Hello all

I have a client who is a lone parent with a housing and council tax overpayment, not fraud, not official error.

As client is working, the overpayment is being recovered at standard rate plus 50% of her lone parent disregard. However for part of overpayment client was single person without any children claimant with £5.00 disregard. HB/CTB have put this all together, but client has definately paid an amount equal to the overpayment during the lone parent part of the overpayment.

Is it correct that the 50% relates to a client's current situation (i.e single parent), or should it apply to when the overpayment occured. In other words can I contact HB/CTB and say that client has paid lone parent part of overpayment, and therefore should only be applying 50% of £5.00 for the time when she was a single childless person.

The amount they take is 50% of the earnings disregard she is entitled to now. It is her current entitlement they are recovering from.

A couple of points -

- if she gets the additional disregard (the "hours" element of Working Tax Credit), they should not be taking any of that disregard - that is specifically excluded from consideration by the regulations. But alot of LA's don't realise (or forget!)

- the standard deduction is a maximum amount - the LA should consider a lower amount on hardship grounds.

Yes, you're right that these deduction/recovery rates are maximum - though LAs seem to apply them by default without making any enquiry.

Because there is an inherent discretion around setting the maximum recovery rate, as a matter of administrative law, each case must be considered on its merits without fettering that discretion and without applying blanket rules. So it would be wrong to only reduce the rate in "hardship cases " or "severe hardship" (have come across this criteria being used) or to refuse to because "we don't normally do that".

All other factors are relevant, such as the impact on family relationships or health of having less money, the possible disincentive to work and the potential cost to the public purse, of a consequent returning to welfare are all relevant.

One can ultimately take complaints about recovery rates to the Ombudsman or even through Judicial Review.

Of course, this all assumes that the OP is recoverable, that it has been properly decided, notified, etc.

many thanks for everyone's help.