I have a client whose employer overpaid her wages between Jan and March 2005. When they realised their mistake they recovered the wages from 3 consecutive week's wages.

The client was on HB, who have treated her as having recevied the amount of wages due not the amount actually received.

The client feels this is unfair because she has had the money taken in to account twice - once when she was getting overpaid and again when she was having it recovered.

I can't find any way around this, any ideas?

Sorry, I don't understand this. In what sense is it being taken into account twice? And what's wrong with taking the amount properly due into account? Taking what was received would have been detrimental to her wouldn't it?

I think you might need to explain this one a bit!

The client was earning £170 per week (wages + working tax credit). For arguments sake she had £20 tax and NI, leaving net income of £150 per week. She claimed housing benefit and they were treating her earnings as £150 per week.

She then received notice from her employer that they had overpaid her - she should only have been paid £120 for some of the period, so they reduced her income to £50 take home per week to recover the overpaid amount. Her wage slip would then be "amount due £170", "deductions for tax, NI, (£20)" "overpaid wages (£100)" = amount received (£50).

She then notifies housing benefit that she only received £50 per week wages, but they are treating her earnings as £150 - ignoring the overpayment of wages figure.

She feels that she has lost out on benefit when she was being overpaid wages - HB were taking into account £150.00 earnings and they are continuing to do so whilst receiving only £50 per week.

Hope this makes more sense.

Yes it makes more sense now - HB is being assessed on what was originally received not what was due. I think they should revise the original decision on the basis that her average weekly earnings are £120 throughout. What might be causing the problem is the statement on the wageslip "amount due £170". Why is it still saying that?

I think thats right. The LA should average the actual income for the whole of the period, then award Housing Benefit accordingly.

When the client notified HB that she was only receiving the lower amount for the relevant period, then the LA should have superseded the last awarding decision and re-calculated HB entitlement for the relevant period according to Reg 22(3) and Reg 25(1)(a) of the Gen Regs and then do the same again when notification of the restoration of her true earnings was notified. Shouldn't they?

The answer to this is both yes and no...

HB is assessed on the basis of income actually received... The HB claimant actually received the amounts due, (the earnings being the total gross earnings, less any deductions specified in the regs, or Schedule3).... So in theory, the earnings actually received form the basis of the calculation....

That would mean that HB should be assessed on the basis of the 'lower' income payable in subsequent weeks, (to reflect the lower earnings, as the earnings O/P would be deducted). However, the 'deductions' made from later payslips do not appear deductible as per schedule 3 of the HB regs (though I am saying this from memory, and have not gone through the schedule)... Therefore it would appear that 'double-counting' might be a problem!!!

To overcome the problem of the weeks where the overpayment was being made, it is not sufficient to reduce the amount of the earnings used for HB, by the amount of the weekly overpayment... The overpayment will have also caused an overpayment of tax and NI on the HB claimant’s payslip, and any changes in the earnings used to calculate HB/CTB etc. would also have to reflect the 'revised' reality of the Tax/NI position, (which becomes even more complicated if the HB claimant is paying the 'contracted out' rate of NI)...

I would take the time to re-calculate the actual tax/NI on the basis of the gross figures that 'should' have been paid in each tax week, and send that to the LA concerned... Whilst that is a lot of work, if the LA do not accept it, you will no have much to do for preparation for TAS, as your work will be done.....

Thank you.