UK Social Security and Child Support Commissioners' Decisions

[2008] UKSSCSC CH_361_2006 (09 July 2008)

 


Decision

1. My decision is as set out in paragraph 2 below. The effect of that decision is that, although the local authority's appeal has technically been successful, the real winner is the estate of the deceased claimant which is not liable to repay the overpayment of housing benefit claimed by the authority.
2. The appeal is allowed. The decision of Stockport North appeal tribunal given on 17 October 2005 is wrong in law and I set it aside. Under paragraph 8(5)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000, I give the decision that the tribunal should have given. For all practical purposes—except, perhaps, for the purposes of the local authority's subsidy claim—that decision is the same as the decision that the tribunal actually gave. It is as follows:

'The tribunal has jurisdiction to entertain the claimant's appeal

That appeal succeeds.

The decision of the Metropolitan Borough of Stockport issued on 6 May 2005 is reversed.

The claimant has been overpaid the sum of £985.90 as housing benefit for the period from 23 September 2002 to 1 May 2005.

That overpayment is not a recoverable overpayment because it was caused by an official error—namely, the breach by the Metropolitan Borough of Stockport of its statutory duty under regulation 12A(3) of the Housing Benefit (General) Regulations 1987 to refer the claim to a rent officer within three days of receiving it or as soon as practicable thereafter—and, at the time the claimant received the payment and the notice relating to it, she could not reasonably have been expected to realise that it was an overpayment.'

Reasons

Introduction

3. Sadly, the claimant died during the course of these proceedings. She was born on 20 May 1938 and, at the latest date I can consider, was 66 years old. Her claim for housing benefit therefore fell to be determined under the Housing Benefit (General) Regulations 1987 ('the Housing Benefit Regulations') until 5 October 2003. From 6 October 2003, it became subject to the modified scheme introduced by the Housing Benefit and Council Tax Benefit (State Pension Credit) Regulations 2003 for those who had attained the qualifying age for state pension credit. Those regulations have now been consolidated by the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006. The relevant law appears to be the same before and after the consolidation. However, it will be more convenient to refer to the regulations that were in force at the time, not least because the consolidation has introduced a few minor differences of wording.
4. It will also be necessary for me to refer to the Child Support, Pensions and Social Security Act 2000, the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 and to the Rent Officers (Housing Benefit Functions) Order 1997. I will call them 'the 2000 Act', 'the 2001 Regulations' and the '1997 Order' respectively.

Background

5. In October 1998 the claimant moved with her adult son to a property within the administrative area of the Metropolitan Borough of Stockport ('Stockport'). That property belonged to her daughter. It was a semi-detached house with three bed-rooms, two living rooms, a kitchen, a bathroom and a toilet. Applying the criteria used to assess housing benefit claims, it was too big for the household. The size criteria in Schedule 2 to the 1997 Order specified two bedrooms and one living room for a household consisting of two adults who are not a couple. This is what I mean when I refer to the claimant's 'over-occupying' the property.
6. The claimant appears to have lived there for some years without paying rent. Then, in August 2001, she entered into agreement with her daughter under which—taking the document at face value—she became liable to pay a rent of £350 per month for a term of three years. A little over a year later, on 17 September 2002, she claimed housing benefit.
7. Stockport refused that claim. They took the view that the claimant's liability was non-commercial and that it had been created to take advantage of the housing benefit scheme. It appears from the appeal papers that they may also have argued that the agreement did not create a genuine liability to pay rent.
8. On 16 March 2005, a tribunal allowed the claimant's appeal against that decision. The tribunal decided that the claimant's liability to pay rent was genuine, commercial and uncontrived.
9. The present dispute arises out of the actions taken by Stockport to implement the tribunal's decision. What happened was as follows:

(a) On 7 April 2005, Stockport notified the claimant of what it described as an 'initial assessment' of her housing benefit, under which she had been awarded 'housing benefit' at the weekly rate of £73 from 23 September 2002. That award was calculated on the basis of a temporary figure (also £73.00) for the rent she had to pay. Her contractual rent was equivalent to £80.55 per week. It will be necessary for me to refer to the precise terms of that letter.

