Citation, commencement and interpretation

1. —(1) This Order may be cited as the Income-related Benefits (Subsidy to Authorities) Amendment Order 2000 and shall come into force on 10th May 2000.

(2) Article 6 of this Order shall take effect in respect of the year commencing on 1st April 1998 and any relevant year thereafter.

(3) Articles 2, 3, 4, 7, 8, 10, 11, 12, 13 and 14 of this Order shall take effect in respect of the year commencing on 1st April 1999 and any relevant year thereafter.

(4) In this Order, “the principal Order” means the Income-related Benefits (Subsidy to Authorities) Order 1998( 3 ).

Definition of “fraud prosecution points”

2. Article 2 of the principal Order shall be amended by adding after the definition of “claim form” the following definition—

“ “fraud prosecution points” means those points described in accordance with paragraph 2(2) of Schedule 5 to this Order; ” .

Reference to fraud prosecution points

3. In paragraph (4) of article 4 of the principal Order for the words “ and benefit-related savings” as they appear in each of sub-paragraphs (a) and (b) there shall be substituted the words “, benefit-related savings and fraud prosecution points”.

New percentage for council tax benefit

4. —(1) In paragraph (1) of article 11 of the principal Order there shall be substituted by the words “Contributions and Benefits Act 1992,” as they appear in the definition of “scheme”, the following words—

“ Contributions and Benefits Act 1992;

• “X per cent.” means, in relation to a local authority, the percentage specified in column (7) of Schedule 1 that applies to that authority, ” .

(2) For paragraph (1) of article 13 of the principal Order there shall be substituted the following paragraph—

“ (1) Subject to any adjustment in accordance with paragraph (3), for the purposes of section 140A ( 4 ) of the Act, the subsidy to be paid to an authority shall, subject in the case of Scottish Homes to paragraph (2), be—

(a) in the case of any authority to which none of articles 14, 16 and 17 applies, an amount equal to the aggregate of—

(i) 95 per cent. of its qualifying expenditure attributable to expenditure in respect of housing benefit; and

(ii) X per cent. of its qualifying expenditure attributable to expenditure in respect of council tax benefit;

(b) in the case of any authority to which at least one of those articles applies an amount equal to the aggregate of—

(i) 95 per cent. of so much of its qualifying expenditure attributable to expenditure in respect of housing benefit as remains after deducting from that expenditure the amount of expenditure attributable to housing benefit to which each of those articles which is relevant applies;

(ii) X per cent. of so much of its qualifying expenditure attributable to expenditure in respect of council tax benefit as remains after deducting from that expenditure the amount of expenditure attributable to council tax benefit to which article 14 applies; and

(iii) the appropriate amount calculated in respect of the relevant benefit under each such article,

plus, in each case, the additions, where applicable, under articles 18 and 21(2), but subject, in each case, to the deductions, where applicable, under articles 20 and 21(3). ” .

(3) For sub-paragraph (b) of paragraph (1) of article 18 of the principal Order there shall be substituted the following paragraph—

“ (b) subject to paragraphs (2) and (3), where, during the relevant year, it is discovered that an overpayment of community charge benefit or relevant benefit has been made and an amount is to be deducted under article 19 in relation to that overpayment, an amount equal to—

(i) in the case of a departmental error overpayment where the overpayment is overpayment of housing benefit, 95 per cent. of so much of the overpayment as has not been recovered by the authority;

(ii) in the case of a departmental error overpayment where the overpayment is overpayment of community charge benefit or council tax benefit, X per cent. of so much of the overpayment as has not been recovered by the authority;

(iii) in the case of a fraudulent overpayment, 80 per cent. of the overpayment;

(iv) except where any of heads (i) to (iii) above apply, 25 per cent. of the overpayment. ” .

(4) Paragraph (4) of article 18 of the principal Order shall be amended by substituting for the words “paragraphs (1)(b)(i) and (3)” the words “ paragraphs (1)(b)(i), (ii) and (3)”.

(5) Paragraph (5) of article 18 of the principal Order shall be amended by substituting for the words “paragraph (1)(b)(ii) and (c)” the words “ paragraphs (1)(b)(iii) and (c)”.

