corporate debt policy - metropolitan borough of...

Corporate Debt PolicyCollection, Recovery and Management of the Council’s Debt


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Document ControlDocument Title: Corporate Debt Policy - Collection, Recovery

and Management of the Council’s Debt

Summary

Publication Date 6th March 2017

Related Legislation/Applicable Section of Legislation

Care Act 2014, Council Tax Regulations 1992, Local Government Finance Act 1988, DWP regulations, National Assistance Act 1948

Related Policies, Strategies, Guideline Documents

Financial Regulations and Standing Orders, Council Services Charging Policies.

Replaces

Joint Policy (Yes/No) No

Name of Partner(s) if joint

Policy Owner (Name/Position) Mrs P Kane

Policy Author (Name/Position) Mrs C Jackson/Mrs T Bland

Applies to All Council services

Review of Strategy

Last Review Date July 2013Review undertaken by Mrs C Jackson/Mrs T BlandNext Review Date April 2018

Document ApprovalsThis document requires the following approvals.

Name Title Date of Issue Version Number


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Table of Contents

Page

1. Executive Summary Why do we have a Corporate Debt Policy and what is it? What types of debts are owed to the Council? How will we operate this Policy?

4

2. How the Council will collect and recover Income 5

3. Making it Easy to Pay and Support for customers Payment options Advice and support for Customers Promoting the Take Up of Benefits and Entitlements Arrangements for Repayment of Arrears

6

4. Debt Recovery Recovery Processes Enforcement Action Range of Recoveries Evasion and Fraud Tracing People Bad and Doubtful Debts

8

5. Vulnerable People 11

6. Charges On Property Local Land Charges Adult Care Charges

11

7. Salary Overpayments 12

8. Operational Processes Financial Management Systems Adjustment to Bills and Invoices – Credit Notes Refunding Credit Balances

12

9. Equality and Diversity 13

10. Measuring Performance 13

11. Disputes and Complaints 13

12. Use of Data 14

Appendices – 1. Helping Customers to Pay 15


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2. Council Tax Recovery 163 Business Rates Recovery 174 Housing Benefits Overpayments Recovery 185. Sundry Debtors Recovery 206. Adult Care Charges Recovery

Legal Framework Charged Services Care Support Plan and Financial Assessments Assessing the service user’s ability to pay Residential services Property Deferred Payments Agreement Scheme Third Party Payments and Top Ups Operational to Residential Care Homes Non-residential care services Personal Budgets – Care Act 2014 Direct Payments/Cash budgets Managed Debt recovery process Legal Enforcement Pursuing Debt Limitation period for recovering debt Deprivation of assets and debts

21

7. Enforcement and Debts unable to be Recovered 28


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1. Executive Summary

Rochdale is the birthplace of co-operation and the Council is committed to retaining this distinction by working with partners, local people and communities to improve the lives of local people. Our vision is to be a Council which builds success and prosperity with our citizens and partners, while protecting vulnerable people. This vision is set out in the Council’s Corporate Plan 2016-2019.

Linked to this vision is our desire to improve performance and to remain focused on managing our resources effectively to help us to achieve our ambitions. Rochdale Boroutgh Council provides and commissions a wide range of services for local people and communities, often working in partnership with others to ensure that services meet customers’ needs and expectations, are of high-quality and provide the best value for the resources we use. One of the outcomes that we want to achieve is the collection of as much council tax, business rates, sundry debts and other monies owed to us as we can. In order to do this we will use technological innovations to offer reliable and efficient handling of financial transactions.

The management of this income is a key business area for the Council. This income comes from many streams. Some of this activity is governed by legislation whilst others by sound principles of financial management.

Our values are at the heart of everything we do. We will:-

Value our people Focus on our customers Act with integrity Use time and money wisely Work together Always learn and improve

1.1 Why do we have a Corporate Debt Policy and what is it?

The Council aims to achieve good practice in revenue collection. Good practice is considered to be achieving the best possible cash flow for the Council whilst ensuring that the liability to pay is calculated correctly, enforcement action is reasonable and those who are vulnerable are assisted in meeting their financial obligation to the Council.

Resources allocated from Central Government to Rochdale Council and those generated locally from council tax and business rates each year will not be enough to meet statutory obligations. The need to develop a focused debt policy will help the Council reduce costs, save time and maximize resources.

For the purposes of this Policy, a debt is defined as any payment expected by the Council that has not been paid by the due date.

1.2 What types of debts are owed to the Council?

The Corporate Debt Policy covers debt owed for a wide range of things including:- Council Tax Business Rates Benefits overpayments

Sundry debts Adult Social Care fees and charges


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1.3 How will we operate this Policy?

The Corporate Debt Policy sets out the general principles to be applied in relation to debt management across all services provided by the Council to support the maximisation of debt collection in an efficient, consistent and sensitive manner in accordance with both the Council’s and Central Government’s requirements.

The key principles of the Policy being:-1. Collection of all money due; quickly, efficiently and economically taking into account the

financial circumstances and mental capacity of the customer.

2. Prevention of debt and arrears; prompt billing, collection of money due, affordable repayment plans.

3. Early intervention and professional debt advice when a customer is in arrears, which is an important element of the Government’s Anti-Poverty Strategy.

4. Provision of a legal framework to enable legal enforcement, where necessary, to recover debts.

5. Compliance with the Council’s Financial Regulations and Standing Orders.

The Council will apply this policy and provide the same level of service at the initial stages of recovery. However, different types of debt may have its own processes for recovery of the debt due to different Government legislation that govern how that debt is recovered.

The Council is committed to continuous improvement and this Policy has been updated to reflect organisational and legislative requirements (including the Care Act 2014).

