Mid Devon tenant refunds underway

£1.8 million payout

Refunds for tenants of a Devon council are being processed as part of an expected £1.8 million payout caused by a calculation error.

Mid Devon District Council became aware it had overcharged around 1,200 of its social housing tenants after an external audit last year exposed a “historical anomaly” that also meant a further 1,600 had been undercharged.

It’s understood around 20 councils are dealing with a similar problem.

Mid Devon has now updated its progress with the refunds, some of which have been complicated by the levels of benefits individual residents receive.

The council said it had now processed all types of cases where residents received no benefits, as well as those cases where residents got housing benefit. It is still awaiting guidance on how to deal with those on Universal Credit.

Beyond refunds, tenants can also apply for compensation.

Mid Devon has said its estimated £1.8 million figure is “just within the boundary” of the reserves it holds in its housing finances, which are ring-fenced from cash used for its day-to-day spending.

In July, the council sent 110 residents – those who did not receive benefits – information about the issue, and by mid-August, 76 tenants had completed and returned the required refund and compensation form, with £119,362 in refund payments being made. That figure also includes a level of compensation.

Up to last month, the council had reprocessed two-thirds of historic housing benefit claims against overpayments. Because the “vast majority” of housing benefit claimants did not have to make a personal contribution, the main repayment will be to the Department for Work and Pensions (DWP).

Mid Devon believes that so far it will need to repay the DWP more than £354,000 for 1,931 individual claims over four years, with a further £38,500 so far pledged to go to housing benefit claimants who did make some personal contribution to their council housing rent.

The council said all DWP and tenant repayments for the housing benefit cohort will be made shortly once the final two years of overpayments that it is refunding have been calculated.

In relation to those housing tenants who claimed Universal Credit, the council said: “To date, no further information has been forthcoming [from the DWP] and we continue to await details as to how this matter will be resolved.

“It is impacting around 600 current tenants where we are unable to resolve their cases as a result. However, in common with housing benefit, the majority of UC claimants had rent covered in full by this benefit whereby any refund will be due to the DWP only.

“There will be a small proportion who have made a direct contribution to rent and therefore will be due an element of the refund.”

Mid Devon has relied on legal advice to state that it would refund six years’ worth of overpayments, even though the issue goes back to 2002.

The council has pledged not to claim back money from tenants who have been underpaying their rent but said it was “likely” new charges would come into effect at the end of a tenancy agreement.