1 Freedom of Information Act Request Reference: F14/0425 Response Date: 31 December 2015 Thank you for your request for information. Maldon District Council can confirm that the requested information is held and the answers to your questions are attached along with the Council s Corporate Debt Policy. Please note that for Council Tax Collection Maldon District Council does not hold information as to whether a household has children. If you are not satisfied with our response to your request please let us know. If we are unable to resolve the matter quickly then you may wish to pursue this through the Council s complaints procedure, and any complaints regarding Freedom of Information matters may be dealt with by contacting the Council Offices at Princes Road, Maldon. Complaints should be made in writing or by to or by using the form on the Council's website at In addition, if you are not satisfied with the Council's decision you may apply to the Information Commissioner for an independent review at the following address: The Information Commissioner, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF Tel Fax Committee Services Maldon District Council Telephone: Enc. 1 / 1
2 Maldon District Council CORPORATE DEBT RECOVERY STRATEGY
3 Version control Issue Date Purpose Author 1 July 2013 New Policy for review Sue Green
4 Contents PART Introduction... 5 PART 2 - Policies and Processes... 6 General Provisions... 6 Billing and Invoicing... 7 Appeals... 7 Payment Options... 7 Reminders... 7 Debt Advice... 7 Arrangements... 7 Enforcement... 7 Complaints... 8 Use of outside collecting agencies... 8 Specific Debts... 9 Council tax... 9 Joint and Several Liability... 9 Arrangements... 9 Appeals... 9 Reminders Final Notices Summons Liability Order Requests for Information (Regulation 36) Attachments of Earnings... Error! Bookmark not defined. Attachments of Benefits Attachments of Member Allowances Bailiffs... Error! Bookmark not defined. Committal Charging Orders Bankruptcy & Liquidation Write Offs... Error! Bookmark not defined. Bad Debt Provision Business Rates Arrangements Appeals Reminders Final Notices Summons... 17
5 Liability Order Bailiffs Committal Charging Orders Bankruptcy & Liquidation Write Offs Bad Debt Provision Benefits debts Underlying Entitlement Fraud Debts Recovery from on-going housing benefit entitlement Local Council Tax Support Overpayments Invoicing Recovery from DWP benefits Reminders Collection Agencies Enforcement - County Court Judgements Enforcement Charging Order Enforcement -Bankruptcy Write Offs Bad Debt Provision Fees and Charges Payments in Advance Sundry Debts Invoicing and accounting Recovery procedures Arrangements Cessation of service Bed and Breakfast charges Rent Deposit Scheme Leases Parking Contravention Notices (PCN s) Part 4 Monitoring Target Setting and monitoring Corporate Roles and responsibilities Part 5 Appendices Appendix 1 -Definition of Vulnerable Person Appendix 2 Delegation Arrangements Appendix 3 Flow chart for Council Tax Recovery... 22
6 Appendix 4 Flow Chart for Business Rate Recovery Appendix 5 - Flow Chart for Benefit Debt Recovery Appendix 6 Flow chart for Sundry Debts Appendix 7 Flow Chart for PCN s Appendix 8 - Flow Chart for Benefit Debt Recovery CORPORATE DEBT RECOVERY STRATEGY PART 1 Introduction 1.1. Maldon District Council provides various goods and services to the residents and businesses within its district. In return it receives payment for these goods and services. The payment can be in the form of council tax, business rates, fees and charges and sundry debtor income. The council is also responsible for the payment of housing benefit and local council tax support and the recovery of any valid overpayment. This strategy is concerned with creating a corporate debt recovery plan, whilst recognising the difference legislation and processes that apply to each type of debt. 1.2 Efficient and effective collection of the income due to it supports the Councils Corporate Goal of being an organisation that delivers good quality, cost effective and valued services in a transparent way. It also supports the high level desired outcome of being a creative organisation that maximises the use of its resources and provides value for money, 1.3 Strong and prompt inward cash flow has a direct impact on the Councils financial situation, enabling the council to minimise its reliance on its financial reserves,
7 maximise its investment income which in turn supports the overall budget and reduces the level of council tax required. 1.4 It also enables the councils to be seen as efficient, cost effective, fair and equitable organisations both in our dealings with external customers and our internal administration procedures. 1.5 The Council strives to achieve high collection rates for all of its debts. Targets for the collection rates for the two main income streams, Council tax and Business Rates are set as part of the annual Business Planning process, and are agreed by Members. They are monitored as part of the Corporate Performance Management process, with quarterly performance reports being reviewed by the Corporate Management Team (CMT), and Members. 1.6 Whilst the Council has stretching collection targets the council recognises that it also has a duty of care to all its customers, particularly those who it considers to be vulnerable. All of its customers should be treated with courtesy and respect and this should be the guiding principle in the recovery of debt. Debt recovery processes will be subject to the councils complaints procedures should complaints arise. 