Legal Advice concerning Benefit Overpayment

[meadbleg]

Hi – just wondering if anyone can offer me some advice. I’ll outline my situation.

 

Between 2008 and 2011 I claimed Housing Benefit. I was out of work, had no savings, and I didn’t claim Jobseekers Allowance. I ‘got by’ on a day-to-day basis by (a) selling the few possessions I had, and (b) receiving food parcels from my parents.

 

I had been ‘homeless’ (without a fixed or permanent place of residence) from late 2006 to late 2008. I moved around a lot, staying with various friends and family – often for about a week at one place, before moving on.

 

In December 2008, I moved into accommodation rented to me by an old friend. He’d agreed to rent me the accommodation if he received rent. AsI knew I was entitled to Housing Benefit, I asked him if this was suitable –and he agreed.

 

As I didn’t have (and still don’t have) a bank account, the benefit was paid directly to my landlord.

 

I was renting part of a large property. As such, it was a shared property with my landlord – although I lived entirely separately. I had my own bedroom, living room, dining area, toilet, etc..

 

My old friend, who I’d known for several years, married my sister. So, in effect, my landlord became my ‘brother-in-law’.

 

I knew that a claimant could receive benefit while renting from family – as I’d previously claimed (back in the 1990’s) while renting accommodation from my grandparents, living in a part of their property.

 

I made the decision to rent the accommodation because, as I was homeless, I needed a place to live. I was, at the time, suffering from mental health problems. I was diagnosed – at the time of my claim – by my GP as severely depressed and suicidal. Additionally, I suffer from an anxiety disorder – which makes me incapable of interaction with others if they are in a position of authority.

 

It was because of my anxiety disorder that I was not claiming Jobseekers Allowance. To do so would require me to attend interviews –and I simply can’t attend any sort of formal interview. I suffer an anxiety attack, and either freeze-up or harm myself. For this reason, I was – and continue to be – out of work, as I can’t attend normal job interviews.

 

The local council sent out a rent officer to view the accommodation that I was renting, and they decided that I was residing separately from the other occupants of the property. A couple of years into the claim, another rent officer visited the property – doing so without an appointment – and again decided that everything was legitimate and that I was residing separately.

 

I had, at the start of the claim, asked the local council if they could find me a council property to rent (rather than the accommodation I was renting from my friend), and if possible do so near my parents home – so thatI could be close to them, and they could help support me. But the council never responded to my request.

 

I voluntarily ended my claim in mid 2011. I had experienced too many bad times – in terms of my suicidal feelings – while living there, and I wanted to move on, even though I had nowhere to actually go. I left, ending my claim, and once again became homeless.

 

My mental health problems are ongoing. I have relapses every so often, during which time I get severely depressed and suicidal. I experienced such a relapse last year, and am now receiving mental health counselling (as well as strong anti-depressants and anti-anxiety meds). The relapse was caused by the chronic neuropathic pain I suffer from, in my spine, which makes me bed-ridden for weeks on end.

 

Anyway, in September of last year the council got in touch with me saying that because my landlord was my brother-in-law so they suspected me of benefit fraud. I explained that this wasn’t something I’d deliberately hidden from them – as it was rather obvious we were ‘related’ due to our identical surnames (he had, strangely, taken my sister’s surname). But, because in my original letter to the council I described him as “an old friend” so they think I was purposefully deceiving them.

 

I tried my best to explain that my circumstances were genuine, that I apologised if I made a mistake in not informing them of what they wanted to know (and that even if I made a mistake, I possessed an underlying entitlement), and that I because I resided separately so I was nonetheless entitled to benefit. I pointed out that the ‘Housing Benefit / Council Tax Benefit Adjudication and Operations Circular A1/1999’ and clause 3.238 of the ‘Housing Benefit and Council Tax Benefit guidance: Part A3’ document (part of the ‘Housing BenefitGuidance Manual 2009’) state that a claimant is entitled to rent from close family, so long as they are not residing with them.

 

They requested a formal interview with me, under caution, but I refused – citing my medical condition. Eventually, I agreed to an informal interview. Still, the meeting was on my mind so much that – prior to thedate – I cut myself several times on my wrists. I attended the meeting, but once they saw my wrists the meeting ended.

 

Since then, my former landlord – my brother-in-law – has received an invoice for the full amount of benefit, saying that it was an overpayment of £8,500.

