Hello guys; I was wondering if you could help. Client has a non-fraudulent overpayment, recovered at a rate of £29 per week from an ongoing entitlement. Her earned income is £323 per week. The HB/CTB Overpayments Guide states at 4.430 "When considering rates of recovery of HB overpayments by deductions from ongoing HB and certain Social Security benefits an LA should be aware that the standard maximum rate of recovery from continuing benefit is £9.00 a week. "
Why would LA recover more then £9 (without client's voluntary agreement)? What am I missing? Is it £9 per instance of o/payment? (because client has few o/payments decisions over last few years).
What can i do (except complain) if these deduction rates were wrong? (for over a year)

I have written to LA but it will take few weeks to have their reply. in the meantime, i want to be ready.

Oh, sorry, I seem to have forgotten the 50% of the income disregards. Please disregard my query- unless I am still missing something.

Hi

I am still surprised at the among being recovered each week. At this authority we only take 50% of the earned income disregard. So the most the weekly recovery could be for a non fraud case would be £21.50,

eg lone parent earned income dis = £25.00 @ 50% = £12.50 plus the standard weekly amount of £9.00.

I would still check how they came to that figure and probably request a reduction as well on the grounds of financial hardship.

Aaaah, it seems that they are also deducting Working Tax Credit disregard £15.45 a week...hmmm...the "funny" thing is , client is not in receipt of WTC. Is it possible to "claw" it back? The overpayment amount has been reduced due to this oversight but client suffered a considerable hardship in the meantime.

The LA could be adding in half of the "hours" disegard which people meeting the conditions for WTC might get.

If they are they are wrong because this disregard is in a different bit of the regs from those disregards which the LA is allowed to take into account for OP recovery purposes - but it is a common mistake which gets made.

Oops - a bit of simultaneous posting there! It is possible for your client to be entitled to that disregard even if not actually getting WTC if they or their partner was working the requisite number of hours (and meeting certain other conditions).

But as I just said, even if that is the case the LA cannot add half that disregard to what they are recovering. Reg 102(4) specifies which disregards can be used in calculating the maximum recovery amount, and the "WTC" disregard is not one of them.

...and yes..they should give back what they incorrectly recovered and then recover it at the correct rate.

But what about para 17 of Schedule 4?
I know that 102 (4) doesn't refer to WTC, but it talks about "or other income falling to be taken into account"
I am confused. Client is working over 30hrs but she does not qualify for WTC (not just doesn't get because for example overpayment.
Thank you for your help- this is obviously not my bread and butter.

Received an email: "We are aware that your client has not received Working Tax credit since 3rd June 05 but she is still in receipt of Child Tax Credit therefore that disregard is still used."
I can't see anything in 102(4) and Schedule 4 about CTC.
HELP!

CTC is taken into account in full as income so there can be no disregard

To make it clear; CTC disregard's 50% reduction cannot be used for OP purposes?

It most certainly can not.

You need to quote chapter and verse at them and once they see that the Regulations do NOT allow them to make the deduction , they should back off.

There is unfortunately no right of appeal if they dont, so you then have the choice of threatening JR or the Ombudman.

I think in this case the Ombudsman is probably the route to take

That's the point - Reg 102(4) specifies the disregards that can be used to increase the recovery deduction. Namely, those disregards specified in paras 3 to 10 of Schedule 4 and paras 14 and 15 in Schedule 5. The disregard in para 17 of Schedule 4 therefore cannot be used.

In its context, the bit of Reg 102(4) which you have quoted simply states that if "income falling to be taken into account" is reduced by any disregards, then half the value of certain of those disregards (which ones it then goes on to specify) can be added to the amount deducted for the OP.

The LA you are dealing with does not appear to realise that it cannot use the Para 17 disregard.

Although the regs allow for the standard recovery rate to be increased, it is not intended to be a blanket policy and in the DWP overpayments guide, it states that the Authority should take account of the the claimants health and financial circustances and avoid causing undue hardship to dependants.

It also says you can take 50% war widows and war disablement, but not sure I would do that.