(b) The reason Stockport had to use a temporary figure for the claimant's eligible rent was that, even though the claim was two years and seven months old, no reference had been made to the rent officer under regulation 12A of the Housing Benefit Regulations. Stockport now made such a reference. The tribunal found, and I am therefore prepared to accept (in Stockport's favour), that they did so on 7 April 2005. However, that finding is difficult to reconcile with the dates given in the rent officer's decision.

(c) On 17 April 2005, Stockport paid the claimant £9,872.01 for the period from 23 September 2002 to 17 April 2005 on the basis of the award notified by the letter of 7 April.

(d) On 6 May 2005, Stockport received the rent officer's decision. The rent officer had determined that the rent of £350 per calendar month was significantly high and that the claim-related rent (i.e., the rent upon which housing benefit would be assessed) was £286 per month, or £65.82 per week.

(e) On the same day, Stockport wrote to the claimant and informed her that '[y]our claim for housing benefit has been changed from 23/09/2002 because we have now received the Rent Officer's decision'. The letter went on to notify her that her 'revised benefit entitlement' was at the rate of £65.82 per week from 23 September 2002 onwards, increasing to £65.64 per week from 1 April 2003.

(f) In a separate letter, also dated 6 May 2005, Stockport notified the claimant that she had been overpaid £985.90 for the period from 23 September 2002 to 1 May 2005. The letter explained variously that this was because a 'change in your circumstances has resulted in more benefit being paid than you were entitled', because 'we have now received the Rent Officer's determination and that 'the overpayment … is the Rent Officer's rent is lower than the Indicative Rent Level'. Finally, the letter offered the claimant a right of appeal against Stockport's decision.

(g) The phrase 'indicative rent level' had not been mentioned in previous correspondence and was not further explained. It refers to the determinations made by rent officers under Article 3(2) of, and Part IV of Schedule 1 to the 1997 Order.

(h) The claimant exercised her right of appeal and, on 17 October 2005, the tribunal found in her favour. He decided that, under regulation 12A(3) of the Housing Benefit Regulations, Stockport should have referred the rent within 3 days of the tribunal's decision on 16 March 2005. They had not done so until 7 April and, in those circumstances, 'the determination of the Rent Officer cannot be relied on by the Council for revising its assessment of HB during the period 23.9.2002 to 1.5.2002.'

The appeal to the Commissioner

10. Stockport now appeals to the Commissioner with the leave of Mr Commissioner Angus. Mr Angus also allowed an application by the Secretary of State to be joined as second respondent to the appeal. The appeal has been transferred to me under regulation 6 of the Social Security Commissioners (Procedure) Regulations 1999, following Mr Angus's retirement.
11. Even though I consider that the tribunal reached the correct outcome, I have set his decision aside because the reasoning by which he did so was flawed. I do not wish to be unduly critical. The overpayment in this case was entirely Stockport's fault and I can readily understand the tribunal's desire to make them, rather than the claimant, bear the consequences. Nevertheless, the tribunal was only entitled to produce that outcome if the law required or permitted it. That was not the case. The law did not provide any mechanism by which Stockport could be prevented from relying upon the rent officer's determination merely because they were dilatory in applying for it. The tribunal should have held, not that the overpayment did not exist but that it was caused by official error and therefore irrecoverable.

Reasons for the Commissioner's substituted decision

The issues

12. The appeal raises three issues:

(a) First I need to establish whether the original payment of £9,872.01 to the claimant was a payment of housing benefit or a payment on account of housing benefit under regulation 91 of the Housing Benefit Regulations. If it was the latter, then, to the extent that the payment on account exceeded the claimant's true entitlement, it is automatically recoverable by adjustment of future benefit payments under regulation 91(3)—and Stockport would therefore be entitled to succeed on the main issue in this appeal—whether or not there had been an official error.

(b) If the payment was a payment of housing benefit rather than a payment on account, then there is no dispute that there has been an overpayment or as to how much has been overpaid. The second issue is therefore whether that overpayment is recoverable. That, in turn, depends upon whether it was caused by an official error.

