HB paid but no claim made!

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    Another query for you folks.

    Customer advised us that she had started work and the claim was calculated on the basis of her earnings and nil qualified from July 2004.

    For some reason a later officer re-awarded HB from August 2004, this appears to be on the basis of a misunderstanding of earlier correspondence from the customer, no new claim was made.

    We have been posting HB to her rent account and finally realised that we had made an error when we contacted the customer to arrange an intervention visit in February 2005, she advised us then that she was working full time and was not aware that she had any live claims for HB.

    For some extraordinary reason we wrote to the customer to request proof of her current income and continued to pay HB until March 2006 when we finally ceased the claim.

    Consequently we have created an overpayment back to 2004, but given that she had not actually made a claim – can we actually treat this as a recoverable overpayment of Housing Benefit?

    Kevin D

    Uh oh…..

    [b:4678ef343d]CH/0269/2006[/b:4678ef343d] seems tailor made for this case…..and, in my view, it’s bad news for LAs.

    It’s not quite made it to the site yet, but it has been reproduced below. In short, unless I’ve gravely misunderstood it, LAs will be on very very (impossible?) difficult ground to try and recover monies paid without a claim. See what you think….

    NB: The formatting has gone a bit askew…..



    1. This appeal proceeds by my leave and is against the decision of the appeal tribunal held on 13 October 2005. I set aside the decision of the tribunal for error of law but consider this to be an appropriate case in which to substitute my own decision, pursuant to paragraph 8(5) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000. My decision is that the local authority (the respondents) had no power to review or supersede any “nil” decision.

    2. The appellant is the person who was in receipt of housing benefit and council tax benefit, the respondent is the relevant local authority. The tribunal upheld the respondent’s decision that there had been recoverable overpayments of both benefits.

    3. Both parties have consented to the decision of the tribunal being set aside, and to my substituting my own decision, on the basis of the reasons provided in determining the application for leave. Those reasons are:

    “This case concerns an alleged overpayment although the appeal submission to the tribunal is very unclear. There is no coherent and chronological background to the claim and the overpayment. The papers do not include the original claim form or the adjudication history.

    The claimant said (and it does not appear to have been disputed) that the only claim she made for housing benefit and council tax benefit was in 2002 and this was refused.

    Paragraphs 13 and 14 of section 5 of the submission of the local authority to the tribunal seem to corroborate this: the computer records at document 13 show that “based on [the claimant’s] income she did not qualify for any benefit from 28 October 2002 however the claim was still live”. The closing remarks are entirely contrary to paragraph 2 of schedule 7 to the Child Support Pensions and Social Security Act 2000 – if a claimant does not qualify for the benefit, or ceases to qualify for the benefit, then the claim is disallowed. It is not susceptible to being revived by a change in circumstances. To put it more plainly the “nil” decision could not be superseded and the claimant in those circumstances had to elect whether to make a further claim for benefit. The view of the local authority, however, was that because they did not close the claim it remained “live” on their computer system. They subsequently wrote to the claimant (document 89) informing her that due to a change in circumstances her claim for housing benefit had been reassessed (from 21 April 2003) and that her new entitlement was £49.35 a week. Council tax benefit was also reassessed from 1 April 2003. The claimant was subsequently issued with letters indicating an overpayment and the appeal was dismissed by the tribunal.

    Leave to appeal is granted because it is eminently arguable that the tribunal erred in law by failing to take account of the fact that the local authority had no power in law to review or supersede a “nil” decision. As there was, then, no subsisting claim for housing benefit or council tax benefit any money paid to the claimant was not excess benefit and was therefore irrecoverable under the housing benefit or council tax benefit provisions.

    If the respondent agrees that the decision of the tribunal is erroneous for the above reasons is it also agreed that I should substitute my own decision, to the effect as set out above? If not the respondent is directed to provide a full submission setting out the chronology of the claim(s) and decisions, providing a copy of the claim(s) for housing benefit and council tax benefit and addressing the above observations. If the appeal is contested then the claimant in due course should be well advised to seek welfare rights advice.”

    4. I set aside the decision of the tribunal for the reasons set out above. Those reasons also support and explain the decision set out in paragraph 1, above.

