Supporting People
Charging Policy - Review Draft 2
Recovery of Supporting People Subsidy/Grant Overpayment and
Backdating of Subsidy Applications
The charging arrangements envisage
- The exchange of schedules and corrections between the SP
Team and provider
- The provider informing the SP Team regularly of changes
in tenancies (including new arrivals, departures, and the
like)
- The notification by the service user that they wish to
apply for SP subsidy be paid on their behalf; and consequent
notification of changes of circumstances which affect their income
or eligibility to have payment of SP grant/subsidy made in respect
of their tenancy.
In addition, there are two stages to the payment of subsidy:
- Payment by the SP Team to the provider
- Posting of payments by the provider to a service users
rent/support account
There will inevitably be errors or mistaken elements of this
process. These errors can be caused by:
- Administrative error – wrong entries, late actioning of
information received, mistaken postings, and the like
- Failure to notify, which would include failure of one
party to provide information which it is required to provide at the
right time. Note that HB teams have no duty to notify about any
tenant under this framework, although local arrangements creating a
framework for information exchange have been put in place
- External error such as fraud, service user error, or
third party error (for example on the part of the Clients Finance
Team or as a consequence of mistaken information provided by
service users to the HB team) or other error external to the normal
business of the provider and SP Team
Let us therefore step through the various possibilities and how
to address them.
Administrative Errors
Generally speaking the burden of administrative errors should be
borne by the party committing them. The balancing constraint is
whether the other party could be expected to have known about the
error. Knowledge, in this case, is divides up thus:
- Information about the presence or absence of service users is
always primarily with the provider
- Information about the financial status of the service user is
always primarily with the SP Team (notwithstanding clause 9.10.2 of
B&NES SP Interim Subsidy Contracts ((clause C3.5 c) for
B&NES Steady State Subsidy Contracts which requires providers
to share information regarding Eligible Service Users which relates
to their status or claim to be an Eligible Service User).
Some examples will help:
SP Team are told by the HB section that service user Mr A is
not on HB, and Clients Finance Team confirm that no subsidy
is payable. Nevertheless SP Team pay the provider for Mr A at full
subsidy rate. In this case the provider cannot be expected to
know whether Mr A is on subsidy or not, and hence cannot be held
responsible if they accept payment and post it to Mr A’s account.
It may be that once an error is discovered Mr A may offer to repay
– but this would be a discretionary request, direct from the SP
Team to Mr A, if that was considered appropriate on the grounds
that he should have known.
Provider tells SP Team that a service user Mr A has moved out.
In the next schedule Mr A still is being paid for. SP Team has made
an error. In this case we would expect that the provider would
correct this error as there would be no rent account to post the
payment to. SP Team could reasonably expect the provider to correct
this error in the response to the monthly schedule following Mr A’s
departure.
Provider receives subsidy for Mr A whom they know is not on HB.
Nevertheless they post the subsidy. It turns out this was an error
on the part of SP Team to include Mr A in the schedule. Here the
responsibility lies with the SP Team. Mr A may not be on HB but may
have had a Fairer Charging Financial Assessment, about which the
provider has no right to know. So they could not be expected to
know this was an error
Provider receives no payment for Mr A but mistakenly posts a
subsidy to Mr A’s account and tells him no payment is due.
Clearly in this case it is a matter for the provider and
service user to sort out. There will also be a mis-posting
(underpayment of support subsidy) on someone else’s account, which
the provider must fund.
The principle here is therefore:
For overpaid amounts by the SP Team, where the decision
to pay is based on financial assessment then the SP Team must take
primary responsibility. Where the payment is for an individual who
is no longer a service user, or relates to dates of occupancy, the
provider must take responsibility.
NOTE here that there is an issue about death which has
been raised. Normally landlords will continue tenancies for a short
period after the death of a tenant. ODPM would recommend that SP
Teams action withdrawal of subsidy at the end of the tenancy, not
the date of death. Bath & North East Somerset local
charging policy is to pay subsidy for one week from the date of
death of the tenant.
