1. finance
2. personal finance
3. debt management

TRAFFORD COUNCIL
DELEGATED EXECUTIVE MEMBER DECISION REPORT
Report to:
Date:
Report for:
Report of:
Executive Member for Finance
18 March 2015
Decision
Director of Finance
Report Title
Social Care & Residential Services Debt Management & Recovery Policy and
Housing Benefit Overpayments Recovery Code of Practice Amendments
Summary
To seek approval of the Social Care & Residential Services Debt Management and
Recovery Policy. The Policy provides a high level policy for how debt will be
pursued and ensures staff and customers are clear how the Council take a fair and
firm approach to recovery of money owed to the Council for the provision of adult
social care services.
To seek approval of the amendments to the Housing Benefit Overpayments
Recovery Code of Practice which have been made to include additional recovery
methods
Recommendation(s)
1) That the Social Care & Residential Services Debt Management Policy and
the amended Housing Benefit Overpayments Recovery Code of Practice
are approved.
Contact person for access to background papers and further information:
Name: Louise Shaw
Extension: 3120
Background Papers: None
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Relationship to Corporate Priorities Low Council Tax
Financial
A debt management and recovery policy for adult
social care charges will provide the framework for the
council to collect debts owed to it and should
contribute to increasing income for the council. The
amendments to the Housing Benefit Overpayments
Code of Practice have been made to include additional
recovery methods which will be financially beneficial
to the Council.
Legal Implications:
Both policies adhere to current legislation and
incorporate new requirements under the Care Act
2014. The policies will be reviewed from time to
time for example when any new legislation is
introduced.
Equality/Diversity Implications
An EIA has been completed for the new social
care debt management policy; no adverse impacts
have been identified as each case is considered
on its own merits at a panel before any legal
action is taken.
Sustainability Implications
None
Resource Implications e.g. Staffing The additional recovery steps can be absorbed
/ ICT / Assets
within existing resource.
Adoption of the policy will mitigate the risk of nonRisk Management Implications
recovery of current and new adult social care debts by
ensuring that there is a common
understanding of the Council’s approach to debt
collection.
Health & Wellbeing Implications
This is a sensitive area dealing with the most
vulnerable section of society in a highly legislated area
of work. Inconsistent application of Council policy
may lead to poor levels of service and place the
Council open to challenge by judicial review
Health and Safety Implications
None
1.0
Background
A
Social Care and Residential Services Debt Management and Recovery
1.A.1 Local Authorities (LAs) have an overall statutory duty, subject to a financial
assessment, to charge for residential accommodation, for example, in accordance
with the National Assistance Act 1948, and it will continue to have this duty in
accordance with the Care Act.
1.A.2 With regards to non-residential care, there was a power to charge, under Fairer
Charging, if it was reasonable to do so and practicable for the individual to pay. The
power to charge will remain when the Care Act comes in to force on 1 April 2015.
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1.A.3 As a consequence of the above, the Council charges clients for a range of adult social
care services in accordance with statutory requirements and local charging policy.
1.A.4 The Council currently raises approximately £9.1m in social care debt each year. This is
inclusive of residential and nursing care homes debt deferred against the client’s property in
accordance with the Deferred Payment scheme.
1.A.5 The Deferred Payment scheme allows funded residents in residential and nursing
care to defer their care charges in return for a legal charge being registered against
their property. The Council is then refunded if and when the property is sold
1.A.6 Whilst the majority of income due is paid on time the Council has a duty to ensure that all
revenue owed to the council is collected promptly and effectively for the benefit of all
Council Tax payers.
1.A.7 Historically recovery of social care debts through the relevant civil courts has not
been enforced for reasons such as the perceived impact on the clients health and
well-being or the fear of adverse publicity.
1.A.8 The balance needs to be drawn between the recovery of the sums due and the
negative impact that this may have on the borough’s most vulnerable adults.
Ultimately, if recovery is not sought in all cases then there will be fewer funds
available for everybody else and this treatment could be deemed to be inequitable
for those clients who do pay appropriately.
1 A 9 All clients are also subject to a financial assessment, which determines their ability to
pay for services and this will be reviewed if circumstances change.
B
Housing Benefit Overpayments Recovery Code of Practice
1.B.1 Trafford Council already has a Housing Benefit Overpayments Recovery Code of
Practice in place which sets out the guidelines for Housing Benefit staff when dealing
with overpayments.
1.B.2 It is recognised that each case should be reviewed on its own merits and that the
appropriate action should only be taken after considering all the facts, however, the
guidance is intended to set a framework within which recovery decisions can be
made.
