Managing Housing Benefit Claims in Supported Housing | Part D: Process and Practice
In brief
- An overpayment is any Housing Benefit paid to which there was no entitlement, judged on the decision as later revised or superseded (Housing Benefit Regulations 2006, regulation 99).
- Every overpayment is recoverable except one caused by official error where nobody paid, and nobody acting for the claimant, could reasonably have been expected to realise it was an overpayment (regulation 100).
- Official error does not include a mistake that the claimant, someone acting for them, or the person paid caused or materially contributed to (regulation 100(3)). A provider that describes its services accurately and reports changes promptly is protected; one that does not is not.
- Where the provider was paid direct, recovery can usually be sought from the claimant, the provider, or both. If the overpayment came from someone’s misrepresentation or failure to disclose, it is recoverable only from that person (regulation 101(2)(b)).
- In calculating the overpayment, the council must deduct the benefit that would have been payable on the correct facts (regulation 104). Where a scheme is found not to be exempt, the overpayment is the difference, not the whole award.
- Recoverable does not mean it must be recovered. Recovery is a discretion, and a blanket policy of recovering everything would be open to challenge (DWP overpayments guide, paras 4.350 and 4.351).
- Recovery from a provider by deduction from other tenants’ benefit treats those tenants’ rent as paid. They must not be charged for it (Social Security Administration Act 1992, section 75(6)).
- SHP’s position: large scheme-level overpayments are a failure of the system, not just of one party. They are best prevented by early scheme-level review and prospective decisions. Where they arise, the council and provider should agree the cause, the amount and a recovery plan that keeps tenants housed and the scheme viable where the service is sound.
The law
| Question | Rule | Reference |
|---|---|---|
| What is an overpayment | Benefit paid with no entitlement, on the decision as revised or superseded; includes excess payment on account | HB Regulations, regulation 99 |
| Is it recoverable | Yes, unless official error and nobody could reasonably have realised | HB Regulations, regulation 100(1) to (3) |
| From whom | The person paid; the claimant as well; only the person at fault where there was misrepresentation or non-disclosure | SSAA 1992, section 75(3); HB Regulations, regulation 101 |
| Landlord protection | Not recoverable from a landlord who reported its suspicion in writing, where the other conditions are met | HB Regulations, regulation 101(1) |
| Amount | Deduct the benefit that should have been paid on the correct facts | HB Regulations, regulation 104 |
| Method | Deduction from ongoing benefit, from other benefits, or through the county court | HB Regulations, regulation 102; SSAA 1992, section 75(4) and (7) |
| Other tenants | Deduction from benefit paid to the landlord for other tenants; their rent is treated as paid | SSAA 1992, section 75(5) and (6); HB Regulations, regulation 106 |
| Challenge | The person from whom recovery is sought is a person affected and can appeal | D&A Regulations, regulation 3 |
“HB Regulations” means the Housing Benefit Regulations 2006. “SSAA 1992” means the Social Security Administration Act 1992. “D&A Regulations” means the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001. The equivalent rules for claimants over State Pension age are in the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006.
Four separate decisions. An overpayment involves separate decisions, which should be kept apart in the council’s reasoning and in its notice: that there is an overpayment, and its period and amount; that it is recoverable; who it is recoverable from; and whether, and from whom, to recover it. The last of these is a discretion and is not appealable to the tribunal (Capital Housing Association Ltd v London Borough of Ealing and SR [2025] UKUT 125 (AAC), para 17, applying R(H) 6/06, paras 20 and 52) (decision). It can be challenged by complaint or, in an appropriate case, judicial review.
21.1 Was there an overpayment, and was it recoverable?
Start with the decision that creates it. An overpayment exists only if the decision on entitlement has been revised or superseded for the period in question (regulation 99) (legislation.gov.uk). Whether that happens, and from what date, is governed by the revision and supersession rules (Chapter 20, 20.2). A revision reaches back to the start of the original decision and can create a large overpayment. A supersession usually takes effect from a later date and often creates none.
Common causes in supported housing.
| Cause | Typical example | Likely category |
|---|---|---|
| Tenant leaves | Provider or tenant does not report the leaving date | Failure to disclose (Chapter 18) |
| Services change | Support or supervision stops, but exempt status continues | Failure to disclose, if the change was not reported |
| Rent or service charges change | Charges fall, or an ineligible charge is added | Failure to disclose, or official error if reported and not acted on |
| Council misapplies the law | Exempt status accepted on full and accurate information, later found wrong | Official error |
| Council fails to act | A change is reported but the award is not altered | Official error |
| Information was wrong | Services described as provided that were not | Misrepresentation |
Official error. An overpayment arises from official error if it was caused by a mistake, by act or omission, of the council, someone acting for it, or DWP or HMRC officers, and the claimant, someone acting for them, or the person paid did not cause or materially contribute to that mistake (regulation 100(3)) (legislation.gov.uk). In Capital Housing, a tenant phoned the council to say she had left, and the council kept paying the landlord for over two years. That was official error (paras 22 and 39).
