LA error or not?

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    Claimant makes a claim for HB in April. Includes WTC on the form, but this is missed by the Benefits Officer.

    In July, claimant gets an increased award of WTC but does not report it to us.

    In October we undertake a review and discover that WTC is in payment.

    Two periods of overpayment are created.

    April – July the overpayment is LA error non recoverable.

    August to October the overpayment is not classed as LA error because the claimant is considered to have materially contributed to the omission by not reporting a change.

    What do others think about the August to October classification?


    Why LA error? Claimant failed to declare increase so surely OP is claimant error.

    Do I know what I'm doing? The jury's out on that........................


    I think its quite tempting to say that its [b:40ef40ceb2]all [/b:40ef40ceb2]recoverable.

    When the clmnt notified you of WTC entitlement in April and the benefit was determined and a notification letter sent, the claimant should have noticed that the WTC was missing from their statement of income.

    This (in my opinion) means that they could “*reasonably be expected to know that a mistake had been made” by looking at the award notice and the info the calc was based on.

    So – whilst April to July is LA error – I’d say it’s recoverable.

    Agree with your Aug to Oct classification.

    Andy Thurman

    …and why is the period April-July non-recoverable? If an incorrect amount of WTC income used, given the recently (Apr05) abolished ‘random’ amount (from clmt’s perspective) for HB purposes, fair enough but this clmt has been awarded HB and, I assume, sent a letter detailing the income used at assessment.
    LA error undoubtedly but clmt could reasonably be expected to have realised (rider required here that I’m assuming clmt doesn’t have any learning difficulties etc.) they were being overpaid.

    ..and yes, I’d go with clmt error beyond date of changed WTC.

    (Edit: keep getting beaten to it today!!! Posted before seeing Peter’s response!


    Leaving aside the “should have known” issue, which affects recoverability and has to be a case by case judgment, there is no doubt that the overpayment up to July was caused by official error. Thereafter, blame is harder to pin down but I think I agree with jmembery’s analysis: the LA’s error continued to be a significant cause of the overpayment, but it might bwell have been discovered if the claimant had reported the changed amount of WTC therefore the claimant contributed to the LA’s continuing error.


    In CH/602/2004 the Council failed to take into acount the claimants inductrial injuries disblement benefit. The claimant then had an increase in that benefit but did not disclose the increase. The Council eventually realised its mistake and averred that the all the overpayments were recoverable because :
    1) The claimant could reasonably be expected to realise he was overpaid
    2) Notwithstanding the reasonably expected to realise argument, there were recoverable overpayments resulting from the cliants failure to disclose the increase.

    Mr Commissioner Mesher rejected both submissions He wrote at paras 45 and 49

    45″ The local authority submitted that the position changed when the claimant’s disablement benefit increased from 5 February 2003 and he did not inform them of the increase. To the appeal tribunal and initially to me, it was submitted that with effect from 10 February 2003 the whole of the excess benefit ceased to be a consequence of official error, but was a consequence of he claimant’s failure to inform the local authority of the increase. Thus it was said that all of the excess benefit from 10 February 2003 to 20 July 2003 was recoverable. In paragraph 8 of the written submission of 6 August 2004 it was said that only the element of the excess benefit relating to the increase in the amount of disablement benefit from 5 February 2003 was recoverable, but after the Secretary of State had suggested in the written submission of 16 September 2004 that the argument on causation might lead to the whole of the overpayment being recoverable, the local authority rather went back to its earlier position in the written submission of 24 November 2004. I then directed further submissions about the effect on those arguments of the particular terms used in regulation 84(2) of the CTB Regulations, of when CTB is “allowed”. Is CTB “allowed” when the award is made or is it “allowed” each time that a claimant pays an amount of council tax that has been reduced by the application of CTB to the claimant’s account?”

