Underlying entitlement and technical Ctax overpayments

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    Hi. The situation is this:

    CTB only claim.
    We are informed by the DWP that a customer’s I.S. has ended.
    We suspend the Ctax and write to the customer.
    The customer doesn’t respond and the claim is cancelled back to the end of I.S.
    2 weeks later he reclaims, so underlying entitlement must be considered.

    The question is this: Does the underlying entitlement period go from the I.S. end date to the suspension date or does it go from the I.S. end date to the cancellation date?

    Some are arguing that once Ctax has been suspended any overpayment past that point is ‘technical’. Circular A2 2006 seems to support this.

    However, if the claim is cancelled 1 month after suspension, surely the overpayment is from the end of I.S. to the date it is cancelled, as suspending Ctax has no effect other than on subsidy.

    Any views, would be gratefully appreciated.


    I dont think that you can suspend CTB in the sense that CTB is allowed as soon as it is credited to the account, and so underlying entitlement, to use the shorthand must be offset against any excess CTB that was allowed; ie to the end of the financial year. (In reality this could be actual rather than underlying entitlement)

    See for example CH/0602/2004 and CH/1780/2005 for discussion as to when excess CTB was allowed.

    Kevin D

    I agree with Stainsby. Even a relatively brief look at just the wording and structure of CTBRs 82 & 83 show that “future” CTB is an overpayment.

    CTBR 82 makes it clear that excess benefit is [u:5a76e2c241]any amount[/u:5a76e2c241] of CTB that has been allowed, but to which there is no entitlement.

    Then, CTBR 83(5) can only operate in respect of future overpayments. If future CTB wasn’t an overpayment, this provision wouldn’t be needed.

    Finally, CTBR 89 makes no distinction between past, present, or future CTB that has been overpaid. Therefore, underlying entitlement applies to ALL excess benefit.



    Does any authority actually apply underlying entitlement to future overpayments?

    Kevin D

    Er…. I’m a bit perplexed…. [b:00d4086aac]CTBR 89[/b:00d4086aac] [u:00d4086aac]is[/u:00d4086aac] the authority. The word “shall” is used in para 1, therefore it is not just the authority; it is mandatory.

    Hope that clarifies.

    NB: Regarding suspension…. I agree with Stainsby that you cannot “suspend” a payment that has already been allowed as, obviously, the payment will already have been credited to the CTAX account. But, I still think an LA must make the token administrative gesture of suspending (albeit to no effect) in order to comply with DARs 11/13/14.


    I meant ‘authority’ in terms of Local Authority. Sorry, next time i’ll use capitals and the full title.

    Kevin D

    Ah! 🙂 Sorry…..

    In practice, it rarely happens because if the clmt is still entitled (albeit to a lower amount), that is actual entitlement. If the clmt no longer qualifies, then any underlying entitlement will, at the time of the decision, be nil in any case.

    The only scenario where future u/lying entitlement comes up is when a previous period of nil entitlement is identified, leaving no claim in existence. In those circs, u/lying ent is used as a means of reducing the future o/p. If the clmt makes a successful new claim in the meantime, then “actual” entitlement would be back in play.

    Hope that’s a bit more helpful than my last post….


    Surely if you can apply underlying entitlement to the entire period until the end of the financial year, the claim would cease to exist when we reach the 01/04/06 as this would no longer be a period of overpayment. You would have to then request a new claim form at this point. Seems a little messy.

    The problem is that if we’re not including any future overpayments as part of the underlying entitlement calc, there will be gaps in entitlement which can only be plugged by back-dating.

    In practice I cant imagine that any Authorities are applying un-ent for future payments.

    But back to my original question, is it everyone’s opinion that the techinical overpayment, contary to DWP advice is a real overpayment and subject to under-lying entitlement.


    I just know I’m going to regret this but still…

    I think “allowed” being used in CTBR 82 and “payment” in CTBR 89 prevents any UE being applied after the date of the decision:

    CTBR 82 “In this Part “excess benefit” means any amount which has been allowed by way of council tax benefit and to which there was no entitlement under these Regulations”…

    CTBR 89 “In calculating the amount of recoverable excess benefit, the relevant authority shall deduct any amount of council tax benefit which should have been determined to be payable in respect of the whole or part of the overpayment period”…

    Council Tax A&E 20 provides for Council Tax to be billed using a number of assumptions including:

    “…(3) The assumptions are—
    (a) that the person will be liable to pay the council tax to which the notice relates on every day after the issue of the notice;…”

    Local Government Finance Act 1992 provides that liability for Council Tax shall be determined on a daily basis.

    When awarding Council Tax Benefit the award is made regarding future entitlement when there is no actual liability, merely an estimate using a series of assumptions – hence the use of the word “allowed” in Reg. 82.

    When calculating underlying entitlement you have to consider the amount that would have been “payable”. I do not believe that a payment can be made until such time as there is an actual liability – you can pay in respect of today and any date before that but not afterwards.

    Following the same argument, it must be possible to suspend CTB – the “allowance” becomes a payment on a day-to-day basis as liability is established, the suspension merely serves to stop that transition from taking effect.

    Comm. Jacobs suggested that “allowing” benefit was something other than a payment in 0602/2004 and was closer to an award.

    “…should have been determined to be payable” can therefore only refer to CTB prior to the date of the decision.

    Even if UE could be applied, surely the term “payable” would result in a zero reduction anyway.

    Now to run for cover…..


    I represented in CH/1780/2005 and discussion of “allowed” centred mostly on the question of the time it was “allowed”. The Commissioner suggested that “allowed” must mean something other than or more than “paid” . I suggested at the hearing that “allowed” means paid to the claimant or payee or credited to the CTAX account. I dont recall the Commissioner disagreeing with my suggestion

    We agreed that the word “allowed” was used in the Regulations because CTB is only rarely paid to an individual as is the case with rent allowances.

    I highlighted the similarity of the CTB provisions to the HB provisions in the case of rent rebates.

    There is no question in my mind that once CTB is allowed ie credited to the account, any excess CTB that is subsequently determined to be recoverable that calculated to the end of the financial year must have so called underlying entitlement set against it

    For the reasons outlined by Kevin D, underlying entitlement to CTB will be rare

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