I don’t know anything about an earlier discussion – but it was generally held until recently that you cannot be treated as occupying a home before you have physically moved into it. This view was challenged successfully in CH/2957/2004 (reported as R(H)9/05) which says the following:
“16. In my judgment, the claimant can be said to have moved into this flat for the purposes of regulation 5(6) when she removed all her furniture from her previous home and moved it into the new flat. In the context which I set out below, I conclude that this is the proper construction of the expression âmove into the dwellingâ.”
So from what you say you aren’t going to be able to treat them as occupying the new home if they hadn’t moved any posessions in yet. But if they had, R(H)9/05 also contains a method of construing the temporary absence rule so that you could have paid throughout the period spent in prison (by interpreting “intention to return” in a clever way). The case is about someone taking up accomodation and then going into hospital, additionally complicated by awaiting disability adaptions to the new home, but the parallels with your claim seem clear to me.
The decision is here if you want to read it:
http://www.osscsc.gov.uk/judgmentfiles/j1700/H%209_05%20ws.doc