CORPORATE FAIR DEBT POLICY

Transcription

1 CORPORATE FAIR DEBT POLICY Introduction The purpose of the is to establish guidelines for the recovery of all debts outstanding to the Authority, also to specify the manner in which these debts are to be collected. The Policy will use all available options to collect from those who seek to avoid paying their debts; equally, it will show that those who communicate they are experiencing genuine difficulties will be assisted in any way possible. Gravesham Borough Council recognises that it is essential to make early contact with debtors, also that the consolidated departmental debt will provide a co-ordinated approach. The fair debt policy approach should ensure that each debtor is treated fairly and as an individual with compassion in cases where genuine financial difficulty is experienced. Principles of Recovery Action Written demands are produced and dispatched in accordance with legal requirements and comply with the published timetable. Every effort is made to maximise benefit entitlement There are clear written guidelines (roles and responsibilities) for all staff involved in recovery action. Also concise information for debtors and advice agencies Advice and information are available for debtors at every stage of the recovery process Procedures must: Be effective, ensuring that where people have the means, they fulfil their obligations by paying their debts Acknowledge the debtors obligations to their department(s) Attempt to sort out debt problems as early as possible Effectively distinguish between the debtors who cannot pay and those who will not pay Allow for full appraisal of a debtors circumstances providing sensible repayment arrangements Achieve a fair balance between the claims of Gravesham Borough Council s competing creditors Provide money advice referral (CAB) where a need is identified Page i

2 Detail Collect current year plus an amount from any outstanding arrears to ensure debts do not continue to increase Any un-collectable debts to be written off in accordance with the financial regulations The debtor should be able to make consolidated payments which the Corporate Debt Team will allocate appropriately to clear their liability on multiple debts Processes and controls must ensure that debt data is up to date, accurate and complete The system must be continually monitored by the relevant department so action occurs e.g. on default Designated officers must be empowered to make corporate decisions Case conferences should be held in the more complex cases. Revised Debt Recovery and Write-off Policies The council recovers the following key sources of income: 1. Sundry Debts 2. Council Tax 3. National Non-Domestic Rates (or Business Rates ) 4. Housing Benefit Overpayments 5. Car Parking Excess Charges 6. Housing Rents Each of the above has their own section within the. Page ii

3 Table of Contents 1 Sundry Debts Council Policy Policies Specific to Sundry Debtors Cancellation of sundry debt invoice Write Offs Council Tax Council Policy Policies Specific to Council Tax Bailiff/External Agency Recovery Committals Write Offs Non Domestic Rates Policies Specific to Non domestic Rates Bailiff/External Agency Recovery Write Offs Overpaid Housing (and Council Tax) Benefit Council Policy Policies Specific to overpaid housing and council tax benefit Write Off Parking Enforcement Council Policy Policies specific to Parking Enforcement Write off Housing Rents Council Policy Policies specific to Housing Rents Recovery of Former Tenant Accounts Write Off Referral of Department Debts to the Corporate Debt Section Summary Appendix 1.Vulnerable Persons Policy Appendix 2.Putting the Customer First: Corporate Customer Service Charter Appendix 3.Write Off Policy Sundry Debts 1.1 Council Policy The Service Manager - Finance on behalf of the council has a duty to recover all outstanding amounts It is essential to maintain council services offered by recovering any costs for those services provided. It is imperative that invoices are paid to ensure the continuance of services At all times the council's Customer Care Putting the Customer First: Corporate Customer Service Charter (Appendix 2) and Vulnerable Page 1 of 43

4 Persons Policy (Appendix 1) strategies must be operated within the Sundry Debtors collection environment. 1.2 Policies Specific to Sundry Debtors Sundry debtor invoices are raised by individual departments and the Income Section. A full individuals name or company name and address, including postcode is required. Invoices should be charged to the correct cost centre and VAT code. A detailed description should be illustrated together with an appropriate due date and for the correct charge. Agreements, evidence or any legislation applicable must be retained by the originating department for future recovery action and to provide an audit trail to evidence that the debt raised is valid The responsibility for the billing, collection and recovery of sundry debtor demands is held by the Service Manager, Finance. Where appropriate, the Service Manager, Finance may agree that staff within other Services may become involved in the process Sundry Debtors can be cancelled at any recovery stage providing the proper procedures are followed Service providers must endeavour to obtain payment in advance or at the time of service delivery wherever permissible. Sundry debt accounts should only be raised where payment in advance for a service is inappropriate Except in the case of a demand payable by instalments, or as otherwise contractually agreed, the settlement terms for all demands will be 28 days. Where a debtor has contacted the authority to make a special arrangement to pay every attempt will be made to clear outstanding arrears by the end of the financial year 31 March At all times the council will act legally and promptly in all cases where payment is overdue Invoices will be issued promptly with sufficient information to explain the charge In the event of non payment a reminder will be issued after 14 days from the due date of the invoice If payment is not made within a further 14 day period, a second reminder will be issued Failure to pay following a second reminder will result in the debt moving to the welfare stage on the debtors system. A decision will then be made to refer the matter to a collection agency, currently Stanford and Green or progress the debt to the next recovery stage letter before action (LBA). Page 2

