One of the most common issues Z2K assists clients with is housing benefit over payments. A common cause of rent arrears, the first time a client normally realises they have been overpaid is when they receive an over payment notice and realise their housing benefit has been suspended.
When a client comes to Z2K having been told they have been overpaid housing benefit the priority will be getting their housing benefit back into payment, if it has been suspended, and then appealing the decision or if that is not an option asking for an underlying entitlement. The decision letter sent to the client is crucial in alerting the client about what has happened and allowing us to act on their behalf. This is especially true when the scales are tipped so firmly against claimants in over payment cases. Claimants are liable to repay over payments even if an official error has occurred, unless they can prove that they could not have known an over payment occurred. Councils set that particular bar very high, essentially viewing every claimant as a maths genius moonlighting as a benefits claimant.
This is why the case of Pat Powers is so important. Pat is in her early 60’s and is particularly vulnerable. She suffers from a complex mixture of physical and mental health conditions in addition to the lasting impact of a stroke. She moved into her current 3 bedroom Westminster council house in 1985, with her 3 children. Her children have since grown up and moved out leaving Pat subject to the bedroom tax. Pat has always struggled to understand quite why she has had money deducted from her housing benefit. So when Pat received a payment of over £3000 into her rent account early last year she was sure the mistake had finally been corrected and she was being paid back the money taken unfairly from her. Pat knew about the money in her rent account only as a result of looking at her rent statement. She received no notice or letter about it. Consequently she went to investigate further to confirm what had happened. Pat’s rent officer told her she could have the money refunded to her account. They told her she was in credit and so no longer needed to use her money from her disability benefits to top up her housing benefit. Pat was reassured by this but still went directly to housing benefit for an explanation. Speaking to somebody from the relevant department face to face they were unable to explain what had occurred but said they would contact her shortly with a full explanation.
Nobody from the council ever contacted Pat. Instead they simply took money back out of her rent account, putting her into arrears. Pat, unaware that the money had been taken out and thinking she was still in credit fell further into rent arrears. The council were quick to begin possession proceedings.
What had happened was an over payment as the result of official error. Specifically, the council had mistakenly calculated that Pat shouldn’t be subject to the bedroom tax and had subsequently given her a relevant back payment. Realising their error the council decided that an over payment had not occurred and so simply took the money back without making any contact with the client. The consequences for the client were confusion and rent arrears.
Without a decision letter a claimant has no right of appeal. That means that when an appeal against an over payment could have been won, if the council decide it’s technically not an over payment they don’t have to worry about losing an appeal and being unable to recover the money.
This is why Z2K referred this case to solicitors so that the decision could be challenged using a Judicial Review. Our stance was that an over payment had occurred and therefore a decision letter should have been issued. Westminster initially refused to change their decision. However, shortly before going into court they changed their minds and conceded that an over payment had occurred and a decision letter should have been issued.
This gives Pat the right to appeal the over payment and importantly means that in the future Westminster will have to issue decision letters in such cases, therefore preventing similarly confusing situations in which the claimant risks falling into arrears and having possession proceedings started against them.
When over payments occur, even if they are the fault of the council, they always put the claimants at risk. If nothing is done they can ultimately lead to eviction. That is why the council must be so careful when dealing with over payments. Whenever a large amount of money is put in or taken out of a tenants rent account they must be notified or the risk of confusion is high. The hope now is that this case is taken on board by the council and consequently the risk of possession proceedings as a result of over payments is reduced going forward.