Summary: Ms X complains about how the Council has dealt with her Council Tax account. The Council is at fault as it delayed in sending a Council Tax bill to Ms X setting out her arrears at her former property, delaying in clarifying that her arrears related to her former property when she contacted the Council, failed to follow its vulnerability guidelines and delayed in correctly calculating her eligibility for Council Tax Support. These faults caused distress and avoidable time and trouble to Ms X which the Council has agreed to remedy.

The complaint

1. Ms X complains about how the Council has dealt with her Council Tax account. In particular she considers the Council:
1. Wrongly considered she had arrears on her Council Tax accounts for 2018/19 and 2019/20.
2. Failed to issue a reminder and summons for arrears of £5.20 so Ms X was not aware of the arrears or that the Council had obtained a liability order;
3. Failed to take account of her mental health when seeking recovery of the arrears, including passing her account to the bailiffs to collect, despite Ms X notifying the Council of her mental health problems;
4. Wrongly removed her single person’s discount in 2020;
5. Wrongly calculated her entitlement to Council Tax support.
6. Did not apply a severely mentally impaired discount to her Council Tax account.
2. As a result Ms X was caused significant distress by the recovery action and put avoidable time and trouble as she had to send the same information to the Council on a number of occasions.

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The Ombudsman’s role and powers

3. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
4. 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)
5. 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

6. I have:

• Considered the complaint and the information provided by Ms X;
• Discussed the issues with Ms X;
• Made enquiries of the Council and considered the information provided;
• Invited Ms X and the Council to comment on the draft decision. I considered any comments received before making a final decision.

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What I found

Council Tax recovery

7. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way bailiffs may recover debts.
8. The Council Tax bill for the year is due on the 1st April. A council will usually collect payment through monthly instalments. If any instalment is missed the council will send the liable person a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
9. To use the various powers available to it to recover unpaid council tax, a council has to apply to the Magistrates Court for a liability order against those it believes are liable. Once a council has obtained a liability order it can take recovery action.
10. A liability order gives a council legal powers to take enforcement action to collect the money owed. This can include using bailiffs who can charge fees to the debtor for recovering the debt.

Council Tax Reduction

11. Council tax reduction (CTR, also known as council tax support) is a discount, not a benefit. If someone is paid too much CTR the Council can reduce the amount of CTR and so increase the amount of council tax owed. We call these changes CTR reversals.

Discounts and exemptions

12. Council Tax bills assume there are two adults over 18 living at a property. A person who lives on their own can apply for a single person discount which reduces the bill by 25%.
13. A person who has a severe mental impairment may be exempt from paying council tax. In order to qualify for an exemption a person must be medically certificated as having a permanent condition which affects their intelligence or social functioning and for the person to be entitled to qualifying benefits.

Vulnerable people

14. The Council has guidelines for officers when recovering arrears from people who may be vulnerable for a number of reasons including mental health problems. The Council’s guidelines provide it will look at each case on its merits and adapt its debt recovery procedures to minimise distress while seeking repayment of the debt. This may include stopping any action by bailiffs or enforcement agents.

What happened

Arrears at property A

15. Ms X and her partner Mr Y lived at property A until April 2019 when they moved to property B. Ms X and Mr Y paid all the instalments of Council Tax due for 2018/19 at property A but had paid £5.20 less than the amount due.
16. In April 2019 Ms X completed an online form to notify the Council she was moving to property B on 13 April 2019 but would be responsible for it from 1 April 2019. Ms X did not choose the online option to notify the Council she was moving from property A to property B so it was not aware she was moving from property A. Ms X therefore remained liable for Council Tax at property A.
17. The Council issued a Council Tax Bill for 2019/20 for property A in March 2019. In May 2019 the Council issued a reminder for the April and May 2019 instalments due for property A. As no payments were made the Council issued a summons and obtained a liability order for the debt. Ms X did not receive the reminder and summons as she was no longer living in the property. The Council has said none of the documents were returned undelivered so it had no reason to believe Ms X and Mr Y were not at property A.
18. The Council passed the account to enforcement agents to collect.
19. In November 2019 the owners of property A notified the Council that new occupiers moved into property A in September 2019. The Council closed Ms X and Mr Y’s account at property A from September 2019. This left arrears of £622.95 which included summons costs of £69. The Council issued a new bill but sent it to property A.
20. Following contact from the enforcement agents in June 2020, Mr Y contacted the Council. An officer checked the Council Tax account for property B and told Mr Y there were no arrears. Ms X also sent an email to the Council asking if there were problems with the payments. The Council did not respond as an officer had spoken to Mr Y.
21. In October 2020 the Council sent a bill for the arrears at property A to Ms X and Mr Y at property B. The Council has said it is likely Ms X will have also received the first letter from its enforcement agents in October 2020 which requested she contact them.
22. Ms X contacted the Council in October 2020 to say she had made all the necessary payments for property B and provided evidence of those payments. The Council responded but did not explain the debt was for property A not property B. Ms X sent further emails to the Council which were responded to by different officers but none clarified the arrears were for property A. In late November 2020 the Council clarified the debt was for property A.
23. The Council considered Ms X remained liable for Council Tax at property A until September 2019 as the new occupiers advised they were liable from this date. The Council now considers Ms X’s and Mr Y’s liability ended on 17 April 2019 following receipt of further information and this reduced the arrears to £131.78 including the summons costs. In response to my enquiries the Council has said it will remove the remaining arrears from property A to acknowledge Ms X would not have received the summons, although properly issued, and to acknowledge it should have dealt with her enquiries more efficiently. So, there is no outstanding debt for property A.

