Around £1 billion of Housing Benefit over-payments are identified as recoverable every year and, at any time, around £2 billion remains outstanding despite the recovery efforts of councils. DWP provides guidance and subsidy incentives to councils, encouraging recovery from those considered culpable.
Currently, local councils receive a subsidy bonus of 40% for monies recovered from either the tenant or landlord. So, in the case of a landlord appeal, I’m dealing with just now, involving an alleged overpayment of £20,000, the potential reward for recovery would be £8,000.
Landlords experience the impact of these perverse subsidies as every year some councils automatically pursue landlords, rather than their tenants, knowing they’ll recover the monies much quicker from the landlord, which in turn expedites payment of the subsidy bonus.
So, it’s not surprising some councils see this as a way of generating revenue, although few, if any, will admit this.
During the past year, I’ve been representing a landlord in an appeal on a point of law, to the Upper-tier tribunal. The case had first been listed before a First-tier tribunal, where the appointed judge agreed with the council that the £2,000 should be recoverable from the landlord on the basis he should have known and reported his tenant’s vacation of the property. I drafted the application for leave to appeal to the Upper-tier tribunal. Judge Turnbull, the appointed judge, agreed with our view that the First-tier judge had failed to consider a key part of the overpayment regulations which can exempt landlords from culpability.
He invited the council to comment on his preliminary view. The council agreed, so he proceeded to set aside the original tribunal’s decision; exonerated my client from any culpability; and determined his ex-tenant was culpable, due to the fact she had clearly failed to notify both the council and landlord of her vacation from the property; something she agreed to when she made her application.
As a consequence, she had breached her obligations to disclose the change and it was this failure that caused the overpayment in the first instance.
Contrastingly, my client didn’t know what was happening, as there were no red flags, so his mistaken belief Housing Benefit was being paid correctly, was reasonably held. My client is understandably delighted he doesn’t have to repay the £2,000.
From my point of view, I’ve another Upper-tier judgement I can use to good effect in any further client appeals, as such judgements are binding on the lower level. However, on the downside, the appeal process has taken the best part of two years to conclude, and could, quite easily, have foundered. Had I become involved, at the initial stage, I’m convinced, through my experience with other such appeals, the same result good have been achieved in a fraction of that time.
I used to run the Housing Benefits Overpayments training for CIH all over the UK. Initially, it was council decision makers who attended. But, as the years passed, more and more delegates came from housing association or PRS landlord/agent backgrounds as they were increasingly feeling the adverse affects and needed to find a way to challenge council practice.
Based on my experience of what can happen, my advice to clients is to seek advice on how to tackle these overpayment demands, rather than tackle them yourself, especially where the value of recovery involves £2,000 plus. Demands for £1k – £10k are now quite commonplace – a lot of money in anyone’s terms. Surprisingly, many of my housing association clients simply accept the demand and pay up. PRS landlords are much less likely to do so.
Don’t just accept the demand; have your position checked first. It costs nothing to do so, and, in most cases, you’ll find there will be sufficient grounds to appeal, and success can be achieved in more than 50% of cases, so it’s well worth the effort.
If you require any further advice on this or any other welfare topic please get in touch by email or phone 07733 080 389.