Housing Law – Landlord’s Repayment of Housing Benefit Overpayment and Treatment as “Rent”

02 Nov 2006

By : Andrew Lane

The issue

Regulation 95(2) of the Housing Benefit Regulations 2006 (“the 2006 Regulations”) provides that:

“Any payment of rent allowance made to a landlord pursuant to this regulation or to regulation 96 (circumstances in which payments may be made to a landlord) shall be to discharge, in whole or in part, the liability of the claimant to pay rent in respect of the dwelling, except in so far as –

  1. the claimant had no entitlement to the whole or the part of that rent allowance paid to his landlord; and
  2. the overpayment of rent allowance resulting was recovered in whole or in part from the landlord.” (my emphasis)

In other words, if a non-local authority landlord has been receiving direct payments of housing benefit from the local authority and it later transpires that there has been an overpayment of such benefit then (subject to the usual rules ands rights of recovery) the landlord may find themselves being required to repay the overpayment. Of course, that would mean that the tenant would owe the landlord the overpayment sum but that may be of little practical benefit to the landlord if it is to be treated as a mere debt rather than rent arrears.

The common law position

The common law position is as set out in the decision of R-v-LB of Haringey, ex p Ayub (1993) 25 HLR 566 – namely that once the rent has been paid by means of the original housing benefit direct payment that the rent liability for that same period is extinguished once and for all.

Regulatory change

Regulation 95(2) referred to above clearly purports to change the previously established common law position in this area, and for some time it has been suggested is ultra vires as the enabling legislation does not provide the Secretary of State with the ambit to make such a provision. Section 5(1)(p) of the Social Security Administration Act 1992 (“SSAA”) merely provides that regulations may provide:

“…for the circumstances and manner in which payments of such a benefit may be made to another person on behalf of the beneficiary for any purpose, which may be to discharge, in whole or in part, an obligation of the beneficiary or any other person”. (my emphasis)

The argument presumably goes that the declaration that a repayment of a housing benefit overpayment does not extinguish the rent previously paid by these means does not come within the definition of “circumstances and manner”.


It is perhaps surprising that there has been no reported decision on this question despite it being raised by CPAG on a number of occasions. I had cause to argue the point at the Clerkenwell & Shoreditch County Court on the 26th October 2006 before HHJ Cotran in circumstances where the majority of the £5000 plus rent arrears outstanding at the time the possession claim was issued consisted of a £4979.00 repayment by the landlord to the local authority in respect of a 2001-2003 housing benefit overpayment.

The Judge was asked to determine the point as a preliminary issue and concluded that the £4979.00 did represent “rent lawfully due” and regulation 95(2) (he was in fact considering the same-worded predecessor regulation 93(2) of the Housing Benefit (General) Regulations 1987) was to be applied and was not ultra vires.

He effectively found in an ex tempore judgment that s.5(1)(p) was sufficient for these purposes and in any event s.189(5) of the same Act provided that:

“Without prejudice to any specific provision in this Act, a power conferred by this Act to make an Order in Council, regulations or an order…includes power to make thereby such incidental, supplementary, consequential or transitional provision as appears to Her Majesty, or the authority making the regulations or order, as the case may be, to be expedient for the purposes of the Order in Council, regulations or order.” (my emphasis)

To this end he had regard to the Court of Appeal authority of Levy-v-Secretary of State for Works & Pensions [2006] EWCA Civ 890 @ 19-23 where Lord Justice Dyson had been minded (as was Lady Justice Hallett) to hold that regulation 6(1) of the Social Security Claims and Payments Regulations 1987 was ultra vires s.5(1) of the Social Security Administration Act 1992 because whilst s.5(1)(a) spoke of regulations “…requiring a claim…to be made…in such a manner…”, regulation 6(1), which provided for the date when a claim would be treated as having been made, did not “require” anything of a claim and did not relate to the manner in which a claim was made.

In that case, Mrs Levy had claimed widow’s benefit by post on the 4/7/00 but it was not received by the Benefits Agency and it was not until a 2nd claim was submitted and received on the 29/10/01 that benefit could be paid (the claim being treated as starting on the 29/7/01). Her appeal against the refusal to treat her 1st claim as having been made was rejected by the Commissioner, and on appeal to the Court of Appeal her counsel for the first time raised the argument that regulation 6(1):

“…the date on which a claim is made shall be
(c) in the case of a claim which meets the requirements of regulation 4(1), the date on which it is received in an appropriate office.”

was ultra vires section 5 of the 1992 Act:

“(1) Regulations may provide

  1. for requiring such a claim for benefit to which this section applies to be made by such person, in such manner and within such time as may be prescribed;
  2. for treating such a claim made in such circumstances as may be prescribed as having been made at such date earlier or later than that at which it is made and may be prescribed.”

However, the Court of Appeal accepted the Secretary of State’s argument that s.189(5) [@23, 25 & 38]:

“23…could hardly be of wider scope. It permits the making of such supplementary regulations as appear to the authority making the regulations to be expedient for the purposes of the regulations. It is fundamental to the proper and efficient working of this legislation that the date on which a claim is made should be ascertainable with certainty…

25. Section 189(5) was introduced as a sweeping provision precisely to cater for the possibility that there was a lacuna in the specific rule making powers contained in section 5…”


This article is not intended to cover situations where the landlord and/or tenant can challenge either the alleged overpayment or its recovery, but merely to clarify the current state of the law in this all-too-common area of dispute.


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