Overpayment of Benefits

[Chalkitup]

Hi All,

As if I do not have enough problems a letter arrived Friday from my council benefits office. I have been overpaid housing benefit by £5900 and council tax benefit by £1900.

I have been on these benefits for six years ..... the first four I had a limited company and then the last two years just self employed. The overpayment has happened as a result of my accounts for 2011/2012 only finalised by accountant approx four weeks ago. I submitted accounts to council benefits office and as they do not allow certain expenses when working out benefits I had a larger profit than I ever did with the limited company where I drew no wage. Hence two years overpayment of benefits.

So I agree my fault for letting accountant take so long. I still qualify for housing benefit and overpayment is going to be paid back at £15 a week from my new housing benefit figure. However the council tax benefit overpayment of £1900 they want by direct debit on 01/03/13 ..... seven days from when I received the letter!!!!! The lady in the council tax office did not seem to take in the fact that I am on benefits and this is an overpayment and I only have been given six days to find £1900!! Also my council tax benefit has now stopped completely.

My questions are:-

a) Are there any ground rules I should know about for paying back council tax benefit overpayments (i.e. what amount a month is considered fair) or do they hand them over to the DCA's straightaway.

b) Does my housing benefit overpayment pay back scheme sound ok (I think it is very fair and I can afford it at present).

c) If I get my accounts for 2012/2013 to the council benefits office at the end of April (my accountant has already agreed to do them in April) and they are a low profit will the 2012/2013 overpayment be overturned and cancelled for that year because I will be entitled to higher benefit again!!

d) Are benefit overpayments included in bankruptcy as I may well be going bankrupt at end of year.

Any other advice would be most welcome and I thank you in advance.

[SXGuy]

Re: Overpayment of Benefits

Can answer a couple of questions.

If your future accounts show a lower profit then that will change the amount of benifit you are entitled to for that year.

But bare in mind, tax allowance also increases next april as well, so you will have more untaxed income.

(personally im suprised your accountant took so long to prepare your accounts, we are normally chasing our clients to pay us in April to get them done and dusted)

Benifit overpayments are not the same as a debt owed to creditors im afraid, if you dont repay them they dont as far as i know, send the debt on to a DCA like other creditors do, they are actually quite more serious than that. I think they go straight to the court for a writ if its unpaid.

Again, whether an overpayment could be considered in the petition for bankruptcy is an issue you should talk to an insolvancy agent about first, because i have a sneaky feeling they will not include it.

These overpayments in my opinion should be treated with a bit more respect than credit card debts as they can get heavy handed.

If im being totally honest, your accountant should have got your accounts prepared as soon as it was possible to do so, 2 weeks after your year end really shouldnt be a problem, like ive said, usually, we at my accountancy firm are waiting on client fees being paid, before they can get done, if i heard of any accountant simply taking to long id be warey of pretty much everything else they do for me.

[Chalkitup]

Re: Overpayment of Benefits

Thank you very much for reply SXGuy.

Update as follows:-

I have spoken to Council Housing Benefit office:-
Lady was extremely helpful and the overpayment pay back scheme from my future benefit will start end of March. (As I said before I think it is very fair and I can afford it at present).

I have spoken to Council Council Tax office:-
This lady was extremely helpful also and has worked out a payment plan over the next year (starting end of March) to cover the Council Tax benefit overpayment I received. (Pay with a swipe card in Post Office each month and I think the figures are very fair and I can afford it at present if I change a few things around).

I have spoken to my accountant about how urgent it is to submit my 2012/2013 accounts early to Council this year and he will do my accounts in April as soon as I get them to him.
The Council have told me that these accounts will change the 2012/2013 figures (as SXGuy said) and as I know I have had a poor year hopefully the benefit overpayment will be reduced a little.

So at present I have managed to make the best of what could have been a disaster of my own making!!!

Note to self .......... Get accounts done as early as possible in future years!!!!