(c) Third, and finally, even if the overpayment was caused by an official error, it is recoverable if the claimant should have known at the relevant time that she was being overpaid.

I will deal with each of those issues in turn.

Housing benefit or payment on account?

13. Payments on account are governed by regulation 91 of the Housing Benefit Regulations which, in April 2005, was in the following terms:

'Payment on account of a rent allowance

91.—(1) Where it is impracticable for the relevant authority to make a decision on a claim for a rent allowance within 14 days of the claim for it having been made and that impracticability does not arise out of the failure of the claimant, without good cause, to furnish such information, certificates, documents or evidence as the authority reasonably requires and has requested, the authority shall make a payment on account of any entitlement to a rent allowance of such amount as it considers reasonable having regard to—

(a) such information which may at the time be available to it concerning the claimant's circumstances; and

(b) any relevant determination made by a rent officer in exercise of the Housing Act functions.

(2) The notice of award of any payment on account of a rent allowance made under paragraph (1) shall contain a notice to the effect that if on subsequent decision of the claim the person is not entitled to a rent allowance, or is entitled to an amount of rent allowance less than the amount of the payment on account, the whole of the amount paid on account or the excess of that amount over the entitlement to an allowance, as the case may be, will be recoverable from the person to whom the payment on account was made.

(3) Where on the basis of the subsequent decision the amount of rent allowance payable differs from the amount paid on account under paragraph (1), future payments of rent allowance shall be increased or reduced to take account of any underpayment or, as the case may be, overpayment.'

In a case where the rent officer has yet to make a determination, paragraph (1)(b) of regulation 91 refers to the indicative rent levels (see paragraph 9(g) above).

14. In cases where a payment on account is made but the claimant is not subsequently awarded housing benefit, it will not be possible for the local authority to rely on its absolute right to recover the overpayment by reducing future payments of rent allowance. In such cases, the amount by which payment exceeds entitlement is an overpayment as defined by regulation 98 and recoverable if the conditions established by regulation 99 are satisfied.
15. By paragraph 6(2)(e) of Schedule 7 to the 2000 Act and regulation 16 of, and paragraph 1 of the Schedule to, the 2001 Regulations, there is no right of appeal against any decision made under regulation 91 except for a decision to adjust future payments under regulation 91(3).
16. The letter dated 7 April 2005 from Stockport to the claimant read as follows:

'Notification of Housing Benefit: Initial Assessment

Your claim for housing benefit has initially been assessed from 23/09/2002.

As a result of this initial assessment you have been awarded the following benefit.

From 23/09/2002 your housing benefit is £73 per week.

Please note that this is a provisional assessment only. The amount you are entitled to each week may be changed when all the information needed to work out your claim is processed. If you are entitled to less than the weekly amount stated above, you may have to pay some money back to the council.

Housing Benefit Payment Details

Your benefit will be paid by cheque at the end of every two weeks.

Your first/next payment of £9,782.01for 23/09/2002 to 17/04/2005 is due to be paid on 17/04/2005.'

That passage was followed by some standard form paragraphs under the heading 'Further information', which included the following:

'If you want to appeal to an independent tribunal straight away you can APPEAL against the decision….'

17. That letter was accompanied by two separate pages explaining how Stockport had arrived at the weekly figure of £73. The pages are identical, apart from figures and dates, and it is only necessary for me to set out the first page, which was as follows:

'How Your Housing Benefit Has Been Worked Out

From 23/09/2002 to 31/03/2003, your housing benefit is £73.00 each week.

Your Maximum Benefit

The rent you are being charged, converted to a weekly figure, is £80.55 each week.

The rent officer has not been able to make a decision about your rent yet. Until a decision is made, your benefit is being worked out using a temporary figure of £73.00 each week. As soon as the Rent Officer provides his decision, your benefit will be looked at again.

If the Rent Officer's decision is higher than £73.00 each week, you may be owed some extra money. If it is lower than £73.00 each week, you may have to pay some money back.

Before your benefit is worked out, the Rent Officer must look at the rent you are being charged, to decide whether it is reasonable for the property you are living in, for someone in your personal circumstances.

