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    We have just recieved back our second wave of proformas from CB centre. About 80 results out of some 220 sent.

    If we take awards into account from 07.04.03 every one will create an overpayment.

    What are others doing, taking into account from above date, creating overpayments, and if done on time by L/A classifying them as Dept Error and non recoverable or contacting customer to ask if they have already been notified so as to consider part “Clmt error”

    Is 07.04.03 the right date???

    What a mess!


    7/4/03 is the correct effective date and yes, we are classifying the overpayments as Dept error, non-recoverable so no need to contact claimant. You have to contact Andrew Curphey now and also provide info before end June. see S3/2003.
    Beware, however……..
    We have cases where the award letter differs from the proforma in that it indicates there was a delay in claimant being paid, we are awaiting Amendment 9 before putting these on.


    Thanks for that

    I have just got a reply to my question
    from Lucy Da-Silva which basically also says take into account from 07.04.03 and classify as Dept Error/non recoverable and not to contact the clmt.

    But, goes on to say, if at a later date it comes to light that clmt has had payment for some time to go back and consdier re-classification as clmt error?

    Nice to know!

    chris harvey

    This scenario is covered in S3/2003 Annex B Case 2. My reading of this indicates that these types of cases do not come under the special arrangements, so there is no need to contact Andrew Curphey and keep additional records.
    However I am still trying to get my head round this. With new award letters that we are currently receiving we count the arrears as capital so we don’t go all the way back to 7/4/03 with the income. If we get a second wave proforma now, is the DWP suggesting we count as income from 7/4/03 but don’t recover the overpayment and claim 95% subsidy. We would be better off treating the arrears as capital as we don’t lose the 5%. Just realised though that unless the proformas have the date of payment sections completed we will not know the date to work out what is arrears and what isn’t. Also assuming some of these have been paid on time ie 28th April in most cases, should not the claimants have notified us of their award by now, so overpayments from the date of payment onwards should definately be claimant error.
    I think I am losing the plot on this. What are other authorities who have received back their second wave proformas doing with them.

    david kearney

    we are inputting from 07/04/2003 and classifying as departmental non-recoverable o/ps. at least its straightforward, and we don’t have to worry about the payment date
    (the only problem being for academy users is that you can’t currently classify an overpayment for a non-is case as a departmental official error):


    I have had 2 appeals this week as a result of WTC information supplied on the proforma 1s and 2s. In both instances the claimants have asked to appeal on the basis that they have not received a penny from the Inland Revenue or had any notification of such. Great !


    I have heard it on the grapevine that Treasury have extended the deadline to Friday 13th June 2003 for classifying departmental errors.


    It was mentioned as a stop press in HB Direct 17 which was issued yesterday. It stated a letter would be sent yesterday to all HB managers.

    We have also heard that the NTC extra subsidy proposed in S3 only compensates LA’s for HB overpayments on Private tenant claims. We had originally planned to classify all types of O/P’s in the same way.

    Have any other authorities actioned any cases in this way ?

    chris harvey

    The way subsidy works is different for rent rebates. There is a lump sum called the specified amount that is based on 1.7% of ordinary benefit expenditure which is meant to compensate for backdating and overpayments which attract no subsidy under the HRA subsidy rules. This means there are no special subsidy payments for NTC overpayments as S3/2003 will only apply to non HRA expenditure which are mainly private rent allowances and CTB.


    But departmental errors for HRA do not attract nil subsidy do they? Aren’t they 100%? The nil subsidy applies only to backdating and LA error as far as I remember. I’m very confused about all this now. Where does it say that the special arrangements in S3/2003 and amendment 8 apply only to non-HRA expenditure? God I hate rumours!

    chris harvey

    Mark, the reason it is confusing is because the DWP are only responsible for non HRA subsidy, so all the subsidy circulars only apply to Rent allowance and CTB. The ODPM currently look after HRA subsidy. There is nothing on the HRA subsidy claim that identifies DWP Official errors separately and marks them for full subsidy. I’ve just skimmed through the legislation (HRA Subsidy Determination) and the definition of overpayments which have to be deducted from qualifying (100%) expenditure includes all overpayments so I am pretty sure we get nothing for rent rebate departmental errors.
    The Tax Credit guide is a DWP publication so everything in there relating to subsidy will only apply to non HRA stuff.

    Julian Hobson

    I’ve mailed DWP to clarify the position in respect of HRA Rent Rebates. I think they will have to cough up and if they don’t I can see that someone might kick up a stink. They can’t possibly conceive of hiding the recompense in the 1.7% given what is likely to happen when the Local Government Bill gets royal assent this year !

    Julian Hobson


    HRA rent rebate largely falls within ODPM’s remit. They are currently
    responsible for the rules/rates of subsidy paid for HRA rent rebates.
    Therefore they would need to consider whether any changes need to be made to
    their subsidy determination.

    ODPM have already set out the HRA subsidy rules for 2003/4 in the HRA
    Subsidy determination 2003/4. This was issued before Christmas, after full
    consultation with all authorities and local government associations. But
    ODPM are now currently considering the possibilities for changes to the
    subsidy determination, to achieve the desired result to compensate local
    authorities, but with minimal disruption.

    HRA rent rebates overpayments or backdated rebates attract a nil rate of
    subsidy. This includes departmental error overpayments. This is because ODPM
    pay all HRA rent rebate subsidy claims at a subsidy rate of 101.7%. The
    additional 1.7% is added as a flat rate allowance to cover expenditure on
    the incentive areas. The additional 1.7% was originally calculated based on
    the average spend on these areas across the country. It therefore provides
    an incentive since an authority which spends less than 1.7% will gain more

    DWP will assume responsibility for payments of rent rebate subsidy from
    2004/2005, subject to Parliamentary approval of the Local Government Bill.

    Andrew Curphey
    LA Subsidy”

    So I suppose quite a few LA’s unfortunate enough to still have LA stock will be well cheesed off, how could DWP expect us to make decisions on departmental error contingent upon the subsidy regime in force, and why should LA’s suffer financially for applying one set of rules regardless of scheme.

    I’m going to raise this internally and suggest that we seek an urgent response from Paul Howarth. I’ll keep you posted.

    chris harvey

    This could get really messy!
    To maximise subsidy on HRA cases we are thinking about asking our tenants to supply their tax credit award notice instead of using the proforma. That way we can count the income from the Monday after the date of the notice and treat anything before then as capital. This doesn’t create much in the way of overpayments and ensures the benefit paid out is full qualifying 100% expenditure.
    It really is crazy that we have to go to all these lengths to save a potential subsidy penalty that is not our fault.

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