Missing Children –  is overpayment of housing benefit recoverable?

Missing Children – is overpayment of housing benefit recoverable?

12:07 PM, 23rd December 2014, About 9 years ago 8

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My current tenant is receiving housing benefit/local housing allowance (which is paid directly to the estate agent and then to me). Initially the tenant, who is a single parent, moved in with his three young kids. I tagged along to the most recent quarterly inspection and noticed that there were no children’s clothing or toys etc around the house. This led me to suspect that his children have left to live with mum or foster care etc.

I’m not exactly sure if the council knows about this. The housing benefit did reduce by £40 per week a few months ago though but not sure if the children had anything to do with that. I’m scared the council is going to come chasing me for overpayments. Is this likely to happen? Its not my fault if the tenant was fraudulently claiming housing benefit, but I appreciate the law isn’t always on the landlords side.

Any advice from someone who has experience of this?

I’m sure there must be some sort of protection for the landlord here? Either via legislation or court appeal? As a landlord I know that the tenant still lives at the property, but surely I cannot be “reasonably” expected to check if the tenant is claiming too much HB/LHA? I can’t keep a track of where his children are and therefore should not be expected to inform the council of a change in circumstances for the tenant. It just seems very unreasonable that the LL can be held accountable for the money where the tenant does not declare a change in his circumstances.


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Neil Woodhead

12:39 PM, 23rd December 2014, About 9 years ago

If neither yourself or the Agent are aware of the change in circumstances they cannot pursue you. Local Authority issue a notice to Agent/Landlord when there is a change in circumstances and you should have received one for the £40 reduction.

Now as you are aware of the "change" you must notify Council immediately but this will put his claim into suspense until resolved. If he cannot afford rent with changes best to look for another Tenant.


13:52 PM, 23rd December 2014, About 9 years ago

Marco, please be careful here. I did inform the council once, then the hb dept suspended the whole claim and I didn't get paid for 6 weeks. Turns out the kids were abroad for 2 weeks.
YOU should write (not phone or text) to the tenant first asking if the kids are ok, are they still with him? Wait for the reply. Once you have been made aware it is your duty to tell the hb dept at council, once again in writing.
ALSO at my request I asked HB dept to visit, they did, all worked out fine. IT SHOWS to HB Dept that you are a good landlord and they will trust you if another tenant does the same thing, etc.

Simon M

14:26 PM, 23rd December 2014, About 9 years ago

The tenant was receiving 'public' money to ensure his children had somewhere to live - and this is paid direct to his landlord to ensure the money is used for that purpose. If the children are permanently no longer resident the taxpayer shouldn't be expected to pay more than necessary. The tenant is required by law to notify the Council, and the Council is also required by law to reclaim the amount overpaid, When told of a Change in Circumstances, Councils can suspend all HB until the tenant confirms.

The £40 reduction could be because the children moved out - in which case, there's no problem - assuming the tenant makes up the extra £40 (or your accept a lower rent?) Another explanation would be if the tenant is earning more than before(?)

The longer the tenant receives more than he's entitled, the larger the amount the Council will need to recover. If there's a delay, many Councils will usually reduce the HB to recover the overpayment, so the tenant would need to make up the difference. If it can't do this, then I'm pretty sure the Council can and will ask you to repay - particularly if you might be expected to know about the change. After all, if the children have moved out, the tenant is defrauding both the taxpayer and - indirectly - you. If the tenant is receiving more benefit than he's entitled, then it's better sorted out straightaway as the overpayment will get bigger. Don't put your head in the sand. I would ask the tenant about why the HB was reduced.

Robert M

22:59 PM, 23rd December 2014, About 9 years ago

Perhaps contrary to what others are advising, yes you can be held responsible for the tenant's change in circumstances and any consequential HB overpayment, BUT only if it is reasonable for you to have known about the change of circumstances, and you failed to inform the HB dept. In the circumstances you describe, you are aware of the possible change in circumstances (you've already stated this suspicion), so if you do not inform the Council's HB dept then yes they can ask you to repay any overpaid HB that you may have received.

I completely agree that it is unfair, and unreasonable, for you to have to keep track of your tenant's circumstances and declare changes (suspected or known)) to HB Dept, but the HB regime is not fair or reasonable, and there is very little protection for landlords. You can find that the HB paid to you is reduced due to HB overpayments many years ago before they were even your tenant (ongoing HB clawback), how unfair is that? but from the point of view of the Council, it is not your rent that is reduced, only the proportion of it that is paid by HB and the tenant is supposed to make up the difference (ha, ha, ha, ..... fat chance of that!!!?). These are just a couple of the many reasons why most landlords do not accept tenants on HB/LHA.

I would suggest that you try to find out why there was a reduction in his HB entitlement, and also immediately serve a s21 Notice (and s8 Notice if applicable) on the tenant as a precaution because if he is not entitled to full HB due to under occupancy (children no longer residing with him) then you stand to potentially lose lots and lots of money, so you need to protect your position as best you can by cutting your losses. - Of course, if tenant is making up the difference in rent then you do not have to act on the expiration of the notice periods, they can just sit on his file and can be utilised anytime in the next 12 months (if needed).

23:22 PM, 23rd December 2014, About 9 years ago

Thank you for all your responses guys I appreciate that very much as they have been very helpful.

