Anyone know of any caselaw concering this? Claimant has been on SSP since mid September last year. When her claim was decided the authority averaged earnings over 5 weeks which included some SSP and some other earnings.

It would be an interesting argument. However, my view is that if an employee has "normal" earnings that reduce (for whatever reason), that constitutes a change of circumstances. I'd argue that HB/CTB should be calculated accordingly - HBR 68 stipulates such a change takes effect in accordance with the "following Monday" rule. (The exception would be if the LA was informed of the change late).

In anticipation of the LA arguing that earnings must be assessed over an average of 5 weeks <HBR 22(1)(a)>, I'd counter-argue as follows:

1) HBR 22(1)(b) should apply.
2) HBR 22 does not negate HBR 68.
3) In any case, income must be attributed to the period it is in respect of.

If an "on-going" claim, I'd also argue between 1 & 2 that HBR 22(3) has effect; NOT HBR 22(1)(a).

Regards





Regards

Mr Commissioner Jacobs considered the issue in a different context in CH/1780/2005 He wrote at para 9

"9. Everyone now accepts that the local authority now made a mistake in calculating the claimant’s income. It averaged his year-to-date income over the whole of the financial year to date. It failed to take account of the fact that there had been a significant change when he began to do overtime. It was wrong for the local authority to average without making inquiries into the pattern of earnings."

and at para 31-32

"31. What mistakes were made in this case? This question can be answered differently. On one analysis, the mistake was made when the decision-maker calculated the claimant’s income by misinterpreting the evidence that the claimant had been asked to provide. The analysis that I prefer, as I have said, is that the mistake was made when the decision-maker failed to investigate in order to obtain more precise information about the pattern of the claimant’s earnings. But it does not matter which analysis is correct. The claimant did not contribute to either of these mistakes. He was asked to provide evidence and he complied with that request. He was not in any way responsible either for the fact that the decision-maker did not ask for more details or for the fact that the decision-maker calculated his income by averaging the year-to-date figure over the whole financial year. Both those mistakes were solely the responsibility of the local authority.
32. It seems to me that there is only one answer to Lord Justice Simon Brown’s composite question. The overpayment in this case was caused by the local authority without contribution by the claimant. The local authority determined the evidence that the claimant was required to provide, what further investigations were appropriate and how the evidence should be analysed. As a matter of common sense, the local authority caused the overpayment."

The law provides a framework for LA's to make the assement, but LA's are responsible for deciding what information is required and how that information is analysed. CH/1780/2005 illustrates what can happen when LA's get it wrong on either count

Slightly at a tangent to this, I am not clear whether (and, if so, how often) relatively minor changes in earnings arising from irregular overtime should be reported as a change of circumstances. Client concerned gets small amount of HB based on 2 months earnings before claim (claim has only just started). Overtime causes fluctuations and probably each 2 months average will differ from the previous 2 months. I know LA can use a different period to get a representative average but at present they have not asked for any more info. How long should the client wait before reporting a change of circumstances?

This is only for cases where earnings fluctuate (distinguished from "permanently" increased rates / hours etc).

Speaking from the perspective of a claimant, but with the advantage of benefits knowledge, I'd inform the LA as follows:

1) Increased earnings: every two months

2) Decreased earnings: just before one month had elapsed from when earnings first decreased (to avoid the "beneficial change" rules preventing reassessment).

In the second scenario, if the LA had advised IN WRITING that they would accept decreases every two months too, I'd be happy with that.

Regards

I know that common practice would indicate the contrary, but I'm not convinced that mere fluctuation in earnings actually constitutes a notifiable change of circumstances, in the same way that a more substantive change - increase/decrease in hours, a change in job, increase in rate of pay, etc - clearly would.

HBRs 19, 21 and more importantly 22 talk about weekly average earnings being *estimated* rather than calculated. It is in the nature of an estimate that the actual outturn is likely to be different from the estimate, but, unlike in tax credits, I can find no provision in HB for going back and comparing the outturn with the original estimate. Indeed this would be impossible now that HB periods are abolished - though it could conceivably work for CTB over a tax year, I guess.

If the LA has made an entitlement assessment based on an estimate of earnings that is itself based on actual earnings for a representative sample five week (or whatever) period, is the claimant then required to undertake a rolling weekly check on the new average for a different five weeks, dropping the five week old figure out of the sum and replacing it with this week's? In lots of jobs, every week would see a different new average. How is the claimant to decide when to notify it - or should she notify it every week to be on the safe side? I would look forward to seeing such a requirement clearly and explicitly set out in HB notifications.