5 Page All debt at LBA stage will be reviewed by a member of the Income Recovery Team, who will decide on the progression of the debt based on debt type, previous recovery history and available, legally appropriate recovery methods If the debt is deemed as non recoverable, the Income Manager will employ the write off procedure (see Appendix 3) If the debt has been deemed to be recoverable, the Income Team will review the debt and the next steps to be taken in the light of the council s Vulnerable Person s policy. This may include the use of the Experian and Locta Systems in order to carry out financial/ historical searches and the Insolvency Services website to check that the current address held is correct and that the debtor is not bankrupt. Search requests made through Locta are sanctioned by the Systems Administrator. The use of Experian for searches is monitored by the Fraud Manager in liaison with the Income Manger. A land registry search to verify property ownership will be carried out at this stage If the debt has been deemed to be recoverable and the methods in have been exhausted, the Income Manager will decide to issue a notice of intent to summons. Where legally permissible, the provision of future services to the debtor may be suspended until outstanding debts are settled after discussion with the appropriate service manager If a notice of intent to summons has been issued, and if after the specified time payment has not been made, a County Court Summons will be issued. This will result in a County Court Judgment (CCJ) being lodged. This may affect a credit rating and make any type of future credit agreement difficult. It should be noted that once Judgment has been granted, court costs and interest will be added to the debt Once Judgment has been obtained, the council will then enforce this, which can include an attachment of earnings order or Bailiff action to seize goods to the value of the debt Under a judgement order a charging order may be obtained on the debtor s property, which will remain in place until the property is sold, although this can be enforced sooner by proceeding with an order for sale Insolvency proceedings may also be instigated for debts above a certain level as stated by the Official Receiver s Office, which results in bankruptcy Remedies as stated in paragraph and are particularly effective for corporate debt due to the consolidation of debts owed across the authority by an individual The costs of enforcement action/ litigation to recover sundry debtor invoices will be charged against the budget of the service raising the

6 invoice. Any costs recovered from the debtor will be credited against these sums To prevent any of the recovery action shown above, it is important that contact is made between the council and the debtor to seek reasons for non payment. If necessary, instalment agreements can be arranged dependant on individual circumstances Ownership of all sundry debts rests with the originating units. It their responsibility to: issue an instruction to cancel an invoice, using a Sundry Debtor Cancellation Form; correspond with or discuss with the debtor issues relating to the validity of the debt; and determine what, if any, services should be provided to debtors who are in arrears. The Income Section will provide reports to the originating units on a regular basis as to the value of their outstanding accounts The Income Section within the Finance Department will supply each Service Manager with a monthly report showing the status of debts raised by that service department. They will also contact the service department: before taking court action against the debtor; requesting that the debt be written off It is the responsibility of the service department to determine how to supply services to a debtor who is already in arrears. However, prior to a council service being withdrawn completely from a debtor, the service department must identify if the service can be legally stopped and then contact the supplier to explain the action to be taken and the reasons behind it. 1.3 Cancellation of sundry debt invoice Only staff working in the Income Section of the Finance Department will have access to cancel sundry debt invoices raised on the debtors system If service managers wish to cancel a sundry debtor invoice then they must complete the Sundry Debtors Cancellation Form, which must be signed by an authorised officer. It should then be sent to the Income Section For an officer to be authorised to sign the cancellation form, they must have approval from their Service Manager or a Director. This is recorded on the Sundry Debtors Authorised Signatories Sheet, which Page 4

7 will be held in the Income Section. It will be the responsibility of the Income Manager to distribute this form to be updated at least annually A sundry debtor invoice can be cancelled at any recovery stage, including court action. However, thorough checks on correctness as stated in (1.2.1) must be established by a member of the Income Recovery Team prior to the issue of a claim through the Court due to court costs At all times the council's Customer Care Policy- Taking Pride in Gravesham (see Appendix 2) and Vulnerable Persons Policy (see Appendix 1). Strategies must be operated within the Sundry Debtors collection environment. 1.4 Write Offs The Income Section will provide the following details to the Service Manager to enable them to decide on whether or not to write off a debt: Debtor reference Total sum Reason for debt Action taken to date to recover the debt Sundry Debt which is identified for write off will be actioned in accordance with Gravesham Borough Council s Corporate Write off Policy (See Appendix 3). Page 5

