A4, change of address and subsidy – part two

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 15 posts - 1 through 15 (of 36 total)
  • Author
    Posts
  • #33529
    peterdelamothe
    Keymaster

    Jane Autherson has agreed to allow HBINFO to post the following response on this issue. Many thanks to Jane (and to Jeff M).

    “When we changed the regulations (Regs) in April 2006 to allow an overpayment from a previous address to be recovered in one lump sum from Housing Benefit (HB) owing for a new property, but only when the HB was being paid direct to the claimant at both addresses, we had several meetings with our Solicitors and policy colleagues to make sure we were all interpreting both the Primary and Secondary legislation the same. We amended HB Reg 102(1)(A) so that local authorities (LAs) could recover the overpayment from the HB owing, rather than having to pay the claimant twice for the same period, and recover the overpayment from ongoing benefit, which could take months (or possibly even years).

    HB is paid for a particular address. That is why a claimant must provide proof that he has an agreement to live in a property, usually by providing a rental agreement. If the claimant is not resident in a dwelling, he is not entitled to the HB for that particular dwelling. It is therefore an overpayment. Now that a change of address is dealt with as a change of circumstances, provided that the claimant reports that he has moved within one month of doing so, he will be entitled to the HB for the new property from when he moved.

    We also amended HB Reg 104(1)(c) to clarify matters. It now specifically states that underlying entitlement is not appropriate in change of address cases: “except a change of dwelling which the claimant occupies as his home.”

    We are in the process of rewriting the HB/CTB Overpayments Guide, and we have included the various scenarios that can happen when a claimant changes address. I will attach it, although please remember there may be slight changes made before it is publicised in June.

    Underlying entitlement when a claimant moves address

    3.60 Underlying entitlement is not appropriate if a claimant has changed address. It does not matter if benefit is terminated or not. The reason for an overpayment if a claimant moves address is usually because they are not entitled to benefit because they have not been resident in the property. Therefore there is no underlying entitlement as there is no entitlement at all.

    HB Reg 104(1)(c) & (SPC) 85(1)(c)

    3.61 Section 130(1) of the Social Security Contributions and Benefits Act 1992 sets out the basic conditions of entitlement to HB. The main condition is

    “(1) A person is entitled to housing benefit if – he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home.”

    3.62 If a claimant has moved address and has continued to be paid HB for the property he is no longer living in (unless HB Reg 7(6) [(SPC) 7(6)] – “where a person is liable to make payments in respect of two dwellings” applies) there will be an overpayment. In most cases a claimant must be living in a property to be entitled to HB for it.

    3.63 The Housing Benefit and Council Tax Benefit (Abolition of Benefit Periods) Amendment Regulations 2003 came into force on 5 April 2004. From this date a change of address within an LA’s area, will be dealt with as a change of circumstances.

    HB paid to Landlord at previous address

    Change reported within 1 month

    3.64 When the claimant moves from Property A to Property B and reports the move within 1 month of it happening, any HB paid direct to the landlord of Property A for the period when the claimant was not living there will be an overpayment. The HB payable for property B will be payable from the date the claimant moved. It will not matter if the rent is more or less than the rent at property A. The new amount will be due.

    Example

    Mr O lives in property A and his landlord (landlord X) receives £60.00 HB a week for him. Mr O moves to property B, where his landlord (landlord Y) is charging rent of £80.00 a week. Mr O informs the LA that he has changed address three weeks after he has moved.

    There is an overpayment of £180.00 for property A, which the LA decides to recover from landlord X. This is because the landlord was paid the benefit and he has a responsibility, along with Mr O, to report that his tenant was not residing in his property. Landlord Y is owed three weeks rent. The LA pays £240.00 HB direct to landlord Y, therefore clearing Mr O’s rent arrears.

    Change reported after 1 month

    3.65 When the claimant moves from Property A to Property B and reports the move after one month of it happening, any HB paid direct to the landlord of Property A for the period when the claimant was not living there will be an overpayment.

    3.66 If the HB payable for Property B is more than that at Property A, this will be an advantageous change. Therefore the amount of HB that was payable for Property A will be paid for Property B up until the claimant has notified the change of address. From that date the new, higher amount of HB will be paid for Property B.