1.7 The strategy covers each of the main types of income and the processes that will apply to those specific types of debt. The strategy also recognises that the Head of Financial Services is the officer with overall responsibility for the administration of the Council s financial affairs for the purposes of Section 151 (S151) of the Local Government Act However various delegation arrangements apply for the various types of debt under both the Committee Terms of Reference and Schemes of Delegation, and the Financial Regulations. A summary of the various delegation arrangements are at appendix 2. Our Objectives 1.8 Our Corporate Debt Policy aims to : Maximise income for the Council, Ensure that all Council Tax payers interests are protected by striving to collect debts Achieve an equitable share of income to pay across all Council debts Achieve efficiency savings by identifying solutions for customers on debt issues at the first point of contact Be fair but firm Be preventative for example offering payment options and other advice Help where possible to maximise customers income Advise customers of advice and support agencies Encourage self help Ensure consistency in dealing with customers Share knowledge, information and expertise across the Council and other agencies whilst striving to comply with legislation such as the Data Protection Act etc. Apply best practice in relation to debt collection PART 2 - Policies and Processes General Provisions
8 Billing and Invoicing We will ensure that all bills are issued promptly, with correct information, and with sufficient detail to avoid the customer needing to contact us unnecessarily. It is imperative that the correct names and addresses are obtained from customers at the outset, and incorrect billing information will prevent recovery and enforcement of the debt at a later date. All initial enquiries about bills will be dealt with by the Councils Customer Services Team. Appeals As a general principle bills that are subject to challenge by the customer will remain payable whilst under dispute. However we recognise that there are some specific debts where it is appropriate to consider withholding recovery action whilst the dispute is being dealt with. Details of the situations where this will be considered are contained in the specific debt policies,(pages x x) Payment Options The options for making payment will be included with the bill, and wherever possible payment by Direct Debit will be promoted as this is often the fastest and most convenient solution for customers. Direct Debits are also a more cost effective way for the Council to collect debts, improving cash flow and minimising the costs of collection. Where payment of Direct Debit is not possible, or the customer is unwilling, then on-line payment through the Councils website should be promoted. The Council does not have customer payment points at its Council Offices, therefore payment by cash or cheque should not be promoted, however the Council recognises that for some customers this may be the only option. Where this is the only option payment will need to be made either by post (cheques only) or through a bank or building society. Customers should never be asked to send cash through the post. Reminders Prompt reminders should be sent to customers where the original bill remains unpaid. Reminders will generally be issued within 7 days of the bill becoming due, and should be clear about the action the Council will take if payment is not received. Again Direct Debit and on-line payment should continue to be promoted at this stage. Debt Advice When reminders are sent out for any debt we will ensure that, where appropriate, customers are provided with information about where they can go for further free help and advice. This information will also be provided on the Councils website, and customers should be made aware of this advice and directed to it when any contact is made which indicates they would benefit from some budgeting or debt advice. Arrangements The Council will always aim to collect outstanding debts in full, however where this is not possible, due to a customer s financial situation, the Council will consider exercising its discretion and may offer a payment arrangement. The duration and level of repayment will be a matter for the service to determine, and will depend on the type and amount of the debt. Further details on payment arrangements are contained in the specific debt policies at pages x-x. Enforcement We will endeavour to recover all outstanding debts, and will include details of the subsequent enforcement action that will be taken when any reminders are issued. The sanctions to the Council will depend upon the type of debt, but could include action through the Courts, and the use of external collection agencies. Further details of the specific remedies to the Council are contained in the specific debt policies at pages x-x