And is the LA then under a duty to do a weekly re-assessment?

Oh what fun...

Gerry - You've set out very clearly the concern that caused me to make my post. The trouble is that, if fluctuation is not treated as a notifiable coc, how long do you go on before notifying anything? The overtime may have a trend - still fluctuating but gradually increasing/decreasing. Do you leave it till something else happens (eg an annual increase in pay rate)?

I think HBR 75(1) makes it clear that a change in earnings is notifiable - and there is no limiting factor (such as only applying to yearly increases / scale increases etc). That means any week on week change is, strictly speaking, notifiable. I'd readily acknowledge that this makes it a nightmare (for clmts & LAs alike), but it doesn't alter the requirement. With regard to the abolition of "benefit periods", it is noticeable that the words "...during the award of Housing Benefit..." are used in HBR 75(1).

In practice, most LAs will "happily" deal with such situations on a monthly / 2-monthly basis. Rather that than end up with weekly amendments and/or appeals galore......

While acknowledging the term "estimate(d)" is used, so is the term "accurately".

On the flip side, addressing gerry's point, if a clmt insisted that his/her earnings should be assessed on a week by week basis due to unpredictable changes in hours / overtime etc, it would be pretty hard for an LA to (lawfully) refuse. If the changes were cyclical, then the LA could argue that an average over the cycle was sufficient under HBR 22(3).

From an LA perspective (& obviously this is a generalised argument), I'd argue that if a clmt expected HB/CTB to increase as a result of a change in income, it is entirely reasonably that the clmt could expect the reverse to be true. This line of reasoning notably appears in more than one CD for HB/CTB overpayment cases.

Regards

In CH/1780/2005 the secretary of state refered to Regulation 22 of the Housing Benefit (General) Regulations 1987 in his submission as the provision whereby a claimants future earnings shall be estimated by reference to the average of his actual earnings in the past, but then went on to suggest that the matter is complicated when considering the matter with hindsight. He cited CH/474/2003 as authority to suggest that the matter could be considered on a month-by-month or week-by-week basis.

I challenged it and I suggested that Regulation 22(3) makes no provision for the matter to be considered on a week-by-week basis, and that CH474/2003 is not an authority for Councils to determine either new or ongoing claims for benefit in that way. CH474/2003 is only an authority for the amount to be offset under Regulation 104 to be determined in that manner.

The SOS withdrew his submission on the day and the issue was not considered further by the Commissioner.

I think it will be a matter of fact and degree when changes in the pattern of earnings will amount to a change of circumstances

Many years ago in a previous incarnation I had a case where the average used was properly worked out arithmetically, but never corresponded to the figure of actual wages in any week. For the sake of the illustration suppose it was something like: £190 + £169 + £183 + £192 + £176. Total £910. Weekly average £182. The notification letter said something like "tell us if your income changes from £182 a week." The claimant rightly pointed out that his income had never been £182 a week. The LA said "that's OK, we're working on an average."

At the end of the benefit period the new average for the five weeks immediately before renewal - without any increase in rate of pay - had gone up to, say, £190 a week. The LA demanded payslips for the whole benefit period. The average of those worked out at, say, £187 a week - and I'm not sure that the client had ever had a pay week of £187 either. They claimed an overpayment back.

At the Review Board I argued that there had been no change of circumstances. The circumstance that the clients wages fluctuated from week to week had obtained at the beginning of the claim, and had remained the same throughout. The Board agreed.

Not a precedent obviously - but I see no reason why a tribunal in a similar situation could not come to a similar conclusion.

Anyway, it'll all be taken care of when HMRC take over HB and CTB and change it to an annual means test aligned with Tax Credits - £25k increase disregard and all!

I have to agree. “Average” weekly income from employment, which is used for HB/CTB assessment, is distinct and often different from actual income received in any one week. It is quite possible for actual income to change for a period, but “average” weekly income to remain the same.

As a result, I also agree with Stainsby that there is no requirement for claimants to regularly report small changes in actual weekly income as this will not change the average weekly income. Only large changes over a small period, or long term changes need to be reported and will lead to a change in average income

Many thanks for all the replies. Looks as if the client has to choose between reporting every two months or leaving it till a significant change occurs.