Single person’s discount

24. In May 2020 the Council issued a reminder to Ms X and Mr Y as they had not paid the Council Tax due for May 2020 at property B. On the same day the Council received an application from Ms X for a single person’s discount from 1 May 2020 as Mr Y was no longer living at property B. The Council ended Ms X’s and Mr Y’s joint Council Tax account from 30 April 2020 and created a new account for Ms X from 1 May 2020. The Council also adjusted the payment due for April 2020 from £130.65 which Ms X had made to £106.14. This created a credit of £24.21. The Council advised Ms X it could not refund the credit without permission from Mr Y as it related to their joint Council Tax account and Mr Y had rights to the credit. In response to my enquiries the Council has said it will refund the payment to Ms X if she can provide a copy of the bank statement to show which bank account it was paid from. The Council will then refund the payment to that account.
25. In July 2020 Ms X telephoned and sent an email to the Council to query the date from when the single person’s discount was applied. She considered it should be from 1 April 2020. In her email Ms X said she was suffering from significant mental health problems. The Council has said the officer did not respond as he thought the matter had been resolved. The officer also failed to consider if Ms X was vulnerable.
26. The Council cancelled Ms X’s single person’s discount in early October 2020 as it received information which linked Mr Y to her address. Ms X provided evidence to show Mr Y lived elsewhere so the Council reinstated Ms X’s single person’s discount on 19 October 2020.

Council Tax Reduction/Support

27. Ms X applied for Council Tax Support in October 2020 and stated she was receiving universal credit and did not work. The Council’s own checks did not confirm Ms X had been awarded universal credit so it considered she had nil income and awarded maximum Council Tax Support. The Council issued a new Council Tax bill for £59.74 as Ms X had made payments of £394.00 by this time.
28. In late October 2020 HM Revenue and Customs (HMRC) informed the Council that Ms X had started work in September 2020 and her earnings for October 2020 were too high to be eligible for Council Tax Support.
29. Ms X became eligible for Council Tax Support in April 2021 as HMRC advised the Council she was no longer working. This led to a credit of £107.05 on Ms X’s account. Following our enquiries the Council reassessed Ms X’s claim and it found HMRC had provided information about Ms X's earnings but the Council’s system could not automatically update her claim. The Council reassessed Ms X’s claim and credited £276.81 to Ms X’s account which increased her credit to £383.86. The Council has acknowledged a reminder notice issued to Ms X in February 2021 could have been avoided if the Council had updated her claim.

Vulnerability

30. Ms X informed the Council of her mental health problems in emails of July and October 2020. The Council has acknowledged it should have taken action in accordance with its vulnerability guidelines when Ms X mentioned her mental health problems. It should have searched for any accounts with arrears and recalled the debt from the enforcement agents or placed a hold on the recovery action. The Council should also have noted Ms X’s vulnerability to ensure her account was not passed to enforcement agents in future. The Council noted Ms X was vulnerable in January 2021 and recalled her account from the enforcement agents.

Severely Mentally Impaired discount

31. Ms X applied for a severely mentally impaired discount. She stated she was receiving a qualifying benefit on the application form and provided a certificate of her fitness to work for a period from her GP. The Council did not grant the discount as it considered the fitness to work statement was not sufficient to show Ms X had a permanent severe mental impairment. The Council set out its decision to refuse her application in its response to Ms X’s complaint.
32. In response to my enquiries the Council has said:

• Ms X would have known about the arrears for property A as she could have compared the payments made for property A with the amount she had paid. She also would have received the bill for 2019/20 which was issued in March 2019 so would have been aware of her liability up until she vacated property A. Ms X and Mr Y also did not inform the Council they were no longer liable for property A.
• It acknowledges the Council should have issued the revised bill for property A to Ms X’s and Mr Y’s new address at property B when it became aware they had moved. Ms X and Mr Y could then have disputed their liability if they considered it to be incorrect.
• The reminder and summons were correctly issued to property A as the Council was not aware Ms X and Mr Y had moved to property B. The Council acknowledges it did not clearly explain the arrears related to property A when Ms X queried the arrears until November 2020.
• It should have considered Ms X to be vulnerable from July 2020 when advised the Council about her mental health. Had it done so, Ms X would not have received letters in October and December 2020 from the enforcement agents. Ms X did not receive the earlier letters from the enforcement agents as they did not have her forwarding address.
• The Council’s decision to remove Ms X’s single person’s discount was correct. If Ms X is able to evidence Mr Y left property B in April 2020 then it may be able to reconsider the start date of the single person’s discount.
• Ms X could have provided proof of her earnings for her Council Tax Support claim between October 2020 and March 2021 as she is responsible for reporting changes of circumstances. The delay did not affect Ms X’s arrears at property A.

