Housing benefit overpayment - help please

Galfonso

Hi.

A few years back I was claiming HB as my household's income was not sufficient to cover our basic living expenses. 

After a year or so the HB office asked for bank statements which I duly provided. It turned out most of the time my capital actually exceeded the qualifying threshold set by the government - not by much, on average £500-1000, I would say. 

Then the HB office requested me to repay pretty much the whole amount I had received over this period, not only the excess over the threshold but basically everything we ever got from them. They insist this is the law but I honestly don't understand how this could be correct.

It goes without saying my capital would be below any thresholds without the HB payments. If, for example, in January I hadn't been paid 500 quid, then in February (and ANY subsequent month) I wouldn't have had £500 "excess capital". I hope this makes sense.

What happens if the threshold is for example 10 grand, someone has been receiving HB for years but suddenly they are found to have maintained just over 10k in their bank over the whole period? Do they just end up with zero capital and a lot of debt?!

How could you be owing money because of an alleged overpayment but at the same time only your capital counts towards your entitlement?! You have £5001 in the bank, owe £5000 to the HB office but the latter doesn't matter - your capital is still £5001.

Of course a "professional" wouldn't end up in this mess - you just keep a bit of cash at home, spend it on a better motor and life is good. But professional I am not.

So my question is: 

Do you guys reckon one can successfully argue that their alleged excess capital only exists because a certain amount of HB for a specific period has been paid?

I hope I have described the scenario clearly enough. I can just add that I am in no position to repay, even in installments.

Any help would be greatly appreciated. What would you advise me to do?

I would also ask you to refrain from snarky comments - I understand I could have had spent all my savings on rent and only after that (a couple of months later) submitted my claim, if not already homeless. I just thought this would be a bit stupid... but on the other hand ending this situation does not speak well about my intelligence, I have to admit.

peteuk

No - basically because benefits are discarded for the period they are awarded, so HB people would have taken this into account. 

Equally you’re probably outside of the time frame to complain given that youve said it was a few years back.  (Google says 13 months to appeal) 

itsthelittlethings

You can try.

Yamor

Housing Benefit has a rule called "diminution of capital", which means they are supposed to do exactly what you are asking for.
Basically, after every 13 weeks in an 'overpayment period', they are supposed to recalculate entitlement based on capital having reduced by the amount overpaid in those 13 weeks.

If you were as close to the threshold as you say you were, I would also consider whether they have the correct figure for your capital.
An important point to remember is that income only 'converts' to capital once a period equal to the period the income is paid for has passed.
So, for example, a salary paid monthly would only become capital one month after it was received. Housing Benefit paid 4-weekly would only become capital 4 weeks after it was received. And so on.

Alice_Holt

https://england.shelter.org.uk/housing_advice/benefits/housing_benefit_overpayments#:~:text=Challenge an overpayment decision&text=You must ask for the,benefit decision from Citizens Advice.

pinkladyvenus

Housing Benefit has a rule called "diminution of capital", which means they are supposed to do exactly what you are asking for.
Basically, after every 13 weeks in an 'overpayment period', they are supposed to recalculate entitlement based on capital having reduced by the amount overpaid in those 13 weeks.

If you were as close to the threshold as you say you were, I would also consider whether they have the correct figure for your capital.
An important point to remember is that income only 'converts' to capital once a period equal to the period the income is paid for has passed.
So, for example, a salary paid monthly would only become capital one month after it was received. Housing Benefit paid 4-weekly would only become capital 4 weeks after it was received. And so on.

I would start by doing a subject access request which should provide an in-depth detail of how they have worked your overpayment out.  This should give you an idea of how to challenge the overpayment, As for the time frame I would still challenge it https://england.shelter.org.uk/professional_resources/legal/benefits/housing_benefit/housing_benefit_reconsiderations_and_appeals

Galfonso

peteuk said:

No - basically because benefits are discarded for the period they are awarded, so HB people would have taken this into account. 

Equally you’re probably outside of the time frame to complain given that youve said it was a few years back.  (Google says 13 months to appeal) 

Hi. Thanks for your response.

Could you please clarify what you mean with the first sentence? I have to verify this but I can say with a very big degree of certainty that my capital wouldn't have been over the threshold if I wasn't receiving HB at the time. is this what you mean - that they discard the benefits in tehir calculations?

In regards to the time frame to file a complaint, I did this straight away and have maintained my stance ever since. If anything, the HB were late with their responses to me more than one. (I don't blame them - all public service are so overstretched in this country nowadays.)

HillStreetBlues

Galfonso said:

peteuk said:

No - basically because benefits are discarded for the period they are awarded, so HB people would have taken this into account. 

Equally you’re probably outside of the time frame to complain given that youve said it was a few years back.  (Google says 13 months to appeal) 

Hi. Thanks for your response.

Could you please clarify what you mean with the first sentence? I have to verify this but I can say with a very big degree of certainty that my capital wouldn't have been over the threshold if I wasn't receiving HB at the time. is this what you mean - that they discard the benefits in tehir calculations?

