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	UK Social Security and Child Support Commissioners' Decisions
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[2007] UKSSCSC CH_3076_2006 (21 September 2007)

CH/3076/2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I grant the claimant leave to appeal and I allow his appeal. I set aside the decision of the Fox Court appeal tribunal dated 12 January 2006 and I substitute my own decision. £93.29 housing benefit and £15.14 council tax benefit was overpaid to the claimant in respect of the week from 30 May 2005 to 5 June 2005 and is recoverable from him. The adjustments of the claimant's council tax account made on 1 July 2005 in respect of the period from 6 June 2005 to 31 March 2006 do not represent the recovery of excess council tax benefit.

REASONS

2. I held an oral hearing of this application at the claimant's request. The claimant appeared in person. The local authority, the London Borough of Brent, was represented by its Tribunals Officer, Mr Ian Granville. I am very grateful to both the claimant and Mr Granville for their helpful submissions and for giving their consent to the application being treated as the appeal if I were to grant leave to appeal.
3. The material facts can be stated very shortly. The claimant was in receipt of jobseeker's allowance, administered by the Department for Work and Pensions, and housing benefit and council tax benefit, administered by the local authority. He then started work and informed the Department for Work and Pensions who terminated the award of jobseeker's allowance on 26 May 2005, with effect from that date. The Department sent notification to the local authority, who received it on 31 May 2005, after the bank holiday week-end. The local authority claims to have suspended the awards of housing benefit and council tax benefit on 1 June 2005 and it informed the claimant on the following day that entitlement had been suspended under regulation 11 of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 (S.I. 2001/1002). On 1 July 2005, it superseded (although it said "cancelled") the awards of housing benefit and council tax benefit so as to terminate them with effect from 29 May 2005. In consequence, it decided on 8 July 2005 that there were recoverable overpayments of housing benefit of £93.29 in respect of the period from 30 May 2005 to 5 June 2005 and of council tax benefit amounting to £661.82 in respect of the period from 30 May 2005 to 31 March 2006. The claimant appealed. The case came before the tribunal on 12 January 2006. The tribunal dismissed the appeal and the claimant now applies to me for leave to appeal, the tribunal chairman having refused leave and Mr Commissioner Angus having adjourned the renewed application while further information was obtained.
4. The claimant does not challenge the local authority's decision to terminate the awards of housing benefit and council tax benefit and the tribunal was clearly entitled to find that housing benefit had been overpaid to the claimant and was recoverable from him and, indeed, the claimant has not challenged that decision in his grounds of appeal. There was no evidence before the tribunal that the claimant had notified the local authority of his change of circumstances. He had notified the Department for Work and Pensions and, although they had acted promptly in informing the local authority, by the time the local authority received notification it was too late to stop the payment of housing benefit in respect of the week in issue, which was made on 27 May 2005. The claimant may have acted innocently and have forgotten that he ought to inform the local authority himself but it does not matter whether or not he was at fault. There was no "official error" in this case and therefore the overpayment of housing benefit was recoverable under section 75 of the Social Security Administration Act 1992.
5. One might think that similar reasoning would obviously apply in relation to the recovery of excess council tax benefit under regulations made under section 76 of the 1992 Act, so that one weeks' worth of council tax benefit would be recoverable in this case. However, council tax benefit is usually "granted" by crediting the claimant's council tax account (see regulation 77 of the Council Tax Benefit (General) Regulations 19992 (S.I. 1992/1814), now replaced by regulation 77 of the Council Tax Benefit Regulations 2006 (S.I. 2006/215)) and Mr Granville explained that the reason it had been decided that £661.82 was recoverable from the claimant was that, where there is an indefinite award of council tax benefit, a claimant's council tax account for the current financial year is credited with a sum based on the assumption that the claimant will remain entitled to council tax until the end of that financial year. Thus, when the award was terminated, it was necessary to recover the sum credited between the date from which the termination was effective until the end of the year.
6. Information obtained as a result of Mr Commissioner Angus's direction shows that there had been a decision in respect of the claimant's entitlement to council tax benefit on 19 May 2005, which had resulted in a considerable amount of arrears being awarded. A printout of transactions on the claimant's council tax account shows that on that day the claimant's council tax account was credited with, among other sums, a "Benefit Adjustment Credit" of £789.43 for the whole year from 1 April 2005 to 31 March 2005. It also shows that the next adjustments to the council tax account were on 1 July 2005 when three were made, one for £15.14 being "Benefit Clawback" for the week 30 May 2005 to 5 June 2005, one for £60.56 being "Benefit Clawback" for the four weeks of the suspension from 6 June 2005 to 3 July 2005 and one for £586.12 being "Adjustment Excess Benefit" for the period from 4 July 2005 to 31 March 2006.
7. Mr Granville's submission is implicitly based on the premise that the original crediting of the claimant's council tax account for the whole financial year was a payment of council tax benefit made in advance. If that were correct it would have some unfortunate consequences for local authorities. In particular, since a reduction in council tax liability would be made when an award was made, or at the beginning of a subsequent financial year, it would be impossible to suspend a reduction if a question arose as to the claimant's entitlement later during the financial year, because the reduction would already have been made. Indeed, the suspension in this case, which in fact had no impact on the council tax account until the period of the suspension ended, would have been impossible. This might not matter in itself, although local authorities would have to stop issuing suspension decisions, but the consequence of a local authority not being able to suspend payments would be that it would then be unable to terminate entitlement under regulation 14 of the 2001 Regulations in the event of the claimant failing to provide information but there being no other grounds for revision or supersession.
8. Regulation 77 of the 1992 Regulations (now regulation 77 of the 2006 Regulations) says nothing about the timing of credits to a person's council tax account and, in particular does not suggest that advance payments should be made to the end of the current financial year. Obviously arrears should be paid promptly but it seems to me that the 2001 Regulations contemplate that current payments of council tax benefit will be made periodically in much the same way as housing benefit and not by way of advance payments. Certainly housing benefit and council tax benefit are usually administered together and decisions in respect of both benefits are very often, as in this case, issued in a single document because the same procedures are considered to apply.
9. I have not overlooked regulation 84(5) of the 1992 Regulations, which, as re-enacted in regulation 83(5) of the 2006 Regulations and then amended, provides –

