We have just been granted leave to appeal in a HB overpayment case.

The issue is as follows:

1. Prior to 6/4/03, when contractors were not permitted to make decisions, a contractor (ITNet, Capita etc) makes the decision to award HB and this is not ratified by a LA officer.

2. It is later determined that this award of "housing benefit" was an overpayment.

3. Is it correct to say that because housing benefit was never lawfully awarded then the payments are not "by way of housing benefit" and therefore cannot be "overpayments" within the meaning of Reg 98.

Any thoughts much appreciated.

If this works then LAs who contracted out HB processing will have to prove for every overpayment where the awarding decision was prior to 6/4/03, that those awards were properly made by an LA officer and not by a contractor- which in my experience will be difficult for them to do.

I've got a feeling that if payments are just money, as opposed to benefit, then there is a general power to recover under civil or common law. So if your bank pays puts £1 million in your account by mistake they are able to recover it. If a payment is benefit, however the council are limited to the recovery rules in benefit law. I have a feeling that the DWP have argued that payments for a period after a death are not benefit and so are recoverable without recourse to the IS or DLA recovery rules.

I think that the bank would not always be able to recover the £1 million from your account that they had put in by mistake: if you go away thinking that it is your money and spend it in good faith then you can argue that the principle of estoppel should prevent recovery (don't ask me to explain anymore about this- about all I know is that it is an equity based argument that funnily enough is quite similar to the principles in Reg 99(2)).

In any event, if we can prevent recovery under the HB scheme then we are happy to take our chances with other forms of recovery (and keep our fingers crossed that the LA will not use them)