Terms & Conditions

[ben steventon]

If anybody can give me some guidance on this I would be very grateful.

Customer lives in Council accommodation and has sizeable rent arrears upto and including 19/04/16.  DRO is granted on 19/04/16.

December 2016, a review highlighted that the customer should have received a further £2,400.30 HB from August 2015 to March 2016 – In this entire period customer hasnt paid any rent at all, hence sizeable arrears.

DRO has resulted in the writing off of their rent arrears.  We therefore refused to pay out the £2,400.30 on the basis that this would then be a windfall for the customer, i.e. doesnt have rent to pay to Council so would effectively be money in their back pocket.

I can find no regulations and very little guidance on what to do in this scenario.  The only thing I have found is that customers 'can' be granted backdate of 'benefit', but in this scenario the benefit award is reliant on liability to pay rent, which would normally be by internal transfer to his rent a/c.  To do this would see them in sizeable credit.

This issue has escalated now with the customer receiving support and we are being pushed to award the underpayment.  I really need to know what the correct approach is here. As I see it, granting the underpayment would be a 2 stage win for the customer.  By this I mean the Council has suffered the loss of being unable to recover the arrears due to DRO (£3k+ loss) and then grant it again to pay the customer in HB.

This doesnt seem right logically, as the customer would benefti from the Counculs loss, but I could do with guidance to back this up or confirm I am wrong.  Please can anybody point me in the right drection?

 

Thanks,

[VFenton]

What actually created the UP?

The DRO aside.   Assuming claimant had not obtained a DRO and the UP was created by something that the LA overlooked or by Disabled benefits would you have paid the rent account?

 

 

[ben steventon]

Yes the U/P would have been paid were it not for the DRO, but because of the DRO it was not paid as there is no charge upon which to pay.

In logical terms I see merit in the customer receiving the money, but that then goes completely against the fact that they have no charge so to pay the rent a/c would see a huge credit.

Are there any regulations regarding this? All I can see is the Insolvency Act regs for DRO which makes no mention of U/P's of benefit, specifically HB that is dependant on liability for rent.

Thanks,

[liffe]

It seems to me that the liability to pay rent nevr ended, the recovery of that rent was varied under the DRO.

 

Reg 8 (2) says:

2)A person shall be treated as liable to make a payment in respect of a dwelling for the whole of the period in, or in respect of, which the payment is to be made notwithstanding that the liability is discharged in whole or in part either before or during that period and, where the amount which a person is liable to pay in respect of a period is varied either during or after that period, he shall, subject to regulations 79 to 81 (dates of relevant changes of circumstances, weekly amounts and housing benefit for rent free periods), be treated as liable to pay the amount as so varied during the whole of that period.

 

This appears to suggest that the liability was discharged (by way of DRO), so HB would still be due.

[liffe]

As an aside, what would you do with the money that was due to be paid? If the case went to Tribunal, would the Judge say that your decision not to award the money in the first instance was correct?

[ben steventon]

Thanks Barry.

When read in that context it does make general 'sense'.  However, the commentary to that Reg in CPAG states that para 2 specifically relates to when payment of rent is made wholly or partly in advance.  I don't belive the context applies to DRO's

Has anybody had any direct dealings with HB underpayments and DRO's?

 

[VFenton]

If the notification of the DRO has only recently been received then the actual "write off" would not take place until the one year period expires. So if the UP were to be paid to the rent account, then it would only go to offset the arrears and the claimant would not benefit from having a lump sum payment.  Granted it would reduce the amount that would eventually be offset by the DRO – thus the customer does not in effect win because it was entitlement that was due and would have been paid if true circs were established at the time.

[ben steventon]

Now I do like that answer! Thanks very much…

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