Misleading information from the council can be official error. The Upper Tribunal has held that a council’s misleading information about what changes had to be reported amounted to official error (Gateshead Council v Frederick Avery [2026] UKUT 214 (AAC), a case under the pension age regulations) (GOV.UK summary). Councils should make sure their notices to providers say clearly what must be reported (Chapter 19).
Could anyone reasonably have realised? Even an official error overpayment is recoverable if the claimant, someone acting for them, or the person paid could reasonably have been expected to realise, when they received the payment or a notice about it, that it was an overpayment (regulation 100(2)). In Capital Housing, the landlord knew the tenant had left, so it could reasonably have been expected to realise it was being overpaid (para 39). The test is about what the person knew or should have known at the time, not with hindsight.
Applying this to exempt status. Where a council later decides that a scheme was not exempt accommodation, or that a charge was ineligible:
- If the provider described the scheme and its services accurately and fully, and the council made the original decision on that information, the mistake is the council’s. The overpayment is likely to be an official error overpayment.
- A provider that reasonably believed, on the law and the facts, that its scheme qualified could not reasonably have been expected to realise it was being overpaid. That is especially so where the scheme reflects the position set out in this manual, or the point was genuinely arguable.
- If the provider overstated its services, failed to report that support had stopped, or did not provide information the council asked for, it is likely to have caused or contributed to the mistake. The overpayment is then recoverable, and possibly only from the provider (21.2).
SHP’s position. A council that takes a different view of a scheme on the same facts should normally do so by a decision that takes effect from now on, after the “minded to” process (Chapter 19, 19.1), and not by reaching back years. Where it does reach back, it should identify clearly whether the provider caused or contributed to the mistake, and why. A change of view is not the same as a misrepresentation.
Calculating the amount. The council must deduct any benefit that should have been paid on the correct facts (regulation 104) (legislation.gov.uk). This is often called “underlying entitlement”. In supported housing:
- if exempt status is removed, deduct the benefit the tenant would have received on the correct basis
- if one service charge was ineligible, the overpayment is that charge, not the whole award
- if a rent is restricted, the overpayment is the difference between the rent paid for and the restricted rent (Chapter 10)
Evidence for this stage.
- The original decision and the information it was based on.
- What the provider told the council, and when, with dates.
- What changed, and when the council was told.
- The council’s calculation, period by period, with underlying entitlement deducted.
21.2 Recovery from the landlord compared with the claimant
The starting point. An overpayment is recoverable from the person it was paid to, and regulations can make it recoverable from someone else as well as, or instead of, that person (SSAA 1992, section 75(3)) (legislation.gov.uk). Regulation 101 sets the rules (legislation.gov.uk).
| Cause of the overpayment | Recoverable from |
|---|---|
| Misrepresentation or failure to disclose, by anyone | Only the person who misrepresented or failed to disclose (regulation 101(2)(b)) |
| Official error, where someone could reasonably have realised | Only the person or people who could reasonably have realised (regulation 101(2)(c)) |
| Any other recoverable overpayment | The claimant, and the landlord if it was paid direct (regulation 101(2)(a)) |
Who failed to disclose. Where a tenant leaves and nobody tells the council, both the tenant and the provider may have failed to disclose, and the overpayment can be recovered from either (DWP overpayments guide, para 4.30, example 2) (GOV.UK). Where the tenant did tell the council, the overpayment is not one caused by the tenant’s non-disclosure. A landlord that knew the tenant had left cannot shift liability to the tenant just because it also told the council (Capital Housing, paras 40 and 41).
The landlord protection. An overpayment paid direct to a landlord is not recoverable from it if the landlord told the council in writing that it suspected an overpayment, the overpayment did not arise from a change of dwelling, there are grounds for prosecution or a deliberate failure to report a change, and the landlord did not collude or contribute to the period or amount (regulation 101(1)). All the conditions must be met (DWP overpayments guide, para 4.12). This protection is narrow. It does not cover the most common supported housing case, a tenant leaving, because that is a change of dwelling (regulation 101(1)(bb); Capital Housing, para 19).