8 2 Council Tax 2.1 Council Policy In accordance with the provisions of the Local Government Finance Act 1992 Gravesham Borough Council is responsible for levying and collecting all Council Tax that is payable on all occupied and unoccupied domestic properties, which are not exempt and situated in the borough of Gravesham In order to ensure arrears are kept to a minimum and the Council Tax is kept as low as possible for everyone, it is essential that Gravesham Borough Council operate an effective and efficient approach to the collection of Council Tax monies using the methods determined by legislation and regulation The Service Manager Revenues and Benefits on behalf of the council has a duty to recover all outstanding amounts of Council Tax and at all times staff within the Revenues Department will operate according to the councils strategy An Excellent Council. 2.2 Policies Specific to Council Tax The responsibility for the billing, collection and recovery of Council Tax is held with the Service Manager Revenues and Benefits It is important that anyone who does not pay their Council Tax by the due date is pursued for payment quickly The collection and enforcement of Council Tax is governed by the regulations Council Tax (Administration and Enforcement) Regulations When a payment is missed an Instalment Reminder letter will be sent within 15 days of the instalment becoming overdue If the resident fails to make payment following an Instalment Reminder letter a Final Notice will be sent and the resident can/will lose the right to pay by instalments and the full sum, payable for the year, will become immediately due Information regarding the availability of discounts, exemptions and benefits along with a copy of the council s Customer Charter will be issued with all demands for payment. Page 6

9 2.2.7 If a resident contacts the authority and agrees special arrangements to pay the agreement will be in accordance with the councils written guidelines and criteria for the making of special arrangements When no contact has been made following the Final notice, the council will request the Court to issue a summons within 15 days of the reminder Explanatory notes will be issued with the summons notice explaining the implication of Council Tax Enforcement If the resident contacts the council and agrees an arrangement to pay following a summons the residents employer details will be captured and retained Should the case reach court the council will make an application for a Liability Order at the hearing Staff attending court will be fully prepared to assist defaulters who may choose to attend court for the Liability Order hearing and ensure they have a written breakdown of summons and liability order costs available. They will also ensure they are equipped with a supply of Benefit/Single Person Discount forms etc and be sufficiently trained to assist taxpayers to complete forms and assess potential entitlement to benefit A Council Tax Notice of Liability Order and information request with details of the possibility of bailiff action will be issued to the taxpayer within 3 working days of the court hearing If the information request is not returned the case will be passed to Bailiffs for recovery action Should the debt fail to be recovered by bailiffs appropriate action to prosecute will be taken Where employer details are supplied an attachment to earnings arrangement will be made to recover the outstanding debt An employer is bound by law to action a local authority request to apply an attachment to earnings in respect of a liability order granted under relevant Council Tax legislation. An employer who fails to set up such an attachment will first be reminded but ultimate failure to carry out this action will result in prosecution Where information about relevant benefits is provided an attachment to benefit will be arranged to recover the outstanding debt. Page 7

10 Should the authority be unsuccessful in arranging attachment to earnings or benefits, where appropriate Charging Orders will be applied for and/or if appropriate the authority will Petition for Bankruptcy. 2.3 Bailiff/External Agency Recovery Before the council instructs the bailiffs the resident will be sent a final warning letter informing the resident that the council is about to instruct a bailiff to recover council tax monies that are due and inform them of the costs involved When the services of Bailiffs/External Agency Recovery have been determined a contract will exist along with formal written procedures specifying the standard of service to be provided and will cover the following matters:- The initial bailiff visit will be expected to be within 10 working days of receipt of the case. Where no contact has been made within office hours then at least one visit will take place outside normal working hours before the case is returned for committal. There will be specific procedures for the uplifting (vanning) of goods. Cases will only be returned by bailiffs after at least three unsuccessful visits have been made. There will be agreed provision for the security of money collected in the form of bond or client account. A joint signatory account will be set up for external bailiffs to pay in all collections requiring an authorised signatory for the withdrawal of the bailiffs portion of fees. The authority will request copies of external bailiff s annual accounts, insurance certificates and monthly bank statements of client accounts and these will be retained by the council. The authority should be able to access the external bailiffs system via a link in order to make enquires. Page 8

