non commercial or not

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  • #31992
    allan
    Participant

    I have a case where i had originally refused benefit for a couple living in their son’s property. They had been living there for a long time but when they retired they put in a benefit claim and the son wrote up a tenancy agreement. There was no change in the sons circs to suggest he now needed to start charging them money it appeared from the information i had that he now only done so as they were retired and might get benefit. He also changed the rental “liability” on a couple of occasions when he found out that the original figures set would mean that no HB would be paid due to the clts income and confirmed that he would not evict them if they didn’t pay.

    Anyway ben was refused and both clt and son accepted this for the reason I had given. However a few months later another claim came in with evidence that the parents had started paying rent money to their son and the son said his circs had changed and if he didnt start charging rent he was going to have to evict them. I decided to pay this claim from the evidence i had.

    6 months later (now) i asked for bank statements to verify that he was still in fact paying his son and he is. However I have seen from the bank statements that the son is paying £60 every fortnight into his parent account with a description “Dad food” This figure equates to roughly the shortfall between what the son says he is charging his father and the HB being paid.

    It looks like this is still being created to take advantage of the hb system and the son is “refunding” his dad the money he is having to make up over and above the benefit.

    Any thoughts or advice on this would be very much appreciated.

    #89437
    Kevin D
    Participant

    Some brief thoughts.

    I hope this isn’t taken the wrong way, but the info given in the post indicates confusion between “non-commercial” and “contrived”. Although there may be *some* overlap between the two in terms of relevant factors and evidence, they are nevertheless separate entities.

    In addition, there is a further option that appears to bear serious consideration. If no rent is being paid, with the inference being that there is in reality no liability (i.e. a sham), no HB is payable in any case – no liability = nothing to pay HB on. In principle and based simply on the limited info given so far (and without having seen the papers), I’d be inclined to consider a 3-pronged decision along the lines of:

    ————-

    Following the recent enquiries made about your award of Housing Benefit, the Council has decided you are not entitled to benefit from the date is was first awarded [insert date]. This decision revises the original decision notified to you on [insert date]. You are not entitled because the Council considers:

    1) there is in reality no rent liability; or, if there is such liability

    2) the agreement between you and your landlord is not on a commercial basis; or, if there is liability and the agreement is on a commercial basis

    3) the liability has been created to take advantage of the Housing Benefit scheme.

    Where either “2” or “3” apply, the law says you must be treated as if you are not liable to make payments in respect of the property in question.

    As a result of this revised decision, there has been an overpayment of [x] for the period [y] ([z] weeks @ [weekly amount]). This overpayment is recoverable because it was not caused by an error on the part of the Council, the DWP or HMRC.**

    ………rights of appeal / SoR / revision etc…..

    ————————

    ** If it went to Tribunal, I would also cover the possibility of a Tribunal concluding the o/p WAS caused by an OE – I’d argue that it is still recoverable because the clmt contributed to the cause of the overpayment and/or could reasonably be expected to realise there was an overpayment at either the time of any notice or at the time of the payment(s) [reasoning presumably being the misrepresentation of material facts relating to the liability and/or arrangements].

    In short, keep it simple – no need to get bogged down in overly complex arguments (at least not based on the info so far).

    Hope the above helps.

    [Edited – typos]

    #42451
    allan
    Participant

    Thanks for that. Yeah my message did confuse the two areas but your advise will help me take the case forward.

    Thanks

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