(6) Paragraph (8) of article 18 of the principal Order shall be amended by substituting for the words “paragraphs (1)(b)(ii)” the words “paragraphs (1)(b)(iii)”.

Scottish Homes

5. For the year commencing on 1st April 1999, for the sum of “£1,278,000” specified as the maximum payable to Scottish Homes in sub-paragraph (a) of paragraph (2) of article 13 of the principal Order( 5 ), there shall be substituted the sum of “£1,010,190”.

Fraud overpayments in previous years

6. Sub-paragraph (c) of paragraph (1) of article 18 of the principal Order shall be amended by substituting for the words “95 per cent.” the words “ 80 per cent.”.

Departmental error overpayment

7. Sub-paragraph (a) of paragraph (4) of article 18 of the principal Order shall be amended by adding after the words “as such” the words “, or a person providing services to either Department”.

Additions to and deductions from subsidy in respect of benefit savings

8. For sub-paragraphs (2) and (3) of article 21 of the principal Order there shall be substituted the following sub–paragraphs—

“ (2) This article applies in the case of an authority to which paragraph 3 or 4 of Schedule 5 applies and in such a case the additions shall be calculated in accordance with those paragraphs.

(3) This article also applies in the case of an authority to which paragraph 5 of Schdule 5 applies and in such a case the deduction shall be calcualted in accordance with that paragraph. ” .

Sums to be used in the calculation of subsidy

9. For the year commencing on 1st April 1999, for Schedule 1 to the principal Order( 6 ) there shall be substituted the Schedule set out in Schedule 1 to this Order.

Definition of “last day”

10. For sub-paragraph (2) of paragraph 1 of Schedule 2 to the principal Order there shall be substituted the following paragraph—

“ (2) In this Schedule, “last day” means—

(a) in the case of a person to whom regulation 6(2) of the Income Support (General) Regulations 1987 (persons not treated as engaged in remunerative work) ( 7 ) applies, the date on which he was first engaged in remunerative work referred to in sub-paragraph (a) of regulation 6(2) of those Regulations; and

(b) in any other case, the last day of the relevant benefit period as “ relevant benefit period” is defined in paragraph 12 of Schedule 5A to the Housing Benefit Regulations or, for the purposes of council tax benefit, paragraph 8 of Schedule 5A to the Council Tax Benefit Regulations ( 8 ) (extended payments). ” .

Definition of “ineligible amounts”

11. The definition of “ineligible amounts” in paragraph 17 of Part IV of Schedule 4 to the principal Order shall be amended by adding the following sub-paragraph—

“ (d) any amount determined in accordance with regulation 10(6) of the Housing Benefit Regulations and deducted under regulation 10(3) of those Regulations. ” .

Amended thresholds for subsidy on rent allowances

12. Part V of Schedule 4 to the principal Order shall be amended as follows—

(a) for the references in column (1) to, and amounts stated in column (2) in respect of, Cumbria, Leicestershire, Midlands (West), Northamptonshire, Staffordshire and Warwickshire there shall be substituted, in the appropriate places within the Part, the following references and amounts–

(b) for the references in column (1) to, and amounts stated in column (2) in respect of, rent registration areas in Scotland, there shall be substituted the following references and amounts–

Benefit savings

13. For Schedule 5 to the principal Order there shall be substituted the Schedule set out in Schedule 2 to this Order.

Modification of Schedule 5

14. In the definition of “benefit savings” and “benefit-related savings” in paragraph 1 of Schedule 5 to the principal Order references to a decision of the Secretary of State shall be read as if they were references to a determination of an adjudication officer–

(a) in respect of the period beginning on 1st April 1999 and ending on 6th September 1999, in relation to decisions relating to retirement pension, incapacity benefit, severe disablement allowance or widow’s pension;

(b) in respect of the period beginning on 1st April 1999 and ending on 18th October 1999, in relation to decisions relating to jobseeker’s allowance; and

(c) in respect of the period beginning on 1st April 1999 and ending on 29th November 1999, in relation to decisions relating to income support.

Article 8

SCHEDULE 1

The following Schedule is substituted for Schedule 1 to the principal Order.