2. How the Council will collect and recover Income

2.1 To achieve good practice the Council will follow the objectives shown below:- Issue requests for payment promptly and accurately. Provide clear bills and recovery notices which show clearly what to pay, when to pay it and

how to pay. Deliver benefit entitlements promptly and accurately. Commence action to recover unpaid amounts promptly to avoid the build-up of arrears. Make it as easy as possible to pay bills by offering a choice of payment options. Ensure that all debt recovery documents are clear and inform of the recovery procedures,

consequences of not paying and the options available to the Council to recover unpaid debts. Make it easy to contact the Council through a range of options including face to face, by

telephone, by e-mail or in writing. Respond to all enquiries promptly and courteously. Signpost to sources of independent money and debt advice. Be proactive in identifying vulnerable persons and in providing them with advice to assist

them in meeting their financial obligation to the Council. Wherever possible use the least severe method of recovering a debt. Instigate legal proceedings promptly where sums due are not paid. Recover legal costs from the debtor, but avoid imposing unnecessary or excessive charges. Respect the debtor’s privacy by conducting enforcement activity as discretely as possible.


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2.2 Whatever the method of payment chosen, it is the responsibility of the person making the payment to ensure that payments made reach the Council by the date they are due. The date payment is due and the due date of any instalments will be shown on each request for payment.

2.3 The Council expects any person, business or organisation that owes a sum of money to the Council to abide by the following principles that they will:- Pay amounts due promptly to ensure receipt by the Council on or before the date that

payment is due. Follow instructions provided regarding the making of payments to ensure payments are

credited correctly against the amount due. Inform the Council promptly of any changes to their circumstances that may affect the

amount to be paid or the ability to pay. Notify the Council promptly if their name or address changes. Contact the Council promptly if it is believed the amount charged is not correct, both where

the amount may be too much or too little. Contact the Council promptly if they are unable to pay an amount that is due. Respect the Council, its employees and its agents and respond to them courteously. Be frank and honest when providing information in connection with the billing, collection or

recovery of sums due to the Council.

2.4 Those having difficulty in paying will be actively encouraged to contact the Council as early as possible. Where a debtor contacts the Council because they are experiencing difficulty in making payment the following actions will be taken:- Provide advice on the most appropriate payment methods. Consider agreeing a payment arrangement (see separate heading below). Provide advice regarding the next course of action that will be taken if payment is not made

as required. Where appropriate advise the debtor to contact an independent advice agency (e.g. Citizens

Advice Bureau).

3. Making it Easy to Pay and Support for customers

3.1 Payment options

The Council recognises the need to make it as easy as possible for its customers to pay their bills. In order to reduce the cost to the Council and, therefore, local taxpayers the most cost effective methods of payment will be encouraged. For most bills this will be Direct Debit because it is, by far, the most economical collection method available. It is also very reliable, easy to set up and cancel, and is backed by a refund guarantee. It is also the cheapest and most convenient method of payment for the customer. The range of payment methods offered is provided at Appendix 1.

3.2 Advice and Support for Customers

The Council wants to support individuals and businesses with their finances, especially those struggling to pay debts that they owe. At the same time the Council has a duty to ensure that people pay their debts as quickly as possible.


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The Council will offer welfare advice to all its customers. In addition a range of support organisations providing help with debt advice are signposted on the Council’s website at Getting help.

The Council acknowledges that there is a distinction between can’t and won’t pay. The Policy will seek to promote financial inclusion and early intervention by recognising that debtors may have underlying problems with money management or may not be receiving all the financial assistance to which they are entitled.

3.3 Promoting the Take-Up of Benefits and Entitlements

The Council will take an active role in promoting the take-up of entitlement to benefits, discounts, exemptions, reliefs etc.

Where appropriate, information about claiming Housing Benefit, Local Council Tax Support or other discretionary support funds will be included with arrears letters. The Council will make every effort to encourage people to apply for benefits and other assistance.

The Council will also advise individuals/businesses as to the range of other discounts, reliefs and reductions available at the time an account is issued.

Staff in contact with customers will signpost them as to where they can obtain advice on benefits and debt matters, where appropriate.

3.4 Arrangements for Repayment of Arrears

Anyone experiencing genuine difficulty in making a payment when it is due is encouraged to contact the Council at the earliest opportunity to discuss repayment options. Where contact is made, consideration will be given to entering into an individual repayment arrangement based on the debtor’s personal circumstances. The Council’s staff will seek to obtain as much information as possible about the debtor’s circumstances as considered necessary in order to make the best assessment of their ability to pay and to determine a realistic payment arrangement. More detailed information is likely to be required where the debtor claims to be unable to pay the debt over a short space of time and where the debt will not be repaid in full by the end of the financial year.

Where a debtor refuses to divulge any information that is considered essential to assessing their ability to pay then no payment agreement will be entered into.

In accordance with recognised good debt management practice the Council will expect the debtor to undertake to pay priority debts in preference to other debts. Priority debts are those debts that can result in loss of an essential service, loss of a person’s home or imprisonment such as:- Mortgage or Rent Council Tax Electricity Gas Telephone

Water Secured Loan Child Support Agency deduction and Maintenance Arrears Income Tax or VAT Court fine

The principles that will be followed in determining repayment arrangements are:- The Council will seek repayment of all outstanding arrears, as soon as possible. The Council, where appropriate, will undertake checks as to whether the customer has any

other debts owed to the Council and consider their ability to meet a payment plan.

http://www.rochdale.gov.uk/council-tax-benefits-and-money/welfare-reforms---benefits/Pages/money-debt-and-benefits-advice.aspx

http://www.rochdale.gov.uk/council-tax-benefits-and-money/welfare-reforms---benefits/Pages/money-debt-and-benefits-advice.aspx


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Repayment should commence promptly and the first payment of any payment arrangement should normally be payable within no more than one week/month of the agreement being reached.

Where liability is ongoing, any arrangement will require payments to be over and above the on-going monthly liability, except in the most exceptional circumstances (for example, where a debtors financial circumstances are expected to improve in the near future).

Payment of current year debts should be given priority except where this would conflict with arrangements already in place for previous years’ debts.

Payment arrangements should not normally be for less than could be obtained by attachment of earnings or deductions from benefits unless there are extenuating circumstances.

Payment arrangements in respect of local taxes should be made on the basis that the Council will progress enforcement action to the point of obtaining a liability order from the Magistrates’ Court.