Failure to Notify
Generally speaking the burden of “failure to notify” errors
should be borne by the party committing them. The balancing
constraint is whether the other party could be expected to have
known about the error. Knowledge, in this case, is divides up as in
the previous section, that is:
- Information about the presence or absence of service users is
always primarily with the provider
- Information about the financial status of the service user is
always primarily with the SP Team (notwithstanding clause 9.10.2 of
B&NES SP Interim Subsidy Contracts ((clause C3.5 c) for
B&NES Steady State Subsidy Contracts which requires providers
to share information regarding Eligible Service Users which relates
to their status or claim to be an Eligible Service User).
Further examples will help:
Provider fails to notify SP Team of new tenant, Mr A, and does
not prompt Mr A to complete a subsidy application form. Mr A
is eligible for HB and therefore SP subsidy under this
policy. In this example the provider has clearly failed in
their responsibility to provide up to date information relating to
new tenancies to the SP Team and has also failed to inform Mr A of
the need to submit a subsidy application form. Mr A cannot be
expected to know and should not therefore be penalised if his rent
account goes into arrears. The provider should fund.
Provider notifies SP Team of new tenant, Mr A, and prompts him
to complete a subsidy application form. Mr A is eligible for
HB but does not submit a subsidy application form. Since the
provider has fulfilled their responsibilities under the contract,
Mr A should be liable for any rent arrears which may have accrued
as a result of a delayed subsidy application form.
SP Team receives notification from provider and subsidy
application from tenant but fails to process claim. The SP
Team is clearly at fault in this scenario so any arrears will be
paid in full from the date of subsidy application.
In summary, the same principle as the previous section applies
here. Providers are required, under the contract, to notify the SP
Team as soon as practical about changes which will affect the
schedule. This includes service users moving in to or out of the
service. The principle here is:
Where the provider has a duty to notify, any failure
to do so may be dealt with by means of repayment of any overpayment
by the provider to the SP Team. Where the provider
fails to notify the SP Team of new tenants entering the service, or
fails to instruct new tenants of the requirement to submit a
subsidy application form, subsidy will only be paid from the date
of application.
If a service user identifies an error and notifies the service
provider then the service provider should then inform the SP Team
as soon as possible.
There is also an obligation to notify on the part of the service
user. Generally speaking they have an obligation to notify HB about
changes in circumstances affecting HB, and the SP Team of changes
to their HB passport status. Additional internal information
exchange links may be in place but this primary obligation remains.
They also have an obligation to inform the Clients Finance Team of
any change of circumstance affecting their financial assessment,
but in that case we would expect any consequence for SP to be
passed on to the SP Team since the Clients Finance Team and SP are
part of the same authority. It does lead to more detailed
questions about the impact of changes in HB or Fairer Charging
status, dealt with under “external error” next.
External Error
This is the more contentious area. There are two main
possibilities here for error
- Housing Benefit or Clients Finance Team make an error in
assessing a service user’s financial circumstances. This error is
deemed by Housing Benefit or Clients Finance Team to be
non-recoverable.
- There is an error which Housing Benefit or the Clients Finance
Team unit deem to be service user error which is recoverable (which
include in some cases what might be described as fraud) Note that
there are cases where simple administrative error on the part of a
Housing Benefit section may be considered recoverable on the basis
that the person receiving the money might have been expected to
know he was being overpaid.
In each of these cases the SP Team should decide how to proceed.
