Overpayment discovered in 2009 recovering now?

Hi i was wondering if anyone can help me track down relevent case law regarding this overpayment. I have a gentleman who inherited 40k from his sister’s estate in 2007. This man is a recovering alcoholic and gambler but at that time he blew the whole lot.In 2009 a letter was issued stating he was paid too much HB/CTB for 2007 to 2009, as he had capital over £16,000. HB stopped and He cannot remember if he told the housing benefit department or not but he was evicted and was homeless and living with others for years. He never heard nothing after that.  In May 2012 he was allocated a property in sheltered housing with us.  He was awarded HB but the overpayment reared its ugly head. I wrote against the overpayment asking for a statement of reasons. I recieved a letter stating that the overpayment was moved into a overpayment sub account but no repayment plan was made or issued. However they now have the facility to recover this overpayment through on-going benefit and will now be recoverable.  This man has no money and his small WP puts him just over the PCG figures.  Can they really recover 3 years after finding out about the capital.  I cant seem to get an answer from the tenant as he admits he cannot even remember having the money!
Any help will be appriecated!

Section 9 of the 1980 Limitation Act allows 6 years to apply to the courts for an order for a party to repay any sum recoverable by statute.  Up until recently the prevailing case law had ruled that this time limit didn’t apply to direct recovery from benefits by the DWP or an LA.  However, a recent High Court decision (Joseph v Newham Council) has decided that the time limit does apply to recovery from Housing Benefit.  I believe that, by extension, that, if that decision is safe, it should also apply to DWP benefits.  However, that decision has proved controversial and many believe the case wrongly decided.  However, this is all well and good, but because we are still within six years from when the cause of action accrued, the short answer to your question is they can.