My understanding (as per CPAG Handbook p1284 ) is that HB/CTB entitlement is based on the amount of tax credit actually received. In particular arrears of tax credits are treated as capital. Therefore if a tenant receives a tax credit award letter dated (say)22/11 for an award period starting on (say) 1/11 then the lump sum paid on the 22/11 for the period 1/11-22/11 should be treated as capital. Is my understanding correct and,if so,does anyone else have experience of their benefits unit taking a different view ?

You will need to check whether customer's tax credit is paid 4 weekly. If so, then it is possible the payment for the payment from the 1/11 to the 22/11 is payment which would fall to be taken into account as income as this is a payment IN arrears and NOT 'of arrears'!

The award letter states that a single payment of £428.40 CTC is to be made on 24/11 and the first weekly payment of £164.22 on the same date and thereafter £164.22pw. Similarly a single payment of £153.90 WTC is to be made on 24/11 and the first weekly payment of £59.09 on the same date and thereafter £58.99pw.

The Benefits unit have calculated housing benefit for the period beginning 29/11 based on weekly CTC of £192.50 and WTC of £69.16, a weekly income £38.35pw higher than the claimant received.They have counted 135 as the award period (22/11-5/4)and included the single payments of £428.40 and £153.90

This is not uncommon, however, we have been non the wiser and not relied on the actual payments that a tenant receives at regular intervals, be it weekly or four weekly. Consider looking at the total award for the year, amount already paid right up to the notification date, the remainder due, divide that by the number of days left until 4/4/05 and divide by 7. That should give you a much more accurate figure of what the weekly entitlement is from the Monday following the notification.
I don't suppose there is an overpayment being recovered by the IR?

There is no overpayment and benefits have based thir assessment on the formula you have referrred to. However surely this is in contradiction with the guidance that

1) Assessments should be based on the amount of tax credit actually being received.

2) Payments of arrears of tax credits should be counted as capital not income.

I had a similar problem last September where the LA applied the formula you refer to (as very confusingly described in the HB Guidance Manual Section C3 I think) and ended up with a very unfair result for my client. When I queried it, they agreed that they found the formula unfair, and had decided to unilaterally depart from what they had been told to do. My client had a number of variations in TC levels over about two months, and the LA took into account what they actually received in any particular week. This means a lot of HB calculations, varying from nil to full HB awards, but every week's HB really was based on what the income was. Apparently they were going to do that for all TC cases, but didn't have any official backing for their approach!

The Benefits Unit have accepted their error and recalculated the hb ent, disregarding the arrears, resulting in approx £20 per week additional hb and some ctb too.