Appeal No. UA-2024-000652-HB
Between:
R.W. (deceased)
Appellant
by
D.W.
Appointee
- v -
London Borough of Haringey
1st Respondent
and
Stroud Green Housing Co-operative Ltd
2nd Respondent
Before: Upper Tribunal Judge Wikeley
Decided on consideration of the papers
Representation:
Appellant: Appointee in person
Respondent: Ms Linda Robinson, London Borough of Haringey
On appeal from:
Tribunal: First-Tier Tribunal (Social Security and Child Support)
Tribunal Case No: SC242/22/05124
Tribunal Venue: London Fox Court
Hearing Date: 1 September 2023
DECISION
The decision of the Upper Tribunal is to dismiss the appeal. The decision of the First-tier Tribunal on 1 September 2023 did not involve any material error of law (section 11 of the Tribunals, Courts and Enforcement Act 2007). The decision of the First-tier Tribunal accordingly stands.
REASONS FOR DECISION
The issue in this appeal
This case concerns the effect of a retrospective reduction in the claimant’s rent, covering a period of some years, and the consequential adjustment of her housing benefit (HB) entitlement, resulting in a recoverable overpayment. The thrust of the claimant’s appeal is that the local authority incorrectly calculated the overpayment by subtracting the new HB entitlement from the gross amount of the benefit that was awarded under the old entitlement (rather than subtracting the new entitlement from the net benefit that was actually due to be paid to her, following a deduction that was being applied to recover a previous overpayment).
This appeal is accordingly about two HB overpayments. For reasons that will become apparent, the overpayment which resulted from the retrospective reduction in the claimant’s rent is referred to in this decision as the ‘disputed section 23 overpayment’. The overpayment which was already in train during the period covered by the disputed section 23 overpayment is described as the ‘undisputed previous overpayment’.
The parties to this appeal
The claimant (‘the Appellant’) is now sadly deceased, but her appeal has been continued by her son (‘the Appointee’). The First Respondent is the London Borough of Haringey (‘the Council’), being the relevant local authority responsible for the administration of HB. The Second Respondent is the Stroud Green Housing Co-operative Ltd (‘the Landlord’), the claimant’s social housing landlord, which has not taken any active part in the Upper Tribunal proceedings. The Secretary of State declined an invitation to be joined as a party to those proceedings.
The Upper Tribunal’s decision in summary
I dismiss the Appellant’s appeal to the Upper Tribunal. In short, and for the reasons that follow, I am not persuaded that the decision of the First-tier Tribunal (‘the FTT’) under challenge involves any material error of law.
The factual context
Section 23 of the Welfare Reform and Work Act 2016 required registered providers of social housing to reduce the rents payable by their individual tenants by at least 1% in relation to each relevant year. Section 23 applied for four years as from 1 April 2016. In the instant case the Landlord originally understood that they were not covered by the section 23 requirement. This misunderstanding (as it subsequently transpired to be) was later corrected, resulting in their tenants’ rents being retrospectively reduced with effect from 4 April 2016.
In that regard the FTT made the following findings of fact in its statement of reasons [the text has been anonymised where appropriate]:
On 8/12/21 (20) [the Appellant] was notified that her rent from 1/10/21 was reduced to £115.15. On 14/12/21 (150) corrected information about rents was sent by [the Landlord’s solicitors] to the Local Authority in relation to [the Appellant]’s rent. This letter made clear that the rent reductions applied from 4/4/16 to 26/4/20 and that the rent after that, although increasing again, was still less than had been previously declared. On 15/12/21 Stroud Green also contacted Haringey and stated that rent was reduced from 4/10/21 (as per the letter of 8/12/21) (152). [The Appellant] contacted the LA on 23/12/21 to confirm that reduction from 4/10/21 (166).
Unfortunately the LA only actioned the notification of change of circumstances for the period 4/10/21 to 14/12/21 requesting only £170.80 overpayment from 4/10/21 to 28/11/21 from the Housing Association. It failed completely to action the email of 14/12/21 in relation to the overpayment since 2016 (158).
In March 2022 the Local Authority Debt recovery team confirmed to Stroud Green that the only outstanding overpayment was £170.80 (a miss-communication as this was the only outstanding debt only because the earlier overpayment had not been calculated).