9 Complaints Any complaints about the provision of service, or the billing and collection process will be dealt with under our Feedback process. We will aim to resolve complaints informally as soon as we become aware of the issue. However we recognise that there will be times when an informal resolution is not possible, and the Feedback process set out clearly the way in which complaints will be dealt with, the timescales for providing customers with a full response to their complaint, and the process for escalating the complaint should the customer remain dissatisfied. Use of External Collection Agencies We will use external collection agencies where we can demonstrate that this provides good value for money. The appointment of collection agents will be subject to our procurement rules, and performance will be monitored at a service and Corporate level to ensure that we are achieving good value. We will ensure that as a minimum we will have a service level agreement with the external collection agency, and will meet to review performance at least quarterly. We recognise that we remain responsible for the actions of our appointed collection agents, and will ensure that the Service Level Agreement sets out the service standards that we expect to meet. Vulnerable Customers The Council recognises that some members of the community may be considered to be more vulnerable and, therefore, may require additional support in dealing with their financial affairs. Vulnerability does not mean that a person will not be required to pay amounts they are legally obliged to pay. However, where a person is recognised to be vulnerable consideration should be given to; Allowing longer to pay, Postponing enforcement action, Assisting the person to claim benefits, discounts or other entitlements, Assisting the person to access sources of independent advice, Providing information in an accessible format, A temporary payment arrangement with lower repayment than would normally be agreed, Using the Council s Safeguarding processes to raise any concerns regarding the debtor s safety or welfare. The cause of vulnerability may be temporary or may be permanent in nature and the degree of vulnerability will vary widely. The following list at appendix 1 identifies the characteristics of persons who could be considered vulnerable and will be used as a guideline for both MDC staff and their agents. Equality Duties The Equality Act 2010 places a number of duties on the Council and these must be considered when considering the appropriateness of action taken to recover a debt. These include: Disability Section 15 - a disabled person is discriminated against if they are treated less favourably because of something arising in consequence of their disability and the public authority cannot show that the treatment is a proportionate way of achieving a legitimate aim. Section 19 -provides that indirect discrimination occurs when a policy that applies in the same way for everybody has an effect that particularly disadvantages disabled people. Section 20(3) creates a duty where a provision, criterion or practice puts a disabled person at a substantial disadvantage in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage.
10 Specific Debts Council tax Joint and Several Liability Ensuring that we collect and record the correct information about who is liable to pay Council Tax is of the upmost importance. Details of all joint owners/ tenants and their partners should be obtained from the outset as the Council Tax legislation specifically provides for more than one person to be treated as jointly and severally liable and as a consequence billed for the debt. Recording the full number of joint and severally liable council tax payers means that we maximise the opportunities of the collecting the debt, as we can take joint recovery action against all of those who are liable. The Council will pursue all jointly and severally liable persons, and will obtain liability orders against all liable persons. However it will have regard to individual circumstances when considering what enforcement action should be taken against which liable person. Arrangements The Council recognises that Council Tax payers may find themselves in difficult financial or personal circumstances, and may not be able to pay their Council Tax on the due date. The Council will encourage early contact with the Service so that mutually acceptable arrangements may be made and any issues regarding liability discussed with the aim of resolution at the earliest possible opportunity. Arrangements will be entered into at the discretion of the Council, and will take into account(but not limited to) the following 1. A Council Tax Payers personal circumstances, and that of his partner and dependent children, 2. The amount of the Council Tax Debt, 3. Previous payment history. Any arrangement made would need to ensure that any debts are fully repaid by regular instalments, within the current financial year. Whilst the arrangement is maintained the Council will not take any further recovery action, and the Council Tax payer will not incur any additional costs. However any arrangements which will result in the debt being carried into a second financial year will result in a liability order being sought to secure the debt. However provided the arrangement is maintained no other enforcement action will be taken. Summons and Liability order costs will be incurred, however discretion in recovering those costs will be applied in exceptional circumstances, providing that the arrangement is maintained and the debt is repaid in full Where a payment arrangement is not maintained the Council will issue one reminder, and provided the arrangement is brought up to date the arrangement will be allowed to continue. Where an arrangement is not brought up to date recovery action will proceed to the next stage without any further notice. Appeals Any appeal must be made in writing or by to the Council in the fisrt instance. Details of the various types of appeal and process to be followed are as follows:. Property banding appeals These appeals should be made directly to the Valuation Office and generally need to be made within six months of becoming liable, or of the entry in the Valuation List.
