Rent Rebate overpayment classification

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    Jo Gregory

    On 18 October 2006 we cancelled HB from 9 October 2006 due to the customer moving address. This resulted in a HBO for the period 9 October 2006 to 22 October 2006.

    On 19 October 2006, our housing department ended the tenancy from 9 October 2006. Leaving a credit of two weeks HB on the rent account. As we are iworld benefits and housing, the HB would have automatically cancelled when running RBE292B etc . As we had already cancelled the HB on-line on 18.10.06 the system did not need to auto-cancel the HB.

    Had the system automatically cancelled the HB, it would have auto classified the HBO as ‘liability error’.

    However, as we intervened before the system automatically cancelled the HB should we:
    a) classify the HBO as ‘Liability error’, as there was actually no rent liability and a corresponding credit on the rent account, therefore not a true HBO;
    b) classify the HBO as CL/LA error.

    Hope all this makes sense. The auditors have queried this!! AAHH!!


    Not everyone agrees with me about this, but I definitly go with option (a): I don’t see these as overpayments at all. If you originally award a rebate by charging reduced rent over a period, then subsequently decide not to charge any rent at all for that same period, it seems to me that you have not overpaid rent rebate. Quite the opposite – you have overcharged rent even after allowing for the rebate.

    Suppose you get a parking ticket and you decide to pay up early so that you get the £40 discount or however much it is. The Council has reduced the charge by £40. Later, the Council discovers that it made an error in issuing the ticket at all and decides to cancel it. They give you your £40 back. Does this mean that the Council has overpaid a £40 discount? I don’t think so – the concept of a discount becomes meaningless if there is nothing to discount in the first place.

    So it is with rent rebates in my view (and CT rebates as well). People who know more about stats and subsidy than I do might well tell you that you have to record these cases in some way and give them a classification because there are cells specifically designed for them. But subject to that, I would go with the no true overpayment option.

    I think the important thing is that you do not record this in cells attracting a rate of subsidy greater than zero, be it 25%, 40% or 100% – that would be creative accounting. You could set up a phantom rent account today, award 100% rent rebate on it, then some time next year retrospectively toast the rent account. You would not seriously expect to get subsidy for that would you?


    I would agree with Peter about the “late reclassification” by your Housing dept meaning that no overpayment has in fact taken place – just a late adjustment following a libility adjustment.

    I feel his “parking ticket scenario” as outlined above, sums up the matter very well. 8)

    In Northgate, there is a special code we use for this which does not attract any subsidy – but as to what it is, I’m not sure.

    (In the absence of any CDs, and knowing Peter B has “re-written” the legislation before, perhaps we can look forward to Mr Commissioner Barker in the future? 😯 😀 )


    If they start taking on lay commissioners one day, I’ll be first in the queue – it’ll be like Harrods sale. In the meantime you may consider my opinions to be highly persuasive if not yet strictly binding case law! 😆


    Taken form the 2004/05 Guidance – but this still applies. LA Error takes precedence over technical error.

    Technical overpayments – rent rebates or CTB credited in advance of entitlement accruing where a change of circumstances or a recoverable overpayment causes that entitlement to be removed or reduced. An overpayment that starts in the benefit week following the week in which the change is disclosed to, or the overpayments identified by, the authority is a technical overpayment and is ineligible for subsidy in 2004/05. Any overpayment covering the period before the ‘technical’ part of the overpayment should be classified in the ‘normal’ way, e.g. claimant error/fraud. The classifications of LA or Departmental error take priority over the technical overpayment classification. An overpayment falling into either of the LA or Departmental error definitions should be classified accordingly.

    To answer your question we would need to know the date the LA was notified as actually this would make a difference between a technical / paper overpayment and an LA error overpayment.

    Assuming you actioned on the day you were notified (???) so that the whole of the first part was eligible the following would apply

    9/10 < ——C—— >22/10

    In this case as LA Error and end of liability take effect from the same week and there is not liability (and only if there is no gross expenditure recorded from 22) technical takes precedence as there was no expenditure.

    If you were notified on the day te tenant vacated and you actioned on 18 the following would apply but again only if there was no expenditure from 23rd.

    9/10 < –C–>15/10<>—-L—— >22/10

    Jo Gregory

    thank you for your relpies.
    I have just received a reply from the DWP HBO policy team reagarding this. They have said that:

    ‘The overpayment must be classified as a Technical overpayment, because there is no overpayment to be recovered. You can take the rent rebate back from the rent account. You should not claim any subsidy for this period.
    If you classified this overpayment as an official error, the claimant would be entitled to the credit on the rent account. You would therefore have to pay HB twice for the same period, for the two addresses. You would then have to make a decision on whether the claimant could reasonably be expected to realise they were being overpaid, which they probably didn’t if it was credited direct to the rent account. You would therefore not be able to recover the overpayment.
    You can only make payments of HB if there is a rental liability, which in this case there wasn’t. As the rent account was closed down (even though it was done retrospectively) the HB section can take the payments of rent rebate back from the rent account, because the claimant was not eligible to them’.

    I hope this helps others

    Many thanks 😀

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