Summary: Ms X complains the Council’s decision to pursue an attachment of earnings order has not taken account of her ability to pay and caused further financial hardship. The Council says it has included all expenditure claimed by Ms X but the evidence provided does not support this. The Council has now cancelled the attachment of earnings order and sent Ms C a new income and expenditure form to complete. This is an appropriate remedy.

The complaint

1. Ms X complains the Council’s decision to pursue an attachment of earnings order has not taken account of her ability to pay.
2. She says the amount being taken each month is causing her severe financial hardship.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

5. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

6. Ms X lives with her disabled partner, Mr Y. She works and he receives benefits. They have a combined monthly income of £2521.55. Due to Mr Y’s disabilities, Ms X acts as his carer and takes responsibility for managing the household income and expenditure.
7. Ms X and Mr Y have council tax arrears covering a number of years. Due to non-payment of previous council tax bills, three liability orders have been issued by the courts. Collection of these debts have been passed to enforcement agents. Ms X reached an agreement with the enforcement agents to pay £82 per month to clear the arrears. Ms X has kept this arrangement since it was made and paid every month.
8. Ms X did not make regular payments for council tax for the year 2019/20. In July the courts issued a liability order for this debt. The Council had sent Ms X an income and expenditure form to complete in June. Ms X returned this to the Council with an offer to pay £140 per month. The Council agreed to this repayment plan and the first payment was due on 1 August. The Council did not receive a payment.
9. Ms X wrote to the Council in September saying she was struggling to pay. She said she was in a “black hole with no where to turn”. She asked the Council if it could help.
10. On 1 October Ms X wrote to the Council again. She said she had been advised to write by Citizens’ Advice. In the letter she again explained she was struggling to cope. She mentioned she felt that she was drowning and had considered ending it all. She said she could not afford £140 a month and asked if the Council would help her. She said she was not trying to avoid paying but needed an affordable arrangement.
11. The Council reviewed Ms X’s account in October. Based on the information provided by Ms X on the income and expenditure form, it decided an attachment of earnings order (AEO) would be the best option. It wrote to Ms X explaining its decision.
12. After receiving notification of the AEO which would take approximately £250 per month direct from her wages, Ms X wrote to the Council again. She reiterated that she was struggling. She said this arrangement would break her and she would not be to afford the mortgage. She again said she felt like giving up and ending it all. She ended the message saying “please help”.
13. Ms X emailed the Council a number of times in October. She said someone had called her and said she had over £400 a month excess income. Ms X said this was incorrect and asked someone to contact her as it was definitely wrong. In other messages she asked for urgent contact as she could not manage or afford the AEO. Her emails were requesting help because she was worried and stressed.
14. The Council replied saying the AEO would remain in place as she had not kept to previous arrangements. It did not offer any help or comment her claim the income and expenditure calculation was wrong.
15. The next day Ms X contacted the Council again. Her email said she thought she could raise £1,100 leaving £344 to pay over three months.
16. Ms X wrote again on 19 October asking to change her previous offer. She now said she could pay £150 per month for six months and then a final payment of £544. She said it was basically the same amount but with the larger sum paid at the end. She said this arrangement would mean she didn’t have to get another loan and would really help her. She said the situation had made her realise she needed help with her finances and accepting this arrangement would prevent her situation getting worse.
17. The Council wrote to Ms X on 21 October. The Council said it was not legally obliged to accept a lower payment once a liability order is issued. It said four previous arrangements had all failed and it was not prepared to accept a lower offer. It advised Ms X to seek legal advice if she was unhappy.
18. On 21 October the Council sent another email which said the amount deducted by an AEO was not negotiable and is a statutory amount set by Government. It said it had put a hold on the AEO due to her making an offer to repay. It asked if she wanted to cancel the offer and if so, it would reinstate the AEO.
19. An email to Ms X on 28 October provided details of the income and expenditure previously provided. It said other payments Ms X had advised it of had been included in her expenditure but the AEO was still in place. Ms X asked someone to get back to her as she was panicking because the income and expenditure was all wrong.
20. An email from Ms X on the same date reads “I am throwing myself on your mercy please can I pay the amount of £1,100 by the end of March and pay £100 a month till then? I know you said you aren’t obliged to do this but I am so very desperate not to go into a darker place than I am at the moment. As getting the loan will cripple me more. My situation with being a carer and finances not being on track due to Mr Y losing his job through illness is why these circumstances have happened. When I say I am suicidal I have really thought about it as I can’t see a way out. My fate is in your hands, please I just need this chance. I’m not sleeping I’m feeling very ill with stress and worry, I will lose my home with this arrangement of taking money from my wages...”
21. The Council responded on 29 October. It said it had considered the six emails sent yesterday and the two emails sent that day. A review of her account had been carried out and the AEO reinstated. It said this is the least stressful recovery option available as deductions are made at source by the employer. It suggested she seek independent advice if she disagreed with the decision.
22. Ms X responded asking if anyone had actually checked her income and expenditure as it was wrong as advised in her previous emails. On 30 October she emailed the Council asking it to send another income and expenditure form so she could provide the correct information. The Council said that its calculations were based on figures Ms X provided and it had decided to leave the AEO in place. Ms X again asked the Council to allow her to complete a new income and expenditure form as it was not including all her outgoings.
23. Ms X made a formal complaint as she was concerned the matter would not be resolved before money was taken from next months’ wages. She said the Council had not followed guidelines about how it treats priority expenditure.
24. The Council sent its stage one response to Ms X on 12 November. The Council said that because Ms X had not made payments or kept to previous arrangements it had taken the view an AEO was appropriate. It said it had considered the information she provided on the income and expenditure form and also the additional information she said had not been included. It said this showed a surplus income of £386.38 per month and as the deduction would be £260 it considered this was affordable. The Council said it had taken all amounts Ms X had told it about into account.
25. Ms X escalated her complaint to stage two of the complaints’ procedure. The Council’s Chief Executive replied explaining the AEO would remain in place.