 

I have received an email (not a letter, as I don’t have an address) saying that it was an overpayment (due to Regulation 9, i.e. that I rented from family) but my former landlord is responsible for paying it back.

 

Now, as it happens, my brother-in-law is about to make himself voluntarily bankrupt (due to his own financial problems). He’s now cited the overpayment on his bankruptcy documents and it will commence in about 6 weeks. Until then, he’s repaying about £10 a week. Then the full debt will, in effect, be written off.

 

But I’ve heard nothing more. It’s been 6 weeks since I received the email saying there was an overpayment. I responded, saying I disagreed but – due to my health – was not challenging the decision. Yet the council’s note says that they may take criminal proceedings.

 

I am aware that, in cases such as this, my circumstances ought to make criminal proceedings statutory time-barred (in accordance with the Housing Benefit and Council Tax Benefit Circular F1/2011). The regulations say that cases of suspected benefit fraud under £20,000 should be dealt with as summary offences, and proceedings must be issued within 12 months of date of representation (that is, when the claim form was completed) or within 12 months of end of the offending period (usually the end of the overpayment). If I am suspected of false representation, then this occurred some 6 years ago; if I am suspected of overpayment, this ended over 3 years ago. Only in exceptional circumstances can a local authority pursue a case after it has become time-barred. And this requires the issuing of a S116 certificate in an effort to ‘save’ the case. If a S116 certificate has been issued issued, then – on the basis of point 16 of this circular – this means that the investigators have only 3 months from the date on which sufficient evidence to justify a prosecution came to light (not the date the certificate was issued or signed) to commence court proceedings. The local council concluded their investigation in late last year, and have had no ‘new’evidence’ since then.

 

But they’re not contacting me – and I’m left worrying.

 

Given these details, is it likely that the local authority will instigate criminal proceedings for fraud?

 

Many thanks for reading the details of this case.

Edited April 20, 2015 by citizenB
tidying up

[mikeymack2002]

From what you are saying at the time of your claim the landlord was a friend, but sometime after they became a relative. At what point did your "friend" become your brother-in-law? as far as you being able to rent off of a relative please read here

>> https://www.gov.uk/housing-benefit/eligibility

 

 

"Who isn’t eligible

Usually you won’t get Housing Benefit if:

 

 

• your savings are over £16,000 - unless you get Guarantee credit of Pension Credit
  
• you live in the home of a close relative"
  

In hindsight and for the benefit of new readers of this post you should and are required to notify your change in circumstances at the earliest/reasonable period of time, if you had done this then maybe this would have been picked up by the LA earlier.

 

 

If it had been picked up earlier the amount of overpayment would have been significantly lower and not been such an amount.

 

 

You may wish to read up on this here http://www.cps.gov.uk/legal/v_to_z/welfare_rural_and_health_cases/ this is a long winded link and maybe of use for you.

 

 

The CAB website have a good link too see here http://www.adviceguide.org.uk/wales/benefits_w/benefits_benefits_introduction_ew/benefits_problems_with_benefits_and_tax_credits_e/benefit_fraud.htm

[meadbleg]

Hi – thanks for the reply.

 

I agree that, as far as the local authority are concerned, they are clearly of the view that I was living with a close relative (and this is grounds for non-eligibility). Specifically, the decision notice I received cites Regulation 9 of the Housing Benefit Regulations 2006, which states that: “A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where: (a) The tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis; (b) His liability under the agreement is to a person who also resides in the dwelling and who is a close relative of his or of his partner”.

 

However, the tenancy agreement I entered into so as tooccupy the dwelling was properly commercial; and I did not reside with anyone, but lived alone in a shared property, and as such cannot be considered asresiding with a relative (or anyone else).

 

I’ve looked around and found the relevant rules, regulationsand guidance issued to local authorities by the State. The relevant ones are:

 

Clause 3.238 of the ‘Housing Benefit and Council Tax Benefit guidance. Part A3: Liability to make payments and occupying the home’ document(part of the ‘Housing Benefit Guidance Manual 2009’) deals with the issue of when a landlord is a close relative. This clause comments on the provisions ofRegulation 9, and states: “A claimant who rents their accommodation from aclose relative but does not reside with the relative, does not fall foul ofthis particular provision.” Furthermore, this clause emphasises that local authorities must “remember, it may be a perfectly normal tenancy createdwithout any intention of abusing the HB scheme.”

