Where grant either HAG or DPF, has to be repaid to the NIHE they will identify, calculate and issue recovery methods for any overpayments
The 'General Determination'
The following procedures apply to grant provided to Housing Associations by means of either Housing Association Grant (HAG) or Disposals Proceeds Fund (DPF).
When this guidance uses the general term ‘Recovery’, it refers to the fact that an obligation arises on the Housing Association to repay a defined amount of grant. This obligation can be discharged by literally repaying the grant and/ or interest to NIHE (DPG) or by an appropriate deduction in grant paid to the Association in respect of its next grant claim. (NB NIHE (DPG) will inform the Association on the required method of recovery).
The Housing Association Grant for Eligible Housing Activities General (Northern Ireland) Determination 1992, known as the ‘General Determination’, gives details of a number of relevant events that trigger grant recovery. The following list of relevant events also describes the circumstances under which grant and/ or interest must be repaid to NIHE (DPG) except when paragraphs 28 to 37 of the General Determination apply. Please note that all references in the General Determination to the Department are now the responsibility of the NIHE (DPG):
- Disposal of a property
- To a registered housing association;
- The sale of the first share of a property under an equity-sharing lease where the property is specifically provided for sale on equity-sharing terms:
- The sale of property acquired for the purposes of repair, improvement or conversion for sale.
- Use of a property for a purpose other than that for which grant was originally paid;
- Failure to use property for the purpose for which grant was paid or failure to keep it available for such use;
- Failure to comply with any condition attached to the making of the grant;
- Discovery that the Department or NIHE (DPG) have received incorrect information or made an error in connection with the payment of grant;
- Failure to complete a scheme within a reasonable time;
- Disposal that should give rise to a full or partial repayment of a discount.
Identification of HAG Overpayments - There are two primary routes by which an overpayment of HAG is normally identified:
- An Association identifies that a potential overpayment of HAG has or will occur and forward timely notification to NIHE (DPG).
- NIHE (DPG) identifies a potential overpayment of HAG.
Guidance may be sought from NIHE (DPG), as required, in respect of specific circumstances where the obligation to repay grant is not clear.
Calculation of HAG to be recovered - NIHE (DPG) will examine the scheme information provided and determine whether an overpayment of grant has occurred, the amount of grant to be repaid and/or any interest to be applied. Sufficient details must be provided by the Association, including relevant events and dates, to allow NIHE (DPG) to investigate and determine the amount to be repaid. The Association may be requested to submit revised TA1 or NT1 and SFN1 forms to NIHE (DPG) to assist in this process.
NIHE (DPG) will notify the Association of the outcome detailing the amount of grant and/or interest to be repaid. The Association is given the opportunity to raise any queries at this point. If no response is forthcoming, the appropriate recovery procedures are initiated by NIHE (DPG).
For example, Associations must note that:
- Where the Association fails to complete the acquisition of the land/property within 30 working days of receipt of grant, the grant and/or interest will be recovered by the NIHE (DPG).
- Where a single submission consists of the acquisition of several properties and one or more of the purchases is not completed within the afore-mentioned timescale, a proportion of the grant may be required to be repaid, with interest, to the NIHE (DPG).
Note. Recovery of Grant – Post Practical Completion. For more information see Revised Approvals.
Where a ‘relevant event‘ occurs after payment of the final practical completion tranche it may be necessary to recalculate the amount of grant that should have been awarded to the scheme in question. It is necessary, therefore, for Associations to monitor actual outturn costs against approved estimated costs and notify NIHE (DPG) of any discrepancies.
N.B. Any interest to be applied will accrue from the date the Association received the overpaid grant. Interest will continue to accrue until the Association is advised that NIHE (DPG) are proceeding with the HAG and/or interest recovery from an appropriate tranche claim or until full payment is received by NIHE (DPG).
HAG Recovery methods - HAG Recovery will take place by one of three methods:
- Deduction from grant due in respect of scheme where HAG overpayment occurred
Where sufficient unpaid grant remains outstanding in respect of the scheme where the overpayment of HAG has occurred, the overpayment and/or any relevant interest is deducted from any subsequent payments payable for that scheme. The balance of approved grant is paid to the Association and is claimed using the normal procedures for the relevant tranche claim depending on scheme type.
- Deduction from other grant due to Association
Where insufficient or no grant remains outstanding in respect of the scheme where the overpayment of HAG has occurred, the overpayment an/or any relevant interest is deducted from any subsequent tranche claims made by that Association in respect of any other of its approved schemes. The balance of approved grant is paid to the Association and is claimed using the normal procedures for the relevant tranche claim depending on scheme type.
- Direct Payment by Association to NIHE (DPG)
Where insufficient or no unpaid grant remains outstanding in respect of the scheme where the overpayment of HAG has occurred and there are no programmed tranche claims anticipated from that Association, the Association is required to arrange payment of the overpayment and/or any relevant interest direct to NIHE (DPG).
The most suitable recovery approach according to the particular circumstances will be determined by NIHE (DPG). The Association will be notified of the method of repayment to be followed and kept advised of the details of any affected scheme payments if relevant.