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  • LHA/Universal Credit

    Ombudsman - compensation for LHA mistake!

    Good morning

    The following bulletin was posted on my website yesterday and circulated to our 1200+ members. The topic of compensation, caused by official error not only affects LHA, but equally applies to Universal Credit. So, if you're invested in either the LHA or UC market-place this info should be worth examining.

    The following link https://www.lgo.org.uk/decisions/benefit...147#point2 relates to a Local Government Ombudsman decision, concerning Housing Benefit (LHA), and the failure of Liverpool City Council to fulfil its earlier decision, to redirect payments to the Landlord, rather than the tenant, by naming the landlord “payee”. The decision to do so, was based on Regulation 96 of the Housing Benefit Regulations 2006 which permits councils some discretion to redirect, for example, where the tenant requests this, due to an inability to manage their own affairs, perhaps because of drug or alcohol addiction or when it’s found, earlier payments made to the tenant are being misused, causing rental loss and a build-up of rent arrears which might contribute to the landlord taking “repossession” action

    The Council having made the decision to pay the landlord, then promptly paid nearly £1000 to the tenant who failed to hand this over. The Ombudsman’s decision stated:

    1. Mrs X’s tenant received £966.56 in benefit which should have been paid to Mrs X, because the Council agreed that it would do so. The tenant did not pass this on to Mrs X and Mrs X has been unable to recover this from the tenant. Mrs X has lost out on £966.56, because of the Council’s fault………………………………………..
    2. Where the Ombudsman finds fault causing injustice we seek to put the complainant back in the position they would have been if the Council had not been at fault. The Council should therefore pay Mrs X. I acknowledge that it cannot pay housing benefit twice for the same period. However, Mrs X should be recompensed for the money she did not receive due to Council fault.

    Landlords dealing with LHA tenants will be all too aware of this scenario. Many assume there’s nothing they can do to recoup their losses, when, in fact, there’s various options available, depending on exactly what’s happened. I often pursue these cases, on behalf of my landlord clients on a "No win, No fee" basis.

    In one case I dealt with a few years ago, the LGO instructed the London Borough of Merton Council to pay £7000 to my client, after the Council had paid this sum by mistake to the single parent tenant, who refused to hand over the cash. By the time the Council started its investigation she had blown the money, in the full knowledge it wasn’t hers.

    More recently, I’ve dealt with several similar cases involving Universal Credit, where, despite APAs having been agreed, payment was made mistakenly to the tenant and misused. In these cases, I argued the payments made to the tenants were “unlawful” making use of some Housing Benefit caselaw. To my surprise, DWP conceded the point with little or no fight, making remedial payments to my clients and agreed to recover the unlawful payments, as “overpayments”, from the tenants. One such case is highlighted here: https://universalcreditadvice.com/privat...n-pays-off

    If you require any further information on this or any other Housing Benefit or Universal Credit issue, please contact me bill@ucadvice.co.uk or phone 07733 080 389.

    Bill Irvine

    UC Advice & Advocacy Ltd

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