On 19/4/22 Stroud Green therefore repaid £170.80 to the respondent and the balance of the overpaid rent for the period 4/4/16 to 26/4/20, £4,386.40, to the appellant (264). The second respondent did point out to [the Appellant] in the accompanying letter that she may have to repay more herself to Haringey if they “decide that the amount should be more.” [The Appellant] acknowledged receipt of the cheque for £4386.40 (267).
It is noted by the Tribunal that the HA deducted the 2021 overpayment from the overpayment for 2016-2020 and [the Appellant] is therefore short-changed by the sum of £170.80.
[The Appellant] contacted the LA on 9/5/22 by way of their complaints procedure, assisted by her son, to see if there was any more money she needed to pay them before she banked her cheque (267). She banked the cheque on 18/5/22 (268).
On 16/5/22 the first respondent wrote to [the Appellant] in response to her complaint to inform her that housing benefit of £4,557.55 for the period 4/4/16 to 4/10/21 had been overpaid to her and was recoverable from her (173). This letter was accompanied by 72 pages of calculations. The overpayment for 4/10/21 to 14/12/21 isn’t mentioned as it had already been repaid by the landlord as requested. On 22/6/22 Haringey invoiced [the Appellant] for the overpaid housing benefit for 4/4/16 to 4/10/21 of £4,557.55 (269).
[The Appellant] did not dispute that the overpayments were recoverable from her (274 para 7 & 9), only the amount of the overpayment. [The Appellant] was prepared to repay the overpayment but just wanted to make sure that the amount had been calculated correctly (273 para 3).
The overpayments were £170.80 for the period 4/10/21 to 28/11/21 because although the rent increased it was less than had originally been charged, and £4,557.55 for the period 4/4/16 to 3/10/21 due to the retrospectively reduced rent.
There does not appear to be any dispute in this case over the chronology or the essential facts. The dispute centres not on issues of arithmetic but on the method of calculating the disputed section 23 overpayment.
The First-tier Tribunal’s decision
In the section of its statement of reasons dealing with the calculation of the disputed section 23 overpayment, the FTT gave its reasons as follows:
Calculating the Overpayment
[The Appointee] argues that the overpayment being sought is greater than the amount of rent overcharged (248), however it is exactly equal to it.
[The Appointee] also argued that because [the Appellant] had to pay some of the rent herself she should get the benefit of the reduction in the rent charged. However this ignores the way in which housing benefit is calculated, for which see below.
[The Appointee] also argues that in calculating the overpayment the old weekly entitlement should be used net of the overpayment recovery that was being made at that time for an earlier overpayment. This is incorrect as it ignores the difference between entitlement (how much you could get) and payments (how much you actually get after any deductions) and would mean that the burden of the previous overpayment was being borne by the LA, not the appellant.
[The Appointee] also argued that because the change was a change in the amount of rent payable then it should only take effect from the date “it actually occurs” which he says means the date on which the change was notified. However, the provision referred to (The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006, Regulation 59(2):
“Subject to paragraph (8) and regulation 8(3) of the Decisions and Appeals Regulations where the change of circumstances is a change in the amount of rent payable in respect of a dwelling, that change shall take effect from the day on which it actually occurs”
is an exception only to the general rule in [regulation] 59(1) that changes in circumstances “shall take effect from the first day of the benefit week following the date on which the change of circumstances actually occurs” and isn’t meant to shift the effective date of change to the date of notification of that change. The change of circumstances in this case was therefore correctly applied from the date that the change occurred i.e. 4/4/16.
The Presenting Officer confirmed that the way in which the overpayment is calculated is by reference to entitlement on the day before the period of overpayment begins. She also confirmed that changes in rent are reflected £ for £ in the amount of housing benefit payable, up to the maximum under the regulations. Changes in income, on the other hand are subject to a taper (which are also illustrated in the figures used (appendix 6 p320).
The overpayment was correctly calculated by reference to the appellant’s entitlement immediately before the period of overpayment began, and subject to subsequent changes in entitlement. The period of overpayment correctly begins at the date on which the rent is retrospectively reduced. In each week of the overpayment therefore the amount of overpayment is calculated by taking the old entitlement (prior to the reduced rent) and deducting from it the new entitlement (after the reduced rent is used in the calculation). Any deductions or shortfall in benefits are irrelevant to the calculation of the overpayment.
The FTT’s reasons went on in the statement of reasons to apply regulation 81 of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (SI 2006/214), which sets out the basis upon which overpayments are recoverable. No point is taken in respect of that part of the FTT’s reasoning.
The FTT therefore issued a Decision Notice which materially stated as follows:
The appeal is refused.