    3.67 If the HB payable for Property B is less than that at Property A, this will be a disadvantageous change. Therefore the amount of HB that is payable for Property B will be paid from the date the claimant moved into Property B.

    HB paid to Claimant at previous address

    Change reported within 1 month

    3.68 When the claimant moves from Property A to Property B and reports the move within one month, and the HB was being paid direct to the claimant, there will be an overpayment for the HB paid for Property A when they were not living there. This will only be recoverable from the claimant.

    3.69 If the HB is going to be paid direct to the claimant at Property B, the overpayment can be recovered in one lump sum from the HB owing for Property B. The amount of HB payable for Property B will be payable from the date the claimant moved (as they reported the move within one month).

    3.70 If the weekly amount is less than the HB at Property A, after the overpayment is recovered from the HB owing for Property B, any remaining overpayment will have to be recovered weekly from the claimant’s ongoing benefit.

    Example

    Ms F receives HB for property A at £80.00 a week. Ms F moves into property B, for which she would be entitled to £70.00 HB a week. Ms F informs the LA that he has changed address three weeks after she has moved.

    There is an overpayment of £240.00 for property A, as Ms F has not been residing in the property. Ms F is entitled to £210.00 HB for property B.

    The LA can recover £210.00 of the overpayment for property A from the HB owing for property B. The remaining £30.00 overpayment should be recovered weekly from Ms F’s ongoing HB payments.

    3.71 If the weekly amount is more than the HB at Property A, the full overpayment will be recovered from the HB owing for Property B. Any HB still owing for Property B should be paid to the claimant.

    Example

    Mr Y receives HB for property A at 60.00 a week. Mr Y moves into property B, which he would be entitled to £75.00 HB a week. Mr Y informs the LA that he has changed address two weeks after he has moved.

    There is an overpayment of £120.00 for property A, as Mr Y has not been residing in the property. Mr Y is entitled to £150.00 HB for property B.

    The LA can recover the overpayment of £120.00 for property A from the HB owing for property B. The remaining £30.00 arrears should be paid to Mr Y.

    Change reported after 1 month

    3.72 When the claimant moves from Property A to Property B and reports the move after one month, and the HB was being paid direct to the claimant, there will be an overpayment for the HB paid for Property A when they were not living there. This will be recoverable from the claimant.

    3.73 If the HB is going to be paid direct to the claimant at Property B, the overpayment can be recovered in one lump sum from the HB owing for Property B. If the amount of HB payable for Property B is more than the amount payable for Property A, the new rate will only be payable from the date the claimant reported the move (advantageous change). The weekly amount of HB owing for Property B will therefore be the same as was paid for Property A, so the full overpayment for Property A can be recovered from the HB owing for Property B. There will then be nothing left to recover, and nothing owing to the claimant.

    Example

    Miss U receives HB for Property A at £60.00 a week. Ms F moves into Property B, for which she would be entitled to £75.00 HB a week. Ms F informs the LA that she has changed address six weeks after she has moved.

    There is an overpayment of £360.00 for Property A, as Ms F has not been residing in the property. Ms F is only entitled to £75.00 from when she reported to the LA that she had moved. She is therefore only entitled to £360.00 HB for Property B.

    The LA can recover the overpayment of £360.00 for Property A from the £360.00 HB owing for Property B. The full overpayment is recovered and there is no HB owing to Ms F.

    3.74 If the amount of HB payable for Property B is less than for Property A, the new rate will be payable from the date the claimant moved (disadvantageous change). The weekly amount of HB owing for Property B will therefore be less than was paid for Property A, so the full overpayment for Property A will not be recovered from the HB owing for Property B. The remainder of the overpayment will have to be recovered from ongoing benefit entitlement.

    Example

    Mrs L receives HB for Property A at £80.00 a week. Mrs L moves into Property B, for which she would be entitled to £70.00 HB a week. Mrs L informs the LA that she has changed address six weeks after she has moved.

    There is an overpayment of £480.00 for Property A, as Mrs L has not been residing in the property. Mrs L is only entitled to £420.00 HB for Property B.

    The LA can recover £420.00 of the overpayment for Property A from the HB owing for Property B. The remaining £60.00 overpayment will have to be recovered weekly from ongoing HB payments.