11 2.3.3 Where an arrangement does not exist between the authority and bailiffs, the bailiff will not retain the case for longer than a maximum of 90 days It will be arranged for money collected by the bailiffs to be paid to the authority on a weekly basis. 2.4 Committals When the Authority has tried all other options it will only list unpaid Council Tax cases for committal which exceed the minimum value which is considered by the authority as uneconomical to pursue Committal Summonses will be served using methods agreed by the authority (i.e. hand delivered, recorded delivery etc) The council will send pre-committal warning letters prior to commencement of proceedings allowing the taxpayer the opportunity to make payment by other methods Where no contact has been made, the Committal Summons will be issued within 20 days of the warning letter and/or 10 working days prior to the court hearing The authority shall charge costs up to the statutory maximum at the time of issuing a Committal Summons to cover admin costs Evidence/cases will be presented in court in line with the council s policy Where payment arrangements are made in court or payment is made (by cheque) cases will not be withdrawn but adjourned. 2.5 Write Offs Council Tax debt which is identified for write off will be actioned in accordance with Gravesham Borough Councils Corporate Write Off Policy (Appendix 3) Where taxpayers have contacted the authority to make a special arrangement to pay every attempt will be made to clear outstanding arrears by the end of the financial year 31 March. Page 9

12 3 Non Domestic Rates 3.1 Council Policy Schedule 7 (part 1) Local Government Finance Act 1988 provides that the multiplier is set by the Secretary of State. Gravesham Borough Council is responsible for levying and collection of Non Domestic Rates payable on all occupied and unoccupied hereditaments, which are not exempt and situated in the borough of Gravesham In order to ensure arrears are kept to a minimum and the Non Domestic Rates are kept as low as possible for everyone, it is essential that Gravesham Borough Council operate an effective and efficient approach to the collection of Business Rates monies using the methods determined by legislation and regulation The Service Manager Revenues and Benefits on behalf of the council has a duty to recover all outstanding amounts of Non Domestic Rates and at all times staff within the Revenues Department will operate according to the councils strategy An Excellent Council. 3.2 Policies Specific to Non domestic Rates The responsibility for the billing, collection and recovery of Non Domestic Rates is held with the Service Manager Revenues and Benefits It is important that anyone who does not pay their Non Domestic Rates by the due date is pursued for payment quickly When a payment is missed an Instalment Reminder letter will be sent within 14 days of the instalment becoming overdue If the rate payer fails to make payment following an Instalment Reminder letter the rate payer will lose the right to pay by instalments and the full sum, payable for the year, will become immediately due Information regarding the availability of any rate relief along with a copy of the councils Customer Charter will be issued with all demands for payment If a ratepayer contacts the authority and agrees special arrangements to pay, the agreement will be in accordance with the councils written guidelines and criteria for the making of special arrangements When no contact has been made following the reminder notice, the council will request the Court to issue a summons within 14 days of the reminder. Page 10

13 3.2.8 Explanatory notes will be issued with the summons notice explaining the implication of Non Domestic Rate Enforcement Should the case reach court the council will make an application for a Liability Order at the hearing Staff attending court will be fully prepared to assist defaulters who may choose to attend court for the Liability Order hearing and ensure they have a written breakdown of summons and liability order costs available If no arrangement is made to clear the Liability Order debt, the case will be passed to Bailiffs for recovery action Should the debt fail to be recovered by bailiffs appropriate action to prosecute will be taken, where appropriate Charging Orders will be applied for or petition for bankruptcy/liquidation sought. 3.3 Bailiff/External Agency Recovery When the services of Bailiffs/External Agency Recovery have been determined a contract will exist along with formal written procedures specifying the standard of service to be provided and will cover the following matters:- The initial bailiff visit will be expected to be within 10 working days of receipt of the case. Where no contact has been made within office hours then at least one visit will take place outside normal working hours before the case is returned for committal. There will be specific procedures for the uplifting (vanning) of goods. Cases will only be returned by bailiffs after at least three unsuccessful visits have been made. There will be agreed provision for the security of money collected in the form of bond or client account. A joint signatory account will be set up for external bailiffs to pay in all collections requiring an authorised signatory for the withdrawal of the bailiffs portion of fees. The authority will request copies of external bailiff s annual accounts, insurance certificates and monthly bank statements of client accounts and these will be retained by the council. The authority should be able to access the external bailiffs system via a link in order to make enquires. Page 11

14 3.3.2 Where an arrangement does not exist between the authority and bailiffs, the bailiff will not retain the case for longer than a maximum of 90 days It will be arranged for money collected by the bailiffs to be paid to the authority on a weekly basis. 3.4 Write Offs Rate payer s debt which is identified for write off will be actioned in accordance with Gravesham Borough Councils Corporate Write off Policy Page 12