Payment arrangements should be refused where it is considered that entering into an arrangement may jeopardise the likelihood of the Council recovering payment in full (e.g. if there is a risk the debtor will be declared insolvent).

Payment arrangements may be refused where the debtor appears to have sufficient funds which could be realised to pay the debt but the debtor is unwilling to take steps to realise those funds.

Payment arrangements will be confirmed in writing so that the debtor is aware of the amount and frequency of their payments.

The responsibility for making sure that payment reaches the account by the due date remains with the debtor. This means that debtors must allow sufficient time for the payment to reach the Council by the due date.

The Council reserves the right to refuse to accept offers of payment arrangements. Where a payment arrangement has been agreed but payment is not received strictly in

accordance with the agreement, action to enforce payment will be recommenced promptly following the default in payment. Where a debtor has failed to make payments as agreed, further payment arrangements will not normally be considered unless the debtor’s circumstances have changed.

The customer must contact the Council if they can’t keep to the payment arrangement, for example because they have a temporary change in their income or some unexpected expense. If the customer doesn’t contact us and payment isn’t made we will take further action and may not be able to agree any further arrangements.

4. Debt Recovery

4.1 Recovery Processes

The Council will establish timely and vigorous processes for the recovery of overdue sums and will start to recover unpaid debt promptly when a payment becomes overdue or an instalment plan or payment arrangement is not maintained. The Council will be stringent in recovering overdue amounts from persistent non-payers and late-payers.

In pursuing the payment of overdue sums the Council may utilise any and all of the methods available to it in law. However, the enforcement actions employed in each case should be on an escalating basis, with repayment being sought by the least severe action, and then actions of increasing severity used where actions are not effective in securing payment. The recovery


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processes for some specific Council debts are laid down by law. The specific processes are outlined at Appendices 2 to 6.

4.2 Enforcement Action

It is widely recognised to be good practice to take prompt action where a payment becomes overdue. Commencing action promptly ensures that the debtor is reminded of the requirement to make a payment as early as possible; allowing them the opportunity to bring payments up to date before the debt increases or more severe action to recover payment is commenced.

The Council will contact promptly in writing, within the appropriate legislative timescale, any person or organisation that fails to make a payment to inform them that the payment is overdue, the payment options available and the consequences of failing to pay. Wherever possible, correspondence issued in relation to debts will be provided in simple language.

Where the collection of sums due results in increased cost to the Council, the person owing the debt should be responsible for paying the full cost incurred to recover the amount. Therefore, the Council will seek to recover all costs or fees that are legitimately due from a debtor. It is a requirement of this Policy that any costs or fees should be reasonable and should reflect the actual cost incurred.

Due to the volume of accounts payable to the Council, the Council will employ automated processes to progress the recovery of sums due. However, where a debtor contacts the Council in response to enforcement action the Council will consider each case individually.

The Council recognises that people do not pay their debts for a variety of reasons:- Some people genuinely struggle to meet their payments and need advice and assistance in

budget management. Some people are not receiving the benefits or reductions they are entitled to. Some people go through personal difficulties that result in short-term problems in paying their

debts. Some people deliberately choose to set out to delay and not pay their debts.

Where the debtor is willing to provide information about their personal and financial circumstance the Council will take this into account in determining the enforcement action to be taken, and in agreeing any payment arrangement.

The debtor’s previous history in paying sums due to the Council will also be taken into account.

A Code of Practice to be followed by Enforcement Agents and Debt Collection Agents appointed by the Council is set out at Appendix 7 to this Policy.

4.3 Range of Recoveries

A range of recovery options will be used where arrangements to pay have broken down. The choice of method would depend on a number of factors including the method available for a particular type of debt, but options can include:-

Liability Order (An order made by the Magistrates Court which gives the Council power to take further action to enforce payment).

Attachment of Earnings Order. Deductions from Benefit. Bailiff/Debt Collection action.


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Charging Order. Insolvency (bankruptcy) action. Securing the debt by obtaining charging order against assets. Enforced sale of assets.

The following enforcement actions are considered to be severe remedies and should only be used in accordance with Appendix 7 to this Policy:- An application to have the debtor declared bankrupt or for other forms of insolvency. An application to register a charge against a property or apply for the sale of a property

against which a charge is registered. An application to have the debtor committed to prison. Instructing a bailiff to seize and sell the debtor’s goods.

4.4 Evasion and Fraud

The unlawful evasion of payments due to the Council reduces the financial resources available to the Council and has a direct impact on all residents, businesses and other organisations that rely on Council services. Unlawful evasion or fraud to avoid payment will not be tolerated and where this is identified then in addition to taking action to enforce payment, the Council will seek to impose such further penalties or sanctions as the law allows.

Where debts arise through evasion or fraud, the Council will seek to recover payment in full as quickly as possible and will only agree payment arrangements in very exceptional circumstances.

4.5 Tracing People

The Council will make all necessary attempts to trace any debtors to ensure that outstanding payments are recovered. This will include checking internal and external sources of information and sharing information with other authorities where necessary. Tracing Agents will be used if the Council feels appropriate.

4.6 Bad and Doubtful Debts

The Council will adopt a prudent approach towards debts which remain unpaid or for which their full recovery may be considered doubtful, for whatever reason.

All debts which are due to the Council will be subject to full recovery, collection and legal procedures as outlined in this Policy. However, the Council recognises that not all debts may be collectable and therefore it will be appropriate, in certain circumstances, to classify debts as irrecoverable.

When a debt is deemed to be irrecoverable, consideration will be given to write-off the debt where appropriate.

Any officer, Member or contractor that has an interest in any debt must not participate in the decision making process regarding the write off of the debt and their interest must be declared.

An interest is as follows:- the debt is owed by a relative, including relatives by marriage. the debt is owed by a relative of a current or former partner. the debt is owed by a friend or neighbour. the debt is owed by an organisation of which you are a member.


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the debt is owed by an organisation of which a relative is a member. the debt is owed by a company or individual with whom you have a business relationship.

‘Write-offs’ will be progressed in accordance with the Council’s Scheme of Delegation to Officers/Cabinet Members.