    49″ However, on the view that I have taken of the evidence, I do not need to work out how that meaning of “allowed”, if it is right, affects the meaning of excess benefit allowed in consequence of official error and the identification of the time at which one has to ask whether a claimant could reasonably have been expected to realise that excess benefit had been allowed. My view is this, accepting and applying the general approach of Sier to when an overpayment is caused by official error. There is no doubt that the award of CTB on 29 November 2002 was caused by wholly uninduced official error. I have also concluded that the claimant could not at that point reasonably have been expected to realise that he had been allowed excess benefit. The award and receipt of an increased amount of disablement benefit would normally be a change of circumstances that a claimant has a duty to notify the local authority of under regulation 65 of the CTB Regulations. However, that duty only arises when the change is one that the claimant “might reasonably be expected to know might affect the claimant’s right to, the amount of, or the receipt of council tax benefit”. It follows from my existing findings that the claimant could not in February 2003 reasonably have been expected to know that any increase in the amount of his disablement benefit might affect the amount of his CTB. His experience from the decisions given on his two claims and the terms of the notification letters was that disablement benefit was something that was not taken into account in calculating CTB. Thus, I conclude that there was no duty on the claimant to notify the change, so that there was nothing to disturb the existing situation of the excess benefit having been caused by a wholly uninduced official error.”

    I dont think any of the overpayments in the present case are recoverable as they were all caused by the LA’s failure to include tax credits when assessing the claim. The focus here by the way is on the mistake not the continuing overpayments. This was held to be the case by the original judge in R(Sier) vCambridge CC HBRB 2001 and the Court of Appeal did not criticise the original judges finding (I have copies of both judgements, but you will find a summary in the analysis of old Reg 99 in Findlay p456-7 of the current edition)

    The Council submitted the counter argument in CH/1780/2005 and averred that the claimant had contributed to the (ongoing) overpayments. (That case involved a miscalculation of the claimants earnings) Mr Commissioner Jacobs rejected that submission. The Sier case was also discussed in some detail.

    There is now a £25000 disregard of in year increases in income for tax credits, pension credit is usually based on a 5 year assessed income period, and in the case of a claimant on pension credit, the HB assement is based on the Pensions Service assessed income figure. With all the complicated disregards surrounding various means tested benefits and tax credits, can the average claimant be expected to fully understand the way all this will affect his housing benefit?

    The overpayments would be recoverable only if he could be expected to fully understand that they were overpayments at the time the overpayments were made. That is a very tall order. Tax credits are also expressed as weekly amounts when assessing HB/CTB. How many LA’s decision letters are clear as to how tax credits are taken into account?


    Yes, but there is also an expectation that the person claiming HB / CTB should check their notifications.
    I think that you have to ask yourselves if your letters are clear to understand, especially when it comes to listing peoples income.
    If the answer is “yes”, then there is still an onus on the person getting the Benefit to inform you of any error.
    Whilst Stainsby makes a good argument for classification of the whole overpayment as LA error, providing your letters make it clear what income has been used to calculate, and were sent out at the correct time, (and as Andy T said earlier, there are no learning disability issues), I would tend to look at this one as an LA error but recoverable overpayment. 8)


    The case Stainsby quoted raises an interesting argument, however I feel its one that does not apply accross the board. Its still down to individual circs.

    I can certainly see more scope for genuine confusion with Disablement Benefit. There is a long history of confusion about disability benefits and the fact that DLA and AA are fully disregarded and others (with similar sounding names) are not. Then there’s all the premiums mullarkey – DLA care counts for some, DLA mobility doesn’t count for others, DLA Care Low rate doesn’t qualify for some premiums, DLA Care medium does, DLA Mobilty high doesn’t etc etc.

    (and don’t get me started on all the benefits that people [i:921061a6b7]think [/i:921061a6b7]they get that have never existed e.g. inva[u:921061a6b7]b[/u:921061a6b7]ility benefit, inva[u:921061a6b7]dil[/u:921061a6b7]ity allowance, national cripple allowance (genuine recent quote))

    WTC is not the same. There has never been a suggestion that WTC is ignored as an income. There are no similarly named benefits that do. The WTC claim pack and award letters make it clear that WTC counts and they should let the LA know.

    I’m not arguing that the WTC sytem is as clear as crystal. But I think there is less justification for being confused about whether it counts as income for a means tested benefit.