    (Signed) S J Pacey

    (Date) 15 May 2006




    Ahh…. thanks for that Kevin. Seems quite clear that the money’s not recoverable through the usual chanels at least, although we presumably could initiate civil proceedings.

    I must say that this was my view but I’ve had very passionate protestations from my colleague to the contrary.

    Would you be able to email me a copy of the decision so I can show this to my supervisor: c*h*a*r*l*o*t*t*e*j*o*h*n@islington.gov.uk?

    Kevin D

    Yes – the only course would appear to be civil action.

    As I read it, there are three problems with making (or “allowing”) payments without a valid claim:

    1) Without a claim, it is not possible to make a decision under the HB/CTB regs. Therefore…

    2) any payments made are not by way of HB / CTB (because there is no claim on which to pay those benefits), and

    3) it is not possible to make any (valid) decision under HB/CTB regs.

    This is why I take the view that any retrospective gaps in entitlement has the effect of nullifying the claim under which those payments were originally made. Hence, if an LA simply allows payments to continue, those payments are not by way of HB/CTB. This aspect was discussed in detail in a recent thread:


    It was pointed out in that thread that there is DWP Guidance (…I’m losing the will live when I hear those two words…) saying that it’s ok to create a “gap” in entitlement and merrily continue with the “claim”. My view is (and was) that the Guidance is wrong and CH/0269/2006 appears to support that.



    But even withouty a claim you still have to give her a right of appeal because you have issued a decision notice. Any civil application would be easily defeated on the basis that the propr appeals process has not been concluded. The LGO would have a field day I think.

    It is arguable (just) that the overpayment is recoverable from August 04 to February 05 but I cannot see any Tribunal or Commissioner upholding the later period. Its all official error of course and the fact you were paying to the rent account does not help your cause (when could the customer reasonably have realised she ws being overpaid for instance?). I was looking through the overpayment CD’s on the site yesterday and the “score on the door” is claimants rather a lot, LA’s not many, if you see what I mean.

    DWP confirmed yesterday at a conference in London that overpayments now generates more enquiries than any others and with so many CD’s around, yet another “stay” of cases for three months (incidentally, DWP officials responsible for overpayment policy were unaware of this), its all become very messy.



    My understanding of the CD – as Kevin notes – is that where payments were made without having a valid claim, the HB regulations are not engaged at all and its not therefore possible to speak of official error overpayments.

    For example imagine a different senario where an officer of a LA sets up a fraudulent claim to pay to themselves – obviously there would be a criminal prosecution for theft and very probably a civil action for recovery of the sums paid, but you would not be able to seek recovery under the HB regs irrespective of whether the system generated notification letters.

    I believe Commissioner Pacey is saying that if there’s no HB claim then any payments you are making are not in fact payments of housing benefit – I don’t think we can argue that any of the payments are recoverable as an official error overpayment.

    [quote:66d604e3f6]As there was, then, no subsisting claim for housing benefit or council tax benefit any money paid to the claimant was not excess benefit and was therefore irrecoverable under the housing benefit or council tax benefit provisions. [/quote:66d604e3f6]

    I’m not sure where we stand on the civil proceedings either – my understanding is that title in money passes upon delivery so that once she received the payments their hers effectively, although we may argue that only legal but not equitable title passed but I’d be surprised if a decision is taken to pursue civil action.

    Kevin – there’s a mistake in my email add above – if you do have a copy of the decision you could email to me theres a ‘ . ‘ between the charlotte and the john.


    Yes Charlie, but it appears in your case that the claimant had made a claim and that you had presumably suspended it after she started work and then (wrongly) assesed it on her new change of circs. From your note it appears that at no stage did you terminate the claim so I cannot see where the no valid claim fit in? Sorry if i am missing the obvious.


    Sorry Peter – my original post didn’t make this clear.

    Customer made a claim, upon which HB was correctly awarded.

    She then some months later had a change in circumstances – starting work. The change in circs resulted in a supersession to nil as her income was to high to qualify for any further HB – her entitlement to HB ceased with effect from July.

    For some reason an officer then re-awarded HB with effect from August – so there was a break of nil entitlement between the valid award of HB and the subsequent erroneous payments.

    The facts are similar to CH/269/2006, the claim was still ‘live’ as far as the system was concerned, but no new claim had in fact been made.

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