 

Also relevant is the ‘Housing Benefit entitlement – renting from relatives. Standard Note: SN/SP/3078 (2006)’ document which states that: “Department for Work and Pensions (DWP) Housing Benefit/Council Tax BenefitAdjudication and Operations Circular A1/1999 (issued to assist local authorities in reaching decisions on HB/CTB applications) advises that people who rent accommodation from a close relative but who do not reside with them are not covered by Regulation 9(1)(b)”.

 

As I entered into a proper tenancy agreement, and was provided with accommodation only because rent was paid (and would otherwise nothave received such accommodation), I should not fall foul of Regulation 9 (a);and because I only rented from family, and did not reside with any relative, I should not fall foul of Regulation 9 (b).

 

Standard Note: SN/SP/3078 (2006) points to the CircularA1/1999. This Circular is important, as it discusses the issue of liability (concerning Regulation 9 (a)). It states that the provision of this Regulation only has relevance if there is evidence that the “arrangements which the claimant has entered into which create a liability which he cannot meet without housing benefit where he could have avoided such a situation and still been adequately accommodated”. This document clearly states that “This would not normally be the case where, for example, even though they rely on HB to helpmeet the rent: - a person previously had no accommodation”.

 

As I had no accommodation, and was homeless, when I entered into the agreement to rent from my friend / brother-in-law – and thus the rules are clear, it should not be assumed by the local authority that I created aliability. Rather, because I was homeless I was perfectly entitled to claimHousing Benefit while renting from a relative (and so Regulation 9 (a) is not applicable). As I resided separately, so I was entitled to claim Housing Benefit (and so Regulation 9 (b) is not applicable).

 

Just to stress, I became friends with the person who eventually became my landlord 7 years before renting from him. He married my sister several years after I met him (I knew him before my sister).

 

The local authority sent out two Rent Officers who visited the property. One attended early on, to go over my claim. The other turned-up unexpectedly (without prior appointment) a couple of years later. On both occasions, these Rent Officers were entirely satisfied that I resided separately in a shared property. They agreed that I did not live with anyone. I was issued Benefit Decision Notices which stated that, in their view, I lived alone.

 

Clearly, it’s somewhat absurd for a local authority to NOW (some 3 and a half years after the tenancy ended) decide that I lived with others? Their own evidence (based on visits to the property) says otherwise. It is impossible to do any independent check now, because the tenancy has ended.

 

However, the real question I’m asking does not concern their decision to deny my prior entitlement and say that an overpayment occurred. They’ve done that – and although I completely disagree with their decision, I’m not challenging it. The fact is, they’re not after me for money (they’ve issued the overpayment debt to my former landlord – who isn’t really bothered at all, as he’s about to declare himself bankrupt).

 

Rather, I’m interested in whether the local authority will follow up this with criminal proceedings.

 

They’ve not said they are doing so (only that their decision to view it as an overpayment does not “prejudice” their future actions). I've never been told that I'm suspected of benefit fraud. Only that I was investigated in relation to an overpayment.

 

Since the claim ended so long ago, and they finished collecting the evidence concerning this case last year, I’m puzzled as to howthey might consider criminal proceedings now. As I noted earlier, the matter ought to be time-barred by statue long ago. And if they issued a S116 certificate, that would have expired by now. So on what legal basis might they proceed?

 

So, if anyone with experience or expert knowledge concerning this sort of situation can help, please let me know.

 

I’ve heard nothing from the local authority in over 6 weeks (when they issued the overpayment decision notice). I've briefly spoken to the CAB about this, and they say that if the local authority were going to initiate criminal proceedings, they would have done so by now. The fact they haven't means - says the CAB - that they don't have adequate evidence to do so.

 

But I'd like the views of anyone who's aware of this type of situation, or had a similar experience.

[mikeymack2002]

Ok lets start with the basics here, did you notify the LA that the landlord was a close relative if so when? the reason behind this could be that they MAY try to use the rule that you failed to declare a relevant piece of information that MAY have made a difference to the amount of benefit you may have been entitled to.

 

 

But since this tenancy was started when he was your friend, then when the change was made I.E. he became a relative then this may needed to have been declared. HB rules are very complex and the reason for notifying a change is important at the time it occurred.

 

 

If they decide to go ahead with a prosecution the earlier link will show you what may happen, it all depends what the LA "think happened" and what they can prove. They seem to have opted for a repayment of the overpayment from the landlord, but you will just have to sit and wait it out or ask them outright what the next stage concerning you might be?