15 4 Overpaid Housing (and Council Tax) Benefit 4.1 Council Policy The majority of Housing and Council Tax Benefit Overpayments are recoverable. A recoverable Housing Benefit overpayment must always be recovered from the claimant and/or person to whom it was paid. This does not apply in the case of excess council tax Benefit, as this is recovered directly from the claimants council tax account through the council tax System and would be administered through the council tax Section in accordance with council tax legislation (see Section 2 of this report). Some debts are irrecoverable, for example, those caused by Official Error where the claimant could not reasonably have known that they had been overpaid or where they had not contributed to the error Officers assessing claims will decide if the overpayment is recoverable at the time of processing the overpayment. Any overpayment considered irrecoverable will be referred to a Senior Officer for a final decision. The Overpayments Officer will monitor the level of recoverable overpayments that the Council decides not to recover by using reports via the Northgate system It is at the discretion of the Council whether to recover an overpayment. Where known, the personal circumstances of the claimant should be taken into account when deciding whether to recover the overpaid amount The Service Manager Revenues and Benefits on behalf of the council has a duty to recover all outstanding amounts of Council Tax and at all times staff within the Revenues Department will operate according to the councils strategy An Excellent Council. 4.2 Policies specific to overpaid housing and council tax benefit Whom to recover from Any recoverable overpayment will be recovered from the claimant or the person to whom payment was made (this could be a landlord or the claimant s appointee). When deciding who should repay the debt all factors must be taken into account such as the likelihood of the person receiving the payments knowing they were being overpaid. Where payments are made to a landlord, we will make a judgement based on evidence available on whom to recover from Where the overpayment has been made due to misrepresentation or failure to disclose a relevant fact by the customer, someone acting on their behalf, their landlord or an agent, then recovery will be sought from the person to whom the payment was made. Page 13

16 4.2.3 The recovery of fraud overpayments are prioritised by interviewing claimants immediately after they have been issued with a Formal Caution or Administration Penalty and make arrangements with them to clear the debt. Recovery Methods Councils can recover overpayments by any lawful means. One or more of the following methods of recovery dependant upon the individual circumstances of each case. The amounts specified in each case are in relation to the 2009/10 financial year. Recovery of Rent Rebate/Rent Allowance from Future Benefit Action Timescale Follow Up Notification Within 2 working days Customer requests to renegotiate recovery rates 10 working days Letter to customer confirming new recovery rate within 2 working days Recovery of Rent Rebate/Rent Allowance by Sundry Debtors Action Timescale Follow up Invoice sent Within 2 days Due date deferred by one calendar month 1st Reminder On due date Failure to pay invoice within 14 days will result in a final reminder being issued Final 14 days after 1st Failure to pay invoice within 7 Reminder Chase up telephone call Letter before action Court Proceedings reminder Weekly report run to identify outstanding invoices Failure to respond to letter before action within 14 days Failure to respond to all of above days Failure to respond to call will result in Letter Before Action being issued Refer for court proceedings within 14 days Recovery from ongoing benefit - Rent Allowance or Rent rebate Where a claimant continues to receive Housing Benefit we will make deductions from ongoing payments of Housing Benefit having regard to Page 14

17 their financial circumstances. Where appropriate we will recover debts at the weekly amounts recommended by the DWP For the financial year 2009/10, the rates are as laid out below. Type of Claimant Claimant Error Cases Fraud cases. Claimants in receipt of Income Support / Jobseekers Allowance (contributions based) 9.75per week per week As well as the above-mentioned rates of recovery, we will also increase deductions, where appropriate, by half (50%) of any of:- the earnings disregard, if applicable regular charitable income or voluntary payments, if applicable War Disablement or War Widows Pension, if applicable In all above-mentioned cases, the recovery amounts are subject to an overall maximum deduction, which does not reduce the benefit payable to less than 0.50 pence. Arrangements A Guide to Housing Benefit and Council Tax Benefit Overpayments is issued with every Overpayment Letter and invoice providing information to claimants about overpayments and appeal rights. There is also advice to contact Housing Benefits if an arrangement to pay in instalments is required. The Overpayment Officer will keep a central list of all arrangements to pay. By deduction from certain DWP benefits We may ask the DWP Debt Management Office, to recover an HB/CTB overpayment by deduction from certain DWP benefits, as prescribed by Regulation. These are as follows: - Income Support Attendance Allowance Jobseeker s Allowance Disability Living Allowance Incapacity Benefit Industrial Death Benefit Industrial Injuries Disablement Benefit Carer s Allowance Page 15

18 Page 16 Maternity Allowance State Pension credit State Retirement Pension Severe Disablement Allowance War Pension War Disablement Pension Bereavement Benefit Widowed Mother s Allowance Widow s Benefit Widow(er)s Pension Where necessary entitlement to benefits will be identified through the Customer Information System (CIS) connected to the Department for Works and Pensions Database. Recovery from benefit payments made by another authority Where possible we will recover overpayments from Benefit payments being made by other Local Authorities. County Court action Where standard recovery action has failed to recover the debt, it will be recovered in the County Court by the Council s Court Officer. Tracing Debtors All available resources will be used to trace debtors including data matching options, Experian searches, LoCTA searches and utilisation of the DWP Customer Information System. External Tracing Agents will also be deployed when all other avenues have been explored and it is cost effective to do so. The effectiveness of the above recovery methods will be reviewed annually by the Assistant Revenues & Benefits Manager and the Overpayments Officer. Payment Methods The following payments methods will be accepted: - Cash Cheque Credit/ Debit Card Recovery from ongoing Housing or Council Tax Benefit