It seems reasonable to suggest that such decisions would be based
on the evidence provided by the decisions of HB or the SP Team, and
action taken as below
Non-recoverable errors: In these cases it is
unlikely that the error would be passed on to either the provider
or the service user. In single tier authorities the responsibility
for ensuring the accuracy of financial assessments lies with the
authority and it is correct to leave responsibility for such errors
as a cost to the authority. The principle here is therefore
that:
The responsibility for non-recoverable “third party” errors
must lie with the SP Team and not the provider or user
Recoverable errors
When an overpayment (or lack of payment) of Supporting People
Subsidy occurs because:
· Housing Benefit was
incorrectly assessed due to service user error
or
· The Fairer Charging
Financial Assessment was incorrectly made due to service user
error,
then the decision may well be made to recover (or pay) the
Supporting People grant/subsidy by the SP Team authority. The
decision to recover (or pay) amounts overpayed (or due) as a result
of the Fairer Charging Financial Assessment process may be made as
part of the overall processing of Fairer Charging within the
authority. The decision to recover (or pay) as a result of
the Housing Benefit assessment must be made independently from the
decision to recover (or pay) any Housing Benefit amounts overpayed
(or due), but might be expected to follow the same path in most if
not all cases.
Having decided to recover (or pay) from the service user, there
are two ways in which this could be done:
- Direct approach to the service user requesting repayment of the
overpayment
- Recovery through reduction of future payment of SP
grant/subsidy to the individual service user who was incorrectly
credited with SP grant/subsidy (ie reflecting the overpayment
in the past by reduced or nil payment in the future, with the
service user progressively making up the loss by regular payments
to the provider)
(Payments due will be made as an additional lump sum in the next
four weekly payment run).
The process to be followed here might be:
- Write, in the first instance, to the service user outlining the
overpayment and the intention to recover it with reasons for this
decision. Set out the options of recovery by reduction of
future rebate of SP grant/subsidy at an agreed rate, or
repayment in a lump
- Provide a period to contest and if necessary review this
decision
- Where the decision is contested, ensure that there is a means
for undertaking an internal review (not a formal appeal as
this is not appropriate in these cases – the decision to allow
rebate from SP charges is discretionary, and no service user has
the right to this. They do, however, have the right to an
administrative process which is fair and reasonable in the
administration of their affairs). The service user could provide
evidence to contest the decision, perhaps that there is a pending
appeal against the HB decision.
- Note that for Fairer Charging Financial Assessment decisions
it is assumed that such a review process is already in place
and suggested that the same process is used to review SP decisions.
Consequently it should not be necessary to put new review
arrangements in place
Following this process of review, notify the service user and
proceed to recover. Normally this would be a reduction in the
regular SP grant/subsidy paid in respect of this service user, and
posted to his rent account, over an appropriate period to recover
the amount. The decision on how to do this would depend on a range
of factors such as:
- The wishes of the service user who must be asked how they wish
to repay
- The size of the overpayment
- Whether the service user continues to be a tenant
- The present financial circumstances of the service
user
Note that the effect of this is that the reduced amount would be
posted to the overpaid service user’s rent account, and the amount
of support charge due to the provider from the service user would
be increase accordingly. The Administering Authority must ensure
that all schedules are amended accordingly to ensure that the
correct user is debited.
The principle here is, therefore, that subject to the
circumstances of each case recoverable overpayments may be
reclaimed by reduction on future payments of SP grant.
Notice of Recovery of Overpayments
If the decision is made that the overpaid amount should be
recovered it must write to the service user to notify him or her
that an overpayment has occurred, the amount of overpayment of
Supporting People grant/subsidy and offer options as to how the
overpaid amount might be repaid (see above). If appropriate, the
letter should also make it clear that unless another means of
repayment is agreed then the overpayment will be recovered from
future Supporting People payments. The letter should also provide
details that outline the process for a service user to challenge
the decision to recover the overpayment of subsidy from
them.
Review Process
The local authority must have a process in place that allows the
service user to request a review of a decision relating to the
calculation of Supporting People Subsidy, including the recovery of
an overpayment of subsidy. The service user should have the
opportunity to produce evidence against the recovery of subsidy,
for example any decisions that may have been taken by Housing
Benefit not recover an overpayment of housing benefit.
Any review would only relate to the details of the recovery of
Supporting People grant/subsidy (amount, period, and so
on).