"Where in consequence of an official error a person has been awarded excess benefit, upon the award being revised or superseded any excess benefit which remains credited to him by the relevant authority in respect of a period after the date of the revision or supersession, shall be recoverable."

That provision, which has a counterpart in housing benefit legislation in cases where benefit is paid by way of a rent rebate, certainly anticipates that there will be advance credits of council tax benefit. However, it does not necessarily contemplate credits being made for a whole year rather than at, say, four-weekly intervals.

10. I can quite understand that computers are so set up that it is easier to manage a council tax account by making a single advance credit in respect of an indefinite award of benefit and then adjusting it if an award of benefit is terminated, but I do not consider it appropriate to regard those exercises as the payment of benefit and the recovery of excess benefit. They are paper, or notional, movements of money. It does not follow from the fact that some credits to council tax accounts represent council tax benefit that all such credits do at the time they are made. The initial credit is not justified by there being an indefinite award of benefit that is liable to be terminated at any time. It is justified by the need for the council tax account to show that the council tax payer is not in arrears while the award of benefit continues and, presumably, some practical difficulty in making weekly credits.
11. In my judgment, the credit should be treated as a credit of council tax benefit only as each week of entitlement under the award passes. If there is a suspension, the credit in respect of the weeks covered by the suspension should not treated as a credit of council tax benefit for as long as the suspension remains in force and payments are not reinstated for that period. If an award is terminated retrospectively, excess benefit credited between the date from which entitlement to benefit is terminated and the date of the termination decision (or the date of any suspension) will be recoverable under regulation 84 of the 1992 Regulations (regulation 83 of the 2006 Regulations). It will also be possible for the local authority to adjust the account so as to demand full payments of council tax from the date of the termination decision (or the date of any suspension). But, insofar as it relates to the period after the termination decision (or the date of any suspension), that reinstatement of liability is not a recovery of excess benefit. It can, of course, be objected that this approach means that the payments are notional and are not directly linked to transactions on the council tax account, but at least it is possible to suspend such notional payments or reductions in liability whereas it is not possible to suspend an advance reduction in liability once it has been made. Moreover, the transactions on the council tax account do not always accurately reflect the decisions made in respect of entitlement to, or suspension of, council tax benefit.
12. Not treating a reinstatement of council tax liability as a recovery of excess benefit is important for two other reasons. First, a claimant's liability for council tax is not a matter within the jurisdiction of a tribunal and accordingly a tribunal ought not to be asked to consider issues arising out of transactions on a claimant's council tax account that do not directly relate to entitlement to, as opposed to payment of, council tax benefit. Secondly, and perhaps more importantly from a practical point of view, the approach taken by the local authority in this case is apt to cause confusion to claimants and therefore to cause unnecessary appeals. The claimant in this case knew that payment of council tax benefit had stopped and that he was liable for the full amount of council tax from that date. Until the position was explained by Mr Granville at the hearing before me, he was clearly, and quite reasonably, under the impression that the decision that council tax benefit was recoverable from him meant that he had to pay over £600 to the local authority in addition to meeting his renewed liability for council tax. I doubt that there would even have been an appeal to a tribunal in this case if the claimant had been told that only £15.14 due in respect of one week was recoverable as excess benefit. There would certainly have been no appeal to a Commissioner.
13. Accordingly, the advance credit of council tax benefit made on 19 May 2005 is not to be treated as a credit of council tax benefit in respect of the weeks after the week in which reductions of liability for council tax were suspended and I therefore give the decision set out in paragraph 1 above. Allowing the claimant's appeal does not, however, make any practical difference to the parties, although it will relieve the claimant of any remaining apprehension he may have that he is in debt to the local authority in relation to his council tax account. The local authority was clearly entitled to reinstate demands for the full amount of council tax from 6 June 2005 and to recover excess benefit in respect of the preceding week. The adjustments made to the account were perfectly correct; it was the labelling that was inaccurate.

(signed on the original) MARK ROWLAND

Commissioner

21 September 2007