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Housing Benefit Overpayments
What is an overpayment?
An overpayment is an amount of benefit that has been paid, but for which there was no entitlement under the regulations.
An example would be if a tenant failed to tell the Council that their income had increased, and a recalculation of their entitlement meant that they had been paid too much benefit.
A fraudulent overpayment may occur when a person has deliberately provided a false statement or document, or has deliberately failed to report a change of circumstances with the intention of obtaining or retaining benefit.
It is important to inform us immediately of ANY change that could affect your entitlement.
How does the Council deal with overpayments?
In line with government legislation the Council has a duty to recover overpayments from tenants and landlords. Criminal proceedings may be taken in respect of fraudulent overpayments.
How overpayments are recovered?
An invoice will be issued for the balance in all cases.
If the tenant is currently receiving housing benefit, the overpayment will be recovered from future benefit payments by a weekly deduction known as a "claw-back" at a rate which is set by the Government.
If payments are made direct to the landlord, the tenant's reduced entitlement will be reflected by the amount of the benefit payment that is issued every four weeks. This shortfall is payable by the tenant to the landlord.
If the tenant is not currently receiving housing benefit an arrangement can be made. Failure to do so could result in an attachment to DWP benefits, a direct earnings attachment via the employer or referral to a collection agent.
How is benefit recovered from the landlord?
If the Council has decided to recover an overpayment from a landlord it will issue an invoice. If repayment is not made deductions from the benefit of another of the landlord's tenants can be made where that tenant receives benefit which is paid to the landlord directly. The amount of these deductions should not be treated as rent arrears for those tenants, and the landlord must not try to recover the shortfall from them. Recovery of an overpayment will not prejudice any criminal proceedings that may be taken by the Council in respect of fraudulent overpayments.
Is there a right of appeal?
Only the tenant can ask for a review of a decision to recover an overpayment by "claw-back". The "claw-back" could be in respect of an overpayment at the current address or a previous one. The tenant would have been notified in writing that a weekly deduction was being made.
A landlord can only request a review where recovery is being sought from him personally; that is, where an invoice for payment has been issued to him, or a deduction is being made from the benefit he receives for one of his tenants in order to recover an overpayment owed by the landlord. Where the overpayment is owed by the landlord personally, he will be notified in writing of a decision to recover from him. Any request for a review should be made within one calendar month.
For further information on reviews and the Appeals Process please go to 'Housing Benefit Reviews and Appeals'.
What will happen if the debt is not repaid?
Where an invoice remains unpaid, or an agreed arrangement to repay the debt over time is not being maintained, the Council may take action in the County Court.
A landlord who habitually fails to repay overpayments that are recoverable from them, can be declared not a "fit and proper person" under benefit regulations, and the Council can refuse to make payments to them directly.