Had a caller on this sort of issue a while ago.
The Administration Act contains the power for LAs to make agreements for one to carry out the HB functions of another and typically its used to enable landlord authorities to pay HB even though the property is in another Authority's area. Widely used in London, I'd guess. Its in s134.
The problem my caller had was that he thought he'd also applied for CTB, but the agency arrangement, where it exists, doesn't extend to CTB; that has to be claimed from the LA that collects Council Tax - ie where the property actually is situated. He didn't find out that no CTB was being paid until there were quite substantial arrears.
I advised him to argue that the application to the placing (HB paying)authority was a valid one, and that if they hadn't passed it on yet to the correct LA for decision and payment they should do so pronto, and that that authority should determine the date of claim as the date it was received by the first LA. This seemed preferable to arguing good cause for a late claim. Hasn't been back in touch so I assume (probably unwisely?!) that it worked.
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