Housing Benefit claim & overpay from employer

Rickee

Hi all

My wife and I are in a bit of a difficult situation after we recently put a housing benefit claim in. The council have agreed to pay us at the moment but I have requested a back-dated entitlement which they have refused.

My wife was overpaid by her employer while on SMP and used the outstanding amount they were due to pay her over the last three months to clear some of the overpayment. This left around £2,000 still due to be paid back to the employer.

My argument is that the overpayment should not be counted as income as it is more akin to a loan which we need to pay back to the employer. Indeed, had the employer (or us) noticed their mistake earlier our claim would have been made earlier and entitlement would have began sooner. The council are saying that they have to take the overpaid earnings into account at the time despite the fact they need to be paid back.

Does anyone know whether this is right or what the legal stance on how the overpayment should be viewed?

Many thanks in advance for any help...

dseventy

What is the status of the amount owed to the employer? Has it been spent? Is it savings in the bank? Under the sofa?

D70

Rickee

It was spent. My employer pays six months full maternity pay once leave begins, we thought it was the same for hers as well until we received the letter from them and consulted the original letter she was sent.

dseventy

Rickee wrote: »

It was spent. My employer pays six months full maternity pay once leave begins, we thought it was the same for hers as well until we received the letter from them and consulted the original letter she was sent.

Well then you have treated it as income and spent it, it seems only fair that the council treats it the same!

Not sure what you want?!

Have you explained this to the council?

D70

Rickee

This is my point. I don't think it should be treated as income as we have to pay it back, it's more akin to a loan which is obviously something they wouldn't normally account as income..

If we still had the money, it would have counted as capital but we don't so it can't..

The OP pretty much explains what I want, the legal view of the money - Is it income or, due to the nature of the situation, simply an accidental payment of money which should not be counted as income..

Rickee

Any ideas from anyone else?

Rickee

Bumpy Bumpy

uganda

Rickee wrote: »

Hi all

My wife and I are in a bit of a difficult situation after we recently put a housing benefit claim in. The council have agreed to pay us at the moment but I have requested a back-dated entitlement which they have refused.

My wife was overpaid by her employer while on SMP and used the outstanding amount they were due to pay her over the last three months to clear some of the overpayment. This left around £2,000 still due to be paid back to the employer.

My argument is that the overpayment should not be counted as income as it is more akin to a loan which we need to pay back to the employer. Indeed, had the employer (or us) noticed their mistake earlier our claim would have been made earlier and entitlement would have began sooner. The council are saying that they have to take the overpaid earnings into account at the time despite the fact they need to be paid back.

Does anyone know whether this is right or what the legal stance on how the overpayment should be viewed?

Many thanks in advance for any help...

Well, first of all the overpaid money is income and they are correct to treat it as such.

However, when a benefit claim is assessed, the assessor should always try to be as fair and as equitable as possible. You are in the realms of interpretation here, so I would go for a reconsideration (which you should ask for within one calendar month of the decision they made, so hurry - if you have missed the deadline, you should explain why).

I don't know what figures are involved here, but let's say that you are paid £1000 in the first month instead of £600, then £400 in the following two months instead of £600, then you have been paid the same money over 3 months as someone earning a straight £600 per month, but may have been deemed over the first month not to qualify, whereas they would have done. On the other hand, you qualify for more than them in the next two months, right?

Of course, if you would be better off being assessed over the average of 3 months, then that is what they should do, but the problem you have there is that no benefit can be paid to you for the initial period if you didn't qualify. If you had qualified for a smaller amount at £1000 a month, that would be different.

When you talk about 'backdated periods' it is important to clarify - are they saying you did not qualify for the earlier period because you didn't have a claim in (in which case, what are your grounds for a backdating request?) or that you didn't qualify simply by dint of having too much income in the earlier period?

I am not on the forum much these days, but I will try and get back to any answer you give (and I am happy for you to send me a PM) but the main thing is to ask for a reconsideration, and if you are still not happy, make an appeal - at least then you will have had your case run over by several experienced eyes rather than just some automaton, and will be clearer about why your claim has been assessed the way it has.

Rickee

My wife was paid about £1,300 per month after tax for five months after she went on maternity leave. She received a total of about £6,500-7,000 overall and, at the time they noticed, she was originally due to receive a further £1,500 over the next three months. Rather than paying it, they kept it to help pay off the outstanding amount. After it all balanced out we owed the company just over £2,000 which we still owe. When I made the claim I included a letter from her employer which basically confirmed what I just said and requested that they discounted the last £2,000 she had received as we had to repay it. They advised that they have to count it as earnings and basically repeated the message when I appealed with the handler. We now have around three weeks left to appeal to an independent person which I'm going to do anyway, but just wondered what the legality of the overpayment were, which you have clarified.

I've made the point that, had her company realised their mistake sooner, we would have started claiming benefits earlier and been entitled to it because she would have stopped receiving it earlier. It just seems strange that money we have to pay back counts as earnings. If any other company had made a mistake (bank, electric company, etc), we'd taken a loan, brorrowed from a friend, none of these would have been counted as they have to be paid back...

Is there any other points you think I should make that may give the letter a little more strength?

dseventy

Yuot just clutching at straws IMO.

You keep saying "their mistake" and "they noticed", you have a responsibility in this to notice and check too.

You have been paid the money and used it! You had a financial advantage by getting the money and you spent it.

Not what you want to hear I know, but I can't see you have a case. Let me ask this, did it ever occur to you that you were getting too much money and yet still qualified for HB? Did it never occur to you that perhaps in reciept of this money you should contribute more to your rent?

D70

Rickee

dseventy wrote: »

Yuot just clutching at straws IMO.

You keep saying "their mistake" and "they noticed", you have a responsibility in this to notice and check too.

You have been paid the money and used it! You had a financial advantage by getting the money and you spent it.

Not what you want to hear I know, but I can't see you have a case. Let me ask this, did it ever occur to you that you were getting too much money and yet still qualified for HB? Did it never occur to you that perhaps in reciept of this money you should contribute more to your rent?

D70

The only reason I keep saying it's their mistake is to help set the scene of the situation. They have sent a letter apologising and admitting their mistake. The company I work for pays full pay for the first 6 months of maternity leave and we assumed her company were the same. The letter they sent confirming her maternity was filed away and we made assumptions that bit us in the bum.

Yes we did spend the money as we assumed it was part of her normal earnings and what she was entitled to, although the fact we now have a £2,000 debt to pay back as a result of it surely overides and equals out any 'financial advantage' we may have enjoyed at the time.

No, I probably don't have a case, I'm sure the initial decision has made that point already...

In answer to your questions, no, it did not occur to me that we were receiving too much money and still qualified for HB. I knew that the income we had together was over the threshold and any claim would be pointless. As I mentioned already, we thought the continuation of her normal wage was correct.

No, it didn't occur to me that in receipt of our pay we should pay more rent, our rent is set at a certain amount and I don't think it should be adjusted depending on the amount of money we earn/did earn..