11 Appeal against a Completion date The appeal is made directly to the Council. If an agreement cannot be reached the Liable Person or the owner can appeal directly to the Valuation Office within 4 weeks of the notice being served Appeal against an Exemption, Discount, Liability, Disabled Reduction or Council Tax Support- The appeal is made directly to the Council. If an agreement cannot be reached the Liable Person or the owner can appeal directly to the Valuation Office. Council Tax remains payable even if an appeal has been submitted, and payment should be made in accordance with the demand notice that has been issued, with overpaid Council Tax being refunded at the conclusion of the appeal. However depending on the circumstances of the individual case the Council may consider suspending recovery action for a period of time to enable the appeal to be dealt with. Reminders The Council will take prompt action to send reminder notices to any account where payment is overdue by more than 7 days. This is important to both protect the interests of the Council Tax payers of the District, and to avoid individual Council Tax payers accruing debts. Reminders will allow 7 days for the account to be brought up to date, and providing this happens no further action will be taken. Wherever possible payment arrangements will be entered into at the first point of contact (generally the customer service team). Where an account is not brought up to date the full years Council Tax becomes immediately payable, and a final notice will be issued (see below) Final Notices Where a Council Tax account has not been brought up to date in accordance with a reminder notice, or it has been brought up to date, but is the third instance that the account has fallen into arrears (even if it has been brought up to date on the second occasion), a final reminder notice will be issued requiring full payment to be made within 7 days. Generally the Council will require full payment at this stage to avoid further recovery action being taken If full payment cannot be made an arrangement can be made, however a Liability Order would be sought and Summons and Liability order costs will be incurred, however discretion in recovering those costs will be applied in exceptional circumstances, providing that the arrangement is maintained and the debt is repaid in full Summons A summons will be issued if the liable person has not made payment in accordance with the reminder or final notices previously issued. Where an arrangement to pay at a final notice stage has been agreed a summons may still be applied for and a Liability Order sought to protect the Council s interest. A summons is issued as a result of the Council applying to the Magistrate s court for a Liability Order against the liable person, and at this stage costs will be charged (currently 45) The process involves the Council making a complaint to the Justice of the Peace or Clerk to the Justices, requesting the issue of a summons, directed to the liable person to appear before the court to show why they have not paid the sum which is outstanding. The summons will allow 14 days between issue date and the court hearing date and will clearly state: 1. the amount of Council Tax that remains unpaid 2. The costs associated with the issue of the summons 3. The additional costs that will be applied for should the debt, and summons cost not be paid before the hearing date 4. the time and place at which the defendant is required to appear at Court (should the debt not be paid in full).
12 The summons will be served by sending it by normal post to the Council Tax payers address, (or last known address) in accordance with the Council Tax regulations. There is no requirement to issue a summons by recorded or registered post. Liability Order The summons to a Liability Order hearing is a legal document requiring the defendant to attend a court hearing. The defendant (Liable Person) has the right to attend the hearing, but they do not have to attend if they consider that they do not have a valid defence against a liability order being issued (see below). If they consider they do have a valid defence they are entitled to attend to give evidence as to why an order should not be made (see valid defences below), however if the defendant does not appear the hearing will proceed in their absence If the Magistrates are satisfied that the sum shown on the summons has become payable by the Liable Person they will issue a Liability Order to the Council. The Council will also ask for a further award of costs ( currently 50.00) in connection with the cost of the Liability order hearing. Valid Defences The defences that the magistrates will take into account before deciding to grant a Liability Order are shown below: You have paid the council tax and costs in full The amount has not been legally demanded -This means the Council have not done one or more of the following; passed a resolution setting the tax and this has been published in a local newspaper, sent a bill to you, giving you 14 days before you have to pay, sent either a reminder or final notice giving you seven days to make payment, sent the Summons at least seven days after the full balance had to be paid Not Valid Defences If you do not have a valid defence the magistrates will grant a Liability Order. The following are not valid defences: You did not receive bill, reminder or final notices - The Council have to prove notices were sent to you - we do not have to prove that you have received them You can't afford to pay however you can still discuss a payment arrangement with the Council, but this will not prevent a Liability Order being applied for. You have applied for council tax benefit or a discount, exemption or other reduction, under the law Council Tax remains payable whilst a claim for a reduction remains outstanding, however the Council will try to resolve any claims or queries as quickly as possible, and wherever possible before Liability Order proceedings commence. However the Council will consider suspending any further recovery action following the issue of a Liability Order to enable the claim to be dealt with. You have an outstanding appeal with the Council or the Valuation Office Agency, under the law Council Tax remains payable whilst a dispute remains outstanding. However the Council will consider suspending any further recovery action following the issue of a Liability Order to enable that dispute to be concluded. Once a liability Order has been granted by the Court the Council have a number of additional powers to collect the Council tax debt. These powers include: Request for information about a persons income Attachment to Earnings Order Attachment to Benefit Order Attachments of Member Allowances Collection Agents (Formerly Bailiffs) Committal to Prison