Analysis

26. The information provided shows Ms X has council tax arrears covering a number of years. The Council has four liability orders against her. The Council passed three cases to enforcement agents for recovery. Ms X has reached agreement on these and is paying £82 per month to clear the arrears.
27. Ms X did not make regular payments for the council tax year 2019/20. The Council gained a liability order and did enter into a repayment plan with Ms X but she did not keep to it. It is at this point that the Council decided to collect the arrears using an AEO. I am satisfied the Council has a duty to collect unpaid council tax and that using an AEO is an acceptable method of payment.
28. The Council says it has spent a considerable amount of time on this case. The information provided to me by the Council shows Ms X was continually emailing the Council about her council tax arrears. The nature of her communications indicate she was experiencing stress and indicated she was struggling to manage financially.
29. The Council’s debt recovery policy says it must identify individuals who could be considered vulnerable and consider all viable options. The policy includes categories of people who could be considered vulnerable. It includes mental illness/severe depression or suicidal tendencies. It says the recovery of debts from vulnerable customers has to be carried out in an adaptable manner and a non-threatening personalised approach needs to be taken to establish payment arrangements or other assistance.
30. The Council has provided evidence to show it did provide information to Ms X about agencies that may be able to provide support. In December it sent an email with contact details for foodbanks, its own welfare provision scheme, its mental health team, Citizens’ Advice, Samaritans and Mind. It January it again sent details of its Welfare Provision Scheme and this included a link to make an application for assistance. In November, concerned about the comments made by Ms X, council tax officers made a safeguarding referral.
31. The Council says it has considered all income and expenditure details provided by Ms X. It says that Ms X has provided further information about her outgoings it has accepted all her figures and this still shows excess income of £386 per month. Ms X disagrees and says not all her income is included. I have seen bank statements which show a loan from Clearly Loans of £165 per month, a repayment to the DWP of £129 per month and a repayment to Amigo loans of £296.44 per month. The income and expenditure form provided to me by the Council does not show this expenditure. I am therefore not satisfied the Council has properly considered all Ms X’s outgoings.
32. I sent an initial draft statement and in response the Council provided further comments. As well as providing evidence that it gave Ms X information about agencies that could assist her, it has provided further comments on the income and expenditure. The Council says Ms X’s bank statements show income of £300 per month. It says Ms X explained this was money from her son to cover the repayment of £296.44 to Amigo loans. The Council says as these two items effectively cancel each other out, it did not include them on the breakdown provided.
33. The Council has continually stated that it has included all expenditure stated by Ms X and that the statement shows she has excess income over the level of the AEO. Ms X has sent several emails in which she mentioned a loan of £165 to Clearly Loans. Ms X says this loan is secured against her home and so is priority spending. I have not seen any evidence to show this amount has been included by the Council. In my previous draft decision I mentioned this loan and the Council’s response makes no mention of it. I am therefore not satisfied the Council is correct when it says all income and expenditure has been taken into account. Bank statements I have seen also show a repayment to the DWP, the Council has not commented on this either.
34. The AEO has now been in place for several months and so the Council has recovered most of the arrears for the current year. Ms X has asked for some of the amounts to be refunded to enable her to meet her other liabilities. I am not asking the Council to make any refunds as I do not consider that would be appropriate or proportionate.
35. I am not persuaded the Council has properly considered Ms X’s financial situation. Its policy relating to vulnerable people states that it will consider all viable options. I note the Council did consider a repayment agreement proposed by Ms X however it is clear this was not viable as Ms X was going to borrow money to make the payments. Ms X repeatedly asked the Council to allow her to provide a new income and expenditure form which would show the true position of her finances. The Council never responded to this request.
36. While I agree with the Council’s view that Ms X’s correspondence has been “scattergun” and inconsistent, I consider it has failed to properly respond to her situation. The Council mentions that council tax is considered a priority debt. I do not disagree with this statement. However, the Council has accepted as expenditure payments for debts that would be non-priority debts and so has not dealt with the income and expenditure statement in line with accepted debt management practice. It is possible that if a full and accurate income and expenditure statement had been produced, Ms X would have sufficient available income to meet the AEO. However, this case has not been handled in a way that enables anyone to take this view.

Agreed action

37. The Council has now cancelled the AEO and written to Ms X to advise her of this action. It has also sent a new income and expenditure form for her to complete. Ms X should complete and return the form ensuring she includes all her expenditure and the Council will then use this to set up an affordable repayment plan.
38. It seems to me that as council tax bills for the year 2020/21 will soon be issued, it would be advantageous to all parties to look at how Ms X will make payments in the coming year to avoid further arrears and the resulting recovery action.

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Final decision

39. I will now complete my investigation as a suitable remedy has been provided.

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Investigator's decision on behalf of the Ombudsman