    Note: Where HB is paid to the claimant at property A and to the landlord at property B and there is a recoverable overpayment, recovery must be made from the claimant. The overpayment cannot be recovered in one lump sum, maximum recovery rates should be applied and the landlord should be notified of the recovery from HB entitlement.

    You should claim subsidy for the benefit you have paid out. So you would claim the appropriate rate of subsidy for the overpayment period (this is usually 40% – Claimant error, for change of address overpayments). You would then claim subsidy for the correct benefit paid out for the new property, which is 100%. You would not offset the subsidy.

    I hope the above helps, but if you need anything further please let me know. I am always happy to discuss any matter you need further clarification on”.

    Kind regards

    Jane Autherson

    HB/CTB Overpayments Policy

    #93082
    peterdelamothe
    Keymaster

    Jane Autherson also wrote to HBINFO with the following very helpful clarification:

    “I can assure (your members) that when I changed HB Reg 104 I fully understood the Department’s position.

    The issue that seems to be in question is whether an LA can claim subsidy twice for the same period, both for the old address and the new property. This became the case when benefit periods were abolished. Guidance was issued, although looking back it could have been clearer. I amended HB Reg 104 to clarify matters. Our position has always been that you cannot calculate underlying entitlement on change of address cases. It is contained in the Overpayments Guide, which was published back in 2003 (we are in the process of rewriting it and the new edition should be published in June.) The fact is that if HB was paid for a property the claimant was not residing in, that it is an overpayment. Since the abolition of benefit periods, when change of address cases ceased being dealt with as new claims and became changes of circumstance, the claimant has been entitled to benefit from when they moved provided they reported it within one month. This means if the LA paid benefit out for a property the claimant wasn’t residing in, that it is an overpayment and they must pay benefit out again for the correct property.

    I amended HB Reg102 so that an overpayment incorrectly paid for a property the claimant wasn’t residing in, can be recovered in one lump sum from the HB owing for the new tenancy, but only if the HB was being paid to the claimant at both properties. Even though this is a very simple recovery process, presently LAs can claim subsidy for lawfully paid HB, which both the overpayment and HB paid for the second property, are”.

    #93083
    peterdelamothe
    Keymaster

    My own view on this:

    I have no doubt that DWP staff were fully aware of the impact of these changes. Perhaps Local Authorities could have thought this through at the time without the need for too much guidance? After all, it is their subsidy. Plus what about the auditors? What were they doing? Probably LA’s WOULD have done had it been on any subject except subsidy? Other regulation changes are analysed to the nth degree – yet eyes glaze over when the subject appears to be all about subsidy. Fortunately, nowadays there are more specialist subsidy postings on the boards.

    Well done to those who raised this issue; it should generate a lot of additonal subsidy for LA’s.

    #93084
    chris harvey
    Participant

    I think I understand this now but would appreciate some confirmation I am on the right track.

    As I see it and following the examples given by Jane, and using a scenario where the level of benefit is the same at both properties to keep it simple, whenever we pay a [b:443f2d4fcb]claimant [/b:443f2d4fcb]we would not pay the “new” benefit but use it to offset the overpayment. For subsidy because we are not paying any new benefit we would claim 100% subsidy on the old property and there would be no overpayment. eg we pay the claimant 3 weeks HB at £50 p/w total £150 at property A then find out the claimant has moved to property B and is owed 3 weeks HB. We would not pay the new £150 but use it to completely offset the overpayment at property A. For subsidy we would claim the amount actually paid which is 100% on the £150 paid on property A. There is no overpayment as it has all been netted off.

    Following this line of thought through, we should:-
    a) only claim the extra subsidy in cases we pay the landlord
    b) never claim the extra subsidy on rent rebates because these are always paid to the claimant (onto their rent account)

    #93085
    keith j
    Participant

    Sorry Chris, but I see it as 100% on the £150 for the new property, and 40% for the £150 opymnt on the old property. I agree with your “actual cash money paid” scenario, but not the Subsidy angle. Anyone else any ideas? I am open to persuasion….as the song goes

    #93086
    chris harvey
    Participant

    Yes I think I see where you are coming from. Reading carefully Jane’s response I think the new money not actually paid out is treated like deductions from ongoing benefit, you can claim it back in subsidy even though you have not actually paid it out.