Prior to a ‘write-off’ for sundry debts being approved, consultation must be held with the budget holder. However, even when debts have been written off as irrecoverable, the Council will reinstate debts and attempt to collect them if new information becomes available; for example, if a current address for a debtor whose whereabouts were previously unknown comes to light

5. Vulnerable People

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. Referring the person to sources of independent advice. Providing information in an accessible format. A temporary payment arrangement with lower repayment than would normally be agreed. Informing the Council’s Adult Care Directorate of any concerns regarding the debtor’s safety or

welfare.

The cause of vulnerability or social exclusion may be temporary or may be permanent in nature and the degree of vulnerability will vary widely. Generally, a person is considered to be vulnerable if it would be unreasonable to expect them to be able to deal with a problem themselves. There is no legal definition of a vulnerable person and care will be taken to assess each situation on a case by case basis.

6. Charges on Property

6.1 Local Land Charges

The provision of a Local Land Charges Register is a statutory function which is maintained by the Local Authority. Specific Financial Charges arise where the Local Authority are empowered by statute to carry out works in default, for instance under the powers of the Public Health Acts, the Highways Act 1980 and the Building Act 1984. An example of when a charge arises is where the Local Authority incurs expenses whilst having to deal with a dangerous building (Section 78 of the Building Act 1984). Such charges are registered as a local land charge (specific financial charge) against the land or property and are binding against successive owners or occupiers.

It is the responsibility of management within the Service to inform the Local Land Charges Officer of the details of the works carried out in default, in order that a specific financial charge can be registered on the Local Land Charges Register.


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If the debt on which a Land Charge has been applied is re-paid to the Council within ninety days of the Land Charge being applied then no interest will be applied to the debt. If the debt is not re-paid within the first ninety days then interest will be charged from day one of the debt at the relevant approved rate.

6.2 Adult Care Charges Against Property

The Care Act 2014 (Sections 34 and 35) requires Local Authorities to offer Deferred Payment Agreements to allow persons to defer the sale of their main or only home where it is needed to fund care fees, see Appendix 6.

7. Salary Overpayments

If a salary overpayment is made to an employee this will be recovered via salary deductions. Where an employee leaves during or before the start of an agreed recovery period, the balance of the overpayment will be taken from their final salary. If the overpayment is greater than the employee’s last salary or notification of leaving is received after the final salary then a sundry debtor’s invoice will be raised

8. Operational Processes

8.1 Financial Management Systems.Management Systems

All bills for collection of Council Tax, Business Rates, Housing Benefits Overpayments and Sundry Debt will be input into the relevant financial management system. Progress against the overall debt raised is measured by the systems employed and in turn these systems automatically generate reminders at predetermined points in the life cycle of an overdue account. The Council’s policy regarding pre-determined reminders is detailed in Appendices 2 - 6 of this Policy.

Officers involved in the collection and recovery of accounts will be given appropriate systems training.

The Council will ensure that all computer systems used to bill and facilitate the recovery of monies satisfies statutory requirements and offers the full range of recovery options to be pursued and are audited regularly.

8.2 Adjustments to Bills and Invoices - Credit Notes

Credit notes will only be used when an invoice is raised incorrectly and must not be used to write off debt. Credit notes must be authorised in line with the Scheme of Delegation and should not be authorised by the same officer who raised the invoice.


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8.3 Refunding Credit Balances

The Council will adopt a corporate approach to refunding credit balances in that, wherever possible, checks will be made for other outstanding debts held by the customer, prior to a refund being made. The preferred method of refund will be via bank transfer.

9. Equality and Diversity

The Council’s vision for equality and diversity is set out in its single Equality Scheme and Equality Diversity Policy – ‘No matter Who’. We value the diversity of people with the Borough and are committed to:- Eliminating unlawful discrimination, harassment and victimisation and other conduct prohibited by

the Equalities Act 2010. Advancing equality of opportunity between people who share a protected characteristic and those

who do not. Fostering good relations between people who share a protected characteristic and those who do

not.

Acting in accordance with this Policy will help to ensure that the collection of sums due is conducted in a consistent and objective manner that will reduce the risk of inadvertent discrimination against persons with protected equality characteristics. It will also ensure and that revenue collection and recovery is delivered in an equally accessible manner to all members of the community.

10. Measuring Performance

The Council will monitor the performance of debt management as follows:- Monthly reports to Directors. Monthly report to Budget Managers showing details of all aged debt over 30 days. In each Finance update report to Cabinet provide an update of debt management performance,

provisions and write-off levels. Audit and quality checks on work processed by individuals within the Corporate Debt Team. Complaints received to assist us with making service improvements.

11. Disputes and Complaints

Any disputes raised regarding the application of this Policy should, in the first instance, be raised with the relevant Council service. In the event that the dispute cannot be resolved then the dispute shall be dealt with in accordance with the Council’s Complaints Procedure which can be accessed using the following link.

http://www.rochdale.gov.uk/council_and_democracy/contact_us/complaints_and_compliments/complaints_procedure.aspx




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In the event that the complainant remains dissatisfied after the Council has investigated the complaint, the complainant may refer his/her complaint to the Local Government Ombudsman, who is independent of the Council, but the Local Government Ombudsman will not consider a complaint where more than twelve months has elapsed since the alleged act/omission.

12. Use of Data

The Council will collect and store personal data for the purposes of the effective billing, collection and recovery of sums due. Data retained for this purpose will be processed in accordance with the Data Protection Act 1998 and will be stored securely at all times.

Data will be shared with agents or contractors appointed by the Council for the purposes of the billing, collection and recovery of sums due. Data may also be shared within the Council or with external organisations where the law allows and in particular where it is in the interests of the debtor or where it will prevent fraud or the unlawful evasion of payment of sums due.


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Appendix 1

Helping Customers to Pay

The ranges of payment methods offered are:-

Direct DebitDirect Debit is offered for payment of Council Tax, Business Rates, Adult Social Care charges and other Sundry Debts where periodic receipts are due.

