East Devon District Council

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Policy Council Tax and Benefits Penalty and Prosecution policy

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2. Terms explained

1 - Council Tax Penalties for Council Tax Registration, Discounts and Exemptions

1.1 - We are legally entitled to obtain information from residents, owners or managing agents to help identify the person liable for payment of the Council Tax.

1.2 - Where a person fails to supply certain information we have requested within 21 days of the request for the information or within 21 days of a change which affects Council Tax registration or an entitlement to a discount or exemption, or knowingly supplies inaccurate information in purported compliance with such a request, we may impose a penalty of £70 on them.

1.3 -  Where a penalty has been imposed and a further request to supply the same information is made again and is not properly complied with, we may impose a further penalty of £280, and may do so each time it repeats the request and the person concerned does not properly comply with it. There is no limit to the number of times this penalty can be imposed.

1.4 - Where a penalty is imposed where the person who has not supplied the information has a Council Tax account this will be added to this account. In all other cases an invoice will be raised for repayment.

1.5 - A customer can appeal about the decision to impose a penalty to the Valuation Tribunal.

1.6 - A penalty is recovered by adding this onto the customer’s Council Tax account.

2 - Civil Penalties for Housing Benefit and Council Tax Benefit

2.1 - Sections within the Welfare Reform Act 2012 ensure that Civil Penalties are an alternative to prosecution.

2.2 - A Civil Penalty (CP) of £50 can be imposed on customers who receive an overpayment of Housing Benefit (or Council Tax Benefit) caused by either:

  • negligently making incorrect statements, or
  • failing without reasonable excuse to provide information or disclose changes in their circumstances

This penalty is for cases of claimant error where the overpayment is wholly after the date of commencement of the legislation of 1 October 2012 and where the recoverable overpayment, which results from this negligent act or failure, is above £65.

2.3 - In a joint claim only one penalty will apply. Either member of the couple might receive the penalty, subject to limitations. In the case of a negligent statement it will not apply to the person who did not make the statement if that person could not reasonably have been aware of the other person’s negligence in making the incorrect statement.

2.4 - The CP will be recovered by raising an invoice for the customer.

2.5 -  A customer can appeal about the decision to impose a CP in the same way as any benefit decision, and with the same time scales as a Housing Benefit or Council Tax Benefit appeal, with appeals being dealt with by the Tribunals Service.

3 - Cautions for Housing Benefit and Council Tax Benefit offences

3.1 -  A caution is an official warning issued to a person who has admitted to defrauding the council and is intended for those persons at the lower end of the range of benefit fraud.

3.2 - The caution is held on record for three years and can be used as evidence against the offender if further fraud is committed within this three year period.

3.3 - For cases where the offence is committed wholly on or after 1 April 2012 or the period of the offence spans 1 April 2012, the policy is either to offer an administrative penalty or prosecute, if considered appropriate.

4 - Administrative Penalties for Housing Benefit and Council Tax Benefit offences

4.1 - An administrative penalty is an alternative to prosecution for Housing Benefit and Council Tax Benefit fraud offences for any offence which has wholly been committed since 1 April 2012.

4.2 - The amount of the administrative penalty is £350 in cases of attempt where the fraud is discovered and stopped before any overpayment of benefit is made. For all other cases it is a minimum of £350 or 50 per cent of the overpayment, whichever is greater (up to a maximum penalty of £2,000).

4.3 - In cases which are jointly investigated by Jobcentre Plus and East Devon District Council the amount of administrative penalty will be calculated using the total overpayment amount.

4.4 - An individual has a 14 day cooling off period to withdraw their agreement to pay the penalty. Following this period there is no right of appeal. If the customer does withdraw their agreement to pay the penalty prosecution will then be considered.

4.5 - The administrative penalty will be recovered by raising an invoice.

5 - Prosecution for Housing Benefit and Council Tax Benefit offences

5.1 - If, following investigation and consideration of the evidential and public interest tests (see Section 3), prosecution action is recommended, the Investigations Officer, in accordance with the Council’s Constitution, will seek advice from the Council’s Corporate Legal and Democratic Services Manager or legal appointee. The Chief Executive (or as delegated under the Constitution) will approve prosecution in appropriate cases.

5.2 - Where the law allows, we will always seek to recover the costs of investigation and enforcement proceedings.

6 - Penalties and Prosecution for Council Tax Support

6.1 - The Council Tax Support Scheme for working-age customers is based upon the Council Tax Reduction Scheme Policy. For pension age customers it is based upon national legislation.

6.2 - Prosecution proceedings brought for a Council Tax Support Scheme offence may begin at any time within a period of three months from the date on which evidence, sufficient in the opinion of the prosecutor to justify a prosecution for an offence, comes to the prosecutor’s knowledge or within a period of twelve months from the commission of the offence, whichever period expires last.

6.3 - The offences which can be considered are:

6.3.1 - A delay, obstruction, refusal or failure to comply with requests for information from an authorised officer of East Devon District Council. In this case where found guilty of an offence they will be liable to a fine not exceeding level 3 on the standard scale (see Appendix 1) and where if they are convicted their refusal or failure to comply continues will result on a summary conviction to a fine not exceeding £40 for each day it is continued.

6.3.2 - False representation for obtaining a reduction. This applies to a person who obtains a reduction under the Council Tax Support Scheme makes a statement which they know to be false or provides or knowingly allows to be provided any false document or information. In this case where found guilty of an offence they will be liable on summary conviction to a fine not exceeding level 4 on the standard scale, or imprisonment for a term not exceeding three months, or to both.

6.3.3 - Failure to notify a change of circumstances. This applies to a person who is entitled to a reduction and has a change in circumstances which they know changes their entitlement to a reduction and fails to give prompt notification of that change. If found guilty of this offence they  will be liable on summary conviction, to a fine not exceeding level 4 on the standard scale, or to imprisonment for a term not exceeding 3 months, or to both.

6.3.4 - Penalties as an alternative to prosecution. As an alternative to prosecution, where there are grounds for instituting proceedings against a person, East Devon District Council may write to the person inviting them to agree to pay a penalty instead of prosecution action starting.

The amount of the penalty is to be 50 per cent of the amount of the excess reduction of Council Tax Support which has been overpaid to the customer subject to:

  • a minimum amount of £100; and
  • a maximum amount of £1,000.

If the penalty is accepted by the customer and an agreement for repayment is made no further action will be taken against the customer for this offence.

The customer can withdraw their acceptance within 14 days of their agreement. After this period expires there is no right of appeal. If the customer does withdraw their acceptance prosecution will then be considered.

6.3.5 -  Penalties for incorrect statements and failing to notify a change of circumstances. In a similar way to Civil Penalties for Housing Benefit (or Council Tax Benefit) if a customer who has applied for or is in receipt of a Council Tax Support either:

  • negligently makes an incorrect statement or representation or negligently gives incorrect information or evidence and does not take reasonable steps to correct this error and as a result of this has an excess reduction in their Council Tax Support; or
  • without reasonable excuse fails to give a prompt notification of a relevant change of circumstances which results in an excess reduction in their Council Tax Support

In these cases a £70 penalty may be imposed.