BENEFITS OVERPAYMENTS POLICY
INTRODUCTION
This policy sets out the guidelines when dealing with overpaid housing benefit and overpaid council tax benefit.
An overpayment of benefit will occur where we have paid more benefit than the claimant is entitled to.
Regulation 98 of the Housing Benefit Regulations defines an overpayment as being “any amount of Housing Benefit which has been paid but to which there was no entitlement under these Regulations (whether on initial determination or as subsequently revised on review or further review) and includes any amount paid on account under Regulation 91 which is in excess of the entitlement to Housing Benefit as subsequently determined”.
Regulation 83 of the Council Tax Benefit Regulations defines an overpayment as being “excess benefit paid or allowed to the claimant and which they have no entitlement in law”.
Having identified that an overpayment has occurred we must determine:-
How the overpayment was caused.
Whether the overpayment is recoverable.
Whether we should attempt to recover the overpayment.
Who we should recover the overpayment from.
How we propose to recover the overpayment.
We recognise that each overpayment case should be reviewed on its own individual merits and that appropriate action should only be taken after consideration of all the facts. This guidance is intended to be a framework within which recovery decisions can be made.
How the Overpayment was caused
Benefit overpayments can arise for a number of reasons:
A claimant does not inform the Council of a change of circumstances until after the event or not at all. This is known as a “claimant error”.
A claimant (or a landlord) has knowingly claimed benefit or has falsified a claim to obtain benefit to which they are not entitled. This is known as a “fraudulent error”.
The overpayment was caused by a mistake made by the Council or the Department for Works & Pensions. This is known as an “official error”.
The overpayment was caused by the Council (or DWP) failing to act on information its has received (e.g. a change in circumstances). This is also known as an “official error”.
NB. Claimants are under a statutory duty to advise us if they experience a change in circumstances which might affect their entitlement. This statutory duty also applies to landlords (or other interested individuals, such as an agent) if benefit is being paid to them direct. Claimants and landlords are advised of this obligation on our application form and benefit determination letters.
Whether the overpayment is recoverable
Where an overpayment has arisen, a decision must be taken as to whether the overpayment is recoverable. Regulation 99 of the Housing Benefit Regulations defines the circumstances when an overpayment of Housing Benefit is recoverable. Regulation 84 of the Council Tax Benefit Regulations defines the circumstances when an overpayment of Council Tax Benefit is recoverable.
Where an overpayment is made due to a claimant error or a fraudulent error, it is deemed as being recoverable. Overpayments made due to an official error are only deemed as being recoverable if the claimant (or a person acting on his behalf or any other person to whom the payment was made) could reasonably have been expected to realise that it was an overpayment.
Whether we should attempt to recover the overpayment
Even though a payment may be deemed as recoverable, we still need to decide whether we should attempt to recover the overpayment. Guidance from the Department for Works & Pensions allows Councils to exercise judgement when deciding whether to collect a recoverable overpayment. However, the guidance explains that this should only be exercised in exceptional circumstances, otherwise Councils may be severely restricted in its ability to recover overpayments.
Generally, we will attempt to recover all “recoverable” overpayments. However, if the claimant’s circumstances are exceptional and indicate that recovery would be unreasonable and likely to cause distress, no recovery should be attempted. In these cases the overpayment should be submitted for write off in accordance with the Council’s Corporate Debt Strategy. Examples of exceptional circumstances include the following:-
Where the claimant (or partner) is suffering from a terminal illness and has no funds to repay the debt
Where the claimant is suffering from poverty.
Where the claimant is entering a nursing home or is suffering from mental illness and has no funds to repay the debt.
Decisions not to recover an overpayment must be made by at least Manager level only.
Who we should recover the overpayment from
Regulation 101 of the Housing Benefit Regulations and Regulation 86 of the Council Tax Benefit Regulations states those person(s) from whom an overpayment can be recovered from. An overpayment can be recovered from any of the following:-
The claimant.
The person to whom the overpayment was made.
In the case where the overpayment was caused by a misrepresentation or a failure to disclose a material fact, the person who misrepresented or failed to disclose that material fact.
Where an overpayment has been made to a landlord, recovery will be sought from the claimant in the following cases:-
Where the overpayment was caused by a claimant error and the landlord could not reasonably have been expected to know that the claimant’s circumstances had changed (eg the claimant starting work or receiving additional benefits).
Where the overpayment was caused by a fraudulent error and the Council became aware of that error due to information provided by the landlord.
How we propose to recover the overpayment
An overpayment of benefit may be recovered at any time regardless of its start date. Under the Limitation Act 1980, actions to recover an overpayment should be taken within six years of the overpayment being identified.
Overpayments of benefit can be recovered in the following ways:-
By issuing an invoice for the amount outstanding.
If the debtor is unable to pay the invoice in one amount, the Overpayments Officer can make arrangements for payment to be made by instalments. The Overpayments Officer will endeavour to collect the debt as quickly as possible, having regard to the debtor’s financial circumstances.
By deduction from the claimant’s ongoing Housing Benefit. Regulation 4 of the Housing Benefit Regulations sets out the deductions to be made from a claimant’s entitlement.
By recovering the overpayment from a landlord through the benefit paid to him in respect of another tenant. The landlord has to be advised that we are recovering the overpayment from the benefit due in respect of his other tenant(s).
If the claimant has moved to another area, we can ask the Council covering that area to recover the overpayment by deduction from his ongoing benefit entitlement.