On-Line via the Council’s WebsiteCouncil Tax, Business Rates, Housing Benefit Overpayments, Adult Social Care charges, and Sundry Debts may be paid by debit and credit card through the Council’s website www.rochdale.gov.uk

24 hour Automated Telephone payment lineBusiness Rates, Non-Domestic Rates, Housing Benefit Overpayments and Sundry Debts may be paid by debit or credit card by telephoning 01706 926180.

Post Offices and Payzone outletsCouncil Tax, Business Rates, Housing Benefit Overpayments, Adult Social Care charges and Sundry Debt can be paid free of charge at any Post Office or Payzone outlet provided the customer presents a bar coded document.

Bank Transfer / BACS / Standing OrderPayment of Council Tax, Business Rates, Housing Benefit Overpayments, Adult Social Care charges and Sundry Debts may be made directly to the Council’s bank account, details of which are provided with requests for payment.

Additional payment methods may be offered in the future where it is economically viable to do so.

http://www.rochdale.gov.uk/


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Appendix 2

Council Tax Recovery

The responsibility for the issuing of Council Tax bills, and collection and recovery of debt is held by the Chief Finance Officer.

The Council will issue a Council Tax bill, which will give instructions on when the instalments are due to be paid. The preferred method of payment for Council Tax is direct debit and flexibility is available on the date on which the direct debit is collected. Unless paid by Direct Debit the first instalment is due by the tenth of the month.

A reminder notice will be issued if an overdue instalment is not paid within seven days of the instalment due date. If the instalment is paid as requested then no further action will be taken. If the instalment is not paid or only partly paid, recovery action will proceed to the summons stage. Within a Council Tax year (April – March) only two reminders will be issued for late payment of instalments.

A final notice will be issued on the third occasion that an instalment is paid late. The final notice will be a request for the full balance to be paid. The balance must be paid within seven days of a final notice being issued.

If payment is not received within fourteen days after the first or second reminder notice or within seven days of a final notice, the Council will take Legal action and a Summons will be issued against the customer. All costs incurred and recoverable by the Council will be added to the amount due when the Summons is issued.

The Council reserves the right to take recovery action where a customer does not pay and does not indicate that they are experiencing difficulty paying. The Council’s policy is to train all officers involved in the recovery of debts on anti-poverty and social inclusion awareness so they can:- Inform customers of their entitlement to Housing and Council Tax Support, discounts, relief’s and

exemptions; and Inform customers of the general availability of other income related benefits.

The ability to refer debt to Enforcement Agents is an important tool in the recovery process of debt. The Council appreciates the sensitivity attached to the use of Enforcement Agents and will only use them if it is deemed necessary. The Council will seek to use Enforcement Agents only where it has been determined that this is the most effective collection method for the debt in question.

Enforcement Agents will be appointed based on the contracts which have been procured in line with Contract Procedure Rules. Bailiff’s performance and contract management will be in place to ensure compliance with codes of conduct and good practice. Bailiff services will comply with the National Standards for Enforcement Agents issued by the Ministry of Justice.


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Appendix 3

Business Rates Recovery

The bills for Business Rates are issued on an annual basis and the responsibility for issuing bills and the recovery of collection and debt is held by the Chief Finance Officer. Business Rates are payable in line with legislative requirements.

The Business Rates bill will detail when instalments are due to be paid and the methods of payments which can be used to pay. If an instalment is not paid on time, then a reminder will be issued following non-payment.

Only one reminder notice will be issued for Business Rate bills; any further default will result in a final notice being issued. A final notice withdraws from the customer the right to pay by instalments and requires full payment of the outstanding amount to be made within seven days. If the account is not brought up to date, the Council will apply for a Liability Order. The Liability Order provides the Council with the option of instructing Enforcement Agents to collect the debt.

If an appeal is made against the rateable value to the Valuation Officer, payment must still be made against the account until the appeal is settled, unless where it is clear that an assessment has been changed thereby reducing the liability.

Enforcement Agents will be appointed based on the contracts which have been procured in line with Contract Procedure Rules. Bailiff’s performance and contract management will be in place to ensure compliance with codes of conduct and good practice. Bailiff services will comply with the National Standards for Enforcement Agents.


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Appendix 4

Housing Benefits Overpayments Recovery

The Housing Benefit Regulations 2006 do not specifically state the extent to which Local Authorities should pursue the recovery of overpayments. Guidance states that this is up to Local Authorities, but that serious attempts should be made to recover overpaid benefit.

Just because an overpayment is recoverable, does not necessarily mean that it must be recovered. The law states that all overpayments are recoverable (except certain official errors), but it does not state that they must be recovered. A recoverable overpayment may be recovered at the Local Authority's discretion. If a Local Authority has a blanket policy of recovering all recoverable overpayments this policy would be open to legal challenge; would not be in the interest of claimants; and would prevent the use of discretion. Although general guidance can be provided each case should be considered on its own merits having regard to the claimant's circumstances.

It is in the interests of both the Council and the claimant to act quickly when recovering an overpayment – it will be much more difficult attempting recovery from a claimant who has moved and left no forwarding address; and from the claimants point of view they can make better provision for repayment if they are informed as soon as possible after it has arisen.

The main principles that must be adhered to if we are to achieve our aims are:- Process changes in circumstances quickly. Identify overpayments promptly. Calculate, classify and record overpayments accurately and correctly to ensure that the correct subsidy is

claimed. Determine whether overpayments are recoverable. Pursue recovery by the most speedy, cost effective and efficient methods available. Ensure that effective financial control is kept over the whole of the overpayment process. Notify affected parties promptly of their overpayment. Pursue recovery by the most appropriate method. Set targets and monitor performance.

The responsibility for the billing of Housing Benefit Overpayments is held by the Chief Finance Officer.