13 Charging Orders Bankruptcy & Liquidation Requests for Information (Regulation 36) Following the granting of a Liability Order by the Magistrates Court the Council will write to the Liable Person(s) confirming that a Liability Order has been granted and the amount payable. The letter will encourage the Liable Person to put forward a proposals for a payment arrangement, but before any offer can be considered the Council requires a request for Information form to be completed, providing details of the Liable Persons employer, expected earnings and any other income. This should be returned to the Council and together with a budget statement so that the Council can consider the appropriateness of a payment arrangement or further enforcement action. The Request for Information must be completed by Law with 14 days, and a failure, without reasonable excuse, to do so constitutes a Criminal Offence for which the Liable Person can be prosecuted, leading to a fine of up to 500. Providing false information constitutes a Criminal Offence for which the Liable Person can be prosecuted, leading to a fine of up to The Council will, in appropriate circumstances, undertake prosecution of those Liable Persons who fail, without reasonable excuse, to provide information, or provide false information requested under Regulation 36 of 1992 Regulations. Attachments of Earnings Where a Liability Order has been granted by the Court the Council can instruct an employer to make deductions from a liable Persons salary under an Attachment of Earnings Order (AOE). An order will be served on the employer, with a copy sent to the Liable Person. The amount of the deduction will depend upon the persons net salary, and are based on percentage deductions within salary bands, details of which are contained in Schedule 4 to the 1992 Regulations, a copy of which are included with the AOE when it is sent to the Employer. Once an AOE has been made, it will remain in force until the whole amount to which it relates is paid or, it is cancelled by the Authority. If a debtor changes his employment, he is under an obligation to inform the Authority of his new employment. Likewise so has the employer if a debtor becomes their employee and they know the debtor has an attachment to earnings in force. In addition to each amount deducted under the AEO the employer may also deduct a further 1 towards administration costs. Where the Liable Person has more than one liability Order, up to two AOE s can be in force at any one time. Attachments of Benefits The Council may apply to the Department of Work and Pensions (DWP) to have deductions made from a debtor s Income Support/Guaranteed Pension Credit/ Income Based Jobseekers Allowance. There is a fixed weekly amount deducted. Deductions may only be made from the claimant named in the Liability Order.
14 An order is issued usually detailing the name, national insurance number and date of birth wherever possible. The deductions are made from the claimants benefit on a weekly/ fortnightly basis and he deductions are usually passed over to the Council on a monthly basis. Deductions may only be made in respect of one Liability Order at a time. Attachments of Member Allowances This enforcement option relates to Liability Orders granted against Elected Members of a billing or relevant precept authority. It does not apply to the earnings of Members of Parliament in their capacity as MPs. The authority of whom the defaulter is an elected member can make an order under which they can deduct 40% from that member s allowances. This means that all councillors attendance basic and special responsibility allowances can be attached. Enforcement Agents (Previously known as Bailiffs) The Liability Order gives the Council the ability to instruct an Enforcement Agent to recover an outstanding Council Tax Debt, and where the debt is not paid to remove goods to the value of the debt, known as taking control of goods, (previously referred to as levying Distress) and selling them at Public Auction The Council has a formal agreement with the Enforcement Agents, to determine 1. The hours that the agents can call 2. The days of the week they can attend 3. That they will operate within the code of practice of The Enforcement Services Agency of England and Wales. The law sets out the fees that can be charged which are currently: 75 for initial contact (Compliance Fee) 235 for a visit and any subsequent contact, plus 7.5% of the value of the debt if it exceeds for the sale or disposal of any goods, plus 7.5% of the value of the debt if it exceeds 1500 plus any costs associated with the sale. If an Enforcement Agent takes control of goods to the value of the debt, he can enter in a Controlled Goods Agreement (previously known as a Walking Possession Agreement) under which he will allow the goods to remain with the debtor, whilst a payment arrangement is entered into. If a debtor fails to sign the agreement, or fails to maintain the payment arrangement the Enforcement Agent is legally entitled to seize those goods to sell at public auction. The Council will only instruct an Enforcement Agent where a debtor has been advised of the Liability Order and has been given an opportunity to make a payment arrangement. Committal The 1992 Regulations provide for the Council to apply to the Magistrates Court for a warrant committing the debtor to prison for a maximum period of 3 months. A warrant can be applied for only if an attempt has been made to take control of goods to the value of the debt, and where the Council has received a certificate from the enforcement agent attempting to recover the debt that he was unable to find any or sufficient goods. This will include cases where the enforcement agent was unable to gain entry.
