Overpayment of housing benefit

Housing benefit overpayments occur when too much housing benefit is paid, this can be for a variety of reasons:

• A change in a tenant's finances
• A change in the finances of a relevant member of the household
• A change in household members
• Failure to supply further evidence and information required to amend a claim
• Through fraudulent activity
• As a result of vacating the property
• As a result of checks on the property which reveal the tenant has never taken up residence or has abandoned the property

When an authority obtains information regarding a change in a claimants circumstances, the claim will be amended from the date the change took place. If the authority did not receive the information at the time the change actually occurred the overpayment may cover a past period.

If you are a landlord or agent and you are receiving direct payments the authority is required to send you a letter advising you that an overpayment has occurred. The letter is not a demand for payment.

If you disagree with the overpayment, you can write to the housing benefit office and ask for a more detailed explanation. You need to do this within one calendar month of the date on the letter.

As a landlord, you can only appeal against the decision to recover the money from you, you cannot appeal about the reason the overpayment occured or the amount overpaid.

After you have received our reply, if you still disagree with the decision, you should write to us again, clearly stating your reasons. Your appeal will then be heard by the Tribunal Service, who are independant from the council.

In all instances, you must state your reasons and supply any evidence which supports your appeal.

An authority is expected to seek recovery of the majority of overpayments to safeguard public funds.

If a tenant is still entitled to housing benefit, the overpayment will be recovered by deducting a prescribed amount from the weekly amount of housing benefit the tenant is entitled to. This will mean that the tenant will have to pay money out of his/her own funds to cover the full amount of rent being charged for the property. If the tenant fails to pay the shortfall the account will fall in to arrears and it is considered to be the responsibility of the landlord or Housing Association to take action against the tenant.

If the tenant is no longer entitled to benefit we will look at the case and the reason for the overpayment will be considered before an invoice is sent out. As a general rule you will only be asked to repay overpayments which are caused as a result of:

• The tenant vacating the property
• The tenant abandoning the property

Where overpayments are due to changes a landlord could not be expected to know we will normally seek recovery from the tenant.
When you receive an invoice asking for repayment you have 28 days to repay the overpayment. If you have not repaid the overpayment after 14 days, you will be sent a reminder, followed by a final demand after a further 7 days.
If you report a tenant because you suspect an act of fraud has been committed, an investigation will take place. If the fraud is proven you will not be asked to repay any of the overpayment.

Please note, reporting that a tenant has vacated is not classed as fraud. If you have been paid for a period after the tenant has left you will still be asked to repay the overpayment.

If an invoice has not been repaid a reminder is issued four weeks later followed by a final demand two weeks after that. If the debt remains unpaid further action will be taken to recover it.

• The debt may be sent to county court to be registered. (This action involves costs which you will be liable to pay and can effect your credit rating). In some cases we can ask for a charging order to be placed on any property you own
• If you are still receiving housing benefit payments in respects of existing tenants we will recover the debt from your future payments. (This is perfectly legal and is a power given to authorities by central government.) If this happens the landlord must credit existing tenants with the amount of housing benefit they would have been paid if the debt had not been deducted from the payments received

If you know a tenant is moving out you can contact the overpayment recovery team and ask if there is an outstanding overpayment or if there is likely to be an overpayment. You are advised to do this before refunding a bond.

Please remember a tenant must apply for housing benefit to cover a period of notice and has to satisfy certain conditions before it can be paid. Housing benefit is not normally granted on two properties. A period of notice not covered by housing benefit must be paid by the tenant. Where a tenant has moved a landlord should not assume that any housing benefit he receives is to cover a period of notice. It is always advisable to contact the Overpayment team and check that the payment is correct.

Please see our related downloads section for further information on overpayments.

Last updated 13/04/2012