Housing Benefit Overpayment

[Rozalind]

Apologies, just re read one of you notes, do you think they can chase me for the debt if its over 6 years old ?

[des8]

A debt over 6 years is statute barred which gives you a defence in a civil court.
However the money can be deducted from certain benefits eg UC

If they successfully prosecute in a criminal court for fraud they may obtain an order for compensation

[Rozalind]

Thank you Des8, will let you know the outcome eventually

[islandgirl]

Des8 is right although usually by the time it gets to criminal court they are already paying back out of benefit deductions etc so compensation is not often awarded. I know that when we are setting fines etc if you deduct from UC they take a percentage of the benefit unlike "old" benefits where the max was usually £5 a week.

[Milo9876]

Hi just received a review for housing benefit and realised that I didn't inform them of a pip award am in trouble it wasn't done intensely.

[des8]

If unintentional probably not, but they will probably require any overpayment refunded.

[Wylderose]

Hi can you help me, regarding an invoice dating back to 2011 for overpayment 10,407.00. I did not get the letter regarding the overpayment until last year. I was interviewed at the time and took a solicitor with me.
I also don't think I owe them the money.

Hi Rozalind
Your overpayment is massive. For an overpayment that large to have been created following a legally represented interview, there has to be more to the circumstances than you have disclosed or you would not have been advised to state No Comment.
At the time the overpayment was created you would have received
1. Notification of the overpayment via a decision notice that was generated as a result of the recalculation of your claim
2. A letter detailing the reason for the overpayment and offering you underlying entitlement if you could provide contrary evidence that would enable the local authority to recalculate your claim based on further evidence and thereby reduce the overpayment
You would also have been informed if the overpayment was deemed to be as a result of fraud. If it was classified as fraud then you may well have had a civil penalty imposed in place of committal to court for prosecution.
All of the above would have been sent by mail to the address from which you claimed your benefits. You state that you then moved and your mail was forwarded. Unless you moved immediately and did not put in place a forwarding service with Royal Mail, you would have received the above communications from your Local Authority
Recoverability of the Overpayment: - Although you state that your benefits were paid directly to your landlord, he/she would not be automatically liable for for repayment overpaid benefits. Recoverability of the overpayment would lie with you in the first instance unless it could be proven that the landlord materially contributed to the overpayment by having prior knowledge of the act/omission that led to the creation of the overpayment. In all instances of changes of circumstances relating to your claim, it is your responsibility under the Housing Benefit Regulations 2006, Reg 88 to notify the Local Authority of your change within one month of the date of change. In circumstances where claims were paid direct to the landlord, the Local authority can decide to recover from the landlord because they received the benefit, but if successfully appealed may then decide to recover the overpayment from the claimant and re-issue the invoice and decision notices.
Before deciding to recover an overpayment a Local authority has to satisfy itself that you:
1, caused the overpayment by omission or failure to disclose material facts
2. did not knowingly cause the overpayment or realise that benefits were being overpaid
3. that the overpayment was caused by an error from information obtained from DWP/LA/
In the event of 2 or 3, the local authority may write off the overpayment. In the event of 1, it is legally recoverable from you.
After an overpayment is created it holds rights for Appeal and you would have had the opportunity to request Reconsideration of the overpayment and you would also have had 13 months in which to submit a formal written request for an Appeal before a Tribunal. Given the length of time that has now elapsed any appeal of the overpayment at this point in time would be refused by a Judge as out of time for a late appeal. Whilst you may be out of time for appeal, there is no limitation on the time for provision of proof for Underlying entitlement to reduce the overpayment, so if you can prove why the overpayment is not owing then stop avoiding the situation and prove it. Make it go away
The fact that the overpayment is so old does not necessarily make it statute barred. The local authority will have continued to chase for payment every year via Bailiff action and also by putting a trace onto you through HMRC, regular checks of your DWP records for forwarding addresses and contact details.
Do not continue to bury your head in the sand because you need to make contact with the local authority in order to find out one way or another if this is a Fraud or a Non Fraud overpayment.
Non-Fraud Overpayments can become statute barred - If this is the case then you will be lucky.
Fraud overpayments cannot be written off under bankruptcy and can be recovered from your benefits (i.e. up to 30% of your Personal Allowance from Universal Credit) or via Attachment to Earnings should you return to employment.
The Not Knowing and burying your head in the sand will not do you any good in the long run. Sometimes it is better to face up to things and that way you know what you are looking at.