19 Recovery through the Council Tax Bill (Council Tax Benefit Only) Recovery from other Welfare Benefits 4.3 Write Off Where all recovery action has been attempted and the overpayment is still outstanding the debt will be passed to the Corporate Debt Section. The Corporate Debt Section will endeavour to recover the overpayment with any other outstanding debts Write Off action will be taken in accordance with the principles set out in the Council s Corporate Write off Policy. The Housing Benefit Overpayment Officer will retain details of all outstanding overpayments where Benefit is no longer in payment, in the event of future Benefit being awarded, enabling recovery in the future. Page 17

20 5 Parking Enforcement 5.1 Council Policy To ensure compliance with the restrictions within the council car parks and the County highways the council is authorised to issue Penalty Charge Notices to vehicles parked in contravention of the restrictions as stated in the Traffic Management Act At all times the council s customer care, taking pride in Gravesham and the vulnerable person s strategies must be operated within. 5.2 Policies specific to Parking Enforcement Penalty Charge Notices (PCNS) will be issued to contravening vehicles whenever an enforcement officer deems it necessary The recovery of the fines is the responsibility of the office team and for reasons of segregation of duties and safety, the enforcement officers are not allowed to take payment for the PCNS they issue Except where a separate instalment arrangement has been agreed by the parking office, all payments will be in accordance with the Traffic Management Act Within the authority the council has the discretion to cancel a Notice for various reasons which can ultimately cancel a Notice and therefore not proceed with the fine. The powers of discretion in these cases can only be exercised by a Senior Parking Manager At all times the council will act legally and promptly in all cases where payment is overdue Before a notice is passed to a bailiff for collection all statutory methods of enforcement must have been taken. Notice to owner, Charge certificate, and statutory declaration Where every effort has been made to recover up to the statutory declaration stage the Debt Officer, in conjunction with the Parking Manager can consider cases to be put forward for a warrant of execution Once the Court are happy that all the statutory steps have been taken and the warrant has been granted to the council further recovery action can be considered. Page 18

21 5.2.9 Through out the life of the PCN the debt officer should make every attempt to recovery the amount due at every stage in the proceedings. This can be done by using external collection agents, telephone contact, interim letters, Experian and other search engines Should the officer not be able to collect the amount due then the warrant can be passed to one of the council s bailiffs for collection Where instalment arrangements are sought by the driver a thorough investigation into their ability to pay must be carried out and initially the amount should not be paid over a period longer than 3 months Where the debt officer feels, due to the amount or circumstances, the balance should be paid over a longer period then a case conference should be held with the line manager to decide a way forward. 5.3 Write off If the Debt Officer, bailiffs and tracing agency have not been able to recovery the money the debt officer must consider the case to be listed as unable to recover and put onto a write off list to be considered and signed by the Director Housing and Environment. As well as the name, address and amount the list should also show the types of recovery action that have been taken. Write off action will be carried out in accordance with the Corporate Write off policy To ensure segregation of duties the officer compiling the write off report cannot remove the records from the system and once the cases have been removed from the system the write off sheet must be passed to the service manager for checking. Page 19

22 6 Housing Rents 6.1 Council Policy The aim of the department is to maximise income collection and minimise arrears owed by current and former tenants. We ensure that tenants have the information and support they need to maximise their income and prevent or minimise debt Tenants are informed of their payment responsibilities before they commence their tenancy, when they sign-up and at their welfare visit which takes place six weeks after the sign up dates/commencement of tenancy The Housing department aims to make paying rent easy. We offer a range of payment methods, which are widely publicised Full advice is given to tenants on their rent obligations and entitlement to Housing Benefit at the time of sign up Tenants are informed of the full rent due and details of any service charges due and details of what the services covered by the charge are. Tenants are advised in writing of any changes to the rent due at the earliest possible time and are provided with a quarterly statement. 6.2 Policies specific to Housing Rents At sign-up / commencement of tenancy new tenants are advised of their responsibilities regarding the tenancy placing great emphasis on the requirement to pay their rent promptly New tenants are to be visited within eight weeks of moving in. This visit provides the tenant the opportunity to resolve any problems relating to Housing Benefit and to highlight the fact that the Council will act if payments are missed Basic debt counselling advice is available to tenants experiencing difficulties with rent payments. Debt Advice leaflet Making ends meet- a self help guide to dealing with debt are given to tenants at the sign up stage A debt counselling service has been set up between Gravesham Borough Council and the CAB for our residents to access if they require assistance. Tenants can be referred to the CAB by rent arrears officers or they can approach CAB directly themselves Housing Benefit advice is given to tenants at the sign up by housing staff. If they need additional support or advice, they are advised to contact the Housing Benefit section. Page 20