We have already issued a section 8 as well as a 21 notice. We are due to commence court proceedings under section 8 as his rent has been arrears for a few months now. Can't wait to get this low life out of my house. We made an incredibly stupid mistake of letting someone like this tenant move into our house when we knew about his current situation. Rooky mistake by a new landlord. Never again will I get a HB/LHA.

I also found this article posted by another member of this forum in regards to overpayments.


Robert M

23:49 PM, 23rd December 2014, About 9 years ago

Reply to the comment left by "Marco Brandon" at "23/12/2014 - 23:22":

Bill Irving is the expert in challenging HB overpayments, so if the worst comes to the worst and the council do try to recover the overpayment from you, then seek Bill's assistance.

malcolm gardner

15:25 PM, 28th December 2014, About 9 years ago

Bill is an expert in this field, but I would give a word of warning if you suppose that what Bill wrote in the article would always protect the landlord from recovery of an overpayment. And having read Bill's article I can see that is not what he is saying either.

Point 1: Housing Benefit is not a payment of rent. The Council does not have a contractual arrangement with the Landlord. It is a payment of benefit, which may be paid on the claimant's behalf directly to the landlord to off-set the rent. But when paid it is still not a contract between the Council and the Landlord. The Council is merely redirecting the monies on behalf of the claimant.

Point 2: If the claimant is paid more Housing Benefit than they are entitled to then the Council should recovery the monies. It is public funds and Councils are duty bound by law to protect the public purse. However, Bill is right that Councils do receive 40% subsidy but this is not to allow them to take a pragmatic view of writing off the debt or some of it. It is an incentive to recover -- the money is to cover recovery costs. remember HB is not the Council's money it belongs to the DWP. The Councils administer HB on the DWP's behalf. A recent National Audit Office report criticised Councils for not pursuing overpayments more vigorously and they also criticised the DWP for not having in place appropriate incentives to encourage councils to pursue the overpayments.

Point 2: Councils should pursue recovery in the first instance from the tenant, whether they have paid the Landlord directly or not. Landlords should be notified that the money has to be repaid -- either by the tenant or the landlord. But to begin with the tenant should be given the opportunity to appeal the decision that generated the overpayment. Landlords have the right to appeal the decision to recover from them and not the tenant. That is when you would call on Bill.

Point 3: There is no law in England or Wales that allows anyone to profit from another's misfortune. This is more complex but what it means in practice is that there is two tests and both have to be satisfied to recover overpaid HB from a landlord:
1) The benefit has to be paid directly to the landlord
2) The landlord has knowledge of s or could have reasonably known of a change in a tenant's circumstances that could affect the amount of benefit that the claimant was entitled.

The fist test is straightforward. The second test has to be proven on the balance of probabilities. That is a more strenuous test thanis often assumed. However, it is as much about common-sense as it is about anything else. If a tenant has taken up a new job then the landlord would not be expect to necessarily know this fact unless they involved in the job application in some way or they giving the tenant a lift to work every morning. It would much harder for the Council to argue that it is reasonable to recover from the landlord. If it is the case that the tenant has moved out, then the council would have grounds to argue that making sure that the tenant is living in the property is part of the normal management of the estate. If the rent is being covered by HB then the landlord may feel comfortable in not ensuring that the tenant is still resident. That would be the landlord fretting their duties. However, as BIll has demonstrated, it is not uncommon for the tenant to try and fool both the Council and the Landlord about their living arrangements. In which case it is down to the Landlord to demonstrate that they too have been deceived. This is of course where life can become difficult. I have myself presented a number of successful case for local authorities at tribunals where landlords have claimed they not have reasonably known and I have demonstrated that it was reasonable to expect them to have known. However, I would only recover from a landlord when it is impossible to recover from the tenant.

It seems to me in this in this forum the landlord is demonstrating in public suspicion of such a change in circumstance. The question of the forty-pound resection is a bit of red-herring as it could be the result of any change or even a older overpayment being recovered.

At the end it has to be understood that there is a contract between the council and the tenant for the payment of HB. There is a contract between the landlord and the tenant through the tenancy agreement. There is no contract between the Council and the Landlord. Therefore, an overpayment of HB becomes, for the private landlord rent arrears. Which every way you cut it the tenant is liable for it either as an overpayment or as rent arrears. The argument between landlord and the council is about who is going to incur the cost of recovery.

I do take issue with one comment in Bill's article. Private sector landlords are not seen as a soft touch. Landlords, like claimants and council officers come in many different flavours. When there is money to be recovered from the tenant, a few councils will be ruthless in the process of recovering directly from the landlord and may not give due consideration to what they can or cannot do. A few landlords do not tend to their tenancies because direct HB when there are no problem is an assured income and they will use any form of sharp practice to avoid repaying the overpayment. And only a few tenants do not meet their liabilities to either the council or the landlord. Unfortunately the HB system is extremely complex and it easy to unintentionally fall foul of it. Do not expect things to get easier under Universal Credit.

23:16 PM, 29th December 2014, About 9 years ago

Reply to the comment left by "malcolm gardner" at "28/12/2014 - 15:25":

Dear Malcolm Gardner,

Thank you for your detailed comment. I appreciate that Bill isn't necessarily trying to express that the LL can "always" be protected. What gives me comfort though is knowing that I can fight back if necessary. Initially I was under the impression that I would automatically be forced to repay all monies with no right of appeal.

Well, let's just hope it doesn't even get to that stage.

Merry Christmas and a happy new to you all.


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