Articles 11(1), 12(b), 13(1), 17(1), 18(1)(b) and (d), 21 and paragraph 1(2) of Schedule 5

“ SCHEDULE 1 SUMS AND PERCENTAGE TO BE USED IN THE CALCULATION OF SUBSIDY

Article 12

SCHEDULE 2

The following Schedule is substituted for Schedule 5 to the principal Order.

Articles 13 and 21

“ SCHEDULE 5 BENEFIT SAVINGS

General and interpretation

1. —(1) The additions to or deductions from subsidy referred to in articles 13 and 21 shall be calculated in accordance with this Schedule.

(2) In this Schedule, unless the context otherwise requires–

• F is the sum specified in column (6) of Schedule 1 (Benefit Savings Threshold) for an authority identified in column (1) of that Schedule;

• G is 0.75 of the value of F;

• H is twice the value of F;

• I is thrice the value of F;

• “authorised person” means—

  (a)

  an officer of an authority; or

  (b)

  an employee of an authority’s contractor,

  who has been designated by that authority for the investigation of fraud;

• “benefit savings” means, in a case where an award of benefit had—

  (a)

  been made before an intervention and a fraudulent overpayment has arisen; or

  (b)

  been made before an intervention, but no overpayment of relevant benefit can be determined by the authority by reason of paragraphs 10 of Schedule 3, 4 of Schedule 4 or 5 of Schedule 5 to the Housing Benefit Regulations or paragraphs 10 of Schedule 3, 4 of Schedule 4 or 5 of Schedule 5 to the Council Tax Benefit Regulations (income and capital to be disregarded) where a person is in receipt of income support or an income-based jobseeker’s allowance ( 9 ) , as the case may be, pending the decision of the Secretary of State; or

  (c)

  not been made before the intervention,

  any amount, which would—

  (i)

  but for the intervention, have been paid by way of relevant benefit to a claimant during a benefit week; and

  (ii)

  had it been paid as relevant benefit, have been a fraudulent overpayment (or in a case within paragraph (a) above, have also been a fraudulent overpayment), within the meaning of article 18(5),

  or, in a case where only a proportion of that non-payment was due to the intervention, the amount shall be that proportion and “benefit-savings” shall also include 75 per cent. of any relevant benefit which would, but for the residence check made by an authorised person, have been paid or allowed to a claimant during a benefit week;

• “benefit-related savings” means—

  (a)

  where benefit savings have been established and the investigation that led to those savings has also led to a decision by the Secretary of State that no designated benefit, or less designated benefit is payable to a claimant, any specified amount of designated benefit that would, but for that intervention and consequent decision, have been paid to that claimant; and

  (b)

  where the benefit savings were less than the total relevant benefit not paid, the benefit-related savings shall be an amount determined by applying to the total of designated benefit not paid a percentage equal to the percentage which those benefit savings bear to the total relevant benefit not paid;

• “designated benefit” means income support, incapacity benefit, jobseeker’s allowance, retirement pension, severe disablement allowance and widow’s pension, in a case where a claimant was, prior to the intervention, also being paid relevant benefit;

• “intervention” means an investigation and intervention by one or more authorised persons whilst involved in the investigation of fraud and not in the performance of any other duty;

• “residence check” means action taken by an authorised person that included—

  (a)

  at least two unannounced visits to the dwelling in respect of which the relevant benefit was paid or allowed to the claimant and which—

  (i)

  took place in what were, for the claimant, different benefit weeks; and

  (ii)

  at which it was established that the claimant had ceased to occupy the dwelling as his home; or

  (b)

  one unannounced visit to the dwelling in respect of which the relevant benefit was paid or allowed at which it was established beyond doubt that the claimant had ceased to occupy the dwelling as his home;

• “specified amount”, in relation to a claimant, means—

  (a)

  where the benefit is income support, the amount payable in respect of a benefit week within the meaning prescribed therefor in regulation 2(1) of the Income Support (General) Regulations 1987 ( 10 ) ;

  (b)

  where the benefit is incapacity benefit or severe disablement allowance, half of the fortnightly payment in arrears by which such benefit is to be paid, pursuant to regulation 24(1) of the Social Security (Claims and Payments) Regulations 1987 ( 11 ) or, in a case where that regulation does not apply, would be so paid if that regulation did apply;

