Overlapping payments subsidy – source?

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  • #286496
    Peter Barker
    Keymaster

    Hi all, putting this here as well as the subsidy board in the hope there will be more passers-by likely to see it!

    When someone claims UC and their HB terminates, there is often an “overlapping” HB overpayment. Reg 10 of the UC (Transitional provisions) Regs 2014 says this overpayment cannot be recovered under the HB Regs and instead it is taken into account as income in the UC calculation. If it’s a relatively short period, it might be possible to account for the overpaid HB in the first UC calculation: “You’re entitled to £1,000 this month, you’ve had £500 of HB, here’s the other £500”. But if UC payments are made before DWP is aware of the overlapping HB, these UC payments will have to be recalculated and there will be a UC overpayment.

    It is received wisdom that the overpaid HB attracts 100% subsidy and is “parked” for administrative purposes as DWP error (even though that is not an accurate description of how it was caused). But it is difficult to pin down a source for that. I found a circular from way back in the early pilot stages of UC full service advising authorities involved at that stage to classify overlapping payments as DWP error, but I cannot find anything since then. There appears to have been no amendment of the Subsidy Order to reflect this practice.

    It is not usually a massive amount of money, but it is in the case I’m looking at and it would be very reassuring to have that source!

    Thanks in advance.

    #286498
    helevans
    Participant

    The Q&A in G5/2018 has:

    Q3. When an overpayment of HB has been created and classified as a DWP error following the migration to UC. Should the two week Transition to UC Housing Payment be offset against the DWP overpayment period or should an additional two week payment be paid and not offset against the DWP overpayment period (if it’s for the same period)?

    A3. Any overpayment that is created for the same period as the two week Transition to UC Housing Payment should be offset from that payment as it is HB entitlement. Any overpayment that occurs after the end date of the Transition to UC Housing Payment is classified as a DWP error overlap.

    There was also a UC full service LA guide in July 2018 that stated:

    What overpayment action should the LA take where a HB claimant moves to UC and receives both HB and UC for a period?

    LAs should create any overpayment arising from a claimant ceasing HB some time in the past in order to switch to UC; as DWP error in their system and class as non-recoverable. There will be no subsidy implications for LAs as they receive 100% subsidy for these types of overpayment. LAs should then record the overpayment on the UC MGP1 (LA) form. DWP will deduct the “overlap” from the first UC payment. Found it online – http://interchange.moray.gov.uk/downloads/file128052.pdf

    I haven’t found anything more recent – the (annoyingly and ridiculously late) HB audit for 2022/23 that we’re going through also had an auditor question on this and they were fine with this as a reply.

    • This reply was modified 3 months, 4 weeks ago by helevans.
    #286500
    Peter Barker
    Keymaster

    That is good enough for me, thanks for the prompt reply

    #286501
    Andy Thurman
    Keymaster

    Hi Peter,
    I would also argue that it is usually an accurate description! What other classification would be more appropriate?

    You could argue (in some cases) that it is more LA than DWP but, having exposed the LA’s to this additional potential for error by the set out migration process, the DWP are significantly contributing? i.e. an LA cannot be expected to fully negate errors in the labyrinth of the parallel systems the DWP has created.

    #286502
    Peter Barker
    Keymaster

    Thanks Andy. There will be some cases like that I think – the classic would be a delay providing a stop notice.

    The causation in this one is … well, let’s say it’s complicated!

    #286977
    Georgie
    Participant

    Thank you, I have been searching for this info also.

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