The Maximum Benefit which can be awarded is therefore £73.00 each week.

Your Total Weekly Benefit

Since you are receiving Income Support, you are entitled to the Maximum Benefit of £73.00 each week.'

18. The law does not provide for an 'initial' or 'provisional' assessment of housing benefit. Under the Housing Benefit Regulations, a decision to pay money to a housing benefit claimant is either a final decision on her claim or a decision to make a payment on account of that claim.
19. The "initial assessment" made by Stockport must therefore be either a decision awarding benefit or a decision to make a payment on account. As it does not claim to be either, I have to decide which it is.
20. Except in two respects, the letter has every appearance of notifying a decision making a full (and final) award of benefit. The following factors point towards that conclusion:

(a) it describes the sum of £73.00 that has been awarded as "housing benefit" rather than as a payment on account of benefit;

(b) it also states expressly "you have been awarded the following benefit" (emphasis supplied). What has been awarded, or is to be paid, is then described as "benefit" or "housing benefit" on at least twelve separate occasions. A decision under regulation 91 does not involve a payment of "benefit" but a "payment on account" of benefit.

(c) except in relation to the level of the eligible rent, the "assessment" has been calculated with precise reference to the personal circumstances of the claimant. That is a process that is not required by regulation 91. The payment on account is not required to represent the claimant's actual, or estimated, entitlement to benefit. It is only necessary for the authority to have regard to the information that is available to it concerning the claimant's circumstances and to pay "such amount as it considers reasonable" on account.

(d) the additional pages tell the claimant expressly that she is "entitled" to the 'Maximum Benefit' of £73.00 each week. The use of the word 'entitled' is wholly inconsistent with the suggestion that the letter is notifying a decision to make a payment on account, which can only be made in circumstances where entitlement has yet to be established.

(e) it does not contain the words "payment on account", or a reference to regulation 91.

(f) the letter offers a right of appeal where none would exist if the decision had been to make a payment on account.

21. The factors pointing the other way are the references to assessment's being 'provisional' and the statements:

'If you are entitled to less than the weekly amount stated above, you may have to pay some money back to the council'

and

'If the Rent Officer's decision is higher than £73.00 each week, you may be owed some extra money. If it is lower than £73.00 each week, you may have to pay some money back'

which, taken together, might be construed as a notice under regulation 91(2).

22. I do not consider that either of those factors (or both factors taken together) outweigh the considerations listed at paragraph 20 above:

(a) All decisions awarding housing benefit are provisional in the sense that they are liable to be revised on any ground if the claimant applies for a revision within a month or, again within a month, the local authority has information that is sufficient to show that the original decision was factually incorrect (see regulation 4(a) and (b) of the 2001 Regulations). In this case such a revision was more than a theoretical possibility. On the same day as Stockport wrote to the claimant they had belatedly referred her claim to the rent officer. As the award had apparently been worked out using indicative rent levels, and the claimant was plainly over-occupying, it was probable that the maximum housing benefit derived from the rent officer's individual determination would differ, from that derived from the relevant indicative rent level. Rent officers normally have to make their determinations with five working days so it was also probable that Stockport would be in possession of information showing the 'award' to be incorrect within a month. In those circumstances, the use of the word 'provisional' reads most naturally as a warning to the claimant of the very real prospect that the award notified by the letter would in due course be revised.

(b) The notice required by regulation 91(2) must be to the effect that if on subsequent decision of the claim the claimant is entitled to less benefit than the sum paid on account, the excess paid, will be recoverable. That is an accurate summary of the effect of regulation 91(1) and (3). That, however, is not what the statements set out at paragraph 21 above say, they say that 'you may have to pay some money back'. I consider the difference between 'will' and 'may' to be crucial. The absence of the former word means that the statements do not comply with the requirements of regulation 91(2). Rather I read them as drawing the claimant's attention to the general rules on recovery of benefit (i.e., under regulation 99 of the Housing Benefit Regulations). In particular, the use of the word 'may' allows for the possibility that the claimant 'may not' have to pay the money back. That is consistent with regulation 99 (under which some overpayments caused by official error are irrecoverable) and is not consistent with the absolute right of recovery conferred on Stockport where regulation 91(3) applies.