Recoverable overpayments can be sought by any reasonable lawful method. The main methods of recovery are:- Deduction from an ongoing entitlement of benefit. By issuing an invoice for payment. Direct deductions from the Housing Benefit payable to a landlord in respect of their other tenants (known as

‘blameless tenant’ recovery); in these cases the other tenants are protected by legislation. Referral to a debt collection agency. Civil action in the County Court followed by appropriate enforcement action. Deduction from DWP benefits. Deduction from arrears of Housing Benefit and/or local council tax support that becomes payable while there

is an outstanding overpayment. Application to another Local Authority to ask them to deduct the overpayment from the claimant’s ongoing

Housing and/or local council tax support entitlement in their area - this method is not currently used. Claim from the estate of a deceased person who had an overpayment. Direct earnings attachments.


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The list is not exhaustive and the Council will seek to recover outstanding debt via the most practical and cost effective manner.

Further information about our approach to Housing Benefits Overpayments can be found in the Council’s Housing Benefits Overpayments Strategy which can be accessed via the following link:

http://www.rochdale.gov.uk/council_and_democracy/policies,_strategies__reviews/strategies/housing/housing_benefit_overpayment.aspx




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Appendix 5

Sundry Debtors Recovery

The responsibility for the raising of sundry debts against a debtor account set up centrally is held by each individual Director. Officers within Services will be responsible for the raising of debtor invoices and the retention of evidence to support the debtor invoice.

The overall responsibility for the collection and recovery of sundry debt is held by the Chief Finance Officer. Directors will be responsible for ensuring that assistance is provided to the Corporate Debt Team in recovering the debt due to their Service, where appropriate. Wherever possible, Council Services should endeavour to obtain payment in advance or at the time when a service is delivered, wherever possible, through the payment methods listed in Appendix 1 of this Policy. The Council will only raise a debtor’s invoice where payment in advance for a service is inappropriate. All sundry debtor invoices must be raised using the corporate sundry debtors system.

The settlement terms for sundry debtors are twenty-one days from the date of the invoice.

A final notice will be issued to the debtor, twenty-one days after the invoice date, which requires the account to be brought up to date within fourteen days. A Court Warning Notice will be issued after a further period of fourteen days which will give fourteen days for the account to be brought up to date.

If the case is sent to a private Debt Collection Agency or a private Bailiff and this proves unsuccessful, a debt may then subsequently be referred to the Litigation Team for recovery through the County Courts.

The Council reserves the right to take recovery action where a customer does not pay and does not indicate that they are having difficulty paying. If the customer informs the Council soon enough that they are having problems, the Council may agree a special payment arrangement in which case no further recovery action will be taken. However, if the Council has started recovery action and subsequently makes a special payment arrangement, the Council reserves the right to continue with recovery if this new arrangement is defaulted upon.

Other recovery methods that will be employed could involve:- Referral to the Council’s approved debt collection agent. Letter Before Action allowing the debtor 14 days to pay. County Court action seeking a Judgement (i.e. Attachment of Earnings).

The list is not exhaustive and the Council will seek to recover outstanding debt via the most practical and cost effective manner.


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Appendix 6

Adult Care Charges Recovery

This Policy sets out how the Council will charge for and collect money owed for non-residential and residential social care services provided by Adult Social Care.

A. Legal Framework

The Council make charges for Adult Care Services in line with the following legislation :-

Care Act 2014. National Assistance (Assessment of Resources) Regulations 1992. Care Act Guidance 2014. Part 3 National Assistance Act 1948. Health and Social Services and Social Security Adjudication’s Act (HASSASSA) 1983 (Section 17). Chronically Sick and Disabled Persons Act 1970). Health Services and Public Health Act 1968). National Health Service Act 1977.

Contributions toward the cost of social care are recoverable as a civil debt. Whilst failure to pay cannot be grounds for cancelling care (Section 17 HASSASSA) it is important that the Council takes all necessary steps to ensure that all monies which are due and are recoverable are recovered.

B. Charged Services

The Adult Care Charging Policy sets out what care and support services the Council does and doesn’t charge for.

C. Care Support Plans

When Adult Care practitioners are carrying out a care needs assessments they will first establish if the service user has capacity to manage their own financial affairs.

If the service user doesn’t have capacity the practitioner will ask for details of the person who is acting on the service users behalf. This could be the person who holds Lasting Power of Attorney or who is a Deputy appointed by the Court of Protection and so on.

If no one is acting on the service users behalf the practitioner will take steps to appoint someone.

The practitioner must then make sure that the service user or the person who acts for them understands that they might have to pay towards the cost of the care and support being put into place.

When the care needs assessment has been completed a care support plan is put into place, this must accurately record information about the care and support that’s needed, for example the number of hours of care and when it will be provided.

http://www.rochdale.gov.uk/council-and-democracy/policies-strategies-and-reviews/policies/adult-social-care-policies/Pages/Adult-Care-Charging-Policy.aspx


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D. Financial Assessments

When the care needs assessment has been completed the Council will carry out a financial assessment to work out how much the service user can contribute towards the cost of their care and support.

The Financial Assessment Team will look at the service user’s income, any savings they have (this includes money in the bank, building society, Post Office) and any other savings and investments such as any land or property they own.

In some cases we will also look at any disability related expenses the service user pays.

When the financial assessment has been completed we will write to the service user or the person who is acting on their behalf to tell them: How much they have to contribute. How we have worked this out. How they can pay. What will happen if payment isn’t made.If the service user decides they don’t want to provide the information we need to complete a financial assessment they will have to pay for the full cost of their care.

E. Residential care and support

Property

If the service user owns (or jointly owns) their home and they move permanently into residential care or a nursing home we will also take into account the value of their home unless: their partner lives there; a relative who is aged 60 or over lives there; or a relative who is incapacitated lives there; or they intend to return home.We will get a professional valuation of the property and will take into account whether there is a mortgage on the property.

If there is any dispute about who owns the property we will gather evidence to clarify the legal position, for example any Land Registry or other legal documents.

If there has been any transfer of ownership we will investigate the circumstances and take this into consideration when we are completing the financial assessment.

Deferred Payment Agreements

In some cases the Council will enter into a deferred payment agreement with the service user of the person acting on their behalf.

This is where the Council pays the service user’s care and support costs and let’s service users use the equity they have in their home to pay for these back.