    I am struggling with another scenario here, relating to Rent Rebate claims. I cannot see any difference in law between the application of these principles to both rent rebates and rent allowances. So if you have a rebate change of address and the claimant has moved out of the old property and not told us and we have an over at the old and an under at the new we should be able to claim the extra subsidy. However the rebate experts at my authority tell me that the Housing Dept here will end the tenancy when they move out and so there is no liability to pay rent at the old property and benefit cannot be paid where this occurs so the overpayment when we take the benefit off the rent account is a technical or paper one which will not attract subsidy. They are saying this is different to the scenario where there is still a rent liability but the tenant has no benefit entitlement because they fail to occupy the dwelling as the home. Our system when rent accounts are voided like this, takes back the benefit and marks the overpayment as paper. The effect on the subsidy claim is to claim nothing at the old property because the payments go in the top level gross expenditure cell and the paper overpayment goes in the technical cell reducing the amount subsidy is payable at 100% to nothing. The new address is paid the relevant amount and subsidy claimed in the normal way.
    If this is correct then in cases where rebates (or allowances too I think) have no rental liability then the extra subsidy is not payable, but in cases where there is a rental liability but no benefit entitlement then we can claim the extra subsidy on the overpayment.
    I know this is getting ridiculously complicated but would appreciate any further views on this.

    #93087
    seanosul
    Participant

    Chris you are correct and I have raised this with Northgate. The same would apply to Council Tax as well where a tenant left a 6 month tenancy early and therefore still maintained a greater interest in the property than a non resident landlord. (In most circumstances LAs would create an exemption and therefore this would not apply).

    I have also asked Northgate to supply a query for 2005/06 as the same applies.

    #93088
    beth_daly
    Participant

    I have just cancelled back a claim at one address to create an overpayment (and I indicated that this was a change of address within the the LA) and recommenced it a new address on our test system (Academy).

    When I ran the subsidy report for the claim the the overpayment is completely offset against the credit for the new address.

    From what I have understood from the posts before, if this had been a true case, then we would have lost 40% of the overpayment.

    I will be contacting our software supplyer to see what they have to say. This sure will be fun explaining this to auditors later this year if they are the same ones that I so confidently told that the overpayments should offset last year ❗

    Thank you all for some very interesting reading and information.

    Beth

    #93089
    chris harvey
    Participant

    Had a reply from Jane Autherson at the DWP about my query regarding cases where there is no rental liability. Seems you cannot claim the extra subsidy on these. Also confirmed the rules when they do apply can apply to Rent Rebates as well as Rent Allowances.
    Jane’s reply copied below:-

    “You are correct that the guidance applies equally to rent rebate as it does to rent allowance, however I would not expect this situation to arise in rent rebate cases very often (if at all). If a claimant moves from a local authority (LA) property to another LA property, the LA should be fully aware of the move. If the claimant is required to give 4 weeks notice at the first property, the LA should either arrange the move after the 4 weeks, or disregard the requirement to give notice. There should not therefore be an overlap of rental liability.

    The example you have given has been covered in the rewrite of the HB/CTB Overpayments Guide, under the Technical overpayments section. I commissioned legal advice on it, sometime ago. If a rent account is closed down (even if it is done retrospectively) and rent rebate is credited to the account for that period, the rent rebate can just be taken back from the account. Our Solicitors advised that it wasn’t an overpayment because the benefit was not lawfully paid benefit. However, I do understand that most software systems would want to classify this benefit as an overpayment, in which case it should be classified as a Technical overpayment. This is because there is no overpayment to recover, it is just a paper overpayment. The LA is not entitled to any subsidy for it. I will attach the section of the new guidance that covers this issue. I would like to point out that it may be changed slightly (only the wording, not the actual guidance) before it is issued in June.

    Housing Benefit – Rent Rebate
    HB technical overpayments can only occur in rent rebate cases. As with CTB technical overpayments this is due to liability ending, but benefit being posted to the terminated rent account. This is often due to both the claimant and housing department failing to notify the benefit section
    Example
    Mrs C claimed HB on 9th January 2007.
    Mrs C vacates the property and she is no longer entitled to HB from 12th August 2007.
    The LA close the rent account from 19th August 2007.
    Mrs C notifies the benefit section of the change on 28th August 2007, and they reassess the claim from 31st August 2007.

