Summary: Ms Y complained the Council mismanaged her finances when acting as her appointee. The Ombudsman has found fault by the Council causing injustice. The Council has agreed to remedy this by apologising, making payments for financial loss and to reflect inconvenience and distress, and service improvements.

The complaint

1. The complainant, who I am calling Ms Y, complained about the way the Council managed her finances, as her appointee. Her representative, Mrs Z, says, on her behalf, the Council mismanaged Ms Y’s benefit claims, payments of outgoings and failed to provide Ms Y with information, causing her financial loss, distress and worry.

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The Ombudsman’s role and powers

2. 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)
3. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, 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. I made enquiries of the Council and read the information Mrs Z and the Council provided about the complaint
6. I invited Mrs Z, Ms Y and the Council to comment on a draft version of this decision. I considered their responses before making a final decision.

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What I found

What should have happened

Appointee for a person claiming benefits

7. An appointee acts for a person entitled to benefits from the Department of Work and Pensions (DWP), who cannot manage their own affairs. A local authority can act as an appointee.
8. The appointee is responsible for making and maintaining any benefit claims and spending the benefit in the claimant’s best interests.

The Council’s Client Finance and Asset Management (CFAM) team

9. The CFAM team manages the finances of eligible Council residents (clients). Clients are referred through a specific process. Decisions on eligibility are made based on vulnerability, lack of capacity to manage specific financial tasks and actual or potential risk of self -neglect or abuse. Clients are allocated a finance officer to manage their account.
10. The team’s quality assurance policy and procedure documents says monthly statements are not sent, to safeguard clients from possible abuse by a third party. But monthly/quarterly/yearly account statements will be provided to clients if requested.
11. Team guidance issued in July 2021 on procedure for income maximisation, budget monitoring and capital limits said:

• New claims were made on the basis they must not precipitate a cycle of accumulation of unspent benefits in a short space of time, requiring the end of a claim relatively quickly to avoid repayment of overpaid benefits.
• In the past it was the remit of the allocated finance officer to make a common sense decision as to the best time to seek new claims based on the service user’s budget requirements.
• The following was general advice only. Finance officers should continue to use judgement around what continued to be a fairly fluid practice:
1. When savings drop below £16,000 - review all ongoing income, to include full rent, domiciliary/residential care, utility bills, council tax and personal allowance.
2. Review again at £12,000 – if expenditure is relatively low, continue to let savings reduce before making a new claim; if the reverse, examine the need to claim benefits.
3. Review again at £10,000 – if expenditure is relatively low, continue to let savings reduce before making a new claim; if the reverse, examine the need to claim benefits.
4. Review again at £6,000 – by this time income and expenditure should merit new claims for any due benefits.
5. If savings are £5,000 or below, seek urgent benefit claims as needed.
• It is recommended after benefits are stopped the officer/assistant conducts periodic reviews (monthly/quarterly) to meet the above criteria.
• It remains the duty of all CFAM team members to ensure budget monitoring is undertaken throughout the year; work does not stop after an overpayment of benefit is identified and income maximisation must be upheld at all times.

Employment and Support Allowance (ESA)

12. ESA is a benefit for people with a disability or health condition affecting how much they can work. To get income related ESA a person must have no income or a low income and less than £16,000 in savings.

What happened

13. I have investigated Ms Y’s complaints about the Council’s actions from February 2016. Although these took place more than 12 months before Ms Y’s representative brought her complaint to us in 2020, I consider there are good reasons why she could not have referred it to us sooner. The Council did not provide her with statements or information, showing how it had managed her account, until January 2020.

