Alleged Fraud Housing Benefit & Council tax - change of circumstances ?

[K147]

I attended an interview under caution yesterday at the council offices for alleged failure to disclose income higher than the £16k threshold that cuts off entitlement to benefits. They had contacted my banks and had all my statements. All of this is making me have suicidal thoughts.

This was for all of 2021 and 3 months in 2020. About £4k-£5k over at most each month, not massive amounts of money. At the time I was very mentally unwell and had been pursuing the NHS and I wasn't capable of dealing with all the issues but the amount I might have to pay back could be £10-£15k

Reflecting later I didn't think I had to disclose the higher than £16k saving because most of it came from NHS awards and I told the council this during the interview yesterday. I think though it has to be taken into account in capital under their rules although Im probably one of a few people who cant get MH care in my county so to apply the rule rigourously would be unfair. The relationship with the NHS trust broke down irreversibly after I pursued them in a civil action and they agreed the same - so in essence I pay for treatment myself now(PTSD and complex PTSD).

The council told me too that they would assess benefit every 6 months but they didn't ask for bank statements for the full period and I simply supplied them with what they asked - 3 months before each twice yearly review. This is how the capital savings >16k got missed. Also because some of the capital related to self employed income for work not yet done so I had amortised the invoices, which the council agreed at the time.

I also note I provided them with bank statements in one assessment over 3 years ago where my total bank statements did exceed £16k but they didn't ask for further bank statements for previous periods. They could have found that out then so I think this is an "official error". Also because the council are working out HB and council tax support to low earning self employed people like me, or indeed low earners, each 6 months to cut down on admin. The effect is there will be periods where they are underpaying HB if they have assessed it previously on higher incomes, but they themselves don't then recalculate on the years earnings and monthly bank balances for each 6 month period. This could mean thousands of people aren't getting correct benefits. To say then that's my fault would be awful as I have just supplied them with the 3 months earnings in good faith, and I've never liked constant recalculations whenever you give them new documents and statements as change of circumstances (as you could do it weekly with bank account changes) but they should ask people for all the bank statements each 6 months and then the overpayments just won't happen. This is another reason why I think this is an official error. It's in the interests of the council to pay people the right amount of benefit at the same time not to pay too much, but they should be asking for 6 months bank statements and earnings, seeing what they did pay, then either seeking money back or paying you more each 6 months. My council seem to make this up as they go along but as they agreed to administer it and review all information each 6 months, I was unwell, why would I have to pay them back.

[Wylderose]

I am sorry that you are going through this, but just take it one step at a time and don't flip out over it, because you are not the first person with capital over the limit and you certainly won't be the last.

Each and every person who claims a Benefit, whether that is Housing Benefit, ESA or UC has to agree to a Declaration when the make their claim. This declaration states that the person will notify the Local authority/DWP of any changes in their circumstances. Notifiable changes include changes to their income (up or down) and capital (increases/decreases), household (who moves in/out), and changes to any other member of the household's income.

Every person who claims Housing Benefit is bound by the "Duty to provide information relating to changes" as described in the Housing Benefit Regulations Section 86 (1 to 7) for the entire lifetime of their claim.

Every claim for DWP/Housing benefit is subject to a ceiling of £16000. Once you hit this ceiling, you are no longer entitled to claim. This is set out in the Housing Benefits Regulations 2006, Section 6 (43)

Reflecting later I didn't think I had to disclose the higher than £16k saving because most of it came from NHS awards and I told the council this during the interview yesterday. I think though it has to be taken into account in capital under their rules although Im probably one of a few people who cant get MH care in my county so to apply the rule rigourously would be unfair. The relationship with the NHS trust broke down irreversibly after I pursued them in a civil action and they agreed the same - so in essence I pay for treatment myself now(PTSD and complex PTSD).

Please remember that your issues with the NHS have no bearing on the administration of your housing benefit claim. Wherever the money came from you were still bound by the duty of care to inform the Local authority of the capital being received. In mitigation however, if as you say "most of it came from NHS awards" then if this is compensation and you can prove it, it may be Disregarded as Capital for 52 weeks but you will need to evidence the origin of the money and what it was for. The local authority will then need to consider how the money is dealt with in your claim and when it becomes capital that needs to be included in your assessment.

The council told me too that they would assess benefit every 6 months but they didn't ask for bank statements for the full period and I simply supplied them with what they asked - 3 months before each twice yearly review. This is how the capital savings >16k got missed. Also because some of the capital related to self employed income for work not yet done so I had amortised the invoices, which the council agreed at the time.

I also note I provided them with bank statements in one assessment over 3 years ago where my total bank statements did exceed £16k but they didn't ask for further bank statements for previous periods. They could have found that out then so I think this is an "official error". Also because the council are working out HB and council tax support to low earning self employed people like me, or indeed low earners, each 6 months to cut down on admin.

It's in the interests of the council to pay people the right amount of benefit at the same time not to pay too much, but they should be asking for 6 months bank statements and earnings, seeing what they did pay, then either seeking money back or paying you more each 6 months. My council seem to make this up as they go along but as they agreed to administer it and review all information each 6 months, I was unwell, why would I have to pay them back.

Assessing and reassessing Self-employed expenses is not unusual especially when dealing with someone who has only just started trading. It is done to gain an idea of the profitability of the business as new businesses often do not turn a profit for some months after start up. Once sufficient income has been assessed (usually at about 9 months in), the assessments are switched to retrospective annual assessments.

With regards the council "finding this out so this is an official error", I will advise that you are totally incorrect - the Local authority does not have the power to obtain your bank statements from your bank. The DWP has the power to request your bank statements under PACE and will do so in the course of an ongoing fraud investigation. If the local authority have your bank statements (those that you did not provide), then the DWP will have provided the bank statements to your local authority for the purpose of the Interview under Caution. Failure to declare Capital is not official error. Official error is where the local authority or the DWP makes an error on your claim such that you could not reasonable be expected to know that you were being overpaid.

Yes it is in the interest of all concerned that the right amount of benefit is paid at the right time, but the local authority is not tasked with chasing claimants all year long to make sure that they disclose all the information that they are required to. You have a responsibility as well in ensuring that the amount of benefit you receive is correct and although you may have been unwell, this does not excuse you and nor does it mean that any overpayment should be written off.

"Working out HB for low earning self employed people like me" - anyone who has £16K in the bank is not entitled to Housing Benefit and can afford to pay their own rent. There are other people in this country who do not have £100 in the bank and who without Housing Benefit would be sleeping on the street corner. They are the low income people that we support through housing benefit and food banks when they can't afford to buy food for themselves.

If you really do not think that you owe the money, you can always appeal the decision and explain to a panel of judges at the First Tier Tribunal hearing why you feel that you are not required to return what you were not entitled to receive.

Good luck