1.B.3 Housing Benefit overpayments can arise for a number of reasons, including:
 Failure to report or delay in reporting a change of circumstances;
 Official error on the part of the Authority or an agency of the DWP;
 Detection of fraudulent claims and payment irregularities;
 Delayed receipt of income, such as an award of a State benefit.
1.B.4 Where an overpayment has arisen, a decision is made as to whether the
overpayment is recoverable (generally all overpayments are recoverable), whether
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recovery should be sought and if it should from whom. This decision is appealable
upon request within one calendar month and is heard by an independent tribunal.
1.B.5 Once the decision has been made to recover an overpayment it will be as quickly as
practicable.
1.B.6 In 2013/14 Housing Benefit overpayments totalling £2.39m were raised by the
Council.
2.0
Proposals and details
A
Social Care and Residential Services Debt Management and Recovery
2.A.1 At present the Council does not have any overarching policy framework for
the management of adult social care debt.
2.A.2 The policy in appendix A sets out to formalise best practice and includes guidance to ensure
that the Council has a transparent, consistent and proportionate approach to
the recovery of money owed to the council having due regard to minimising arrears whilst not
causing undue hardship or consequences to the client as a result.
2.A.3 The key aims of the policy are:
 Collection of all money due; quickly and economically taking into account the
financial circumstances of the client;
 Prevention of debt and arrears; by prompt notification of charges, billing and
collection of money due and affordable repayment plans and early intervention when
a client is in arrears;
 Ensuring that principles protecting the rights of vulnerable clients underpin all actions
and that where there are issues of financial mismanagement or exploitation,
appropriate investigations are carried out under the Council’s Safeguarding Policy.
2.A.4 In order to ensure the balance between safeguarding vulnerable adults and recovering debt
owed to the Council is met, a monthly debt recovery panel will take place at which each
individual case where debt has accrued will be presented to the panel who will assess all of
the risks. Debt recovery will be on hold pending the outcome of the panel hearing.
B
Housing Benefit Overpayments Recovery Code of Practice
2.B.1 The code of practice has been amended to take in to account changes to reflect
legislative and procedural changes as well as improve recovery within existing
legislation.
2.B.2 The key changes to the policy are:
 The introduction of Direct Earnings Attachments (DEA) as an additional recovery
method. The Welfare Reform Act 2012 amended the Social Security Administration
Act 1992 to allow local authorities to recover Housing Benefit overpayments by
attachment of earnings without court authority. The rate of the deduction is
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determined by the legislation based on earned income received in Pay as you Earn
(PAYE) employment;
 The removal of reference to Council Tax Benefit and associated legislation which
was replaced with the introduction of Local Council Tax Reduction legislation in
2013.
 The recovery method of third party deductions from a Landlords next payment at the
outset. Previously the policy was to initially send an invoice and recover third party if
the invoice remains unpaid. Existing legislation allows for the deduction to be made
from the next payment without an invoice.
 In cases where a review or appeal is received against an overpayment decision,
consider which part is in dispute, if not all of the overpayment is in dispute, recovery
to continue on the undisputed element.
2.B.3 In all cases, a request to appeal against the decision to an independent tribunal
remains in place.
Other Options
No change will hinder the action that can be taken to pursue debt and there will be financial
benefits to the Council if both policies are implemented.
Consultation
Consultation on the Social Care and Residential Services Debt Management and Recovery
policy has taken place. Key stakeholders who represent vulnerable adults and their
families and representatives, for example Age UK, Citizens Advice Bureau Trafford and
SCOPE as well as local solicitor firms, were all sent a copy of the policy along with a
consultation questionnaire and a personal invite to attend a consultation event which took
place on 11 March 2015. The overall feedback from the event was that the policy was
welcomed as it offered a clear view of how the Council will recover adult social care debt
which allows the stakeholders to offer clear advice to their clients. A request was made for
a more user friendly version of the policy, this request was agreed. The Council also
agreed to share a draft version of the user friendly policy with the attendees of the event for
feedback before finalising.
The policy has also been consulted on internally and with the Executive Member for Adult
Social Services and Community Wellbeing.
Reasons for Recommendation
The reasons for the recommendations are set out in this report.
Key Decision : Yes
If Key Decision, has 28-day notice been given? Yes
Finance Officer Clearance PS………………
Legal Officer Clearance
HK………………
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[CORPORATE] DIRECTOR’S SIGNATURE (electronic)…… ……………………………………………
To confirm that the Financial and Legal Implications have been considered and the Corporate
Director has cleared the report prior to issuing to the Executive Member for decision.
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