February 2016 to January 2017

14. Ms Y’s finances have been managed by the CFAM team for many years and the Council is the appointee for her benefit claims. Her account was managed by an allocated finance officer.
15. As at February 2016 Ms Y received ESA and Disability Living Allowance (DLA) every four weeks. She lived in rented accommodation. Her utility bills and rent were paid from her account, together with a personal allowance. Her account balance on 1 February 2016 was £15,670.
16. Ms Y’s balance increased to £16,414 on 3 February 2016. Her finance officer notified DWP of the change and Ms Y’s ESA claim was stopped. Her DLA payment was reduced to £87 every four weeks.
17. Ms Y’s finance officer was told by her social worker she would be moving into residential care, payment of bills should be stopped, and her tenancy would be transferred to her son. Ms Y moved to the care home on 25 February 2016.
18. Direct debit payments for rent, utilities and council tax for her rented accommodation were not stopped and continued to be paid from her account after 25 February.
19. By 18 July Ms Y’s balance had reduced to £10,425. But on 19 July, she received an inheritance payment of £9,696, which increased her balance to £19,922.
20. Ms Y received a personal allowance of £200 a week. The only income to her account from February was the DLA of £87 every four weeks. Rent payments were stopped in July but the utility payments continued until the finance officer cancelled the direct debits in September. By 23 September Ms Y’s balance had reduced to £15,824.
21. In October the finance officer told the Council’s housing team rent payments from Ms Y’s account had continued in error from February 2016 and asked for a refund. The housing team told him the transfer of Ms Y’s tenancy to her son had not completed until September and the tenancy had remained in Ms Y’s name until then. The rent account was in arrears because payments from Ms Y’s account stopped in July. If the payments from February to July were refunded, the arrears figure would increase.

February 2017 to October 2017

22. The balance on Ms Y’s account continued to reduce from September 2016. On 20 February it was £11,776.
23. On 22 February the team received a letter from DWP asking for up-to-date information about Ms Y’s savings. On 27 February, I understand Ms Y’s care home asked the finance officer for proof of Ms Y’s benefit entitlement. This was needed to allow Ms Y to reclaim travel costs for attending her dialysis treatment.
24. The finance officer notified the DWP on 10 March Ms Y’s savings balance was £11,464 and made a new claim for ESA.
25. The care home say they asked the finance officer again on 21 and 28 April for proof of Ms Y’s benefit entitlement. On 2 May, they were told Ms Y’s ESA had not yet been reinstated and the officer would call DWP the next day.
26. The finance officer contacted Ms Y’s social worker about the rent payments. The social worker told him there had been a delay by Ms Y’s son in arranging the tenancy paperwork with the Council. This was why the transfer did not complete until September 2016. On 23 May the social worker told the finance officer:

• He had spoken to Ms Y. She was clear she was happy to pay £2,600 for her son’s rent last year. He had assessed her as having capacity for this decision.
• Ms Y remained very keen to know what is held in her account. He asked the finance officer to let him know.
• The care home needed Ms Y’s ESA entitlement letter to claim back several hundreds of pounds in taxi fares to/from hospital. Was there was any update on her claim?

27. The finance officer confirmed Ms Y’s balance was now £8,500. The DWP had told him her claim was still with a decision maker.
28. The care home manager contacted the finance officer the same day. She asked how Ms Y’s balance had gone down to £8,000 when she had been told on 13 March it had just dropped below £16,000.
29. DWP told the team on 14 July Ms Y’s ESA had been reinstated. The confirmation letter was received by the CFAM team on 20 July. The care home contacted the finance officer again to ask for news about the ESA claim. They were told ESA had been reinstated, the entitlement letter had been received and he would scan a copy over the next day.
30. The care home did not receive a copy of the letter. The finance officer told them on 26 September, he had not located one yet and would check again the next day. The letter was finally emailed to the care home on 12 October.

October 2017 to January 2018 – claim for travel costs

31. Ms Y could reclaim travel costs for her hospital visits for dialysis when in receipt of ESA. The care home has told us, with proof of ESA, Ms Y could reclaim up to four weeks of travel costs at the hospital counter. But claims for a refund of travel costs of up to three months had to be made by post by an appointee.
32. The care home says, because they were not given the July entitlement letter until 12 October, Ms Y was only able to reclaim travel costs at the counter for the period from September. And as the DWP letter confirmed Ms Y’s entitlement to 5 April but not that it was continuing, it could not be used to reclaim expenses going forward. It referred this error to the finance officer.
33. DWP issued a further letter on 8 January 2018. Ms Y has been able to use this since then to reclaim her travel costs at the hospital counter. But the team’s application of 11 January 2018 for a refund of Ms Y’s previous months’ travel costs was rejected as being too late.