23. Stockport's submissions to the Commissioner suggest at one point that the use of the phrase 'initial assessment' indicates a decision to make a payment on account. I do not accept that submission. The word 'initial' merely indicates that, as was the case, this was the first assessment made on the claim rather than an assessment made on a subsequent revision or supersession. I do not read the word as a synonym for 'provisional' or as conveying in any other way that the decision was to be regarded as temporary.
24. The Secretary of State was joined as a second respondent to this appeal by Mr Angus. His representative submits that I should conclude that the payment made to the claimant was a payment on account. He states:

'I submit that the relevant authority was not in a position to make an award of benefit on 07/04/05. Under regulation 12A of the [Housing Benefit Regulations] the relevant authority was obliged to refer the claim to a Rent Officer for a determination to be made. Until that determination had been made, it was impossible for them to determine the maximum rent under regulation 11 and the eligible rent under regulation 10(3)(a). It was therefore impossible for them to establish the maximum housing benefit under regulation 61, which meant that there could be no entitlement to Housing Benefit under section 130(1)(b) of the Social Security Contributions and Benefits Act 1992. I therefore submit that the letter at pages 25 to 26 cannot have been a notification of an award of Housing Benefit. There is no record of an award being made and indeed the legislation precluded an award being made at that time.

I submit that the fact that the letter dated 07/04/05 erroneously contains the words "assessment" and "award" and alludes to appeal rights that do not exist does not mean that an awarding decision must have been made, when the sum of the evidence suggests otherwise. I submit that the legislation requiring a notification to be issued is separate from the legislation governing the making of decisions and that the issue of a notification is not the same thing as making a decision. An incorrect notification cannot have the effect of altering the decision it was intended to notify.

I submit that the officer who composed the letter of 07/04/05 may have misunderstood the status of a payment on account, which would explain the inaccurate terminology. However I submit that they did manage to convey the important message that the amount being paid was "provisional" and that money might have to be repaid if weekly entitlement was found to be less than the amount paid.'

25. I accept without reservation, the Secretary of State's submission that a decision and the letter notifying that decision are two separate things. If, in addition to the letter dated 7 April 2005, Stockport had produced a contemporaneous document which recorded or evidenced a decision to make a payment on account, I would have held the payment to be a payment on account even if it was inaccurately identified as benefit in the notifying letter. But that is not the case in this appeal. Under the procedures operated by the Department for Work and Pensions, the decision maker makes a documented decision and a letter is then generated, either by a computer or clerically, notifying the claimant of that decision. But the computerised procedures operated by most local authorities tend to conflate those two stages with the effect that a single document both notifies the claimant of the decision made and evidences the terms of that decision. In those circumstances, the terms of the decision can only be ascertained by reference to the letter.
26. I have already explained why I do not accept that the word 'provisional' assists Stockport's case. I also accept that the inclusion of the words 'assessment' and 'award' in the letter do not, by themselves, establish that housing benefit has been awarded. Indeed I would also accept—contrary to my provisional view—that the word 'award' is neutral in this context (because of the use of the phrase 'award of any payment on account' in regulation 91(2)). I am not saying that Stockport had to use the phrase 'payment on account' in order validly to make such a payment (although that point may fall for decision in some future case). But I cannot ignore that the only document evidencing the decision states unequivocally that what was awarded was 'benefit' and that the claimant was 'entitled' to that 'benefit'.
27. It is no answer to say (as the Secretary of State's representative does) that the officer responsible for the decision may have misunderstood the status of payments on account and used inaccurate terminology. It is equally possible that he did not do so. And even if he did, I cannot decide the issue by speculating about what he meant to say. I have to determine the meaning of what he actually said.
28. As regards the Secretary of State's submission that Stockport was not in a position to make an award of housing benefit on 7 April 2005, I accept that Stockport was under a duty to refer the case to a rent of officer before making an award of benefit and that an award of benefit made without such a referral would, as regards procedure, be irregular. However, I do not accept that such an irregularity would invalidate the award. Whether or not it does so depends upon the legislative intention. That intention is not stated expressly anywhere and must therefore be inferred. The inference I draw from the housing benefit scheme as a whole is that the legislator did not intend procedural mistakes to invalidate decisions.
29. I need only give one example. The duty to refer a claim to a rent officer does not arise in every case. Schedule 2 to the Housing Benefit Regulations lists a number of categories of tenancy that are excluded from the requirement. The terms in which those categories are defined are often technical. For example, it may be necessary for a local authority to decide whether a particular tenancy is a 'statutory tenancy within the meaning of the Rent (Agriculture) Act 1976'. A local authority that misapplies those definitions may well fail to refer a claim that it was under a duty to refer. If the consequence of that mistake is that there can be no valid award of housing benefit because it is impossible to establish the maximum housing benefit without a rent officer determination, then any sums paid to the claimant would not be 'paid by way of housing benefit' within regulation 98 and therefore could not be recovered under regulations 99 to 105. In my judgment, such was not the legislative intention.
30. To summarise:

(a) The correct decision for Stockport to have made was to make a payment on account but it does not follow that that is what they actually did.

(b) Similarly, Stockport should not have made an award of housing benefit until the rent officer determination was available but that does not mean that they did not do so.

(c) Neither does it mean that, if they did do so, the resulting award of benefit was invalid.

(d) It may be that the officer who took the decision intended to make a payment on account but that is not something about which I can speculate. The question is whether he succeeded in doing so. That depends upon the terms of the decision he made and the only direct evidence I have of those terms is the letter he wrote to the claimant on 7 April 2005.

(e) Correctly interpreted, the letter notified the claimant of a decision awarding her housing benefit, not a decision to make a payment on account of housing benefit.

(f) I therefore conclude that the sum of £9,782.01 paid to the claimant on 17 April 2005 was a payment of housing benefit for the period from 23 September 2002 to 17 April 2005 and not a payment on account.

Was the overpayment recoverable?

31. It follows that Stockport had no right to recover the overpayment by reducing subsequent payments of rent allowance to the claimant under regulation 91(3). 0That regulation only applies to payments on account and, as I have held, no such payment was made in this case. The overpayment could only be recovered, if at all, under regulations 98 to 105 of the Housing Benefit Regulations.
32. In particular, regulation 99 provides that an 'overpayment caused by an official error' is not recoverable unless (on the facts of this case) the claimant could reasonably have been expected to realise at the time she received the payment, or the notice relating to it, that it was an overpayment.
33. 'Overpayment caused by an official error' is defined by regulation 99(3) as meaning (so far as is relevant):

'… an overpayment caused by a mistake made whether in the form of an act or omission by—

(a) the relevant authority;

(b) an officer or person acting for that authority;

…

where the claimant, a person acting on his behalf or any other person to whom the payment is made, did not cause or materially contribute to that mistake, act or omission.'

34. I have concluded that the overpayment in this case was so caused. My reasoning is as follows:

(a) As the tribunal correctly noted, under regulation 12A(3) of the Housing Benefit Regulations required Stockport to make an application to the Rent Officer 'within 3 days, or as soon as practicable thereafter,' of receiving her claim. Under regulation 12A(4) the reference to '3 days' is to three working days.

(b) Stockport received the claim on Tuesday 17 September 2002. The primary time limit for making the application to the rent officer expired at the end of Friday 20 September 2002. Stockport did not make that application until 7 April 2002, 929 days later. It therefore exceeded the time limit by a factor of over 30,965%. I do not accept that it was impracticable for Stockport to refer the case to the rent officer at any time during that period. Stockport was in breach of its statutory duty to refer long before—probably years before—the tribunal decided in the claimant's favour on 16 March 2005.

(c) In my judgment, it is not necessary for there to be a breach of duty by an authority before there can be an official error within regulation 99. However, a breach of duty will always raise the possibility that an official error has occurred. In this case, I find that Stockport's failure to refer the claim to the rent officer was 'a mistake … in the form of an … omission by … the relevant authority' within the regulation. As the claimant did not cause or materially contribute either to that mistake or to the overpayment as a whole, that mistake was an official error.