By asking the Debt Management Services of DWP to recover the overpayment from benefit paid by DWP (e.g., income support, incapacity benefit, etc). In the case of Council Tax Benefit, to add the overpayment to the Council Tax account and recover it as Council Tax owed.
Administrative arrangements for overpayments
The Council uses the Academy Benefits system for recording the awarding and payment of Housing Benefit and Council Tax Benefit. Changes in circumstances, which may result in an overpayment of benefit, should be actioned and recorded on the system promptly and accurately. This will ensure that all overpayments are properly identified and the correct level of subsidy claimed. As the Council receives no subsidy in respect of overpayments caused by a local authority error, care should always be taken to ensure that these are minimised.
Staff raising overpayments should ensure: -
That the amount and reason for the overpayment are recorded accurately and promptly.
That any “underlying entitlement” is awarded and recorded against the overpayment.
That recovery is sought from the correct individual.
That any decision not to recover the overpayment is made by a Manager and recorded on the system.
The Academy Overpayments module is used to detail the action taken by the Council to recover overpayments. The Overpayments Officer, who is responsible for administering the recovery of overpayments, shall ensure:-
That action taken to recover an overpayment should be in accordance with this policy.
That all invoices and reminders produced are issued promptly and are checked for accuracy beforehand.
That any letters, emails or phone calls received in relation to overpayments, are actioned in accordance with the standards set in the Revenues & Benefits Business Plan That where an arrangement has been made with a debtor, for payment to be made by instalments, that this is monitored monthly and action taken promptly if the debtor fails to keep to the agreement.
That a monthly reconciliation of the “Control Account” for overpayments is undertaken to ensure that it balances with other feeder systems (e.g. Cash Receipting system, Ledger, etc).
That, in accordance with the Council’s Corporate Debt Strategy, debts which are considered as “irrecoverable” are regularly submitted for write off.
Monitoring arrangements
The following monitoring arrangements will be undertaken to ensure that overpayments are being administered correctly and in accordance with this policy.
A report detailing all outstanding overpayments and the recovery stages they have reached will be produced monthly. The Overpayments Officer will check the report to ensure the records are accurate.
The performance in relation to the collection of overpayments recovered will be monitored monthly.
The performance in relation to the amount of local authority overpayments raised will be monitored monthly.
The reconciliation of the “Control Account” for overpayments is undertaken monthly.
WHO DO WE RECOVER FROM AND WHY?
The main body of the policy details who we can legally recover an overpayment of benefit from. This document is provided to give staff guidance as to who we should recover the overpayment from and ensures that conformity is applied to all overpayments.
- If benefit was paid to the claimant, any overpayment should be recovered from them.
- If benefit was paid to the landlord or a third party (usually an agent acting on behalf of the landlord) any overpayment should normally be recovered from them. However, in the following circumstances recovery will still be sought from the claimant.
Where the overpayment was caused as a result of the claimant experiencing a change in circumstances (such as an increase in income, etc) and it is felt that the landlord (or third party) could not be expected to know of the change in circumstances.
Where the overpayment has been designated as a “fraud overpayment” and the Council became aware that fraud was being committed following information provided by the landlord (or third party).
NB. Landlords (or agents) are expected to be aware if the claimant has vacated the property, especially if the claimant is topping up the rent.
- In the case of Council Tax Benefit, the overpayment will be debited to the Council Tax account and collected from the claimant.
HOUSING BENEFIT OVERPAYMENT ACCOUNT RECOVERY PROCEDURES
AMOUNT OUTSTANDING ON ACCOUNT
/ RECOVERY ACTION TO BE TAKENUnder £5.00 and debt under 2 years old /
- account to be sent with decision letters
- account over £2.00 send 1st reminder
- submit account for write off for following month
- if customer balance greater than £5 pursue as below
£5.00 - £100 under debt under 2 years old /
- account and 2 reminders to be sent
- HB letter 1
- Legal letter recorded delivery
- determine if recovery possible for other Social Security benefits or Housing Benefit paid by another Local Authority
- if debtor is a landlord receiving housing benefit for current tenants consider blameless tenant recovery
- no legal action to be taken
- account to be submitted for write off
£100 - £200 and debt under 2 years old /
- Account and 2 reminders to be sent
- HB letter 1
- Legal letter recorded delivery
- determine if recovery possible for other Social Security benefits or Housing Benefit paid by another Local Authority
- if debtor is a landlord receiving housing benefit for current tenants consider blameless tenant recovery
- no legal action to be taken
- account to be submitted for write off after 2 years
Greater than £200 and debt under 2 years old /
- Account and 2 reminders to be sent
- HB letter 1
- Legal letter recorded delivery
- determine if recovery possible for other Social Security benefits or Housing Benefit paid by another Local Authority
- if debtor is a landlord receiving housing benefit for current tenants consider blameless tenant recovery
- send to Legal Services for recovery through County Court if information on file sufficient.
- if not account to be submitted for write off after 2 years
At any stage a debtor may make an arrangement to pay by instalments / Send letter confirming the arrangement with vouchers or standing order form
Default on arrangement – if debtor becomes 2 months in arrears with instalments / Send letter withdrawing right to pay by instalments
If no response send legal letter and proceed as per table above
If debtor contacts within 2 weeks ask for the arrangement to be bought up to date so that instalments can continue
NB The above assumes that the debtor is no longer in receipt of Housing Benefit in the Poole area. If at any stage they become entitled even once an account has been written off, the account must be recovered from ongoing housing benefit.
Procedure agreedProcedure amended 17 APRIL 2003
B M JONESJ R SPRINGETT