2018 and 2019

34. Ms Y’s balance in April 2018 was £4,421. Ms Y’s social worker asked the finance officer about:

• An update on Ms Y’s finances and a rough idea of her balance. They were trying to arrange a holiday to Italy (where she had family) with other family members and carers.
• Ms Y’s weekly personal allowance, which had been reduced to £100. The care home had told the social worker this did not meet Ms Y’s needs and restricted her outings, making her behaviour difficult to manage.
• Ms Y’s account statements. Her family had told him they had previously been sent monthly statements and were unhappy about the limited information provided now. The finance officer told the social worker policies on data sharing had changed and he was happy to speak to family directly about this.

35. In 2019 Ms Y’s social worker told the finance officer he had received many requests from Ms Y, and her former partner, about the state of her finances as they wanted to plan another family holiday. The holiday last year was a success and Ms Y’s family wanted to make it an annual event.
36. The finance officer said Ms Y did not have enough funds or income to save for a holiday. After discussion, Ms Y’s weekly personal allowance was reduced to £80 to allow her to build up funds for a holiday that summer.
37. Following Ms Y’s 2019 summer trip the social worker told the finance officer saving for her holiday should be a priority, as Ms Y seemed greatly enhanced by having this to look forward to.

Ms Y’s complaint

38. On 4 December 2019 the care home asked the finance officer for Ms Y’s account statements from 25 February 2016 to date. She said Ms Y had been requesting these for years, via the care home, her social worker and the Relevant Person’s Representative (the person appointed to represent Ms Y in matters relating to deprivation of liberty). The officer said the team did not provide statements, but he would be happy to meet with Ms Y in person.
39. On 12 December 2019 the care home sent the finance officer a letter from Ms Y in which she asked for her account statements from February 2016 to date. She said she had been asking for this information for the last three years.
40. The finance officer had a meeting with Ms Y and her social worker in January 2020. He provided her account statements for the period from April 2016. Ms Y expected to see a balance around £16,000. Her current balance was around £2,000.
41. Ms Y complained to the Council in April 2020 about the management of her finances. She said:

• The outgoings for her previous accommodation should have been stopped when she moved out in 2016. The care home staff had to help her obtain refunds in November 2016.
• She had no choice but to allow the deduction of £2,600 for rent arrears to stop her son being evicted.
• The Council had failed to claim the Severe Mental Impairment (SMI) exemption for council tax while she was at her rented property.
• Although her savings fell below £16,000 in 2016, the Council did not make a new claim for ESA until 2017.
• The Council had not helped her manage her inheritance. She was not given the opportunity to spend the money on things she needed at the time, such as clothing or a funeral plan. Had her benefits claim been made at the right time, she could have used her inheritance money for trips to Italy where her family live.
• She had been unable to recover all the travel costs for her treatment because the team did not take action at the appropriate time.
• The Council owed her £12,000 for payments wrongly made from her account, ESA it had failed to claim for her and travel expenses she had not been able to recover.

Council’s response

42. In its response in April 2020, the Council said:

• It could only share her financial information with her, and not her family as this would be in breach of the Data Protection Act and, from May 2019, GDPR (General Data Protection Regulations). Her social worker should ascertain whether she had capacity to decide to share financial information with other parties.
• It accepted there had been difficulties getting information to her. The finance officer had not been fully clear about information sharing permissions prior to January 2020.
• The team did not have authority to notify the housing team about the tenancy transfer. She had agreed to pay the rent arrears for her son, as confirmed by her social worker.
• It could have stopped the tv licence payments, although this would have left her son with a debt. More could have been done to stop utility payments but refunds had now been obtained. It was working on the council tax refund.
• The team’s standard procedure was to allow savings to drop significantly below £16,000 before making new claims for means tested benefits. Applications could be a time consuming process. It made sense to wait as long as possible to avoid exceeding capital limits again quickly.
• A new claim would normally be made once savings had dropped to £10,000 but this was a matter for the finance officer’s judgement, depending on the level of monthly income and expenditure. As far as its records showed, Ms Y’s finance officer observed correct protocols before reclaiming ESA.
• But it acknowledged a new claim could have been made sooner and would have been prudent as her outgoings exceeded her income. But there was no loss to Ms Y as she continued to receive a weekly allowance of £200.
• It could not have provided proof of Ms Y’s ESA entitlement earlier because it was not reinstated until July 2017.
• It could not see evidence of dialogue with the care home about using Ms Y’s inheritance for her benefit. But it accepted a better dialogue could have been agreed to access some of her inheritance.

