Upper Tribunal (Administrative Appeals Chamber)

ST v Sunderland City Council (HB) (Housing and council tax benefits) [2019] UKUT 33 (AAC) (24 January 2019)

Reported as [2019] AACR 20

Housing Benefit – whether rent payable in advance of the commencement of the tenancy can be immediate arrears for the purposes of regulation 95 of the Housing Benefit Regulations 2006 – application of regulation 95 to the overriding interest of the claimant – approach to the cessation of direct payments

The appellant is a landlord who rents out properties in the Sunderland area. Under the tenancies that were offered by the landlord, two months rental in advance was required. The effect of this for tenants who could not pay was that by the time they took possession of the property they were in arrears. This was the position in the present case. The appellant applied to the local authority (LA) for direct payments under regulation 95 of the Housing Benefit Regulations 2006. The LA refused the application. The appellant appealed to the First-tier Tribunal (F-tT). The LA argued that the arrears were essentially “engineered” at the outset of the housing benefit claim to give rise to a direct payment, and rent charged in advance could not be rent in arrears until the tenant had been in possession of that property for that period. More generally, the LA argued direct payments should not be made without giving the tenant a chance to manage their income, including rental payments, as a policy of financial inclusion. The F-tT refused the appeals. The appellant appealed to the Upper Tribunal.

Held, allowing the appeal, that:

1. rent payable in advance can be arrears at the outset of a housing benefit claim, if the date for payment is past (paragraphs 18-19);

2. whether a landlord is a fit and proper person to receive direct payments cannot be a factor in whether it is in the overriding interests of a claimant not to pay the landlord under regulation 95 (paragraph 20) because it is directly provided for under regulation 95 (3);

3. the possibility of direct payments under regulation 96 arises only where such payments under regulation 95 cannot be made (paragraph 26);

4. the overriding interest of the claimant question cannot be answered by a generic formula (for example the principle of financial inclusion benefitting claimants). Circumstances particular to the claimant must be considered (paragraph 31); and

5. (obiter) there must be grounds for supersession for cessation of direct payments, not mere a (token) reduction of the eight week arrears (paragraphs 32 to 34)

The judge set aside the decision of the F-tT and remitted the appeal to be re-decided in accordance with her directions.

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