The decisions of the 1st Respondent of 16/12/21 and 12/5/22 are confirmed.
There is a recoverable overpayment of housing benefit totalling £4,728.35 for the period 4/4/16 to 28/11/21. This is made up of a recoverable overpayment of £170.80 for the period 4/10/21 to 28/11/21 and of £4,557.55 for the period 4/4/16 to 3/10/21.
The overpayment is recoverable from the Appellant and/or the second Respondent.
The reason for this decision is that the Appellant was overcharged rent from 4/4/16 to 28/11/21 by her Landlord, the 2nd Respondent. When the error was realised the Appellant was refunded rent and her Housing Benefit entitlement was recalculated, resulting in the overpayment. There was no failure to notify by the Appellant and no official error by the 1st Respondent.
The issue before the Tribunal was the calculation of the amount of the overpayment. The Tribunal found that the 1st Respondent had correctly calculated the overpayment using the gross figure for Housing Benefit entitlement
The 2nd Respondent had repaid the local authority for the overpayment of £170.80 and deducted that from the excess rent payments refunded to [the Appellant] totalling £4386.40. [The Appointee] indicated that [the Appellant] was prepared to repay the overpayment of Housing Benefit in the amount assessed by the Tribunal.
Permission to appeal was refused by the FTT but granted by the Upper Tribunal.
The Appellant’s grounds of appeal
The essence of the Appellant’s case is that the FTT should have found that the disputed section 23 overpayment of HB should extend only to the amount of benefit that was actually paid to her, rather than to her full HB entitlement. I gave the Appellant permission to appeal on two grounds.
The first ground was that the FTT had failed properly to consider and apply the statutory definition of the term ‘overpayment’ in regulation 80 of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006.
The second ground was the submission that it must necessarily be the case that the starting point for calculating the disputed section 23 overpayment must be the net housing benefit paid to a claimant, as to calculate that overpayment from the gross housing benefit award would cause a double recovery of the undisputed previous overpayment. Thus, it could not have been the intention of legislators for a benefit claimant to repay more benefit than had in fact been overpaid; and the approach to calculating the disputed section 23 overpayment involved ordinary arithmetic and accounting principles.
Analysis
Ground 1
Ground 1 concerns the concept of an overpayment. As a matter of the ordinary meaning of the term, a person is overpaid HB if they get more HB than they are properly entitled to. Again, and as a matter of common sense, the amount of an overpayment for a particular period is calculated by identifying the amount of the original (mistaken) HB entitlement for the period in question less the amount of HB that the claimant was in fact properly entitled to for that same period. As the FTT put it in paragraph 27 of its reasons, “In each week of the overpayment therefore the amount of overpayment is calculated by taking the old entitlement (prior to the reduced rent) and deducting from it the new entitlement (after the reduced rent is used in the calculation).”
Regulation 80 of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 accordingly provides as follows:
Meaning of overpayment
In this Part, “overpayment” means any amount which has been paid by way of housing benefit and to which there was no entitlement under these Regulations (whether on the initial decision or as subsequently revised or superseded or further revised or superseded) and includes any amount paid on account under regulation 74 (payment on account of a rent allowance) which is in excess of the entitlement to housing benefit as subsequently decided.
The Appointee submits that there is no suggestion in regulation 80 that the concept of an overpayment is limited to a calculation based on gross entitlement. Rather, it is argued, regulation 80 specifically states that an ‘overpayment’ refers to an amount which has been ‘paid’ and does not refer to any higher gross amount. It follows, in the Appointee’s submission, that the FTT was wrong to base its decision on a finding that deductions made from the gross benefit entitlement are not relevant to the calculation of the disputed section 23 overpayment.
