Hi,

Am querying this just in case I have missed something. I have contacted three local authorities to inform them that there are tenants who are more than 8 weeks in arrears with their rent and to ask for HB to be paid directly to the landlord. All three authorities have come back and have said that they will not pay the HB direct but they will suspend the HB claim in case the claimant wishes to challenge the decision to pay HB direct to the landlord. This is despite evidence of the arrears being sent to the LA.
I was under the impression that when it was proven that the claimant was more than 8 weeks in arrears, LA were obliged to pay direct to the landlord?
Has anyone else come across this and does anyone out there have the HB reg that confirms what action LA's should be taking in cases like this.

Thanks in advance

John

HBR 95(1)(b) is categorical.
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(1) Subject to paragraph (2) and paragraph 8(4) of Schedule A1(a) (treatment of claims for housing benefit by refugees), a payment of rent allowance shall be made to a landlord (and in this regulation the "landlord" includes a person to whom rent is payable by the person entitled to that allowance)—

(b) where sub-paragraph (a) does not apply and the person is in arrears of an amount equivalent to 8 weeks or more of the amount he is liable to pay his landlord as rent, except where it is in the overriding interest of the claimant not to make direct payments to the landlord.
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However, I can understand the LA's caution. I am personally aware of two cases where payments have been made to one party and THEN the other has appealed (payment having been made). In one case, a Tribunal ruled that the LA must obtain the money back from the "first party" (er, on what basis? It hasn't been overpaid....) and then pay to the "second" party. Cmmrs have remitted that case back for rehearing.

LAs are in a cleft stick here. Imagine that the clmt appealed and the Tribunal found for the clmt, but the monies had already been paid to you. Are you really going to hand back the money to the LA? If I was the L/L, I wouldn't - there is no legal basis compelling me to do so unless there was a recoverable overpayment. And, from the LAs view, on what (legal) basis do they pay benefit "twice"? The only option available is to pursue a complaint + claim for compensation (outside the HB scheme).

But, the last 2 paras ignore a rather important point. As payment is only SUSPENDED, no decision has yet been made. Therefore, the clmt CANNOT appeal. In fact, the clmt can only appeal once a decision has been made - there is no right of "challenge" until the decision has been made. Therefore, my advice is to complain to the LA that they are failing to comply with HBR 95(1)(b) and that it is a MANDATORY requirement (subject to being in the clmt's interest etc). If you are prepared to follow through, remind the LA that they could be subject to JR.

Regards

Thanks for this Kevin,

You have confirmed what I thought. I'll get back onto the LA's and see what happens

Regards

John

Of course, there is no right of appeal against a decision under 95(1)(b).

Unusually, I disagree with Andy.

In my view, there is definitely a right of appeal in respect of HBR 95(1)(b). This would be consistent with para 1(c) of the Schedule to the D&A Regs 2001. BUT, the right of appeal is limited in respect of one aspect of HBR 95(1)(b).

HBR 95(1)(b) addresses two linked, but separate issues:

1) the question of the amount / length of arrears;

2) the question of whether or not it is in the overriding interests of the clmt.

CH/4108/2005 looked at these questions. Firstly it was confirmed that the 8 weeks+ arrears must equate to the GROSS rent and that this issue is appealable as normal. However, the second issue (i.e. overriding interests) is only "appealable" on JR grounds - see para 6.

Hope the above helps.

Forgot to note that CH/2986/2005 also confirms that a change of payee is appealable.

Hi,

Does anybody have a copy of CH/4108/2005 - can't seem to find it anywhere.

Cheers

John

CH/4108/2005 has been forwarded to Rightsnet. Rightsnet has confirmed receipt and I assume a link will be given soon.

hi kevin .. had emailed you last week ... is not a useable copy of the cd i'm afraid - cheers shawn

Dang! I'll try again.

Right, a cut & paste job.... The following version is a text copy - some of the formatting on the original CD has been lost. None of the text of the CD has been altered, but italics have been added to the "event dates" in para 3 for the purpose of trying to make it more readable.

