Enquiry about getting Housing benefit backdated when still not discharged

HPS

Here's the scenario.

This person goes bankrupt in May 2012, and lives in private let at £600 a month for him and wife and 2 kids. Total income is only just over twice the rent, (about £1250,) and after the council tax and bills etc, there's only about £300 a month left for food and petrol and sundries. It's a struggle.

Something comes up six months later, that needs to be paid for, and the person goes to the CAB because they cannot find the money. CAB advises that they should probably be on Housing benefit because the income is low.

Said person applies for HB and discovers, not only can they get £250 of the monthly rent paid, but also, that they can apply to have it backdated. A month later, the council backdate to start of tenancy. Total: £1.5K.

So the question is: should this £1.5K be declared to the Official Receiver? And should the fact that they're £250 a month better off be mentioned/declared? Because, even though they have an extra £250 a month, life was such a struggle on the money they had before, that they had to take occasional handouts from a parent and even take some money from child's savings ... so this extra money is basically what they 'should' be on to survive, and what they should have been on all along. Even with this extra £250, there would not have been a surplus - or very little anyway.

And let's face even the council decided that their income was extremely low. They obviously did, or they wouldn't have said they are entitled to have £250 of their monthly rent paid. So surely, all along, the person has been 'short' in their income by £250 every month.

So I don't think that the OR should have any right to any of that, as this is obviously what they should have been receiving all along... But I am a bit confused about the backdate. Should the OR be informed, or is it totally 100% the said person's money, because they were 'short changed' from the start of the tenancy, and should have had that money all along.

Obviously, they were 'surviving' on that money: (before the extra £250 a month) but they were barely surviving, and having to borrow money. PLUS, the council decided that they were £250 short on their income, and that's why they gave them extra.

Can anyone advise?

mattannar

It is an increase , so therefore should be reported

tigerfeet2006

Yep! unfortunately you have to inform the OR of the windfall and he will possibly want it. You will have to submit a new SoA as your circumstances have changed. If you pop it up here before hand then someone will check it for you.

http://www.stoozing.com/msoc/soacalc.php

rossireps

yep you have to inform them

Ms_Survivor

Hey

I've only been bankrupt for a few weeks, but I've had to sign about a million forms (it feels like) pledging to let the OR know about any change in my income at all. I'm guessing it's the same for you

I get your frustration at that. I can't quite get my head around tax credits for example - which I only get because the government has decided I don't earn enough to reasonably live on - being included in the general "income" pot. It's like there's certain money from whatever source that we only get because some Power-That-Be's has deemed we need it. Then the OR says we don't actually need it that much..... I can't quite understand the logic there.

I wish a knew some wee gem of a loophole that meant otherwise, but sadly I'm not sure there is one.

I'd love you to keep us posted about what happens.

Take care

Ms S

HPS

Thank you for the replies. It isn't me though: it's someone I know who doesn't currently have the internet - because he gave it up, as he was struggling so badly financially. I would have thought that as he should have had this income to start with, and was actually short of £250 income - which the council confirmed, that it's his money and entitlement. But I don't know for sure, and that is why I came here. I will let him know what has been said on here. Thank you again.

sniggings

I doubt an extra £250 a month will make any change, so still no IPA. A family of 4 on that amount a month would be struggling to make ends meet still, never mind have excess.

Not sure about the back dated money but tell your OR and you may be surprised and they are OK with you keeping it, just have something in mind if they ask you what it is needed for.

HPS

sniggings wrote: »

I doubt an extra £250 a month will make any change, so still no IPA. A family of 4 on that amount a month would be struggling to make ends meet still, never mind have excess.

Not sure about the back dated money but tell your OR and you may be surprised and they are OK with you keeping it, just have something in mind if they ask you what it is needed for.

Thanks Sniggings. I will pass this on. I have spoken to a couple of other people too, who say that it's best to tell the Official Receiver, but my friend should still not have an IPA, because even with that extra £250, he is still not on masses of money. As I said, the council actually confirmed that he isn't on much income, otherwise, they wouldn't have bothered awarding him £250 a month towards the rent.

He is a bit miffed at the thought of having to give up the £1.5K though, because this is money that he was entitled to all along, just to survive. This is why 'I' think he should be allowed to keep it. But we'll see.

HPsauce63

It would be very tempting to not say anything. Especially as the discharge date is getting close, but I reckon there is a very real possibility that they OR may find out. I am sure these people talk to one another. When our tax credits went up a bit (after an overpayment was paid off that we owed them,) our HB went down. So I think there is some system in place for them to be able to communicate, so I would not risk it, and would inform them. That said, I agree with the OP, that it seems to me that the person he/she is talking about, should be able to keep the money, as it was theirs all along. But that will be for the OP to decide.