43. And in its response to us, the Council said:

• Council tax refunds had now been received, £249.87, for the SMI exemption and £590.27 for part of the year to 31 March 2017. It accepted these should have been claimed sooner and offered £125 in recognition of its service failure.
• Recommendations had been made for a review of administrative process in this area of client account management.
• It offered Ms Y £84.90 (tv licence payments from March to September 2016) in recognition of its failure to stop these payments sooner.
• Ms Y’s travel costs of £560 for the period from March to July 2017 could not be reclaimed because of the error in the July 2017 DWP letter. The further DWP letter confirming Ms Y’s ongoing entitlement was not received until January 2018. Although the team then applied for a refund of the costs of £560, this was rejected as it was too late. Ms Y was able to reclaim her travel costs for the period from November to December 2017.

Analysis – was there fault by the Council causing injustice?

Payment of outgoings for Ms Y’s previous accommodation

44. The finance officer was told in advance about Ms Y’s move to the care home and to stop the payments for her rented accommodation. He did not stop the rent payments from 25 February 2016 when Ms Y moved into the care home. In my view this was fault by the Council which caused Ms Y financial loss. Her housing benefit payments stopped when she moved into the care home but the Council continued to make rent payments from her account totalling £2,426 (including arrears of £130.45 in May 2017) for a property she no longer lived in.
45. There were discussions between the finance officer and the social worker about the rent payments issue which led to the social worker confirming Ms Y was happy to pay the rent for her son. But in my view, she would not have been put in this position, had the rent payments been stopped from February 2016. I consider the Council should refund the rent payments of £2,426 to Ms Y’s account.
46. I also consider it was fault by the Council to pay the full amount (£1,383) of Ms Y’s council tax bill in May 2016 for year to March 2017, when she had already moved out of her rented accommodation, and to fail to claim her SMI exemption for previous years. The Council has provided details of the refunds obtained. But it did not obtain a refund of the council tax of £793 paid for the period from April to September 2016. In my view the Council should refund this amount of £793 to Ms Y’s account.
47. I consider it was fault by the Council not to cancel the direct debit payments for utilities and tv licence in February 2016. The payments for utilities have been refunded and the Council’s offer to repay the tv licence payments and £125 in recognition of its service failure is, in my view, an appropriate remedy for the injustice this fault caused.

Claim for ESA

48. Based on the Council’s April 2020 complaint response and July 2021 guidance, I understand, in the period before 2021, the team’s procedure for making new claims was:

• A client’s balance would normally be allowed to drop significantly below £16,000 and a new claim would not be made until savings had gone down to £10,000.
• But finance officers should use their judgement and make a common sense decision about the best time to make a new claim, based on the client’s budget requirements, their level of monthly income and expenditure.
• Finance officers had a duty to ensure budget monitoring was undertaken throughout the year

