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WINDFALL CLAWBACK CASE RAISES ISSUES OF 'PUBLIC IMPORTANCE'

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case no: CO/2718/94 ...
case no: CO/2718/94

A disabled Middlesbrough pensioner who won a £2,500 benefits windfall, only to have his local council try to 'claw back' three-quarters of it, has won a victory in London's high court.

Edwin Holmes, 78, of Coulby Newham was awarded the sum as a backpayment for disablement benefits which he should have been receiving.

He spent the sum improving the sheltered accommodation in which he lives with his wife, who is also disabled.

But after he had spent the money, Middlebrough BC decided the windfall meant he should never have received almost £2,000 in poll tax relief and housing benefits.

Since June last year, the council has 'clawed back' the sum from Mr Holmes's pension at a rate of £1 a week.

But Mr Justice Brooke ruled that the council was not entitled to do so.

'Mr Holmes suffered an accident at work which badly damaged his right foot and in due course he sought advice from the Middlesbrough Citizens Advice Bureau about the possibility of an increase of industrial injury benefit.

'It was not until 1993 that a medical appeal tribunal heard his appeal and in June that year it decided that he should be treated as 20% disabled.

'He was awarded a disablement pension and also arrears of £2,500 in respect of payments backdated to 1990.

'I have been told that money has now been spent.'

Mr Holmes dutifully informed Middlesbrough BC of the windfall, only to have it demand that he repay £1,869.79 he received in benefits during the period covered by the lump sum backpayment.

Mr Holmes appealed against the decision but in June last year, the council's housing benefit review board upheld the earlier demand and the council began to 'claw back' the alleged overpayment at the rate of £1 a week.

It was the review board's decision which he successfully challenged in the high court.

Mr Justice Brooke said the crucial issue was whether the lump sum payment to Mr Holmes should be treated as income or capital.

If it were income, then the council was entitled to 'claw the money back week by week until the full sum was recovered', he said.

But if it were capital, then the benefits which Mr Holmes had received in relation to poll tax, council tax and housing benefit since 1990 was irrecoverable.

Mr Justice Brooke said after wading through the complex legal web defining capital and income, he had come to the conclusion that the lump sum should be treated as capital.

'I am satisfied that the housing benefit review board was wrong in law and its decision will be overturned.

'Nobody could possibly blame it for going wrong because the arguments advanced in this court were not advanced before it.'

The judge said the case had raised issues of 'public importance' and gave Middlesbrough BC leave to take its case to the court of appeal.

Outside court, a spokesman for Mr Holmes said the pensioner suffered his foot injury in the 1950s but it had become worse over time.

'He and his wife live in sheltered accommodation. They spent the (backpayment) money prudently,on new carpets and on a special high chair for Mrs Holmes, who is disabled.'

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