Analysis

Arrears at property A and Ms X’s vulnerability

33. Ms X and Mr Y had Council Tax arrears at property A as they had underpaid the amount due for 2018/19 by £5.20. They were also required to pay Council Tax for the period they were responsible for property A in April 2019. The Council is not at fault for issuing the summons to property A for the arrears as the Council was not aware they had moved. But, as the Council has acknowledged, it should have issued a new bill to Ms X and Mr Y’s new address when it ended the account for property A in November 2019. It did not do so until October 2020.
34. The Council’s communication with Ms X also lacked clarity as officers did not clearly explain the arrears related to property A when Ms X contacted the Council in January and October 2020.
35. The Council has acknowledged it failed to follow its vulnerability guidelines when Ms X advised it about her mental health in July 2020. Had the Council followed its guidelines then it is likely it would have recalled the debt from the enforcement agents. So, Ms X would not have received two letters from the agents including a notice to remove goods.
36. As the Council has acknowledged Ms X and Mr Y could have disputed the liability at property A if the Council issued the bill to them at property B in November 2019. Ms X would also have understood why the enforcement agents had contacted Mr Y in January 2020 if the Council had issued the bill.
37. The delay in issuing the bill and lack of clarity in the Council’s communication also caused avoidable time and trouble to Ms X as she sent bank statements to the Council to demonstrate she was not in arrears at property B. She was also caused distress by the Council’s failure to follow its vulnerability guidelines as she received avoidable contact from the enforcement agents.
38. The Council has removed the arrears for property A to acknowledge its communication was not clear which goes some way to remedying Ms X’s injustice. However, I consider the Council should also make a payment to Ms X to acknowledge the avoidable time and trouble and distress caused to her.

Single Person’s discount

39. The Council removed Ms X’s single person’s discount in October 2020 as Mr Y was linked to her address. Ms X provided Mr Y’s address when she applied for the single person’s discount so I am not clear why the Council removed the discount without a further search to establish if Mr Y was resident elsewhere. However, I will not pursue this matter further as the Council reinstated the single person’s discount within 11 day. So, any fault would not cause significant enough injustice to Ms X to warrant further investigation.

Council Tax Support

40. The Council has said the delay in calculating Ms X’s correct entitlement to Council Tax Support was caused by its system being unable to automatically update Ms X’s earnings. I accept Ms X is responsible for reporting any changes of circumstances to the Council and she could have notified it of her earnings. But, on balance, I consider the Council is at fault as it had details of her earnings from HMRC so could have correctly calculated her claim sooner. Had it done so, Ms X would not have had to pay the level of Council Tax she paid as she was eligible for support. I understand the Council has credited the Council Tax Support to Ms X’s account but it should also make a payment to acknowledge the potential hardship and distress caused to her.

Severely mentally impaired discount

41. The Council has considered Ms X’s application for a severely mentally impaired discount and explained why it did not consider the information provided to be sufficient for a discount to be awarded. I have not investigated how the Council made its decision as Ms X has the right to appeal to the Valuation Tribunal Service if she disagrees with the Council’s decision. However, there is no evidence to show the Council notified Ms X of her right to appeal. The Council should now do so.

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Agreed action

42. That the Council will:
1. Send a written apology and makes a payment of £300 to Ms X to acknowledge the distress and avoidable time and trouble caused to her by its delay in notifying her of the arrears at property A, the lack of clarity in its communication with her, the failure to consider her as vulnerable and delay in correctly calculating her entitlement to Council Tax Support.
2. Notify Ms X of her right to appeal to the Valuation Tribunal Service against its decision to refuse her application for a severely mentally impaired discount;
3. By training or other means, ensure officers are aware of the Council’s vulnerability guidelines and when these should be applied;
4. Review its procedures or guidelines for officers to ensure the faults experienced by Ms X do not recur. This should include ensuring officers check whether a Council Tax payer has other open accounts when closing an account to ensure a final bill is sent to their current address and all accounts are checked when dealing with queries from a Council Tax payer.
43. The Council should take the action at a) and b) within one month of my final decision. The Council should take the action and c) and d) within three months of my final decision and provide evidence to the Ombudsman of how it has improved is practice in these areas.

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Final decision

44. The Council is at fault as it delayed in sending a Council Tax bill to Ms X setting out her arrears at her former property, delaying in clarifying that her arrears related to her former property when she contacted the Council, failed to follow its vulnerability guidelines and delayed in correctly calculating her eligibility for Council Tax Support. These faults caused distress and avoidable time and trouble to Ms X which the Council has agreed to remedy. I have therefore completed my investigation.

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Investigator's decision on behalf of the Ombudsman