The thing is if it went to your LL to cover legitimate rent (and it seems you kept the house rented from the LL even though other people moved in) you will be I believe liable for the debt. I can see why you were interviewed under caution - you were I think claiming HB whilst not living in the property. Presumably the people there paid you rent?

This is not necessarily true. If the rent was paid to the landlord and the tenant received rent from the other occupants, there would be a dual liability for the overpayment. In the first instance this would lie with the landlord because he/she has a duty to know who is resident in their property and should know if their tenant is not resident. A responsible landlord does regular tenancy checks for gas safety etc, so a local authority could choose to recover from the landlord first either directly through Blameless tenant liability (via another benefits claim) or by invoice. If disputed by the landlord and the dispute was accepted and proven that the landlord was not found to have materially contributed to the overpayment then the overpayment would revert to recoverability from the claimant. All of this could take months and perhaps even up to 2 years if it goes to a tri-party tribunal hearing

I am sorry this answer is so long. I have tried to cover as much information that could help Rosalind as possible

[islandgirl]

Fabulous information and I am sure the OP will be very grateful. Just about my comment - I thought HB was to house a specific person. They cannot as I understand it go and live somewhere else and still claim HB on their property whilst collecting rent from others. Why would the person renting out the property not be 100% liable? Their tenants had no part in the HB claim - they could not be held responsible. Perhaps I am confused but this is how I see it!

[Wylderose]

HBen is house specific but I have known many a claimant to vacate a property (with HBen in payment to the landlord) that then sublet, move to another local authority and make another claim for benefits. Unfortunately this does not always get picked up until significant overpayments occur.

A lot of claimant's automatically think that if the benefit is paid directly to the landlord then this absolves them from all reporting responsibilities. They also believe that when overpayments occur that the landlord should pay it back because they received the rent. With regards recovery this prior to 2009, overpayments were generally recovered from the person to whom the benefit was paid. After April 2009, the HB Regulations 101(2) were amended to make Reg 101 more prescriptive in that it made it clear that if an overpayment was caused by misrepresentation that it had to be recovered by the person who failed to disclose the information and thereby contributed directly to the overpayment.

So, if a person left the property, rented it out to a subtenant, then failed to disclose they were no longer resident there would be two aspects to consider.
1. Did the landlord knowingly allow the benefit claim to continue in order to profit from both HBen and rent from the subtenant?
2. Did the tenant rent out the property to a subtenant and take the rent paid whilst HBen remained in payment.

Although tenants are supposed to have quiet enjoyment of their tenancies, landlords still have repairing responsibilities and we would expect that they should know if their tenant is resident or not. If not then they would be expected to at least inform the LA that they have absconded

So the decision would be taken to recover from the landlord as this is who the rent was paid to and therefore has the most likelihood avenue for recovery. This then puts the ball into his/her court to prove that he/she had no knowledge of the tenant's activities and therefore had not contributed to the overpayment. In which case we would then go after the tenant for recovery.

If the landlord then disputed the overpayment and provided sufficient evidence to raise reasonable doubt, then the overpayment would be switched to "claimant error, recoverable from claimant"

In almost all circumstances irrespective of whether a landlord receives the rent or not, the overpayment is always recoverable from the claimant. This includes failure to disclose changes to income, people moving into and out of the property, changes to Non-dependent income, undeclared capital etc. This is because a landlord could not reasonable be expected to have knowledge about how much a claimant is earning if they work, if their children have moved out, a partner moved in etc.

However when it comes down to doubt over residency, we will always try to recover from the landlord first if the claim was in pay to the landlord. I know it seems a bit unfair but this is the way that the Housing Benefit Regulations and the Recovery of Overpayments are set out by the government.

[islandgirl]

Thank you Wylderose that was an extremely helpful explanation and is much appreciated.