23 6.2.6 Council Housing Rents and Housing Benefit staff will undertake joint visits to vulnerable clients who have difficulty in paying their rent. Please refer to the Corporate Policy Vulnerable Persons Policy. Tenants will be provided with information about the arrears recovery process, including contact names and numbers should they become unable to pay the rent due or keep to an agreement to clear arrears Peak periods of non-payment have been identified, i.e. Christmas period and such times have been targeted with publicity campaigns about the consequence of non-payment Arrangements must be put in place to oversee and action arrears when a Team member/staff post is vacant, annual leave or absent through sickness Our objective is to achieve upper quartile performance in the level of rent collection and rent arrears by ensuring the following: - a corporate approach to the recovery of debt taking account of social inclusion providing a debt counselling service adopting examples of Good Practice and ensuring an approach of Continuous Improvement. staff are fully trained, supported and developed. customer focus in the delivery of the service. close liaison with the Housing Benefit department and ensure that Housing Benefit overpayments are treated separately to rent arrears The Housing Operations Manager is responsible for the collection of rent income and recovery of rent arrears. It is important that anyone who does not pay their rent by the due date is pursued for payment quickly At the first missed fortnightly payment an immediate letter is sent to the tenant. Alternatively, if there are concerns about the account, a letter should be sent to the tenant If there is no response by the next payment date a second letter (RA2) is sent out and the situation monitored If there is no response to RA2 letter a home visit must be arranged by the Rent Officer. If on arrival for this appointment the Rent Officer finds the tenant is not in, a business card should be left asking the tenant to contact the office Service of Notice of Seeking Possession Page 21

24 A Notice of Seeking Possession is the first step in taking legal action against the tenant. The purpose of this action is to recover possession of the Council s premises from the tenant and may result in the tenant s eviction from their home. Service of the Notice (NOSP) is governed by Law and must be carried out correctly for successful legal action to follow As a general rule, the arrears should not be permitted to get any higher than the equivalent of six weeks rent before a NOSP is served. However, the Rent Officer has the discretion to serve a NOSP earlier than this or to delay it providing an explanation for the action is recorded. The Notice should be served, together with a covering letter A NOSP service is still appropriate if the tenant is in receipt of Housing Benefit whereby Benefit payment does not cover the full rent and the remainder has not been paid by `the tenant NOSP is valid for 28 days from date of issue. If a tenant pays off the debt or makes arrangement to clear the arrears within this period no further recovery action Whereby the tenant is unable to clear the debt and unable to make arrangements to pay off the debt gradually, after the 28 days period the case will be entered into Court The Rent Arrears Officer will only refer a case to Court under the following circumstances:- Court Hearing Tenant has been interviewed and completed an Income and expenditure form. An arrears report was completed. A referral has been made to the Citizen Advice Bureau The Housing Benefit position and Direct Payments from the Benefit service has been established. The NOSP is still valid The Rent Arrears Officer attends and presents the cases to the Court and will ask the Court Judge for one of the following orders; A - Money judgement for the sum outstanding B - Possession order-(suspended or outright) C - Case adjourned D - Case dismissed Page 22

25 Regarding the A & B above, if the tenant defaults on repayments or the court order, the Rent Arrears Officer will apply to the Court for an eviction order to repossess the property. Officers are advised to seek eviction as a last resort. Pre-Eviction Action Prior to seeking an eviction, the Rent Arrears Officer should inform the Housing Needs Team and Social Services if the household includes: Young children up to 16 years old Elderly people Any one with disabilities Any one classified as vulnerable or at risk The eviction should be cancelled if the tenant clears the debt in full before the Bailiff enforces the warrant for eviction Where the tenant makes a large payment and offers to pay off the balance in instalments, the tenant should be advised to apply to the Court for a stay hearing Tenants have the right to apply to the Court for the eviction warrant to be suspended before the eviction date. Based on evidence presented to the Court by both parties, the Judge may dismiss the appeal or suspend the eviction on terms of payment of the rent plus arrears. 6.3 Recovery of Former Tenant Accounts Should a tenant leave a property without settling the rent account, the arrears accrued are known as former tenant arrears and an account is created, known as a former tenant account (FTA), to manage and recover monies owed to the Council. The Allocations and Homelessness Sections of the Housing Department will check FTA records to ensure that clients requesting social housing with previous arrears arrange to repay any debt owed A computerised list of FTAs should be scrutinised monthly by the Housing Income Manager to establish the following: Current contact details (address and telephone number) Case allocated to one of three specific Housing Income Officers (based on geographical areas) Each case must be investigated to establish viability of recovery and the type of FTA as follows: Page 23

