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Neutral Citation Number:	2009 70
Reported Number:	R(H)9/09
File Number:	CH 3495 2008
Appellant:	JD
Respondent:	Leeds City Council
Judge/Commissioner:	Judge J. Mesher
Date Of Decision:	21/04/2009
Date Added:	18/05/2009
Main Category:	Housing and council tax benefits
Main Subcategory:	recovery of overpayments
Secondary Category:	Recovery of overpayments
Secondary Subcategory:	other
Notes:	Recovery of overpayments – bankruptcy order made before recoverability decision – whether liability for overpayment bankruptcy debt The claimant was made bankrupt on 6 June 2007 and discharged from bankruptcy on 23 April 2008. On 4 September 2007 the local authority made decisions that she had not been entitled to housing benefit or council tax benefit for the period from 1 February 2002 to 20 November 2006, because of the amount of capital possessed by her husband, and that the resulting overpayments were recoverable from her. She appealed, arguing that the overpayments were not recoverable as her liability to repay was a bankruptcy debt incurred before the bankruptcy order and therefore, unless obtained fraudulently, was deemed to form part of the bankruptcy estate. The appeal tribunal accepted the local authority’s view that the appeal was against the local authority’s decision to exercise its discretion to recover the debt by way of deductions from the claimant’s incapacity benefit and disallowed the appeal on the basis that it had no jurisdiction to decide it. On the claimant’s further appeal it was common ground that her appeal was against the recoverability decision. Held, allowing the appeal, that: 1. there is no liability to repay an overpayment of housing benefit until a local authority has made a decision that it is recoverable under section 75 of the Social Security Administration Act 1992 and the Housing Benefit Regulations 2006 and so the liability that arose as a result of the decision of 4 September 2007 was not a bankruptcy debt and there could therefore be no question of there being any inhibition on the making of the decision on 4 September 2007 or of the debt being discharged on the discharge from bankruptcy on 23 April 2008 (R (Steele) v Birmingham City Council and Secretary of State for Work and Pensions [2005] EWCA Civ 1824, [2006] 1 WLR 238 and Secretary of State for Work and Pensions v Balding [2007] EWCA Civ 1327, [2008] 1 WLR 564 followed) (paragraph 12); 2. the only evidence before the appeal tribunal of the claimant’s capital, including her husband’s capital, was the income support decision-maker’s decision that she was not entitled for part of the period in issue to any income support (for which the capital limit was £8,000) but that did not show that the capital exceeded £16,000 (the limit for housing benefit and council tax benefit) for any part of the period and the amounts mentioned by the income support decision-maker should have put the appeal tribunal on enquiry to investigate the actual amounts of capital throughout the period in question (paragraphs 13 and 17); 3. the question of whether debts have been obtained fraudulently is only relevant when the debt is a bankruptcy debt, having been incurred before the date of the bankruptcy order, and so was not relevant in this case (paragraph 14). The Judge remitted the case to a differently constituted tribunal with directions.
Decision(s) to Download:	R(H)_9-09 bv.doc