In regards to the time frame to file a complaint, I did this straight away and have maintained my stance ever since. If anything, the HB were late with their responses to me more than one. (I don't blame them - all public service are so overstretched in this country nowadays.)

An example would be
If HB payment runs from 1st to 28th  the actual HB payment and any wages in that period are income not capital.
So if you received £500 HB & £500 wages  on the 7th  and that means you have £10,000 in the bank (or elsewhere), £1000  is income that leaves £9,000 as capital.

Any overpay should take this into account, but that doesn't mean they have

Galfonso

Yamor said:

Housing Benefit has a rule called "diminution of capital", which means they are supposed to do exactly what you are asking for.
Basically, after every 13 weeks in an 'overpayment period', they are supposed to recalculate entitlement based on capital having reduced by the amount overpaid in those 13 weeks.

Thanks a lot for this eye opener! I was never aware that this rule existed, actually in my correspondence with the HB office I was made to believe exactly the opposite - the the source of my alleged capital did not matter at all. Hmmm...

I just read this on the government's website though:

"consider applying the diminution of capital calculation, if the overpayment was caused by a person’s capital (HB Reg103 & (SPC) 84"

What I find a bit bizzarre (as a complete layman in everything law-related) is the use of the verb "consider" - in my book it implies that the HB are not really obliged to apply this, they are merely encouraged to take this into account if they feel like it. Am I wrong?

HillStreetBlues

Galfonso said:

Yamor said:

Housing Benefit has a rule called "diminution of capital", which means they are supposed to do exactly what you are asking for.
Basically, after every 13 weeks in an 'overpayment period', they are supposed to recalculate entitlement based on capital having reduced by the amount overpaid in those 13 weeks.

Thanks a lot for this eye opener! I was never aware that this rule existed, actually in my correspondence with the HB office I was made to believe exactly the opposite - the the source of my alleged capital did not matter at all. Hmmm...

I just read this on the government's website though:

"consider applying the diminution of capital calculation, if the overpayment was caused by a person’s capital (HB Reg103 & (SPC) 84"

What I find a bit bizzarre (as a complete layman in everything law-related) is the use of the verb "consider" - in my book it implies that the HB are not really obliged to apply this, they are merely encouraged to take this into account if they feel like it. Am I wrong?

If you look at the applicable law it relates to.
 https://www.legislation.gov.uk/uksi/2006/213/regulation/103/made

Diminution of capital

103.—(1) Where in the case of a recoverable overpayment, in consequence of a misrepresentation or failure to disclose a material fact (in either case whether fraudulent or otherwise) as to a person’s capital, or an error, other than one to which regulation 100(2) (effect of official error) refers, as to the amount of a person’s capital, the overpayment was in respect of a period (“the overpayment period”) of more than 13 benefit weeks, the relevant authority shall, for the purpose only of calculating the amount of that overpayment—

(a)at the end of the first 13 benefit weeks of the overpayment period, treat the amount of that capital as having been reduced by the amount of housing benefit overpaid during those 13 weeks;

(b)at the end of each subsequent period of 13 benefit weeks, if any, of the overpayment period, treat the amount of that capital as having been further reduced by the amount of housing benefit overpaid during the immediately preceding 13 benefit weeks.

(2) Capital shall not be treated as reduced over any period other than 13 benefit weeks or in any circumstances other than those for which paragraph (1) provides.

Shall is an instruction that must happen, there is no option to disregard that regulation.

Sadly some of the "guidance" is misleading  the only thing that matters is statute / case law.

 

Spoonie_Turtle

Galfonso said:

Yamor said:

Housing Benefit has a rule called "diminution of capital", which means they are supposed to do exactly what you are asking for.
Basically, after every 13 weeks in an 'overpayment period', they are supposed to recalculate entitlement based on capital having reduced by the amount overpaid in those 13 weeks.

Thanks a lot for this eye opener! I was never aware that this rule existed, actually in my correspondence with the HB office I was made to believe exactly the opposite - the the source of my alleged capital did not matter at all. Hmmm...

I just read this on the government's website though:

"consider applying the diminution of capital calculation, if the overpayment was caused by a person’s capital (HB Reg103 & (SPC) 84"

What I find a bit bizzarre (as a complete layman in everything law-related) is the use of the verb "consider" - in my book it implies that the HB are not really obliged to apply this, they are merely encouraged to take this into account if they feel like it. Am I wrong?

I am no expert but I believe 'consider' in this context means to check whether it applies.  If it does, they have to apply it.  If it doesn't (and there is a paragraph later setting out circumstances in which it doesn't*) then they don't have to waste time and effort working it all out when it would have made no difference.

*"3.93. It is not necessary to apply this rule if it is clear that it will not affect the amount of the recoverable overpayment, e.g. if the

• amount of capital above the cut-off point is considerably greater than the actual amount overpaid

• overpayment would be unaffected by the knowledge of the undisclosed capital"

[It's my understanding that in general benefits speak, 'consider' means to take into account, i.e. 'considering' all the facts and the relevant laws.  Although as I said, not an expert so always happy to be corrected.]