Suspension, overpayments and repayment of LHA Housing Benefits
We often deal with Landlords who out of the blue receive a letter from the Benefits Department (council) stating that the Tenant's payments have been suspended or there has been an overpayment and the council seek reimbursement from the Landlord. These amounts can often be in the thousands (12 months overpayment at £800 is not uncommon).
The section below covers
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Overpayments
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Overpayments prior claim
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Suspended Benefits
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Overpayments
In the situation where the Landlord or their Agent are paid directly and the Tenant has made a false claim for Local Housing Allowance the Council will often try to recover monies from the Landlord.
The council's stance is, we invoice you, you pay us and then advise the Landlord that they will have to recover the monies from the Tenant. If we simplify the councils position Yes the Tenant made a false claim - whoops the Tenants got no money so we'll invoice the Landlord and scare them into paying.
If they send you an overpayment claim, firstly put the debt into dispute and tell them you wish to apppeal this. The rules that govern recovery of overpayments are very clear
The Housing Benefit Regulations 2006
Part 13 Deals with Overpayments
Person from whom recovery may be sought
101.—(1) For the purposes of section 75(3)(a) of the Administration Act(1) (prescribed circumstances in which an amount recoverable shall not be recovered from the person to whom it was paid), the prescribed circumstance is—
(d) the relevant authority is satisfied that the landlord— .
(i) has not colluded with the claimant so as to cause the overpayment; .
(ii) has not acted, or neglected to act, in such a way so as to contribute to the period, or the amount, of the overpayment.
APPEAL Considerations
It is virtually impossible to proof you have not colluded - but your appeal would be on the premise that you had no reason to believe the Tenant was making an unlawful claim and if you had believed they had done so you would have informed the council of such. The question should be asked of the council why are you asking for the monies from me and what reason do you believe I have colluded or acted in such way to facilitate an over payment to the tenant.
Repayment of monies
If you ignore the council's letter be advised they will recover the money.
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They will pass this to debt collection.
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or Notification of deductions from future payments of housing benefit of this Tenancy
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or Deduct monies from other benefits the Landlord may be receiving in respect of other tenancies.
Over payments for previous claim - resulting in underpayment of new claim
With effect from 1 April 2010 regulation 104(A), The Housing Benefit Regulations 2006 allows an overpayment from a previous property to be offset against the claimant's housing benefit (HB) on the current property where the Housing Benefit is payable to the same person.
So if a tenant made a false claim for benefits last year and moves into your property - then they will reduce the rent paid by LHA.
The benefits may deduct the overpayment from their Local Housing Allowance. This may result in them falling into arrears with you see Benefits Tenant in Rent Arrears
Suspensions
These fall into three categories
1) The Tenant has failed to provide the council with information or complete their forms correctly - work with your tenants and if so required assist them in completing the benefit forms. Otherwise they may not complete them and you get no money.
2) Suspension prelude to overpayment
3) Suspended Overpayment -
Unless you have a very good reason not to, as a precaution you are wise to issue a Notice see Compare Tenant Eviction Notices or Benefits Tenant in Rent Arrears