15 Committal is only considered where every other option to recover the debt has been attempted, and where the debtor has been given every possible opportunity to reach an arrangement to repay the Council tax Debt. Committal Proceedings will only be considered following careful consideration of the facts by a Team Leader, and where appropriate having taken legal advice. The decision to apply for a Warrant of Commitment, and the reasons for doing so will be fully recorded by the Team Leader making that decision. The examples of the factors taken into account are (but not limited to) the following: circumstances that will be considered are Amount of Debt Period that the debt has accrued Reviewing an accurate history of the origin of the debt and attempts to recover it Gathering sufficient evidence about the debtor s circumstances and the reasons (if known) for the non payment of the debt Whether there is an on-going liability Considering all information about past, present, disputed or outstanding benefit claims or any discounts or exemptions that might be relevant What other recovery action has been taken, and have all other remedies been exhausted Considering whether a debtor s failure to pay and to respond to other recovery measures could arise from a disability (including a mental impairment with a longterm and substantial effect on normal day-to-day activities), and considering whether the debtor s personal circumstances warrant them being protected from the consequences of recovery action. Careful consideration of the proportionality of the approach taking into account size of the debt, and the likely costs associated with Committal proceedings both for the customer and the Council Where a decision is made to instigate Committal proceedings a complaint is made to the Magistrates Court, requesting the issue of a summons requiring the debtor to attend Court to enable a means enquiry to be undertaken. If a debtor fails to attend Court the Council can request a Warrant of Arrest to be issued by the Court. The Warrant can be issued with, or without Bail, and is served by the Police. When the Debtor attends Court the Magistrates will conduct an enquiry as the means and circumstances of the Debtor to determine if they consider the non-payment of Council tax was due to either wilful refusal (for example the customer made a conscious decision not to pay), or culpable neglect (for example the debtor had money to pay, but chose to spend it on other lower priority debts) Possible Outcomes If the Magistrates find the debtor guilty of wilful refusal or culpable neglect that have the power to Commit the debtor to prison immediately for up to 90 days Issue a suspended prison sentence on condition that regular payments are made If the Magistrates do not find Wilful Refusal or Culpable Neglect they can order the Council to remit all or part of the Council Tax debt.
16 Magistrates can also Dismiss a case at any time without reaching a decision about Wilful Refusal or Culpable Neglect. This could be appropriate if the debtors employment details are identified at the means enquiry, enabling an attachment of earning to be made. In this situation the Council can apply to start the Committal process again at a later date. Agree to adjourn a hearing, for example to enable further enquiries to be made, or for more information to be. Charging Orders The Council can apply to the County Court for a charging order against the defaulter s dwelling that gave rise to the Council Tax if it has obtained a Liability Order and the debt outstanding is at least 1,000. In deciding whether to grant a charging order the County Court will consider the personal circumstances of the debtor and whether any other person would be unduly prejudiced if an order was granted. If granted the order can give the Authority a charge on the property so that if sold it is automatically entitled to receive the outstanding amount from the proceeds of the sale, provided that there is sufficient equity remaining when any charges having priority are redeemed such as a mortgage. Generally a Charging Order is considered to be a way for the Council to Secure a debt, rather than enforcing the debt, consequently a Charging Order will only be considered following careful consideration of the facts by Team Leader, and where appropriate having taken legal advice. The decision to apply for a Charging Order, and the reasons for doing so will be fully recorded by the Team Leader making that decision. When reaching that decision consideration will be given to: Amount of Debt Period that the debt has accrued Reviewing an accurate history of the origin of the debt and attempts to recover it Personal circumstances of debtor and his partner and dependant children Likely length of time that debt will take to recover (i.e. is the property currently up for sale) Whether there is an on-going liability Considering all information about past, present, disputed or outstanding benefit claims or any discounts or exemptions that might be relevant assessing that there is no realistic prospect of recovering the debt by other means in a reasonable timescale gathering sufficient evidence about the debtor s circumstances considering whether a debtor s failure to pay and to respond to other recovery measures could arise from a disability (including a mental impairment with a longterm and substantial effect on normal day-to-day activities), and considering whether the debtor s personal circumstances warrant them being protected from the consequences of recovery action. Careful consideration of the proportionality of the approach taking into account size of the debt, and the likely costs associated with applying for Charging Order both for the customer and the Council