Mon 20-Aug-07 02:30 PM by Joanna

Thank you for your patience, guys. I have relied the arguments you've provided me with. I received a response which states that what the LA does is actually beneficial to client.
It goes:
"HB reg 14.30- In addition to the £25 claimant disregard, we also use the working tax disregard of £15.45 if the following conditions are met.

1. The claimant or any partner receives working tax credit 30 hours element; or

2. the claimant is aged at least 25 and that person is engaged in full time work for an average of at least 30 hours per week; or

3. the claimant is in a couple who have at least one dependant child or young person and at least one member of the couple is engaged in full time workfor an average at least 16 hours per week; or

4. The claiamnt is a lone parent who is engaged in full time work for on average of at least 16 hours per week; or

5. the claimants applicable amount includes a disability premium because of their disablity and the claimant is engaged in full time work for on average at least 16 hours a week; or

6. the claimants applicable amount includes a disability premium because of their partners disability and the partner works full time on average for at least 16 hours per week; or

7. the claimant or any partner receives receives the 50-plus element of working tax credit; or

8. the claimant or any partner would qualify for the 50-plus element of working tax credit if they were to make an application; or

9. The claimant is aged at least 60, meets the conditions for disabled/ long-term sick earned income disregard and does paid work averaging at least 16 hours per week; or

10. The claiamnt or partner is aged at least 60, one of them does paid work averaging at least 16 hours per weeks and that persons circumstanes meet the condition for the disabled/long term sicked earned income disregard.

The client meets the conditions for point 4. therefore an additional £15.45 is disregarded from the income, for example if she earns £500 per week, the income we use for the benefit calculation will be £459.55 (500.00- £25 claimant disregard and - £15.45 working tax disregard) therefore this is beneficial to the client as we use a lower income for her housing benefit calculation.

When there is an overpayment and we will be recovering the overpayment by on going benefit, we use these disregards to establish the maximum rate to be recovered each week."

Then they go on to say that HB reg 18.65 allows for that as the maximum permitted weekly deduction is £9.00 plus 50% of the income disregards previously identified.


So, they are saying that because they are disregarding the £15.45 to start with, they will also reduce this disregard when recovering OP.
Does 102(4) override this?

Once again, thank you for helping me out.

They are simply wrong. They cannot add half the value of the 15.45 disregard to the deduction they are making. They are only allowed to use the disregards specified in Reg 102(4) - and this is NOT one of them!

Not sure where the "more beneficial to the claimant" argument comes in. They are correctly applying the appropriate disregards to their assessment of your client's income, but then wrongly using some of the disregards as a basis for what they are deducting for the overpayment. They clearly think that any disregard they have applied to the income can then be used to determine the OP deduction. They need to read Reg 102 and the Schedules it refers to.

And just what is "HB reg 18.65"??

To answer my own question - what they refer to as "Regs 14.30 and 18.65" appear to be paragraph numbers from an out-of-date version of a certain well-known reference book on HB and CTB, which they have proceded to read wrongly.

I suggest to you point them in the direction of the ACTUAL regs!

Dear Andy and Ciaran; thank you very very much. I was struggling with this. I will let you know the outcome.

and stainsby...what a faux pas!

Small update; LA decided to recommend a write-off rather then justify their position. I am still asking for their policy on recovery- with a help of our MP. So far they have emailed only to say that they are "correct" in including Tax Credits in recovery.

Have a secondary question though- the recommendation for a write-off came as a response to client's DHP application.

The letter also states that "further rent increases would be considered totally unreasonable by the LA and no consideration would be given for further increases in benefit assessment."

The RO restricted the rent to £800, the market average for the area is £900-£1000, the actual rent paid by client is £975.
Is there any basis for the LA to refuse increase in benefit assessment if the client's rent goes up (considering the fact that the l/lord pays mortgage and the interest rates will go up sooner or later)?

I am aware of discretionary nature of DHP but should benefit assessment be curtailed like this? What would be an "unreasonable rent increase"?

Oh dear! The D in DHP stands for "Discretionary". This means not stating up front that you will exercise no discretion whatsoever on an application that hasn't even been made yet.

Hi Andy- the remark about refusal to consider increase of rent was made with regards to calculating the housing benefit, not DHP. Strange though, as the rent is restricted anyway....