sets out.
In English law the Limitation Act only applies to starting court proceedings within the limitation period. It does not extinguish the debt or prevent a creditor from using any other recovery method which is handy, such as offsetting the debts against any money he owes to the debtor. Certainly with recovery from ongoing benefits in DWP benefit overpayments the Limitation Act does not apply.
It also does not apply in fraud cases.
but wonder whether as an alternative you could possibly succeed in arguing that the original notifications to the wrong addresses (which the LA is now relying on) meant that the appeal rights had been exhausted.
The difficulty is that even if the LA readly accepts the notification process was defective (whether in procedure or substantive content), there is nothing in law to stop the LA from simply rectifying that process and, effectively, restarting the process from scratch. Of course, this is not withstanding any arguments as to Limitiation.
In English law the Limitation Act only applies to starting court proceedings within the limitation period. It does not extinguish the debt or prevent a creditor from using any other recovery method which is handy, such as offsetting the debts against any money he owes to the debtor. Certainly with recovery from ongoing benefits in DWP benefit overpayments the Limitation Act does not apply.
It also does not apply in fraud cases.
I don’t believe this is correct. I’m slightly hesitant here because this isn’t an area where I am particularly knowledgable - so when I had a case with these issues a couple of weeks ago I had to research and contact the Citizens Advice specialist support.
In my case my client had an IS overpayment due to fraud dating from 91-93 and notified (correctly) in 1994. Client served community service and paid a fine. He believed that he had paid back the overpayment but I suspect this is confusion with the fine paid (as I would expect paying £14000 to be rather more memorable - he couldn’t remember how much or how long he paid for at all). DWP say only £500 was paid back. Either way nothing was heard until a recent letter out of the blue - one of those “about the money you still owe us” letter for £14000.
The first thing I checked out was whether the debt could be time barred - as I know debt due to fraud is treated differently for bankruptcy and DRO, I wondered if that might be the case there. Debt handbook etc. didn’t get me anywhere.
Specialist support said “There is nothing in the Limitations Act which stops a debt from being time barred because of fraud.”
As I “knew” that benefit debt could be recovered via benefit even when statute barred from court action I was going to tell the client that he could basically not be made to pay unless he claims again in future.
However specialist support also said that a recent court case had challenged this. The case in 2009 of Joseph v Newham :
“confirmed that statute barred overpayments cannot be registered in the county court for overpayment. Therefore, if the final decision on an overpayment was made more than six years before the DWP or the local authority applied to have the debt enforced by the county court, subject to part payment or acknowledgement, the debtor can apply under CPR 3.1(7) on form N244 to have the order revoked, citing s9. The application should be made as soon as possible after the debtor becomes aware of the order as it may be refused where there is unnecessary delay.
It had been thought that the Limitations Act did not apply to the recovery of overpayments of benefit by deduction from the debtor’s current benefit. However, Joseph v Newham, held that statute barred overpayments could not be deducted from current benefit on the grounds that the authority to make deductions was a statutory power under SSAT 92 and was, therefore, subject to s9. Therefore, where an overpayment is statute barred, no deduction from benefit should be made to recover it.”
The case was actually about housing allocation - that Newham should not be allowed to penalise a tenant using the bidding allocation system where the debt is time barred. The judge saying “it is unlawful for Newham to apply its property-related debt policy when operating its choice-based housing allocation scheme to debts created by the requirement to repay overpaid housing benefit where those debts are irrecoverable by virtue of section 9 of the Limitation Act 1980…”. This being seen to give a wider implication that a council should not use extra powers to compel people to pay debts it can’t collect in court.
So the advice I was given is that my client’s debt is time barred. And that if he goes back onto benefit and they still attempt to collect then we should object. We are going to ask for a write off but I suspect not - as they hold out in hope that he will claim again and that a new decision could reverse this one.
As I said at the beginning I’m very much relying on information I have been given by others - but it is a good source.
Victoria J
[ Edited: 16 Aug 2010 at 04:29 pm by Victoria J ]The judge is clearly wrong. “Action” in section 9(1) of the Limitation Act means a court action, in my view. It does not mean “procedure” or “step”. This is a very strange judicial review case and I have no idea whether the judge in question (who was sitting apparently in the Commercial court) knows anything about social security law. It also appears to have concerned a different section, not section 71.
There is ample, undisturbed case law such as R(SB) 5/91 and CIS/026/1994 confirming that it is only the right to bring a court action that is prevented by the Limitation Act. Both these cases do, however, confirm what Joseph states, that the 6 years only starts to run from the date of the overpayment decision, not from the date on which the overpayment is alleged to have occurred.
The judge is clearly wrong.
[...]
There is ample, undisturbed case law such as R(SB) 5/91 and CIS/026/1994 confirming that it is only the right to bring a court action that is prevented by the Limitation Act.
If those are both commissioners decisions doesn’t the high court take precedence ? In which case it doesn’t really matter if the judge is utterly barking…
Victoria J
If those are both commissioners decisions doesn’t the high court take precedence ? In which case it doesn’t really matter if the judge is utterly barking…
Victoria J
Commissioners’ decisions are made in a jurisdiction “coordinate with the High Court” - R(IS) 15/99. R(I) 12/75 suggests a HC judgement carries more weight, but R(IS) 15/99 is a later decision and as it is of equal standing with R(I) 12/75, it is more likely that R(IS) 15/99 will be preferred.
