The introduction of Real Time Information for Housing Benefit Overpayment Recovery.
2018 might be a bad year for some people if they have historic Housing Benefit debt.
The recovery of historic Housing Benefit debt has for a long time been a problematical thorn in the backside for all local Authorities. The biggest problems a Local Authority faces when trying to recover historic debt is finding the person who owes them the money and then finding out whether they can afford to repay the money.
People move both home and workplace and I guess letting a local Authority know that they are moving out of the area and into a new area is not a priority ;) So, historically a lot of housing benefit debt has to some extent been unrecoverable because the person owing the money cannot be found.
The DWP have for some time been benefiting from having access to information that HM Revenue and Customs collects in relation to peoples place of residence, place of work, earnings and amount of interest paid on savings etc. This has made it much easier for the DWP to identify potential benefit fraud cases.
Now it seems that information is being made available to Local Authorities as well in an attempt to make the recovery of housing Benefit debt a more realistic proposition for them.
We are aware that prior to Christmas 2017 some Local Authorities were provided with historic data going back to 2012 by the DWP. The data included key information such as records of peoples home address and earnings details. Finding people with historic Housing Benefit and Council Tax Reduction debts was then a simple matter of matching the Local Authorities debt records with the data provided by DWP/HMRC to obtain current earnings and home addresses for the people the Local Authority were looking for.
Recently both Benefit Advice Essentials and Universal Credit Essentials have been receiving an increased volume of requests for information and advice relating to historic Housing Benefit over payments that the group member has suddenly been asked to repay.
Introduction of Local Authority Access to Real Time information
We are also aware that the government are aiming to introduce a Real Time Information (RTI) service for tackling all local authorities’ (LAs) stock of Housing Benefit (HB) debt by March 2018. This means that LA's will have immediate access to data from the DWP/HMRC that will enable them to identify and find people that owe them money.
A small pilot of this RTI initiative was recently run with 6 authorities and the results so far indicate that those LA's with access to the pilot RTI scheme dramatically improved their success rate for identifying housing related debtors.
The 6 authorities searched 4,100 records relating to debts raised in 2013/14. No recovery was taking place on any of these cases as the trail had gone cold when it came to locating the whereabouts of the debtor.
Of the cases matched, 62% were returned to LAs with up to date employed or self-employed income information; suggesting a voluntary repayment or Direct Earnings Attachment could be made. The highest earner was paid £15,000 in the previous month (this is not a typo!), suggesting their £2,000 overpayment would be affordable for them to repay.
In addition, all the cases matched (over 90%) provided an up to date address for the debtor and, in many cases, this was new information that the authority had not been able to obtain elsewhere.
What is the likely impact for households that are on Universal Credit?
Anyone on Universal Credit will tell you that debt recovery is a common problem with deductions appearing on monthly statements as a deduction at source without any prior warning.
With many Universal Credit claimants already struggling to manage with monthly payments an unexpected new monthly deduction that further reduces the household income could prove to be catastrophic for some people.
What does this mean for the recovery of housing related debt in 2018?
in simple terms, it means that more people with historic debt are likely to find themselves being pursued for the debt, because the LA's will have details of home address and earnings.
It is going to be harder for people to deliberately hide from paying a debt and it is going to be very much harder to claim that a debt can't be repaid on grounds of affordability as the LA will know exactly how much income the debtor has.
As we have said above, our advisers are already reporting an increase in the number of people who are being told they have to pay back an historic housing benefit or housing related debt and we do not believe this is coincidental with the initiatives detailed above. It is our belief that what we are seeing now is simply the start of LA's getting better at pursuing and recovering historic debt.
The BASE adviser team will be happy to answer any questions you have on this article or any other benefits questions that you need help and support with.
If you haven't already done so, please come and join our thriving online Facebook community where you will be able to meet the people that have brought you this article and ask them questions to your hearts content.
Join the Facebook community here: Sign Up Here