(d) The official error caused the overpayment. Had Stockport referred the case to the rent officer within the time limit imposed by regulation 12A(3), the rent officer's determinations would have been available before the tribunal's decision and Stockport would have been able to base the award of housing benefit on those determinations and not on the indicative rent levels. Had that happened there would have been no overpayment.

(e) I have also decided that the claimant could not reasonably have been expected to realise at the time she received the payment, or the letter of 7 April 2005 that related to it, that it was an overpayment. Given what she was told about the 'provisional' nature of the award, she would certainly have been aware that the payment might have been an overpayment but that is not the test that I have to apply. An overpayment caused by official error can only be recovered from the claimant if she ought to have realised that she was definitely being overpaid (see R v Liverpool City Council ex parte Griffiths (1990) 22 HLR 312 (QBD) and CH/2554/2002). There is no basis for me to draw that conclusion in this case. Among other things, it would involve my assuming, without evidence, that the claimant's knowledge of the indicative rent levels and the local market for rented property exceeded that of the officer who made the decision notified on 7 April 2005.

35. I suspect the reason that Stockport did not refer the case to the rent officer between September 2002 and April 2005 was that it formed the view at an early stage that the claimant was not entitled to housing benefit because of her relationship with the landlord. The submissions made to the Commissioner by the Secretary of State's representative seem to accept that as legitimate. He states:

'Clearly it was not "practicable" to make a referral whilst the claim was disallowed on the basis that rent allowance was not payable. Therefore it could not have been practicable to make the referral within 3 days of the claim having been made by the authority.'

With respect that is a non-sequitur. The claim was not disallowed as soon as it was received. Although I am not told precisely when Stockport decided to refuse housing benefit, they must have investigated the claim before it reached that decision. The reference to the rent officer could—and should—have been made while that investigation was being undertaken.

36. I take this opportunity to correct what, in my experience, is a common misunderstanding about the duty on local authorities to refer to the rent officer. Taken together with regulation 12A(4), regulation 12A(3) states that where an application to a rent officer is required it shall be made within three working days, or as soon as practicable thereafter, of the circumstance that gives rise to the duty to refer. Those provisions mean precisely what they say. The intention is that the application to the rent officer should be one of the very first stages of the processing of a claim for housing benefit and not something that need only be dealt with once it is established that all the other conditions of entitlement are satisfied. The three working day time limit on local authorities is complemented by the five working day time limit within which the rent officer must normally make a decision (see the definition of 'relevant period' in article 2(1) of the Order). The two limits together are designed to enable the local authority to comply with its primary duty to decide the claim within 14 days (regulation 76(2)). Where that is not practicable, observance of those limits ensures that the authority has as much information as possible available when it makes a payment on account under regulation 91.
37. There is another reason why it is important that the referral to the rent officer should take place at the earliest practical opportunity. It is not usually possible for a further referral to be made until 12 months have elapsed from the previous one (see, for example, my decision in CH/3590/2017 which is also being issued today). A delay in making the referral can therefore have the practical effect that a claimant suffers a significant financial loss if his rent is increased during that period. That is what happened in CH/1556/2006. Neither the Commissioner nor a tribunal is in a position to order a local authority to pay damages for such losses. However, a delay in making the application to the rent officer will eventually amount to maladministration, in which case the claimant would be able to seek a remedy from the local government ombudsman.
38. I accept that the three working day limit is qualified by the words 'as soon as practicable thereafter' and that there may be cases in which issues arising from the claim, or extrinsic factors—such as staff sickness or holidays, an exceptional volume of claims or an exceptional backlog of work—may mean that it is not practicable for the local authority to satisfy the primary limit in every case. What is not permissible, however, is for a local authority to take a conscious decision not to make a reference to a rent officer because it is believed that the claim will eventually fail on other grounds.

Conclusion

39. My decision is therefore as set out at paragraph 2 above

(Signed on the original)

Richard Poynter Deputy Commissioner 9 July 2008