A tenant was overpaid Housing Benefit from September 2004 to March 2005. HB deemed it claimant responsibility and set to recover from the claimants ongoing benefit at £8.55 per week. They have subsequently assessed a new claim and this has created an underpayment of £700+. HB have now offset the underpayment against the overpayment and witheld the £700+ from his rent account. As the overpayment was deemed claimant responsiblity, is it right for HB to withold the payment from the landlord. Should they not pay HB to the landlord at the assessed rate from the date of entitlement, and deduct the £8.55 per week as previously agreed.

The LA can offset an overpayment with an underpayment only if the underpayment is for the same period as the overpayment.

Under Reg 102, an LA can use 'arrears of entitlement' to reduce an overpayment.

However, it is not arrears of entitlement if there is a bulk payment due for a new claim or the bulk amount is a result of slow processing.

Your example does not sound like it would qualify as 'arrears of entitlement', so unless it's for the same period as the overpayment, they should only deduct £8.55 for each week the £700 represents.

You could perhaps point the authority in question to the HB/CTB overpayments guidance manual.


Delays in processing new claims
4.70 A delay in processing a claim at a new address, and the resulting payment due to the claimant, does not constitute arrears in the sense that an LA can use all of this money to reduce any overpayment that the claimant may have.

4.71 Although recovery can be made from the ‘bulk payment’ that is due, any recovery is subject to the ‘maximum deductions’ rules, ie you cannot use the whole of the ‘bulk payment’ to reduce the overpayment, you must only take a maximum of £8.40/£11.20 for each week of the payment due.

Example

Miss Y has an overpayment of £300 from a previous claim, which the LA has been unsuccessful at recovering.

She reapplies for HB at a new address on 3rd September 2004.

The LA fails to process this claim until 7th October 2004 when they decide she is entitled to £40.00 per week.

She is due to be paid for 6th September to 10th October, ie five weeks @ £40.00 per week = £200.00

As the original overpayment was not fraudulent, recovery will be at the standard rate of £8.40. The LA can deduct five weeks at £8.40 from the first payment of £200.00 due to Miss Y, to reduce her overpayment accordingly.

It is not clear whether this claimant is on Income Support or Jobseekers Allowance - but the Local Authority should recover from ongoing at £8.55 or £11.20 per weeke PLUS 50% of disregarded earned income.

Although it would appear that they have not acted correctly in this instance by recovering the whole of the overpayment in one go, it is still not recovery from the Landlord it is recovery from the claimants ongoing HB entitlment.