Benefit Overpayments:

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Benefit Overpayments A training update for
Customer Service staff
Housing Benefit Training
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Benefit overpayments
What is an overpayment? overpayment means any
amount which has been paid by way of Housing
Benefit and to which there is no entitlement
under these Regulationsand includes any amount
paid on account under regulation 93 which is in
excess of the entitlement to Housing Benefit as
subsequently decided (HB Reg 99/HB SPC Reg 80)
Overpayments essentially arise either because
the benefit decision was made in ignorance of a
material fact or based on a mistake. Once the LA
becomes aware of the correct circumstances they
will make a new decision based on the correct
information
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The overpayment notification

• When the overpayment notification is received
• What does the claimant want to know
• Can it be reduced?
• Why is it recoverable?
• Which is linked to
• What caused it?
• Who should the LA be recovering from?
• What can they do if they want to dispute it?

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Can the overpayment be reduced?
Has the customer been asked to provide
information which would reduce any
overpayment? Underlying entitlement is an
accounting device to reduce an overpayment by
an amount the customer would have been eligible
for, if their true circumstances had been known.
It is not a payment of benefit. Example1 A
claimant on JSA(IB) starts work and his claim is
suspended. This creates a 3 week overpayment
(80x3 240). The claimant is notified and
asked to provide details of his new income within
a calendar month. The information is provided
and he turns out to be entitled to 40 a week.
His overpayment is reduced by 120 (40 x 3)
and his claim continues.
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Underlying entitlement

• From the claimants viewpoint, underlying
  entitlement has its limitations.
• Any gap in entitlement will still require a new
  claim even where underlying entitlement reduces
  the overpayment to zero.
• Any underlying entitlement awarded has to be due
  within the overpayment period,
• If the notified change would increase the
  entitlement above the level paid any extra is
  not paid.

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Recoverability and Liability
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Why is it recoverable?
Was the overpayment due to official error?
No
Yes
Could the claimant (or the person to whom payment
was made) reasonably have been expected to know?
Recoverable
Yes
Unrecoverable
No
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Who should the LA recover from?

• Recovering the overpayment
• Once the LA has established that the overpayment
  is correct and recoverable, it now has another
  series of decisions to make
• From whom can the overpayment be legally
  recovered?
• From whom should the overpayment be recovered?
• Should the LA actually seek to recover the
  overpayment?

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Who should the LA recover from?

• For overpayment decisions made prior to the 10th
  April 2006, the LA had a legal choice from whom
  it could recover. Once it made that choice it
  could only be challenged at a Judicial review.
• The choices were
• The claimant
• The person who received the payment
• Any person (e.g. an appointee) who misrepresented
  or failed to disclose a material fact which
  resulted in the overpayment
• The claimants partner

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Who should the LA recover from?

• For overpayment decisions made prior to the 10th
  April 2006, the LA had a legal choice from whom
  it could recover. Once it made that choice it
  could only be challenged at a Judicial review.
• The exceptions were
• If Reg 101(1) applied, in which case the LA could
  not recover from the landlord/agent.
• In Reg 101(4), instalment recovery cannot be made
  from the claimants partner, unless they were
  partners during the period of the overpayment and
  at the time of recovery.

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Who should the LA recover from?

• The regulations were amended on the 10th April
  2006. Now, for any overpayments after this date
• The Reg 101(1) exemption preventing recovery from
  the landlord no longer applies when the
  overpayment arises due to the claimant vacating
  the property.
• Reg 101(2)(a) now limits recovery to the person
  who caused the overpayment or could have known it
  was occurring even where payment has been made to
  a third party.
• Reg 101(2)(b) also allows recovery from the
  claimant and/or partner, as well as the person
  the HB was paid to, where there is a no fault
  overpayment to be recovered.

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The discretion to recover

• LAs have the discretion not to recover a
  recoverable overpayment. When making the
  decision to pursue recovery the LA should
  consider
• The LA finances
• The circumstances of the claimant
• Age, health, ability to pay, amount of the
  overpayment
• There will also be additional local factors to
  be taken into account such as corporate
  Write-Off policies and the LAs Anti-Poverty
  Strategy. However, the final decision rests with
  the LA and is not subject to an appeal.

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Notifications and Appeals
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Notification and Appeal Rights

• You will be asked questions. Do your letters
  give sufficient information to allow you to
  answer the claimants enquiry?
• Why is it a recoverable overpayment?
• Why are you recovering from me?
• The change which caused the overpayment
• The actual period covered by the overpayment
• The date the LA were informed of the change
• The date the LA actioned the change

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Notification and Appeal Rights

• The Decision Notice
• The LA should provide claimant/affected party
  with
• Confirmation that it is a recoverable
  overpayment,
• The reason why it is a recoverable overpayment,
• The amount, how it was calculated and the period
  it relates to,
• The decision of the LA to recover,
• The decision on the possible targets for recovery
  (subject to appeal),
• The decision on the actual target for recovery
  (not subject to appeal).

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Notification and Appeal Rights

• The Decision Notice
• The LA should provide claimant/affected party
  with
• The right to a written statement,
• The right to an appeal within the given time
  limits (normally one calendar month),
• The right to make full repayment or negotiate
  some other arrangement within 28 days.
• In addition, LAs are required to notify
• The proposed amount of instalment recovery (if
  applicable)
• The method of recovery if a CTB overpayment

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Notification and Appeal Rights

• The Decision Notice
• The LA must ensure that ALL the affected parties
  are notified in accordance with the Regs and
  given the appropriate appeal rights
• Decisions subject to appeal
• Is the overpayment correct?
• Is the overpayment recoverable?
• Can we legally recover from the persons
  identified?
• Decisions not subject to appeal
• The method of recovery
• From whom the benefit should be recovered

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Notification and Appeal Rights

• Making an Appeal
• Before an appeal can be accepted it must
• In writing
• Be signed by the appellant or appointee
• Be received by the LA within a calendar month of
  the original notification or later if good
  cause is established
• Advise the LA you want to appeal
• Identify the grounds for an appeal
• Give sufficient detail to allow the LA to
  identify the decision they wish to appeal against.

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The Recovery Process
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The Recovery Process

• Managing the recovery process
• The DWP advise that no recovery should take place
  until the calendar month for appeals has lapsed.
• LAs should seek to maximise the rate of recovery
  while having regard to the affected persons
  individual circumstances.
• If an appeal is outstanding recovery should be
  stopped until it has been decided.

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The Recovery Process

• Managing the recovery process
• Claimant is still in receipt of HB
• By deduction from ongoing HB payments.
• By withholding arrears of HB.
• Claimant is no longer in receipt of HB from the
  LA
• Invoice
• From deductions from certain DWP benefits
• Court action
• applying to another LA where the claimant is in
  receipt of HB
• recovery from a deceased persons estate
• Recovery from a blameless tenant

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The Recovery Process

• Managing the recovery process
• There is a time limit within recovery action
  must be taken once the claimant has been
  notified of the overpayment
• Once 6 years has elapsed the Limitations Act
  1980 will stop any court action being taken. The
  LA effectively has 6 years from that
  notification to start recovery action. There is
  no time limit where recovery is to take place
  from ongoing benefit
• However LAs should be able to prove that their
  notifications are compliant with Schedule 9 were
  sent and to the correct address.
• Where the overpayment has been newly created the
  period of the overpayment is not subject to the
  Limitation Act.

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Prevention
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Prevention