26 Former tenants with a County Court Judgement (CCJ) and a money judgment for the arrears Former tenants who have absconded leaving no forwarding address and of whom a CCJ and money order has not been applied for A decision should be made on the most effective and appropriate method of recovery. This is based on the client information available. An initial telephone call is made, or a letter sent detailing the status of the account, including periods of tenancy, address and value of arrears. A request for payment in full is made at this time Should a debtor advise that payment in full is not affordable, a brief financial assessment must be carried out by the Officer and a potential payment plan is offered to repay the total debt by instalments. Letters of confirmation are sent to confirm all agreements to pay (either in full or by instalments) Each case should be delegated to the Housing Income Assistant, designated to deal with FTAs. Accounts are monitored for payment according to instructions decided in paragraph Should a debtor default on payment, a telephone call should be made, a letter sent or a personal visit made, advising of the default and the requirement to satisfy the agreement. This recovery method must be repeated monthly for up to a period of three months advising that failure to respond may result in further recovery action Cases, in which payment is not received according to an agreement as decided in paragraph 6.4.3, will be referred back to the Housing Income Manager. Address searches will be investigated through the Experian Search engine and cases for which a current address can be ascertained will be referred to the Debt Collection Agency In line with procedures, unsuccessful cases will be returned to the Council from the Debt Collection Agency within three months. The Housing Manager will decide whether a case returned will be referred to the Corporate Debt Section for further recovery or to put the debt forward for write off in line with the Corporate Write Off Policy Debts referred to the Corporate Debt Section in which a CCJ and a money order have been attained will follow the progression rules for sundry debts in this position (see section 1.2 of the policy). The Corporate Debt Section will progress the execution of the judgement. Page 24

27 Debts referred to the Corporate Debt Section, in which there is no CCJ will follow the progression rules for sundry debts in this position (see section 1.2 of the policy). 6.4 Write Off A report is compiled by the Senior Accounts Officer each month of Housing rent debts assessed as potential write-offs. The criteria for consideration for write off are as follows: Debt is uneconomic to pursue Financial hardship Residence in a care home Debtor sentenced to prison for a long time Debt Statute barred Tenant is deceased No money in the estate No forwarding address obtained after twelve months The Assistant Director of Housing has the authority to write off debts up to the value of Housing Rents debts valued over 1000 but up to 5000 should be submitted for write-off to Director of Transformation and Finance Housing Rents Debts valued over 5000 but up to should be approved for write off by the Director of Transformation and Finance in consultation with the relevant Cabinet Portfolio holder. Page 25

28 Referral of Department Debts to the Corporate Debt Section Department responsibility It is the individual Departmental responsibility to collect monies owed to the Council by ensuring initial recovery methods are carried out within its own powers in accordance with legislation. Preliminary checks should be carried out by the Department prior to referral to the Corporate Debt Section including land searches, credit checks and tracing. It is also the individual Departmental responsibility to offer initial welfare advice and record an assessment of an individual Debtor s circumstances. Referral of Department debt to the Corporate Debt Section On initial referral of a debt to the Corporate Debt Section, an investigation is carried out by the team to ascertain whether the debtor has any other outstanding debts in respect of council services or functions. Multiple debts will then be consolidated and progressed through the most effective recovery method; ensuring the welfare of the debtor is considered. In certain cases a debt may be referred from a Department at an early stage of recovery (prior to Court) if it is considered to be in the best interest of the Council and the debtor to do so i.e. a welfare case or as identified under the Council s Vulnerable Persons Policy (Appendix 1). It may be considered that a debt be referred to the Corporate Debt Section at an earlier stage if consolidation of all Council owed debt is necessary i.e. Bankruptcy. Due to the variation in legislation and Court procedures and protocol, recovery of debts owed to the Council will be referred to the Corporate Debt Section at varying stages of recovery. A summary is itemised below: - Sundry Debt with the exception of commercial rent invoices, most sundry debt invoices will be referred to the Corporate Debt Section upon return from the external Collection Agency; this being at least four months following the due date of the invoice. Unpaid commercial rent invoices will be referred to the Corporate Debt Section at least two days after the due date if the lessee has vacated the Unit or if the Bailiff has failed to recover monies under the Distress for Rent Act. Council Tax unpaid council tax liabilities will usually be referred to the Corporate Debt Section at least three months after a default on an instalment; a liability order will firstly be obtained through the Magistrates Court and when all other recovery action within the Revenues jurisdiction under council tax legislation has been exhausted. Page 26