[ken100464]

Re: Overpayment of Benefits

Isnt it interesting when you get a situation where you wish to pay back where you get polite and helpful staff who try and organise a payment plan that not only discharges the debt but doesnt put you up **** creek.

When you get this attitude there is a win win situation for both parties.

And best of all the OP has a reasonable experience if paying ever could be and now wishes to modify his future plans not to get in the same situation.

Compare that to a bank, who gets a sniff you are in trouble so activley pushes you further in the mire. Once you in the brown and smelly then all sort of weapons are released to terrorise you and eventually the hounds of hell are released.

End result one traumatized consumer and a bank that has grown fat on misery.

It really doesnt need to be the way they do it. If they had a shred of humanity or were ethical in their business.

[SA Gold]

Re: Overpayment of Benefits

Very true Ken which is why i am so happy to have found AAD!

[Chalkitup]

Re: Overpayment of Benefits

Latest Update

I have over the past six weeks received five more letters from Council each one giving different amounts of benefit I am/was entitled too and hence each time the overpayment has either increased or decreased. It seems to me that different Council employees are working out the figures differently each time!!

I am sure they are now trying to get me to pay back more council tax than I actually received via overpayment.

However more importantly two weeks after they confirmed I could pay the overpayment back monthly I received a letter from them stating the payback scheme had been ceased and I owed them over £5000 immediately. This as you can imagine caused me much stress and worry and I am already on medication for another quite serious health issue. So I sent a recorded letter to them asking them to reconsider and reinstate the monthly pay back scheme they put in place as I can in no way repay a lump sum. Three weeks later I received a letter from them saying the payback scheme is still in place and the letter they sent telling me it was cancelled "was wrong and they apologise". I obviously feel this is a very bad error on their part that caused me much stress at an already low time for me.

Yesterday I have received a letter stating they wish me to attand a taped interview next Monday as they feel a fraud has been committed as I did not inform them of changes early enough!!!! This is not at all fair as I have never intentionally tried to deceive them and I can prove I gave my books to my accountant early in the year plus I had a serious health issue last year that put me out of action for most of the time.

Questions are:
Their letter gives no indication at all as to what changes they are concerned about so how can I prepare to answer their questions?

It seems to me that the time I have been given before the interview is rather short ..... will it be ok for me to postpone for a few weeks to seek advice ... especially as I am at present (starting four weeks ago) going through a flair up of my injury and I am on three different medications so not in the best of health. Or would the fact I ask for a postponment go against me?

Any other advice would be most welcome as this is all new to me and I feel very worried.

[SXGuy]

Re: Overpayment of Benefits

Im not expert but i would think you have a right to seek legal advice before any interview, so you should be able to change the date on those grounds.

[kuma]

Re: Overpayment of Benefits

Either ask for a posponement or ask at the interview. They would find it
hard to refuse you your right to seek advice whilst on tape.
Kuma

[Chalkitup]

Re: Overpayment of Benefits

Thank you very much for replies.

I have contacted council and interview rearranged for four weeks time so allowing me to seek advice.

[Pixie]

Re: Overpayment of Benefits

Well done on the postponement...wishing you luck for the interview.

[Chalkitup]

Re: Overpayment of Benefits

Thank you very much for replies.

I have contacted council and interview rearranged for four weeks time so allowing me to seek advice.

Update:-

The council phoned me only an hour and half before rearranged interview was actually due to take place at their offices (I was just about to leave home after a month of worry) and they cancelled due to unforeseen circumstances!!! They added a letter will be sent to me.

This is all becoming a little unfair from my point of view and a little bit of a farce.

[Pixie]

Re: Overpayment of Benefits

It does seem rather unfair but maybe you can use it in your favour?

[SXGuy]

Re: Overpayment of Benefits

In that case, take this oppotunity to seek legal advice, even if its just the CAB, you really need someone on your side with this, even if all it does is ease some of your worries.