49. From March 2016 when Ms Y’s ESA claim was stopped, her only income was £87 DLA every four weeks and her expenditure (personal allowance) was £800 every four weeks. I consider it should have been clear to the finance officer, Ms Y’s balance would fall by a very significant amount each month.
50. I have not seen any evidence Ms Y’s finance officer conducted any reviews of her account between February 2016, when her ESA claim was stopped, and March 2017 when the new claim was made. Her account does not appear to have been monitored because no action was taken to cancel direct debit payments for outgoings until July and September 2016.
51. There is no evidence any consideration was given to Ms Y’s budget requirements, income and outgoings between April 2016, when her balance fell below £16,000 again, and March 2017, when her balance was £11,264 - and not just below £16,000 as the care home appears to have been told.
52. I consider there was a failure by the finance officer and the CFAM team to review and monitor Ms Y’s account and the impact of the significant gap between her income and outgoings between February 2016 to March 2017, and this was fault by the Council. It should have been clear Ms Y’s balance would continue to fall, even after ESA payments restarted and this was not a case where the balance would fluctuate above and below the £16,000 limit. Had the account been properly monitored, in my view it is likely a common sense decision would have been made to start a new claim before March 2017.
53. But I do not consider Ms Y has been caused injustice by the delay in making the new claim. This is because of my finding payments of some £3,800 for rent and council tax should not have been made from Ms Y’s account in 2016. Had they not been made, her account balance would not have fallen below £16,000 (following the inheritance payment) until about mid February 2017. With proper consideration, a new claim could have been made around March 2017 in any event.

Reduction in Ms Y’s personal allowance

54. The social worker confirmed Ms Y’s trips to Italy in 2018 and 2019 had a very positive effect on her wellbeing. The finance officer had reduced her weekly allowance, having said this was required to fund the trips. But for the fault in making the payments of £3,800 in 2016, I consider Ms Y would have been able to fund these trips without such significant reductions to her weekly allowance, which the care home confirmed restricted the activities it could provide to promote her wellbeing. In my view the impact of the reduced allowance caused Ms Y avoidable distress.

Travel expenses

55. The finance officer knew the care home needed proof of Ms Y’s ESA entitlement to reclaim the significant travel costs she was incurring for her hospital visits. The claim was made in March 2017. There is no evidence the progress of the claim was monitored by the team. When it was chased on 13 July 2017, this appears to have prompted a decision by the DWP the next day.
56. I consider the failure to monitor the claim, together with the failure to send the entitlement letter received in July, to the care home until 12 October 2017 was fault. In my view without these delays, and with the support by the team in making the application for the three month refund sooner, it is likely Ms Y would have been able to reclaim her travel costs of £560 for the period from March to July 2017.

Provision of account statements

57. Based on the evidence seen so far, I accept it was made clear to the finance officer from February 2016, Ms Y wanted to see her account statements. I consider it was fault by the Council not to provide her with the information about her own account and this caused her injustice.
58. I do not consider Ms Y was caused financial loss, but my view is she was caused worry and distress. Ms Y was unhappy she did not know how much money she had or how her account was being managed. She was denied the information she needed to make some financial choices, in particular about her inheritance.

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Agreed action

59. To remedy the injustice caused by the above faults, and within four weeks from the date of our final decision, the Council has agreed to:
60. Apologise to Ms Y for its failures in the management of her account from February 2016 to January 2020
61. Pay Ms Y:
1. £2,426 for the rent wrongly paid from her account from February 2016 to May 2017
2. £793 for the balance of council tax from the year April 2016 to March 2017 wrongly paid from her account
3. £560 for travel costs Ms Y was unable to reclaim for the period from March 2017 to July 2017
4. £84.90 for the tv licence payments wrongly paid from her account from March to September 2016 (as it has already offered to do)
62. Pay Ms Y:
1. £125 to reflect Ms Y and the care home’s time and trouble claiming refunds of the utility payments wrongly paid from her account from March to September 2016 (as the Council has already offered to do)
2. £500 to reflect Ms Y’s distress and worry at not being provided with information about her financial circumstances for nearly four years and the impact on her wellbeing of the avoidable reduction in her personal allowance in 2018 and 2019.
3. These figures are a symbolic amount based on the Ombudsman’s published Guidance on Remedies.
63. Within three months of the final decision provide us with evidence it has:
1. shared the learning from this decision with CFAM managers.
2. reviewed the guidance issued to the CFAM team in July 2021 and made any appropriate additions or changes in the light of the findings in this decision.
3. reviewed its procedures for oversight and monitoring by CFAM managers of finance officer’s management of client accounts where benefit claims have been stopped because of capital limits.

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Final decision

64. I have found fault by the Council, causing injustice. I have completed my investigation on the basis on the basis the Council will take the above action as a suitable way of remedying the injustice.

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Investigator's decision on behalf of the Ombudsman