Council tax are we at fault?

[areweatfault]

Hello everyone! I am new here and would really appreciate your knowledge and a moment of your time please.

 

On Feb 5th 2010 my wife and I made a claim for council tax benefit. I receive contribution based ESA (which is non means tested so our savings don’t count in calculations) and my wife works part time 10 hours a week. We get child benefit for our son and some child tax credits.

 

We handed in ALL the information we had on the above income and were asked to provide bank statements which we said we would organise. On the 8th Feb 2010 three days later we got our council tax award and thought no more about it. We assumed the council had decided we were entitled to benefit.

 

Two weeks ago we had an issue with our son’s school meals and wrote to the council and our MP about it. We got a response quite quickly and interestingly in the letter the council also informed us that they had our council tax claim down as ESA income based but had now changed that to the correct benefit of ESA contribution based (how they made that mistake is beyond us as it stated contribution based on my ESA award letter that I showed them back in Feb 2010)

 

They also apologies for their error and acknowledge that they did ask us for statements in Feb 10 but did not pursue the request due to ‘lack of clarity of our benefit type’ and have now asked us to provide two recent consecutive bank statements for all accounts including savings.

 

Well, we got ALL our bank statements together and went down to the office and handed them in as we were requested to do. We are now concerned that we may be accused of hiding savings which will result in a large overpayment even thought we never gave them any misleading info when we made our claim in Feb 2010.

 

As our main benefit of contribution based ESA is non means tested and we are allowed any amount of savings, all this time we assumed that the council did not peruse any statements in Feb 10 because of this fact. We have never claimed council tax before so don’t know how it works etc.

 

If an overpayment is proved and we are not entitled to the benefit, then we want to pay it back in full even if it is their fault. Can they say we should have known that our benefit was given in error? Or can we claim that they made an ‘official error’ to which we as the claimants did not contribute?

 

Thank you so much you wonderful people who help on this forum!

Edited September 9, 2011 by areweatfault

[id6052]

the basic rule is that all overpayments of council tax benefit are recoverable

 

there is an exception where the following 3 conditions are met

 

1) there was an offical error made by the council, dwp or hmrc

2) you did not contribute to the error

3) you could not reasonably have been aware you were being overpaid

 

the questions that need to be asked are

1) why did the council assess your claim as esa(ir) instead of esa(cb)?

2) when you completed your claim form, did you state you were in receipt of contribution based ESA? or did you just state ESA?

 

if you provided your letter stating contribution based, then i would expect you to pass the first 2 tests, so it just leaves the third test

3) did your notification letters state your council tax benefit was based upon income related esa or just state esa?

[areweatfault]

Hi id6052 thanks for replying, much appreciated.

 

1: We have no idea why they assessed our claim as esa(ir) instead of esa(cb) but you ask a good question there!

2: When we made our claim we said we were in receipt of ESA and handed them our most recent ESA award which states very clearly it is contribution based. They photocopied all our evidence of income so it is surprising they made a mistake about what type of ESA it was.

3: Our notification letter back from them does clearly state that they are basing our claim on income related ESA.

 

Does any of this come to an exception?

 

Thanks

[id6052]

The only problem i can potentially see is the notification letters, some councils may argue that you could reasonably have been aware that you were being overpaid as the award notices state that your benefit has been assessed based upon income related ESA, other councils will simply accept it was their fault and not recover the overpayment.

 

I think at this stage, the best thing to do is wait for the council to reassess your benefit and then see if they are going to recover or write off any overpayment.

 

Let us know the decision and we can advise you further. It sounds like you have reasonable grounds for appealing if they decide to recover.

[areweatfault]

Thanks for the advice and I will let you know what they decide. We are now concerned that we may be accused of hiding savings which will result in an over-payment even thought, we never gave them any misleading info when we made our claim in Feb 2010. They just never gave us a chance to hand in our statements before they awarded our benefit. Is it normal practice for them to not wait and award benefit before they have the bank statements and any other info they ask for in their system and calculated, and then not stop the benefit if they don't get this info? We don't want benefit we are not entitled to but we also don't want to be seen as trying to cheat them.

[id6052]

if a person is in receipt of an income related/income based benefit, they very rarely need to see bank statements, as any capital would have been taken into account by DWP already

 

even where a person is not in receipt of an income related/income based benefit, the council can choose to assess benefit based upon capital declared on claim form, without waiting for bank statements

[areweatfault]

if a person is in receipt of an income related/income based benefit, they very rarely need to see bank statements, as any capital would have been taken into account by DWP already

 

Does that mean that if the DWP are not taking our savings into account as they are non means tested then the council will do the same? I am slightly confused by your answer

 

Thanks

[id6052]

if a person is getting a means tested benefit from dwp, the dwp take into capital and the council doesnt (because the dwp already has)

 

if a person is NOT receiving a means tested benefit from DWP (as in your case), the dwp do not take capital in account, however the council does take it into account

 

this is to avoid people getting penalised twice for having capital

[id6052]

out of interest, how much capital are you talking about?

 

if it is less than £6k, it is disregarded

 

if it is more than £16k, it extinguishes any entitlement

 

if between £6k and £16k, you are treated as having £1 income for every £250 (or part of) above £6k

[areweatfault]

Oh heck, so non means tested capital is treated as means tested capital for CTB! I did not know that I thought that as we are in receipt of a non means tested benefit that it would not be taken into account as they just paid our award. Although if they had waited for our bank statements we would of known as they would of told us we were not eligible for a full rebate as our capital at the time of our CTB claim was about 10-13k.

[id6052]

At that level of capital, you would be treated as having £16 to £28 income from capital for council tax benefit purposes.

 

In additions they will take into account your other income for the means test. E.g. your esa, wife's earnings and child tax credit (child benefit is disregarded for council tax benefit purposes).

 

A lot of council's have benefits calculators on their website, which would give you an estimate of what your entitlement should be.

 

If you cant find one on your council's website, you could try: -

 

http://www.turn2us.org.uk/benefits_search.aspx

 

I have not tried that one, just found it by googling for "council tax benefit calculator", you could try the same adding your council's name to the search.

[areweatfault]

Thanks for your help...

[Nystagmite]

Your local council website may have a calculator too.