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Tenant claimed benefits fraudulently – Council reclaiming from us!

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Readers Questions

We have received the email below from Trudy. Please help by leaving comments if you have been in the same position yourself or if you know the law and can advise her what she should do.

Trudy’s email is below:-

“Hi Mark

We have had a DSS tenent in since 2009 who has just left the property and the council has just sent us a letter stating that we owe them £26,000 as he was claiming his housig benefit frauduently.  Can this be right that we owe this amount to the council?

I look forward to your advice.

Kind regards

Trudy”

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Comments

  • Ben Reeve Lewis says:

    I would want to know a lot more about it to be able to comment accurately Trudy and I wont commit to answer without more info. Fraud can come about in so many different ways. I’m happy to talk to my HB people when I’m back in work tomorrow.

    What does the council’s letter say exactly? Quote it verbatim


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  • This is known as ‘clawback’ and is one of the big problems with getting payment of benefit direct from the Council, and is one reason why some landlords (when this was more of an option) would refuse to accept direct payments.

    The best way to avoid this happening is for landlords with tenants on benefit to arrange for payment via a credit union or the Tasker payment service, rather than accept payment direct. I write about this on my blog here http://www.landlordlawblog.co.uk/2011/10/18/five-ways-for-landlords-to-ensure-payment-of-housing-benefit/

    So far as Trudy’s case is concerned, I remember in the past Councils were sometimes successfully challenged if they had not used the correct paperwork. However housing benefits work is not my area of practice so I will leave it to others to comment on whether this is still an option.


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  • This is covered by Social Security Administration Act

    Post April 2009 – HB Reg 101(2)

    4.20 From 06 April 2009, HB Reg 101(2)/(SPC) 82(2) was amended in order to clarify the legislative intent. It states that an overpayment• which was not caused by a misrepresentation, failure to disclose information or an official error is recoverable from both the claimant and the person to whom it was paid (landlord/agent)• which was caused by a misrepresentation or a failure to disclose information, is recoverable from any person who misrepresented or failed to disclose that information.This could be the claimant, a person to whom it was paid (landlord/agent) or both

    The LA must consider whether the overpayment was caused by someone who misrepresented or failed to disclose information• decide who misrepresented or failed to disclose information, if– one person misrepresented or failed to disclose information, the overpayment would be recoverable from them– more then one person misrepresented or failed to disclose information, the overpayment could be recovered from both or either, if ~ one person was more at fault, recover from them ~ both people were equally at fault, recover from both

    Source http://www.dwp.gov.uk/docs/hbopg-rec-op.pdf

    I will tweet the people who are experts in this field and ask them to post their best advice here

    Follow me on Twitter@landlordtweets


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  • Hi Mary

    My layman’s interpretation of that is that if the landlord was not a party to the fraudulent claim and was completely unaware of the fraud then the Local Authority has no right to pursue the landlord for repayment of the fraudulently paid benefits. Is that your interpretation?

    Regards

    Mark


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  • John Paul - says:

    Based on the very limited information, if you appeal the decision I think they will chase the tenant rather than you. The council is hoping you will roll over and accept the decision. As the benefit is classed as an overpayment due to the tenant claiming benefits fraudulently they MUST chase the tenant. I’ll post the
    exact legislation tomorrow once I’m at work but we come across this situation on a regular basis. We haven’t lost an overpayment appeal for nearly 3 years in this situation. Another common overpayment situation is where the tenant does a moonlight flit, same applies, it can be beaten with a carefully worded letter


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  • steven latham says:

    you wil not have to pay this money back, if you would like to discuss how to prevent the claw back contact me directly on TEL NUMBER REMOVED BY MODERATOR or EMAIL REMOVED BY MODERATOR to find out how.


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  • Hi Steven

    Thanks for commenting but presenting your details and soliciting offline contact without providing any information is not really in the spirit of the forum. Therefore, I have removed your contact details.


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  • Mark Trenfield says:

    Hi Trudy,
    If your tenant has committed fraud (by claiming HB that they were not entitled to) AND you were not complicit in this fraud (ie: you had no way of knowing) then the Local Council should chase the tenant for the over payment – and not yourself.

    However, if it can be proved that you were complicit (eg: tenant moved out 3 years ago and you knew and you failed to notify the Local Council) then legislation allows for the Local Authority to recover monies from you.

    I would guess, as this is fraud, that you would not have been complicit … so you should immediately instigate the “appeals process”.

    Mark


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  • Phil Wheeler says:

    Hi Trudy,

    As mentioned on here by the other posters you can only be held responsible if you are complicit. Councils try to pin it on the ignorant Landlord as they go after the money thinking were all minted!

    My advice for you is to speak with Bill Irvine from HB Advice and Advocacy who resolves these issues for housing associations and Landlords. Google his details for his contact number, if you cant find it let me know and I’ll pass it on. In the meantime relax and enjoy the rest of your weekend.

    He is your man. I have used his services myself and he’s brilliant! John Paul’s letter may be worth a try too.

    Phil


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  • trudy.mariner says:

    thank you so much everyone for you valued comments – this is very much appreciated. I shall talk to the council office tomorrow and see what they have to say. Thank you all so much again for your responses, especially on a Sunday.


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