The principal difficulty with this submission is that it presupposes a very narrow and unduly literal view of what is meant by HB having been ‘paid’. Regulation 80 provides expansively that “‘overpayment’ means any amount which has been paid by way of housing benefit and to which there was no entitlement under these Regulations”. More particularly, it does not provide that “‘overpayment’ means any amount which has been paid to the claimant by way of housing benefit and to which there was no entitlement under these Regulations.” It will be recalled that the first step in the process of the calculation of an overpayment is to identify what the FTT referred to as ‘the old entitlement’. This must mean the amount of HB to which the claimant was originally found to be entitled to on the facts as they were then understood to be (namely that the weekly rent was £x more than it was subsequently transpired to be, where £x represents the difference between £y, the rent originally charged by the Landlord, and £z, the reduced rent as stipulated by section 23). The fact that a portion of that assumed HB entitlement was diverted at source to refund the Council in respect of the unrelated and undisputed previous overpayment did not mean that it was not ‘paid’ – it was still HB paid by the Council on the Appellant’s behalf, albeit by a different route. As the FTT observed, the Appointee’s argument “ignores the difference between entitlement (how much you could get) and payments (how much you actually get after any deductions)” (paragraph 24). In short, the expression “any amount which has been paid by way of housing benefit” in regulation 80 is wide enough to include any sum which is assessed to be part of a claimant’s HB entitlement, albeit such a sum may be paid out otherwise than directly to the claimant. The legislation makes specific provision for certain adjustments to be made in calculating recoverable overpayments – see regulations 84 (diminution of capital) and 85 (sums to be deducted in calculating recoverable overpayments) – but there is no suggestion in the regulations that deductions for earlier overpayments should be disregarded.
It follows that Ground 1 does not succeed, as the FTT did not err in law in its understanding of what was meant by an ‘overpayment’ of HB.
Ground 2
The second ground of appeal, in a nutshell, is that the disputed section 23 overpayment must be calculated from the Appellant’s net HB entitlement as to do otherwise would cause a double recovery of the undisputed previous overpayment. The Appointee observes that a weekly deduction was applied to the gross HB award in order to recover the pre-existing overpayment. He contends that if the disputed section 23 overpayment is calculated from the gross HB awarded then there is a double recovery of that undisputed previous overpayment. First, he argues, there is a recovery by the weekly deductions that have taken place and, secondly, there is a recovery by introducing the debt back into the disputed section 23 overpayment calculation. The FTT’s assumption that it was necessary to calculate the latter overpayment using the gross HB entitlement – so as to reflect that the undisputed previous overpayment was being repaid – was, he says, incorrect, since the Appellant had already repaid the undisputed previous overpayment by the time that the Council had calculated the overpayment. On that basis, the undisputed previous overpayment was not something which needed to be accounted for since it had already been recovered. Thus, the Appointee submits, accounting for the undisputed previous overpayment leads to a double recovery of the sum that the Appellant had previously owed. However, there are two main reasons why this submission is not persuasive.
The first reason is that the FTT’s approach to the calculation of the disputed section 23 overpayment is entirely consistent with the proper construction of regulation 80, as explained above in relation to the first ground of appeal. The breadth of the statutory reference to “any amount which has been paid by way of housing benefit and to which there was no entitlement under these Regulations” is sufficient to include that part of the gross HB award to which the Appellant was entitled (at least as matters then stood) but which was paid by deduction at source by way of meeting the liability for the undisputed previous overpayment.
The second reason is that on closer inspection there is no double recovery as such. The undisputed previous overpayment was recovered once and once only, namely by way of the Council’s weekly deductions from the gross HB award paid in respect of the overpaid period. So far as the separate overpayment caused by the section 23 adjustment was concerned, this calculation reflected the differential arrived at by “taking the old entitlement (prior to the reduced rent) and deducting from it the new entitlement (after the reduced rent is used in the calculation)”, as the FTT correctly explained. In undertaking that calculation, the Council was required to consider the Appellant’s rent and income at the material dates (and any other factors relevant to assessing her entitlement to HB) on what was essentially a ‘before and after’ basis. In carrying out that process, the fact that part of the gross HB award was used to discharge the undisputed previous overpayment debt simply did not enter into the equation. By the same token, the fact that the Council paid HB to the Landlord was neither here nor there so far as the mechanics of the calculation were concerned.
In further support of his submissions on the second ground of appeal, the Appointee seeks to rely on what he describes as expert opinion evidence from an accountant. There is a moot point as to the question of the admissibility of such evidence, given that it post-dates the date of the FTT hearing. However, the Council take no point in that regard but rather address the substance of the accountant’s evidence. In any event I am not persuaded by the accountant’s evidence, not least as it appears to be based on the erroneous assumption that there would be double recovery.
I therefore also find that Ground 2 is not made out.
Conclusion
I accordingly conclude that the decision of the First-tier Tribunal does not involve any error of law. I dismiss the appeal (section 11 of the Tribunals, Courts and Enforcement Act 2007). My decision is also as set out above.
Nicholas Wikeley
Judge of the Upper Tribunal
Authorised by the Judge for issue on 13 November 2025