Choosing whom to recover from. Where an overpayment is recoverable from both, the council chooses. The choice is not appealable (Capital Housing, para 17), but it must be made properly. SHP’s view is that the council should consider:
- who caused or could have prevented the overpayment
- who received the money and who benefited from it
- the circumstances of the person, including health and finances, so as not to cause hardship (DWP overpayments guide, para 4.182)
- the effect on the tenant’s tenancy and on the scheme (21.3)
Methods of recovery. The council can recover by deduction from ongoing benefit, by asking DWP to deduct from other benefits, or through the county court (regulation 102; section 75(4) and (7)) (legislation.gov.uk). Deductions from a claimant’s ongoing benefit are capped each week (regulation 102(2) and (3)). The DWP guide suggests the council may offer the landlord the option to repay by agreement, and turn to deductions if that breaks down (para 4.171).
For providers: protecting yourself.
- Describe services accurately, and update the council when they change (Chapter 13).
- Report each leaving date promptly, in writing, and keep proof (Chapter 18; regulation 88).
- If you suspect an overpayment, tell the council in writing straight away.
- Keep the council’s notices about what you must report (Schedule 9, para 11; Chapter 19).
Notices and challenge. The overpayment notice must give the fact, reason, amount, calculation, benefit weeks and method of recovery (Schedule 9, para 15; Chapter 19). The provider is a person affected by a decision that the overpayment is recoverable from it, and can ask for a revision or appeal in its own name (D&A Regulations, regulation 3; Chapter 20, 20.5).
21.3 Effect on tenants and on whether the scheme can continue
“Blameless tenant” recovery. Where an overpayment is recoverable from a landlord, the council can recover it by deducting from benefit paid to that landlord for other tenants (section 75(5)(c); regulation 106) (legislation.gov.uk). Each other tenant’s rent is then treated as paid, in full, by the amount deducted (section 75(6)). The DWP guide calls them “blameless tenants” (paras 4.172 to 4.175).
| Duty | Who | Reference |
|---|---|---|
| Tell tenants at the start of direct payment that their rent is protected if this happens | Council | DWP overpayments guide, para 4.174 |
| Name the tenant overpaid, the tenants deducted from, and the amounts and periods | Council | DWP overpayments guide, paras 4.175 and 4.179 |
| Credit each blameless tenant’s rent account in full | Provider | SSAA 1992, section 75(6) |
| Not ask blameless tenants to pay the shortfall | Provider | SSAA 1992, section 75(6) |
The tenant whose claim was overpaid. Where the tenant did nothing wrong, for example where the overpayment arose from a council decision about the scheme, SHP’s position is that the provider should not pass recovery on to the tenant as rent arrears. Where the tenant’s own failure caused it, any action should still be proportionate to the tenant’s circumstances, and support staff should help the tenant understand and respond to the decision. Whether arrears can be pursued depends on the tenancy and the circumstances, and providers should take advice.
When recovery threatens a scheme. A large scheme-level overpayment, recovered quickly from a provider, can close a scheme. That can leave vulnerable tenants homeless, move costs to temporary accommodation and statutory services, and help nobody. Where the service is sound, and the issue is the classification or the level of charges:
- the council and provider should first agree the cause, the period and the calculation (21.1)
- the council should use its discretion on whether and how to recover (DWP overpayments guide, paras 4.350 and 4.351)
- recovery should be by agreed instalments that the scheme can bear, reviewed periodically
- any changes to the scheme’s charges or services should take effect prospectively, with time for the provider and commissioners to adjust (Chapter 10, 10.8; Chapter 17)
- tenants should be told what is happening and that their tenancies are not at risk because of it, where that is so
Where the concern is quality or conduct. Where the overpayment reflects misrepresentation, services not delivered, or poor conduct, recovery is appropriate and the council should consider its wider duties, working with commissioners and regulators (Chapter 22). Even then, planning for the tenants comes first (Chapter 18, 18.6).
Subsidy. The subsidy the council receives on an overpayment depends on its category. That classification must follow the facts. It should not influence whether an overpayment is labelled official error or not (HB subsidy guidance manual) (GOV.UK).
The guidance
| Para | What the guidance says | SHP’s view |
|---|---|---|
| 4.30 (overpayments guide) | Where both tenant and landlord failed to report a move, recovery can be from either | Agreed. Prompt written notice protects the provider |
| 4.171 (overpayments guide) | The council may offer the landlord repayment by agreement before using deductions | Agreed. Agreed instalments should be the norm for scheme-level overpayments |
| 4.172 to 4.175 (overpayments guide) | Blameless tenants’ rent is treated as paid and must be credited | Agreed. Providers must credit accounts in full |
| 4.182 (overpayments guide) | Consider health and finances to avoid hardship | Agreed. Include the effect on the scheme and its tenants |
| 4.350 and 4.351 (overpayments guide) | Recovery is discretionary; a blanket policy is open to challenge | Agreed |
Good practice
For councils:
- Keep the four decisions separate, with reasons for each.