  (c)

  where the benefit is jobseeker’s allowance, the amount payable in respect of a benefit week within the meaning prescribed therefor in regulation 2(1) of the Jobseeker’s Allowance Regulations 1996 ( 12 ) ;

  (d)

  where the benefit is retirement pension or widow’s pension, the amount payable in respect of the week in advance in which such benefit is to be paid, pursuant to regulation 22(1) of the Social Security (Claims and Payments) Regulations 1987 ( 13 ) or, in a case where that regulation does not apply, would be so paid if that regulation did apply; and

• “verification framework” means the framework set out in the following circulars issued by the Secretary of State ( 14 ) –

  HB/CTB	F6/98;
  HB/CTB	F15/98;
  HB/CTB	F20/98;
  HB/CTB	F17/99;
  HB/CTB	A24/99;
  HB/CTB	A34/99;
  HB/CTB	A37/99; and
  HB/CTB	A48/99.

Fraud reduction score

2. —(1) An authority’s fraud reduction score is the sum of its fraud prosecution points and fraud detection points.

(2) Fraud prosecution points shall be calculated in accordance with sub-paragraphs (3), (4) and (5) for each conviction in respect of—

(a) charges under section 111A or 112 of the Act (dishonest or false representations for obtaining benefit) ( 15 ) , section 15, 15A, 17 or 22 of the Theft Act 1968 ( 16 ) , section 1 of the Criminal Law Act 1977 ( 17 ) , section 1 or 3 of the Forgery and Counterfeiting Act 1981 ( 18 ) , section 8 of the Accessories and Abettors Act 1861 ( 19 ) or section 44 of the Magistrates Court Act 1980 ( 20 ) ; or

(b) other charges (whether under statute or otherwise),

that relate to relevant benefit paid by an authority (referred to in this paragraph as a “relevant conviction”).

(3) No calculation may be done under sub-paragraph (5) in respect of a relevant conviction until—

(a) a period of one month has passed beginning with the date sentence was passed or deferred and no appeal against conviction has been brought; or

(b) any appeal against that conviction brought within that month has been rejected.

(4) No calculation may be done under sub-paragraph (5) by reason only of offences in relation to relevant benefit being taken into consideration on sentencing.

(5) Fraud prosecution points shall be expressed in monetary amounts and calculated in respect of each relevant conviction according to the following formula—

(6) Fraud detection points shall be expressed in monetary amounts and calculated according to the following formula—

Additions to subsidy

3. —(1) Subject to sub-paragraphs (2) and (3), in the case of an authority where its fraud reduction score is greater than F, the addition for that authority shall be–

(a) 25 per cent. of the sum by which that score exceeds F in respect of the year commencing on 1st April 1999; and

(b) 30 per cent. of the sum by which that score exceeds F in respect of any subsequent year.

(2) Subject to sub-paragraph (3), in the case of an authority where its fraud reduction score is greater than H, the addition for that authority shall be the sum calculated for that authority in sub-paragraph (1), plus 5 per cent. of the sum by which that score exceeds H.

(3) In the case of an authority where its fraud reduction score is greater than I, the addition for that authority shall be the sum calculated for that authority in accordance with sub-paragraphs (1) and (2), plus—

(a) 10 per cent. of the sum by which that score exceeds I in respect of the year commencing on 1st April 1999; and

(b) 5 per cent. of the sum by which that score exceeds I in respect of any subsequent year.

Additional subsidy if verification framework compliant

4. In the case of an authority which is certified by the Secretary of State as having complied with the verification framework in the relevant year, where its fraud reduction score is greater than G, the addition for that authority shall be 10 per cent. of the sum by which that score exceeds G subject to a maximum addition of 2.5 per cent. of F.

Deduction from subsidy

5. —(1) Subject to sub-paragraph (2), in the case of an authority where its fraud reduction score is less than G, the deduction for that authority shall be 50 per cent. of the sum by which that score is less than G.

(2) Sub-paragraph (1) shall not apply in a case where the value of F for an authority is less than £60,000. ”