    There is an overpayment of HB from 13th August 2007 to 31st August 2006
    The HB overpayment will be broken down as follows:
    13th August to 19th August 2007 = Claimant error overpayment
    20th August 2007 to 31st August 2007 = Technical overpayment

    I hope the above is helpful, but please let me know if you need anything further.”

    #93090
    seanosul
    Participant

    [quote:fd29ffddb6=”chris harvey”]Had a reply from Jane Autherson at the DWP about my query regarding cases where there is no rental liability. Seems you cannot claim the extra subsidy on these. Also confirmed the rules when they do apply can apply to Rent Rebates as well as Rent Allowances.
    Jane’s reply copied below:-

    “You are correct that the guidance applies equally to rent rebate as it does to rent allowance, however I would not expect this situation to arise in rent rebate cases very often (if at all). If a claimant moves from a local authority (LA) property to another LA property, the LA should be fully aware of the move. If the claimant is required to give 4 weeks notice at the first property, the LA should either arrange the move after the 4 weeks, or disregard the requirement to give notice. There should not therefore be an overlap of rental liability.

    The example you have given has been covered in the rewrite of the HB/CTB Overpayments Guide, under the Technical overpayments section. I commissioned legal advice on it, sometime ago. If a rent account is closed down (even if it is done retrospectively) and rent rebate is credited to the account for that period, the rent rebate can just be taken back from the account. Our Solicitors advised that it wasn’t an overpayment because the benefit was not lawfully paid benefit. However, I do understand that most software systems would want to classify this benefit as an overpayment, in which case it should be classified as a Technical overpayment. This is because there is no overpayment to recover, it is just a paper overpayment. The LA is not entitled to any subsidy for it. I will attach the section of the new guidance that covers this issue. I would like to point out that it may be changed slightly (only the wording, not the actual guidance) before it is issued in June.

    Housing Benefit – Rent Rebate
    HB technical overpayments can only occur in rent rebate cases. As with CTB technical overpayments this is due to liability ending, but benefit being posted to the terminated rent account. This is often due to both the claimant and housing department failing to notify the benefit section
    Example
    Mrs C claimed HB on 9th January 2007.
    Mrs C vacates the property and she is no longer entitled to HB from 12th August 2007.
    The LA close the rent account from 19th August 2007.
    Mrs C notifies the benefit section of the change on 28th August 2007, and they reassess the claim from 31st August 2007.

    There is an overpayment of HB from 13th August 2007 to 31st August 2006
    The HB overpayment will be broken down as follows:
    13th August to 19th August 2007 = Claimant error overpayment
    20th August 2007 to 31st August 2007 = Technical overpayment

    I hope the above is helpful, but please let me know if you need anything further.”[/quote:fd29ffddb6]

    If the claim was re-instated from 13 August as a result of her change of address there would be no netting off for this period until 20th (where technical o/p kicks in) as there remains a liability and valid overpayment.

    #46596
    Anonymous
    Guest

    Only the DWP could possibly make something so complicated. It’s a wonder [b:d6244d535c]any [/b:d6244d535c]authority’s subsidy claim is 100% accurate

    #93091
    Simo
    Participant

    We’ve run the benfix supplied by Northgate and made the amendments for ‘no netting off’.

    My understanding (may be wrong) is that the o/p cells would therefore increase, which they have, however i thought that the expenditure cells would also have to increase similarly – which they haven’t.

    Am I right on this or have I now lost the plot?

    #46598
    seanosul
    Participant

    You are correct – that is what should happen (otherwise you are increasing the level of penalty)

    #93092
    keith j
    Participant

    [quote:074e7fc6bd=”simo”]We’ve run the benfix supplied by Northgate and made the amendments for ‘no netting off’.

    My understanding (may be wrong) is that the o/p cells would therefore increase, which they have, however i thought that the expenditure cells would also have to increase similarly – which they haven’t.

    Am I right on this or have I now lost the plot?[/quote:074e7fc6bd]

    I think you’re right Simo. Have you raised a helpcall?

    #93093
    Simo
    Participant

    wanted to get conf from some of my learned colleagues on here that i was right before doing so.

    Thanks very much to you and Sean for doing so.

Viewing 15 posts - 1 through 15 (of 36 total)
  • You must be logged in to reply to this topic.