[mikeymack2002]

A further thought here have you ever appealed the overpayment decision? can you state how long ago you were notified of this? as in certain situations you can appeal it late with a valid reason, (up to 13 months) you may be able to appeal this and state that 2 officers attended and noted you lived alone.

[id6052]

Issue one

Iif there has been any misrepresentation or failure to declare a change in circumstances - (for example, if you failed to declare you were related to your landlord) - then under HB legislation, the overpayment is recoverable from the person responsible for the misrepresentation or failure to declare a change in circumstances.

 

This means that even if your brother in law goes bankrupt, they may still pursue you for the overpaid HB.

 

Issue two

Rent Officers are not employed by the Council, they are employed by the Valuation Office (part of HMRC) - they are not responsible for HB administration as such - their only role is to set a reasonable rent level for the property.

[meadbleg]

Hi - many thanks for the info ... it's given me things to consider.

 

Just to let you know:

 

The rent officers who visited me were directly employed by the local authority (while this may not happen these days, we're talking about 6 years ago). So the local authority collected evidence themselves and decided - at the time - that I lived separately.

 

But they NOW think that I "lived with" family (simply because I rented from family).

 

There's no evidence to support their suspicion (because there can't be, as I lived alone). But, because I did not inform them of this "change in circumstances" they suspect that I lied. However, as I've provided medical proof that I wasn't thinking clearly - as I was severely depressed, suicidal and suffered a mental breakdown at that time (totally unrelated to the claim!) - I think they're a bit stuck as to how to proceed. This is especially so as now I'm frequently bed-ridden (due to a physical condition) and on strong meds (which cause memory loss and bouts of confusion when I'm anxious). Due to my ill health, they've not pursued a formal interview (and were eventually satisfied with an informal one - which ended quickly, once they were sure of my condition).

 

In all likelihood, I think it's because of my state of health that they've opted simply to recover the overpayment. They've sent me a letter stating that I'm not legally responsible for paying this money back.

 

So, once my former landlord does declare himself bankrupt, they can't really come after me - as they've already said that I'm not responsible.

 

It's amazing - they contacted my former landlord and said that he owed the money, and that if he refused to pay then they'd proceed to take him to court and if he still refused then they'd start bankruptcy proceedings against him. Little did they know he was already in the middle of applying for bankruptcy!

 

I'm not at all bothered by them coming after me for money ... I doubt they will. Even so, I have none. I don't work, due to my illness. I'm 40 and have never had a "normal" job (I have done lots of voluntary work). I don't even have a bank account. I've not claimed any income support type benefit (e.g. Jobseekers) in over 15 years, even though I've been entitled to. This claim for HB was the only thing since the late 1990's.

 

What worries me is the possibility of criminal proceedings.

 

The claim ended 3 and a half years ago. They started looking into it last April. They concluded their investigation late last year. They've had no new evidence since then. I received a letter - 6 weeks ago - saying that they decided to withdraw my entitlement and so, in effect, I received an overpayment. They failed to provide a reason (and didn't provide all the necessary information that accords with minimum standards concerning a Decision Notice). They simply said that, in connection to Regulation 9, my entitlement had been cancelled.

 

I wrote to them, saying that I disagreed with their decision - and I explained why, citing the relevant rules, regulations and guidance. But I said that, due to my on-going ill health, I simply wasn't up to further engaging with this matter - so I told them they didn't need to reply to my letter.

 

As far as the rules go, they ought to have replied by now (within 14 days) if they were going to. They haven't.

 

But I'm just worried about them continuing with this ... They seem to "dislike" me (to put it politely) as I kept having to point out to them the relevant rules (when we met they said I was "very clever for a man with mental problems"). I took this as an insult. Having mental health issues has noting to do with cleverness (or a lack of it). And they did try to push the formal interview under caution, even sending out a police officer - who, once he verified my condition, reported back to them that I didn't have to attend.

 

I told them that, based on the law, they ought to have dealt with the issue of overpayment within the first 12 months after the claim ended. That is, unless they issued an S116 Certificate - which provides them with 3 months to initiate criminal proceedings once they've finished collecting evidence.

 

Over 3 months have elapsed - but I don't think they really care.

 

That's why I was wondering if anyone knew of a similar case - in which, after an 'overpayment' decision has been reached, a local authority still sought to initiate criminal proceedings after the 3 months had elapsed.

 

I do appreciate your comments, and I've read the links you pointed me towards. My thanks.