----------------------------------------------------
CH/4108/2005

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. My decision is that the appeal tribunal (the tribunal) erred in law in its decision given on 8 June 2005 under reference U/42/919/2005/00359. I allow the Authority’s appeal. Under paragraph 8(4) of the Seventh Schedule to the Child Support, Pensions and Social Security Act 2000, I set aside the tribunal’s decision, and under paragraph 8(5)(c) I remit the case for rehearing by a differently constituted tribunal. My Directions are given in paragraph 7.


2. Both parties have accepted the view that the decision appealed against was erroneous in point of law. When granting leave to appeal I listed seven decisions, in all, which appeared to have been made in this case and continued:

“However, I must confine myself to the seventh decision appealed against, of 8 December 2004, as decided by the tribunal. It appears that the claimant, the tenant, was not invited to the hearing. Under regulation 77 and Schedule 6 Part IV paragraph 11 of the Regulations, decisions are to be notified containing specific information in relation to direct payments. That information and general information relating to all decisions, reasons for the decision, and the right to appeal is extended to all persons affected. Under regulation 3 of the Housing Benefit and Council Tax (Decisions and Appeals) Regulations 2001, this includes the landlord and the tenant in direct payment cases. None of the relevant information was notified and not all the persons affected were informed, as it appears from the file papers, on several occasions, but I am concerned only with the decision appealed against.”

I am satisfied that the tribunal erred by not dealing with this aspect. The Authority will no doubt now give the appropriate notices to the claimant.


3. Although my decision is limited to the appeal in connection with the decision of 8 December 2004, it appears that the chronology was as follows:


Date---------Decision/event

Unknown 1st decision relevant to housing benefit direct payments i.e. they were being made to the landlord, but it is not clear whether that was under regulation 93 (e.g voluntary) or regulation 94 (e.g. arrears).

19.4.04 The claimant’s solicitors requested that payment be made to their claimant (doc 1 page 1), and on 21.4.04 made claims for damages.

26.4.04 2nd relevant supersession/revision decision - ended direct payments. The decision does not appear to have been recorded, or notified to the parties, there is no indication of the grounds, but it seems to have been taken on 26 4.04 (by changing payment instructions - effective from 5.4.04.)

4.5.04 The landlord claimed there were 8 weeks of arrears (document 2/page2).

5.5.04 First monthly payment (for April) to claimant

6.5.04 3rd relevant supersession/revision decision making direct payments to landlord on the grounds of 8 weeks arrears (document 3/page 3)

11.5.04 Benefit suspended

13.5.04 Claimant’s solicitor challenged 3rd decision – there were not 8 weeks arrears (document 4/page 4)

14.10.04 Benefit cancelled from 3. 5 .04

?.12.04 Claimant’s solicitors asked for payments to the claimant to be made

8.12.04 Presumably a decision made to reverse the suspension and cancellation above because a 4th direct payment decision was made to send housing benefit for the period up to the claimant losing possession on 7.12.04. No grounds or notification, as before, and the payment is made to the claimant’s solicitors, possibly in breach of regulation 92(3)


It appears, at least from the file papers, that none of the decisions was properly notified, and the Authority, the landlord and the claimant may wish to consider the arguable point that all the parties still have the right to notification, and therefore of appeal against any hitherto un-notified decisions. In particular, the second decision, that of 26 April 2004, which was challenged by the landlord on 4 May 2004, was probably not properly made and notified, although in that case the month’s rent was sent to the claimant, and was not a direct payment made to the landlord. The third decision of 6 May 2004 reinstated direct payment to the landlord because he was of the opinion that there were eight weeks of rent arrears. As can be seen from the chronology, this was challenged by the claimant’s solicitors on 13 May 2004, two days after benefit was suspended, on 11 May 2004.


4. Although there is no decision reinstating benefit within the papers, it is clear rent was eventually paid to the claimant’s solicitor (document 15, page 22) but it is not clear under what authority that payment was made, a point raised by the tribunal, and I see no error in its findings in paragraph 10 of the Statement of Reasons. In the absence of any agreement to the contrary, the solicitors would hold any such sums as agents for their client, to whom they must account.


5. However, despite the heading “A Red Herring” to paragraph 10 of the Statement of Reasons, it is rather the question of rent arrears and counter claim/offset which may have been the red herring in this appeal. Regulation 93 of the Housing Benefit (General) Regulations 1987 states:

“ 1. … a payment of rent allowance shall be made to a landlord …..

