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    Andrew Sheldon

    I would be grateful for help in how you would deal with the following overpayment. Please accept my apologies for the length but want to put all the facts and my thoughts down.

    Customer informed us they were moving from their own property to a rented property. This was done in advance and at the same time they stated they were going to put their own property up for sale. A few weeks later they informed us that they had moved into the rented property and we assessed HB disregarding the property as we took it on face value that it had been put up for sale.

    We did not diary this to review it after 26 weeks.

    The customer has come in and stated they have moved back to their own property and it transpires that it was never put up for sale. We have now included it as a capital asset and created a two year hb o/p. It should be noted that we did not diary it to review the disregard after 26 weeks and did not carry out an intervention in the 2 years as they are on PCSC with an AIP.

    Also when we assessed the claim we only sent our system notifications and did not send an ad-hoc letter stating why the property was disregarded. However, based on the recent contact with the customer it is obvious some discussions took place about this. He has stated that he was advised he had 12 months to sell the property, forgot to contact us when he didn’t but thinks we should have contacted him after twelve months.

    How would you treat the o/p and would you recover? I have various senarios in my head and cannot decide which is correct.

    Claimant error throughout as the customer told us he was putting it up for sale and did not? (therefore recover all the o/p) or

    Claimant error for six months and then LA error because we should have reviewed the disregard? (recover first six months as his error, 2nd six months is not recoverable and the o/p after that is recoverable even though LA error as he could have realised he was being o/p as he thought he had 12 months).

    La error throughout because he said he was going to put it up for sale and we never confirmed it? (even then it could be argued that the whole o/p is still recoverable because he contributed to it or the o/p after the first twelve months is recoverable as he could have know he was being o/p).


    Two more questions:

    – was the AIP already running when he moved out, and
    – if not, does the AIF include the capital value of the house?

    I’m trying to find a way of making some or all of the overpayment go away.

    Andrew Sheldon

    The AIP was running when they moved house and the AIF does not include the capital value.

    I look forward to your response.


    [quote:8b7fab5722=”Andrew Sheldon”]The AIP was running when they moved house and the AIF does not include the capital value.[/quote:8b7fab5722]

    I think that’s the answer PeterB was looking for. 😉




    I don’t think that helps. I was recently successful at a first-tier tribunal with the following argument:

    When your claimant moved out of the owned property it ceased to be disregarded as it was no longer occupied as hisr home. The transfer of a disregarded asset to a non-disregarded asset amounts to an increase in capital.* Reg 27(8) of the Housing Benefit (state pension credit) Regulations 2006 applies where the Secretary of State has notified the authority that the claimant’s capital was less than £16,000, and subsequent to that determination and during an assessed income period the capital increases to more than £16,000. In these circumstances tghe LA is required to make its own assessment of the claimant’s capital.

    (*In CH/7330/1995 Commissioner Howell confirmed that the transfer of capital into a form that is disregarded can engage the “deprivation of capital” provisions, suggesting that such a transfer amounts to a reduction in actual capital. It stands to reason that the corollary must also apply)

    Of course, “taking steps to dispose of the property” does not necessarily mean it has to be up for sale with an estate agent. It could refer to necessary repair works, surveying, market research, etc. Probably not for two years though – it will depend on the claimant’s actions.

    Regarding the overpayment – there is certainly some element of official error in not verifying the claimant’s statement and not reviewing the situation after 26 weeks, but the claimant appears to have contributed to the error so I would be fairly confident at tribunal.

    Andrew Sheldon

    The claimant did not take any steps at all to sell the property they changed their minds and let their son live in it.

    How would you code the o/p for subsidy? All La error but recovery because the contributed?



    I don’t think it’s LA error at all because even if you say that failing to review the situation after 26 weeks was a mistake the claimant contributed to that mistake.

    Any chance the son counts as incapacitated? That would be a disregard.

    Failing that, do make sure that you have given the property an actual value (not just assumed it must be more than £16,000) and have done diminishing capital calculation under Reg 84

    Andrew Sheldon

    Thankyou everyone your help.

    It has re-inforced what my thoughts ie:- recoverable as they contributed because they told us it was being put up for sale and it was not.

    As a foot-note the customer has repaid the o/p of HB and CTB which was a healthy amount in one go. However, they have gone to their MP to query it and obviously the MP is sympathetic to there cause.

    I think we are going to explain to the MP the regulations and why we feel it is recoverable and if the customer dis-agrees they can appeal. However, Peter has made a great point in respect of the diminishing capital which I am not sure if we have addressed it. I think I will delegate that bit.

    As a footnote the customer has already repaid the full o/p in one go (I do wonder how as the pension credit notice does not show any declared capital but that is one for another day).


    [quote:d19c7dad04]I think I will delegate that bit[/quote:d19c7dad04]
    I wish I could do that at times 😀

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