Commissioners’ decisions are made in a jurisdiction “coordinate with the High Court” - R(IS) 15/99. R(I) 12/75 suggests a HC judgement carries more weight, but R(IS) 15/99 is a later decision and as it is of equal standing with R(I) 12/75, it is more likely that R(IS) 15/99 will be preferred.
Ah - thanks. I’m not great on the rules re. precedent.
So they would be equal and oppposite.
Outside of physics where does that leave us ?
Victoria J
In exactly the same place as in any case where the Commissioners/UT disagree, or where different High Court decisions are in conflict - limbo….you pays your money and takes your choice.
Or you “distinguish”, which means looking for differences in the factual circumstances which mean that the cases are not on quite the same point. There is a lovely lawyer’s expression which is that a particular case is only binding “on its facts” - ie, that only in exactly the same circumstances will it be followed. Sadly, a decision that a case is only binding on its facts can only be made by the next appeal tier up, ie the Court of Appeal.
I note that Upper Tribunal judges are not paid the same as High Court judges; they are on the same pay scale as Circuit/County Court judges.
for what it’s worth, i am of the view that a High Court Judge trumps a UT Judge….until the CA tells me otherwise…
on the other hand ....
Or you “distinguish”, which means looking for differences in the factual circumstances which mean that the cases are not on quite the same point. There is a lovely lawyer’s expression which is that a particular case is only binding “on its facts” - ie, that only in exactly the same circumstances will it be followed. Sadly, a decision that a case is only binding on its facts can only be made by the next appeal tier up, ie the Court of Appeal.
Difficult with this case I’d have thought. The case itself (which is here for anyone else who wants it) isn’t about recovery through benefit at all, but the judge goes through the issue in detail and decides it’s completely unacceptable.
I’m interested in why you believe he is wrong. It’s not an issue I have a lot of knowledge about.
The reasoning from the case (again for anyone else as Ariadne is clearly familiar with it) is :
“The starting point of my consideration of this short point of construction is to look at how this type of debt is referred to in the relevant legislation. The reference in the policy to housing benefits overpayments is an obvious reference to the debt created by section 75 of the Social Security Administration Act 1992. This provides:
“Housing Benefit
75. Overpayments of housing benefit
(1) Except where regulations otherwise provide, any amount of housing benefit paid in excess of entitlement may be recovered in such manner as may be prescribed either by the Secretary of State or by the authority which paid the benefit.
(2) Regulations may require such an authority to recover such an amount in such circumstances as may be prescribed.
(3) An amount recoverable under this section is in all cases recoverable from the person to whom it was paid; …
(4) Any amount recoverable under this section may, without prejudice to any other method of recovery, be recovered by deduction from prescribed benefits.”
I should also refer to section 9 of the Limitation Act 1980:“Actions for sums recoverable by statute
Time limit for actions for sums recoverable by statute
9. (1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
A deduction made from a payment otherwise payable is not, on the face of it, subject to a time limit imposed for actions for sums recoverable by statute. However, it is to be noted that what may be deducted pursuant to section 75(4) is “any amount recoverable under this section”. The relevant sum to be deducted is “any amount of housing benefit paid in excess of entitlement [that] may be recovered” in the prescribed manner (subsection (1)). The overpaid HB that is being recovered is being recovered by virtue of this statutory provision so it is only recoverable within six years from the date of the cause of action accruing (section 9 of the LA 1980). Thus, once overpayment ceases to be recoverable under subsection (1), it is no longer recoverable under “this section” and is, therefore, no longer capable of being recovered by deduction from HB. The same situation arises under the current Housing Benefit Regulations 2006 because the power to deduct only arises in relation to recoverable overpayment (Regulation 102(1)). This construction of section 75 is supported by the reasoning of Mummery LJ in the analogous decision of the Court of Appeal in Regina (Balding) v SS for W & P) [2007] EWCA Civ 1327, particularly at paragraphs 27 – 29.If the debt is irrecoverable because it is statute-barred or time-barred if Newham sue for it or claim it from Mr Joseph or if it is to be recovered by a deduction from HB payments otherwise to be paid by Newham, the debt would also fall to be written off under Newham’s debt write-off policy. I also observe that the power to include a provision in a local authority’s housing allocation policy should only be used for such bad property-related debts as constitute “minor rent arrears” (see Code of Guidance, paragraph 5.23). Once such arrears become statute-barred, they are not properly described as being arrears at all. “
Where does that go wrong ?
I note that Upper Tribunal judges are not paid the same as High Court judges; they are on the same pay scale as Circuit/County Court judges.
I love the idea of how well that argument would sit with the upper tribunal judges…
Victoria J
Resurrecting this to ask:
Has the argument been tested yet - one way or the other - that the Joseph case means a DWP debt aged 6+ years should not be recovered by deductions from benefit?
They amended the Limitation Act 1980 to put the matter beyond doubt. See section 108 Welfare Reform Act 2012- in force from 8/3/2102.
Section 108 has retrospective effect (section 108(4)) unless the court proceedings had already been commenced before 8/3/2012.
Joseph was a bonkers decision in any event.