- Identify the cause precisely, and say whether and how the provider caused or contributed to the mistake.
- Deduct underlying entitlement in every case.
- Make changes of view on a scheme prospectively, after a “minded to” stage.
- Agree recovery plans for scheme-level overpayments, and tell blameless tenants their rent is protected.
For providers:
- Describe services accurately and keep the council updated.
- Report leaving dates and changes in writing, promptly, and keep proof.
- Credit blameless tenants’ accounts in full.
- Challenge the decision that the overpayment is recoverable from you within one month if you disagree (Chapter 20).
- Do not pass recovery on to a tenant who did nothing wrong.
Evidence
| Point | Council | Provider |
|---|---|---|
| Cause | The original decision, the information it was based on, and what changed | What was reported, when and how, with proof |
| Official error | The mistake, and why the provider did or did not contribute | Accurate scheme descriptions and correspondence |
| Could have realised | What the provider knew at the time | Why the provider reasonably believed the award was right |
| Amount | Calculation by period, with underlying entitlement deducted | Its own reconciliation of rent accounts |
| Recovery | The reasons for the choice of person and method | Its financial position and the effect on tenants |
Finding common ground
Agree the facts first. Most disputes about overpayments are about what happened and when. A shared timeline of reports, decisions and payments often settles the category without an appeal.
Separate the past from the future. Agreeing how the scheme will be treated from now on is usually more important to both sides than the past. Settle that first, then deal with the past period.
Treat recovery as a plan, not a penalty. Where the service is sound, a recovery plan the scheme can bear protects public money and the tenants.
Key cases and cross-references
| Case or provision | Point | Chapter |
|---|---|---|
| Capital Housing Association Ltd v London Borough of Ealing and SR [2025] UKUT 125 (AAC) | Official error; landlord could have realised; choice of whom to recover from not appealable | 18, 21 |
| Gateshead Council v Frederick Avery [2026] UKUT 214 (AAC) | Misleading council information can be official error | 19, 21 |
| R(H) 6/06 | Decision whether, and from whom, to recover not appealable | 21 |
| HB Regulations 2006, regs 99 to 106 | Overpayments, recoverability, persons, amount, methods | 2, 21 |
| SSAA 1992, section 75 | Recovery, including from other tenants’ benefit | 21 |
- Related chapters: Chapter 2 (2.8, overpayments); Chapter 10 (rent restriction); Chapter 13 (scheme evidence); Chapter 18 (claim lifecycle and leavers); Chapter 19 (notices); Chapter 20 (revisions and appeals); Chapter 22 (quality assurance)
- Appendices: Appendix 1 (table of cases); Appendix 10 (model decision notice)
Sources
- Housing Benefit Regulations 2006, regulation 99: https://www.legislation.gov.uk/uksi/2006/213/regulation/99
- Housing Benefit Regulations 2006, regulation 100: https://www.legislation.gov.uk/uksi/2006/213/regulation/100
- Housing Benefit Regulations 2006, regulation 101: https://www.legislation.gov.uk/uksi/2006/213/regulation/101
- Housing Benefit Regulations 2006, regulation 102: https://www.legislation.gov.uk/uksi/2006/213/regulation/102
- Housing Benefit Regulations 2006, regulation 104: https://www.legislation.gov.uk/uksi/2006/213/regulation/104
- Housing Benefit Regulations 2006, regulation 106: https://www.legislation.gov.uk/uksi/2006/213/regulation/106
- Social Security Administration Act 1992, section 75: https://www.legislation.gov.uk/ukpga/1992/5/section/75
- DWP, Housing Benefit overpayments guide, Part 4: https://www.gov.uk/government/publications/housing-benefit-overpayments-guide/part-4-recovery-of-overpayments
- HB subsidy guidance manual 2025 to 2026: https://www.gov.uk/government/publications/housing-benefit-subsidy-guidance-manual-2025-to-2026/housing-benefit-subsidy-guidance-manual-2025-to-2026
- Capital Housing Association Ltd v London Borough of Ealing and SR [2025] UKUT 125 (AAC): https://assets.publishing.service.gov.uk/media/6825e397a60aeba5ab34e041/UA-2024-000493-HB.pdf
- Gateshead Council v Frederick Avery [2026] UKUT 214 (AAC): https://www.gov.uk/administrative-appeals-tribunal-decisions/gateshead-council-v-frederick-avery-hb-2026-ukut-214-aac
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Next: Chapter 22: Quality Assurance and Monitoring
This manual is licensed under CC BY-ND 4.0: you can share it freely, with credit to SHP, without changes. See Rights and licence. Supported Housing People Ltd, Version 1.0, October 2026.