17 Where the debtor is residing (Charging orders more likely to be effective where debtor is outside of UK jurisdiction, or their address is unknown making other enforcement options unviable) Whether there are any other options to enforce the Debt more effectively Benefits of a joint approach with Private Sector Housing Team (particularly Enforced Sale) to address the issue of an empty/ Derelict property. The Council will ensure that appropriate action using Charging Orders is widely publicised to ensure that it acts as a deterrent against non-payment. Bankruptcy & Liquidation Bankruptcy is one of the most extreme recovery remedies that exist under the 1992 Regulations, and as such should only be considered after careful consideration of all the facts by a senior officer. Prior to any action being taken to instigate bankruptcy proceedings the following steps will be taken: 1. All reasonable attempts to contact the customer in person must have been made including a minimum of two attempts to visit the customer where this is practicable. 2. A letter will have been sent to the customer advising that a. bankruptcy action is being considered b. warning them of the serious consequences of bankruptcy and their continued failure to make arrangements to pay the debt, c. and urging them to seek independent advice and sign-post to local sources of advice. d. Allowing a minimum period of 14 days to respond to that letter before bankruptcy proceedings are instigated 3. A senior officer to have decided that pursuing bankruptcy is a fair and proportionate action after: considering all information about past, present, disputed or outstanding benefit claims or any discounts or exemptions that might be relevant reviewing an accurate history of the origin of the debt and attempts to recover it assessing that the debtor has assets that will clear the debt if bankruptcy is pursued assessing that there is no realistic prospect of recovering the debt by other means in a reasonable timescale gathering sufficient evidence about the debtor s circumstances considering whether a debtor s failure to pay and to respond to other recovery measures could arise from a disability (including a mental impairment with a longterm and substantial effect on normal day-to-day activities), and considering whether the debtor s personal circumstances warrant them being protected from the consequences of recovery action. Careful consideration of the proportionality of the approach taking into account size of the debt, and the likely costs associated with bankruptcy both for the customer and the Council 4. The decision to instigate bankruptcy, and the reasons for doing so will be fully recorded by the Team Leader making that decision The Council will ensure that appropriate action using Bankruptcy Orders is widely publicised to ensure that it acts as a deterrent against non payment. Bad Debt Provision The Council will ensure that adequate provision is made within it fincial accounts, and these provisions will be reviewed annually.
18 The amount calculated for bad debt provision will be based upon a analysis of outstanding debts, taking account the age of the debt and likelihood of recovery. Business Rates Billling Ensuring that we promptly identify business premises that are liable to pay Business Rates and collecting and recording the correct information about who is liable to pay is of the outmost importance. Particular care will be taken to ensure that the correct liable person, or company details are recorded to maximise the opportunities of the collecting the debt, as the companies trading name is not always the same as the person or company who are in beneficial occupation of the business premises. Arrangements Appeals Reminders Final Notices Summons Liability Order Bailiffs Committal Charging Orders Bankruptcy & Liquidation Write Offs Bad Debt Provision
19 Benefits debts Underlying Entitlement Fraud Debts Recovery from on-going housing benefit entitlement Local Council Tax Support Overpayments Invoicing Recovery from DWP benefits Reminders Collection Agencies Enforcement - County Court Judgements Enforcement Charging Order Enforcement -Bankruptcy Write Offs Bad Debt Provision Fees and Charges Payments in Advance Sundry Debts Invoicing and accounting Recovery procedures Arrangements Cessation of service Bed and Breakfast charges Rent Deposit Scheme Leases Parking Contravention Notices (PCN s)
20 Part 4 Monitoring Target Setting and monitoring Corporate Roles and responsibilities
21 Part 5 Appendices Appendix 1 -Definition of Vulnerable Person
22 Disabled Persons A person with a disability is not necessarily vulnerable for the purposes of this Policy. However, where the disability affects the persons ability to deal with their financial affairs they should be considered to be vulnerable. Persons with Mental Impairment or Learning Difficulties If it is evident that the debtor has mental impairment or learning difficulties they should be considered to be vulnerable. Persons Experiencing Serious Illness, including Mental Illness Where the debtor (or the debtor s partner) appears to be suffering from any condition which is serious or life threatening they could be considered to be vulnerable. Persons receiving Income Support, Job Seeker s Allowance, Employment and Support Allowance or Pension Credit (or where a benefit application has been made but not yet determined) Those on Income Support, Job Seeker s Allowance, Employment and Support Allowance or Pension Credit are considered to be vulnerable for the purpose of this Policy as they are living on a subsistence level benefit. Unemployed Persons Unemployment does not automatically mean the debtor is vulnerable. For example a person may have received a substantial redundancy payment and be financial secure in the shortterm. However, loss of employment may result in serious financial difficulties if a person is suddenly unable to meet their existing financial commitments. A person who has recently become unemployed after a long period of employment may be unfamiliar with processes for claiming benefits and may need additional assistance to understand their entitlements. A Person who has Difficulty Understanding English Where a person does not understand either spoken or written English they should be considered to be vulnerable, particularly if they do not have support from family members who can speak and read English. Appropriate translations should be provided where necessary. Persons Aged Under 18 It is unlikely that a person aged under 18 years will owe any sums to the Council, however, it is possible that a person may assist or care for a parent or other older person and could contact the Council on their behalf. A person aged under 18 years may be the only person at home when an enforcement visit is made. Anyone aged under 18 years should automatically be considered to be vulnerable. Elderly Persons An elderly person is not necessarily vulnerable and many elderly people are financially secure and both mentally and physically healthy. However, some elderly people are frail, confused, ill, and living on fixed and limited incomes and, therefore, are considered to be vulnerable.
