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Benefit Overpayment


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I have a tenant who has claimed housing benefit for the last 2 years. It goes straight to me.

I heard that the LA can claim it off the landlord if there is an overpayment. So I recently made him a joint account holder on one of my bank accounts so that it could be paid direct to him but I could gain immediate access to it.

He is about to the payment route to his name in our joint account with the council.

However, I have just found out that he has been employed for at least the last four months, meaning an overpayment of about 3000 pounds!!

What do I do? Do I pressurise him to come clean with the council himself?

Obviously, Im very concerned about the 3000 pound liablity I may have now. Should I tell the council myself?

Help please.

Paul :huh:

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Hi Paul,

You have been misinformed regarding the Local Authority claiming overpayment from the landlord and you did not need to create joint accounts etc to try and avoid this .....

The benefit always belongs to the TENANT - even when the money has been paid directly to the landlord. If the tenant has been overpaid then the tenant will need to pay the money back to the Council. The Council may decided to recover the overpayment from future benefit payments (on a weekly basis) and, if this happens, then your tenant will need to pay you the shortfall each week until the overpayment is paid.

You can also appeal overpayments directly with the finance section of your local Council if you think the overpayment is incorrect.

However - if you do not inform the Council that your tenant is working you are, in effect, colluding with the tenant to defraud the Council ... and it is likely that you will then be held responsible for the overpayment and you will need to repay the monies that you took (knowing that you should not have been paid them because your tenant was working).

So - tell the Council your tenant is working ...... and don't worry about having to repay the overpayment yourself as - assuming you have been honest throughout- the overpayment will be recovered from the tenant and not the landlord.

Good Luck


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Just to add to what has already been said, overpayments can be recovered from the person who failed to disclose or misrepresented a material fact. This could be, for example, the claimant, their appointee, agent or landlord if rent is paid direct.

Recovery can take place in various ways, such as:

Recovery from ongoing Housing Benefit entitlement - the tenant is responsible for paying any rent arrears that occur as a result of the reduced amount paid to the landlord.

By the issue of an invoice for payment in full.

Recovery from ongoing Housing Benefit entitlement from another local authority, if the person now lives elsewhere.

Deductions from certain social security benefits.

Outside debt recovery/bailiff companies.

If recovery is sought from a landlord, the local authority can recover an overpayment from any Housing Benefit they may be receiving in respect of other tenants. If a landlord habitually fails to repay overpayments that are recoverable from them, the Council can decide that the landlord is not a ‘fit and proper person’ under benefit regulations and can refuse to make direct benefit payments to that landlord.

Court action, which would result in further costs and, for example, an attachment of earnings order.

If you dispute a repayment claim against you though, always appeal - you might be surprised by how many appeals are successful if you go through the whole procedure.


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