This means that the service user isn’t forced to sell their home while they are receiving care. The agreement means that payment of the cost of the service users care is delayed until either their death or they decide to sell their home.


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We will put a legal charge on the service user’s home to secure the amount owed and any interest charges.

Further information about deferred payment agreements can be found in the Council’s Deferred Payment Policy.

Third Party Payments and Top UpsThere might be occasions where the service user decides they want to be in a care or nursing home that costs more than one that the Council decides can meet their needs.

In these circumstances there are two options open to the service user:(a) In some cases the service user can choose to pay the difference between what their chosen care or

nursing home charges. This is known as a ‘first party’ top up and is available where: The service user owns their own home and can make the payments from their savings. A deferred payment agreement is in place (the weekly difference is added to the amount owed on

the agreement).

(b) Someone other than the service user can agree to pay the difference between what the chosen care or nursing home charges and what the Council agrees to pay. This is known as a ‘third party top-up’.

The person who has agreed to pay the difference has to enter into a written agreement with the Council who will check that they can afford to pay the difference and also that they will be able to afford any later increase in the fees.

The Council will make sure that both the service user and the person who is going to sign the agreement know what will happen if the ‘top up’ payments aren’t made, this can include the service user having to move to a cheaper care or nursing home.

Payments and overpayments to care and nursing homes

The Council will make payments for residential or nursing care directly to the home.

We will make every effort to stop payments where for example we know that a service user has died or is leaving the home.

Where we aren’t able to do this we will collect any overpayment from the care or nursing home. We will do this by deducting the amount that has been overpaid from any payments for other service users we are making to the home.

F. Non-residential care and support

(a) Personal Budgets

A personal budget is the amount of money the Council has worked out the service user needs to meet the cost of their care and support. It allows the service user to take charge of their budget either by telling the Council how they want to spend the money or by spending it themselves.

There are two types of Personal Budgets:

http://www.local.gov.uk/documents/10180/5756320/Guidance+on+deferred+payments+AM.pdf/3ce0348f-586b-4328-b556-79a0f1a2ad90

http://www.local.gov.uk/documents/10180/5756320/Guidance+on+deferred+payments+AM.pdf/3ce0348f-586b-4328-b556-79a0f1a2ad90


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(i) Cash Budgets (these are also known as Direct Payments) These are where the service user has decided they want to organise and pay for their own care and support.

The service user has to set up a bank account that is separate than their main day to day account.

We can’t make a direct payment into this bank account until we have carried out a financial assessment and worked out how much the service user can contribute towards the cost of their care and support.

The amount of the service user’s contribution is deducted from the personal budget amount and the Council then pays the balance into the bank account the service user has set up. The service user has to pay the amount of their contribution into the same bank account.

We will regularly monitor Cash Budgets and ask to see bank statements and receipts.

There are some circumstances where we could pay too much into a service users bank account, these include: Where the service user isn’t spending all of their cash budget. The service user no longer needs the same care and support.

In these circumstances we will send an invoice to the service user or the person who is acting on their behalf. If payment isn’t made we will recover the money in line with the ‘Debt Recovery Process’ shown at G below.

We will also send an invoice if the service user or the person acting for them doesn’t pay their contribution into the bank account that has been set up (which would mean there was a shortfall). If payment isn’t made we will recover the money in line with the ‘Debt Recovery Process’ shown at number 7 on page *.

(ii) Managed /ISF Budgets

These are where the service user has decided they don’t want the responsibility of managing their budget.

Usually the Council will organise the care and support on behalf of the service user but an account can also be set up with a third party, for example a voluntary organisation or with a carer, family member or friend (this is called a user-controlled trust).

With a managed budget the service user has to pay the amount of their contribution to the Council. We will send an invoice to the service user or the person who is acting on their behalf. If payment isn’t made we will recover the money in line with the ‘Debt Recovery Process’ shown at G below.

A service user can also decide to have a mixture of cash and managed budget.


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G. Debt Recovery Process

Enforcement action is the last resort option and will only be considered after all other forms of collection, recovery and mediation have been exhausted.

(i) Principles underpinning the approach to debt recovery:- Possible debts must be discussed with the person or their representative. The Local Authority must act reasonably. Arrangements for debt repayments should be agreed between the relevant parties. Repayments must be affordable. Court Action should only be considered after all other reasonable avenues have been

exhausted.

(ii) Debt recovery process

Where payment is outstanding for over three weeks:- A debt reminder letter will be issued where a service user fails to pay the charges detailed in their

invoice by the due date. This will be followed up by a second reminder letter if payment not received. Service users or their representative(s) will be encouraged to discuss the reasons for non-

payment and their individual circumstances with the Corporate Debt Team. Establish if the service user is aware of the debt Establish if the service user cannot pay the debt or is refusing to pay. Wherever possible direct personal contact will be made by either Adult Care staff or the

Corporate Debt Team to discuss the payment of the arrears Council staff are encouraged to refer service users to money advice agencies who can support

the service user in managing their debt and finances, for example, Citizens Advice Bureau. Payment plan options are to be negotiated with the service user if it is established that the

service user is unable to pay the debt.

Failure to pay charges within agreed timescales will result in a final debt reminder – Court Warning Notice being sent to the service user, setting a final deadline for payment.

Contact between Adult Care staff, Corporate Debt and the service user is essential to seek to:- Discuss with the service user the possible use of recovery actions available. Establish if there are any safeguarding concerns. If the service user is refusing to pay, consider mediation with the Head of the Corporate Debt

Team/Legal Services.

Failure to pay by this final deadline will result in the Council issuing a Letter Before Action that will lead to legal debt recovery action being undertaken.

Before debt recovery procedures against a service user are initiated the Corporate Debt Team will work closely with service users or their representative and Adult Care Services staff to ensure vulnerability checks are undertaken and record on file that these checks detail the level of understanding and capacity of the service user. If the service user is found to lack capacity e.g. due to severe mental illness, then the decision to proceed should be discussed with senior Adult Care Services staff.