23 A Person Recently Bereaved A person suffering the recent bereavement of a close relative could be considered to be a vulnerable person. Lone Parents A lone parent is not necessarily a vulnerable person and it is recognised that some lone parents are financially secure. However, lone parents, and in particular those with very young children, may have difficulty in undertaking employment and, therefore, rely on Welfare Benefits. Pregnancy A person in the later stages of pregnancy may find dealing with serious financial issues stressful, particularly if they are not supported by a partner, or if they are on a low income or benefits. This may be compounded by any additional essential expenditure due to the pregnancy or birth of a child. A person that has difficulty reading or writing A person who has difficultly reading or writing should usually be regarded as vulnerable because they will have difficulty in understanding written notices. People who have difficultly reading or writing may be reluctant to reveal their difficulties and where there is concern that a person has such difficulties the issue should be addressed in a sensitive manner. This list is not intended to be exhaustive and each case should be considered on an individual basis taking into account all relevant factors. For the purpose of this Policy the key factor in determining that a person should be regarded as vulnerable will be that the circumstances which give rise to the concern that the person is vulnerable affect their ability to deal with their financial affairs or ability to pay. Particular care must be taken in authorising enforcement action where the debtor is known to be vulnerable. Appendix 2 Delegation Arrangements Appendix 3 Flow chart for Council Tax Recovery Appendix 4 Flow Chart for Business Rate Recovery Appendix 5 - Flow Chart for Benefit Debt Recovery Appendix 6 Flow chart for Sundry Debts Appendix 7 Flow Chart for PCN s Appendix 8 - Flow Chart for Benefit Debt Recovery
24 The Children s Society A freedom of information request to all billing authority Councils in England 1. Provide the number of households (a) overall and (b) with children that were in arrears on their council tax on the 31 st March for each of the following years. Total number of households liable for council tax in your local authority Number of households with children in your local authority Number of individual households in Council Tax arrears Number of individual households in Council tax arrears with children When a household loses the right to pay their council tax by instalments, does the council have a policy to: (a) allow an individual to negotiate for instalments to be reinstated - Yes (b) allow an individual to negotiate affordable repayments - Yes (c) signpost to debt advice services before a court summons is sent - Yes (d) signpost to debt advice services after the summons is sent but before the court hearing - yes (e) signpost to debt advice services once a liability order has been granted yes (f) other (please explain) - N/A See Policy attached to 3. Do you have specific council tax arrears collection practice for households with children under 18? Please explain how this differs from standard practice and send us any relevant policies. - No 4. How many individual (a) households and (b) households with children under 18 have been issued with a court summons in each of the last three financial years (2013/12, 2012/13, 2011/12)? Cases 2013/ , Cases 2012/13 986, Cases 2011/ Please complete the table below, showing when liability orders have been granted for households within your local authority in the last three financial years Number of liability orders granted / 2
25 Number of liability orders granted for households with children Please complete the table below, showing how liability orders have been used for households within your local authority in the last three financial years. If the answers are not known for number of households with children please indicate this and provide for the number of households overall. Number of households with children that an attachment of earnings order has been made Number of households with children that a deductions from benefits order has been made Number of households with children that have been referred to bailiffs Number of households with children where proceedings have started for a committal to prison Total Total 189 Total Total -159 Total Total NIL NIL NIL Total Total Total How many of the referrals to bailiffs have resulted in the removal of goods for (a) all households and (b) all households with children None (for both (a) and (b)) 8. Council Tax Support Scheme: How many households within your local authority received 100% subsidy for council tax in 2012/13? How many households within your local authority received 100% subsidy for council tax in 2013/14? For non pensioner households with children what was the maximum percentage of their council tax bill that could be covered by council tax support? 3,000 Pensioners only - 1,405 Working age liable for 20% 80% 2 / 2
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