<(a) does not apply>

(b) where sub-paragraph (a) does not apply and the person is in arrears of an amount equivalent to 8 weeks or more of the amount he is liable to pay his landlord as rent, except where it is in the overriding interest of the claimant not to make direct payments to the landlord.”

Regulation 93 requires the arrears to be equivalent to eight weeks or more of “the amount is liable to pay his landlord as rent”. The regulation is concerned with the tenant’s liabilities. Questions of offset and counter claim do not arise, as the tribunal found on the facts that the terms of the tenancy precluded the withholding of deductions or set-off from the rent, the liability in this case must have been in excess of 8 weeks’ gross rent.


6. The tribunal went into considerable detail as to whether it was in the overriding interest of the claimant/tenant not to make direct payments to the landlord. Regulation 93 deals with whether it is in the overriding interest of the claimant for the Authority not to make direct payments to the landlord, as for example where a tenant wishes to withhold rent to try to put pressure on a landlord to do essential repairs. The question of the tenant’s overriding interest as set out in Regulation 93 must be a question for the Authority’s discretion, and thus appealable only on judicial review grounds such as impropriety or illegality. The decision of the tribunal in R(H) 3/04 on that point has been reinforced by the recent decision of a Tribunal of Commissioners in CH/4234/2004 (paragraph 39).


7. There are therefore further matters for consideration by each of the parties, the Authority, the landlord and the claimant. Clearly if in the event, further appeals are made, it would be helpful if they were coordinated if possible, so that they could all be dealt with at the same tribunal hearing. I direct that a copy of the decision be sent to the claimant’s solicitors.


8. For the reasons stated, the Authority’s appeal succeeds and my decision is set out in paragraph 1.




(Signed on the Original) E A Jupp
Commissioner

5 June 2006

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Thanks for this Kevin, really appreciated.

Cheers

John

The question as to whther or not there are 8 weeks arrears may not be a simple as it sounds. In R(IS)14/95 Mr Commissioner Rowland wrote at paras 6-7
"6. Ms. King submitted that the tribunal had clearly failed to address the central issue before them which was the question of fact as to whether there were any arrears of rent at all. Mr. Roe supported that submission and I accept it. It appears that the tribunal believed that a mere request by a landlord for deductions was sufficient. That is not so. There can be no deduction under paragraph 5 of Schedule 9 to the 1987 Regulations unless all the conditions of sub-paragraph (1) are satisfied. Sub-paragraph (1)(c) requires the tribunal to be satisfied that there are in fact rent arrears and, indeed, it is necessary for the tribunal to determine whether or not the arrears are in respect of at least eight weeks, or at least four weeks, so as to enable them to decide whether either head (i) or head (ii) is applicable.
7. Doubtless an adjudication officer or tribunal is entitled to rely upon a bald statement from a landlord as to the amount of rent arrears where there is no dispute that there are more than eight weeks arrears. However, if a claimant submits that there are no arrears, it will often be necessary for further evidence to be obtained from the landlord. As the deductions are made for the benefit of the landlord, it is not unreasonable to expect the landlord to provide the adjudication officer with the evidence necessary to prove the case. Where there is a dispute on the arrears, a landlord cannot expect to avoid consideration of the tenant’s case by asking the Department of Social Security to make deductions from benefit and not prosecuting county court proceedings. The evidence provided should usually be sufficiently detailed to enable the adjudicating authority to identify the rate at which and the period over which, the arrears are alleged to have accrued so that the claimant has a realistic opportunity of adducing evidence to meet the allegation."

and at para 9

"9. Ms. King submitted that a tribunal should have regard not only to a claimant’s defence but also to any counterclaim. Again Mr. Roe supported that submission and I accept it. A tribunal is not entitled to try a counterclaim and to set damages off against arrears of rent. However, as Mr. Roe pointed out, paragraph 5(6), in contrast to paragraph 5(3), provides a mere discretionary power to determine that a sum should be deducted from the claimant’s benefit and paid to the landlord. The existence of an arguable counterclaim by the claimant against the landlord for a sum of damages exceeding any rent arrears is a matter an adjudicating authority might properly take into account in deciding not to exercise that power."