    Perhaps in the particular case there is enough reason to give the particular bloke the benefit of the doubt on WTC. But I don’t think the arguments about general justified confusion can be given the same weight.

    (taking wig and gown off now – backing away carefully)


    I tend to agree that the first period is definitely non-recoverable and that the second is doubtful. It is easy to say that the customer should have alerted HB but surely its a test of reasonableness:

    a) is the wording on the HB letter really that clear?
    b) does the customer have a history of informing changes promptly?

    The problem surely is that the tax credit system is complex and confusing and experienced welfare benefits staff struggle to understand the Revenue letters let alone customers. Nor is there just one; do you really want ALL your customers coming in with the multitude of different letters about last years revisions etc? Tax credit is treated differently for HB, its ignored as income for some periods etc. revised awards may or not have have an impact – just thinking aloud how many arguments a half-decent rep could put forward.

    The fact remains that the customer informed the LA of the income at the start and I would be suprised if any Tribunal found for the LA in such circs (unless the apellant didnt turn up).


    I find this concept (that a claimant has an obligation to check notifications and notify the LA) intriguing.

    Is there a regulation that backs this up?

    The practicality seems very difficult to me. How can anyone know if a claimant understands implications of a notification?

    I can see why it is desirable for claimant’s to check. It’s also usually in their own interest to check.

    I just do not see why any LA should think that claimants have a duty to check and notify errors that the LA themselves made.

    Whatever happened to the legal principle of equality of arms?


    I don’t think anyone is actually saying its a “good thing” Derek. I think its just the concept of reasonableness as applied over the years in appeals and CDs.

    Its reasonable to expect someone to read a benefit notification with reasonable care as it is an important financial matter that pertains to them. They should check they are not getting too much or too little and that there are no evident errors.

    If the person has some issue that prevents them from taking reasonable care then that can be looked at when deciding recoverability. But I think we need to start from a point where we expect people to look at their notification letters.

    Anyone point to a reg that says claimants are under no obligation to take any notice of their caim once they have posted it? No thought not. Bwah ha ha ha (evil laughter).


    There’s a recent CD (CH/2935/05) that touches on this and makes interesting reading:

    “33. If every letter had to be checked for financial accuracy by the recipient, that would be likely to entail either the recipient being forced to contact the council to go through those details with somebody, or going through it with some other person with professional experience of the relevant benefit. The council would not expect either its resources or those of agencies offering assistance with benefits to be used in this way, which would be a substantial drain on their resources.

    34. In the standard form first page of the letter awarding the benefit, the final paragraph draws attention to the notes on the back, but none of those notes relate to checking the council’s calculations for errors. The letter does also ask the claimant to check the calculations carefully and to let the council know if he thinks that any of them are wrong. However, for the reasons given, I find it unrealistic to expect most claimants to be able to check those calculations, and I do not consider that the council could realistically have expected that the vast majority of claimants, whether of normal intelligence or not, would have been able to do so. Nor do I consider it reasonable to expect claimants to act as the council’s auditors and to carry responsibility for any errors that they do not point out.”


    Hi Mark

    Do you have a link to this decision; I can’t find it in the 2 places I usually search.
    (on the face of it, this is at odds with other CD’s, but were there perhaps specific circumstances?)


    If you ‘pm’ me your e-mail address I’ll send you it.


    Crikey that [b:e71961bdfa]is [/b:e71961bdfa]an interesting CD.

    I mean I actually completely agree with it “in real life” but I wasn’t aware that commissioners had caught up with views like mine. In my previous life as a WRO I always saw it as impractical for many people to really read and understand a 15 pager. However I was resigned to the fact that they are expected to, and that’s just part of the “deal they buy into” when they claim HB.

    How would this affect other areas of law?

    [color=darkred:e71961bdfa]”Yes I know I totally broke the law… but English law [b:e71961bdfa]is [/b:e71961bdfa]a [b:e71961bdfa][i:e71961bdfa]bit [/i:e71961bdfa][/b:e71961bdfa]complicated. You can’t expect me to be a legal expert or consult a lawyer before everything I do. It would take ages and I’d never get anything done”[/color:e71961bdfa]

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