In cases where payment arrangements and other all avenues have been exhausted, independent mediation can be accessed through the Council’s Welfare Rights and Debt Support Service.


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(iii) Debt Recovery process – Legal Enforcement if debt remains unpaid

Enforcement options available to the Council through the legal process include:-

(a) Referral to the Council’s approved Debt Collection Agency for recovery.

(a) Instruction to Legal Services to apply for County Court action. The resulting judgment would mean enforcement of recovery of the debt by either:-

Warrant of execution leading to Bailiff action undertaken by Court approved Enforcement Agents.

The service user being required to attend court for an oral examination of their means and assets.

Attachment of Earnings Order. Charging Order. This may result in a current charge on a property leading to an enforced

sale of the assets. Third Party Debt Order.

In a small number of cases independent arbitration via the Council’s Legal Service may be required depending on the complexity of the debt being recovered.

(iv) Limitation periods for recovering debts

Any debt relating to care, which arises after the 1st April 2015 must be recovered within 6 years of the date when the sum became due to the Local Authority. It is considered to be unfair or improper to write to a debtor saying that they could be the subject of a Court action for the amount of the stature barred debt when it is known, or reasonably thought to be known, that the relevant limitation period has expired.

It is important to ensure that regular invoices are being sent to the debtor, which will demonstrate that the Council as creditor has maintained regular contact with the service user (debtor).

There are some exceptions to the general rule. For example, if a debtor acknowledges that the sum is due and payable then the limitation period starts to run again from the date of that acknowledgement.

For debts accrued in relation to care services received before 1st April 2015 the time period for recovering that debt continues to be 3 years as previously set out under Section 56 of the National Assistance Act 1948 as any change to this would retrospective and unfair

(v) Continuing Healthcare (CHC)

Until full CHC is awarded the Local Authority will continue to pursue the debt. If CHC is awarded then reimbursement of overpaid fees and charges would be agreed with the customer

(vi) Deprivation of assets and debts

People with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family. This is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. However, it is also important that people pay their fair contribution towards their care and support costs.

Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they are charged towards their care. This means that they must


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have known that they needed care and support and have reduced their assets in order to reduce the contribution they are asked to make towards the cost of that care and support.

Before deciding to pursue the Council will seek to establish whether this was a deliberate avoidance of payment or due to circumstances beyond the person’s control.

What will the Council do where deprivation of assets has occurred?

If the Council decides that a person has deliberately deprived themselves of assets in order to avoid or reduce a charge for care and support, they will first need to decide whether to treat that person as still having the asset for the purposes of the financial assessment and charge them accordingly.

The Council will firstly seek to charge the service user as if the deprivation had not occurred. Where the service user has transferred the asset to a third party to avoid the charge, the third party is liable to pay the Council the difference between what it would have charged and did charge the service user receiving care.

If the service user has transferred funds to more than one third party, each of those people is liable to pay the Council the difference between what it would have charged or did charge the person receiving care in proportion to the amount they received.

The Council will use the County Court process to recover debts should all other avenues have been exhausted.

(vii) Debt write off

Where all attempts to secure a payment have failed the write off procedures contained in the Corporate Debt Policy will be followed.


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Appendix 7

Enforcement and Debts unable to be Recovered

Code of Practice – Enforcement Action

Below is the Code of Practice detailing the practices to be followed by any Enforcement Agent acting for and on behalf of Rochdale Borough Council:-

What happens if an Enforcement Agent is sent to my home?As part of a liability order, Enforcement Agents can be sent to your home to seize your personal belongings should you be unable to set up a repayment plan.

There are three stages that Enforcement Agents follow:

1. Compliance stage

A written request is sent to pay your outstanding council tax and the compliance fees in full or to arrange a payment plan.

This written request is an official notice that an Enforcement Agent will visit your property in seven days to take control of goods if you do not respond.

A fee of £75 is added to your account balance at the compliance stage. Every time a liability order is passed from us to an Enforcement Agent a fee of £75 is charged to your account balance.

2. Enforcement stage

An Enforcement Agent visits your property and takes control of your goods - if you do not contact them within 7 days to pay the account in full or to arrange a payment plan.

If you arrange a payment plan, the Enforcement Agent may let the goods stay in your property and you enter into a Controlled Goods Agreement. This agreement means a list of all items is created. Should you fail to honour the payment plan then items can be taken.

If you do not pay in full or agree to a payment plan for the outstanding balance of your account, an Enforcement Agent can seize goods - up to the value of what is owed; this is known as Taking Control of Goods. The value of the goods may not be as much as you paid.

An enforcement fee of £235 is added to your account balance as soon as an Enforcement Agent visits your property for the first time. Should you owe more than £1500, 7.5% of the total amount above £1500 along with the enforcement fee will be added to your account balance.

For multiple liability orders, only one enforcement stage fee is charged.


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3. Sale or disposal stage

An Enforcement Agent attends your property to remove goods for auction or prepare goods to be sold – if the sale takes place at your home.

A fee of £110 is added to your account at the sale or disposal stage, for multiple liability orders, only one enforcement stage fee will be charged.

Should you owe more than £1500, 7.5% of the total amount above £1500 along with the enforcement fee will be added to your account balance.

In addition to the above fees Enforcement Agents may also recover fees for associated costs that are reasonable such as storage fees following removal of goods, locksmith’s fees and auctioneer’s fees.Please note: Once your account is passed to an Enforcement Agent your account balance and all fees must be paid to the Enforcement Agent, not the council.

Should you miss an Enforcement Agent visit, their details will be left and you should contact the Agent to make payment or arrange another visit.

Debt unable to be recovered

The Council will seek to minimise the cost of write off to the local Council Tax payer by taking all necessary action to recover what is due. All reasonable and economical debt recovery action will be taken before consideration is given to writing off a debt. The degree of enforcement will be dependent on the amount owed, the type of debt and the debtor’s personal circumstances. This will be progressed in accordance with the Council’s Scheme of Delegation.


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Rochdale Borough Council

Number One Riverside

Smith Street

Rochdale

OL16 1XU

rochdale.gov.uk

01706 647474

[email protected]