Summary: Miss X complained about the Council’s calculation of her housing benefit overpayment. We have found the Council was at fault for not telling her it moved housing benefit payments to cover her council tax arrears. This caused Miss X avoidable uncertainty and confusion. The Council agreed to make a £100 payment to Miss X to remedy the injustice its actions caused.

The complaint

1. Miss X complained about how the Council dealt with her housing benefit since 2013. She said the Council sent correspondence about a housing benefit overpayment to a wrong address, which meant that she was not aware of the debt. She further complained the Council did not explain to her how it calculated the housing benefit she owed, and why the amount increased in the period when she no longer claimed housing benefit. She also complained about the delay in the Council’s responses.
2. She said that as a result she had to pay more money than she should have if the Council explained the calculations properly and the payments were too high and left her struggling financially.
3. She would like the Council to confirm what she owes and why.

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What I have investigated

4. I have exercised my discretion and investigated the Council’s actions from 2017 in connection to a recovery of a housing benefit overpayment. The reasons for not investigating the earlier parts of Miss X’s complaint are explained at the end of this decision statement.

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The Ombudsman’s role and powers

5. 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)
6. 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)
7. The Social Entitlement Chamber (also known as the Social Security Appeal Tribunal) is a tribunal that considers housing benefit appeals. (The Social Entitlement Chamber of the First Tier Tribunal)
8. 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)
9. 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)
10. When considering complaints, if there is a conflict of evidence, we make findings based on the balance of likelihoods. This means that we will weigh up the available relevant evidence and base our findings on what we think was more likely to have happened.

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How I considered this complaint

11. I considered the information Miss X gave me.
12. I looked at the documents the Council provided in reply to my enquiries.
13. Miss X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Benefit overpayments

14. Councils are responsible for administering certain state benefits. If a council reviews a claim and decides it has paid too much benefit, this is an overpayment.
15. Councils can recover an overpayment from the claimant or the person to whom it made the overpayment, for example the claimant’s landlord if a council has made a direct payment. The person from whom the authority decides to recover an overpayment can appeal to tribunal.
16. Housing benefit regulations state the minimum information that should be included in a decision notice about overpayments. This includes the right to apply for a revision of the decision or appeal against it and the manner and time to do so.
17. The Statement of Means form is a questionnaire designed to clarify a person’s income and outgoings. This helps the Council decide the amount of money a person is able to pay without it causing hardship.
18. The Department for Work and Pensions publishes a Housing Benefit overpayments guide. Paragraphs 4.240-4.243 says it is good practice to not start recovery until the end of the one-month appeal period. Recovery action should also be suspended if a claimant appeals.
19. The Government published a Good practice guide titled, “Pursuing Housing Benefit overpayment recovery effectively”, in 2015. This sets out the powers to recover Housing Benefit debt through a Direct Earnings Attachment (DEA) without County Court action and an effective recovery timeline.

How the Council process Direct Earnings Attachment payments

20. The Council contacts the employer and asks them to set up a DEA. It provides a reference number for the outstanding invoice. The employer uses that number when sending the payment to the Council.

Council complaints policy

21. The Council’s complaint procedure consists of two stages, the investigation and the review stage.
22. The policy says that at the investigation stage the Council will answer the complaint within 15 working days. Then the complainant can escalate to review stage.
23. The policy requires a full response to the review stage within 25 working days. It also allows the business intelligence team to send a holding letter to a complainant if the Council is anticipating a delay in the final response. The letter should include an apology for the delay, an explanation for the delay and the date the complainant can expect to receive the full response.
24. The final response letter must refer the complainant to the Ombudsman if they are not happy with the Council’s response.

Background

25. Miss X was a student nurse between 2013-2014 and she claimed housing benefit.
26. In 2014 the Council decided that it overpaid Miss X her housing benefit, and it started to recover the amount owed by weekly deductions from her housing benefit payments. Miss X also had council tax arrears the Council was collecting through a Direct Earnings Attachment (DEA) order.
27. Between September 2017 and October 2017 there were three DEA payments credited to Miss X’s housing benefit account.
28. In October 2017 the Council wrote a letter to Miss X and told her that from May 2017 she did not qualify for housing benefit. At this point Miss X still had housing benefit arears outstanding.

What happened

29. In January 2018 the Council wrote to Miss X and said that she still owed money as it had overpaid her housing benefit. It said that Miss X had to pay £232.13 and it advised her to contact the Council to arrange repayment. The Council could no longer take off payments from the housing benefit entitlement because Miss X did not qualify for it.
30. Miss X contacted the Council to ask about the overpayment and asked for a copy of a Statement of Means form, which the Council sent on the same day. Miss X did not return the Statement of Means form to the Council.
31. The Council sent a final repayment request at the end of the month. In the letter it told Miss X that it would not issue any more reminders and would start recovery action by DEA or a debt collection agency.
32. In February 2018, the Council took further recovery action by DEA with Miss X’s employer.

What happened in 2020

33. In 2020 the Council contacted Miss X again and said she owed £563.87 of her housing benefit overpayment. It advised her to contact the Council to arrange repayment otherwise it would start recovery action by DEA or a debt collection agency.
34. Miss X called and emailed the Council and asked why there was a difference between the amounts it gave her in 2018 and 2020. She said this was wrong and that DEA would cause her hardship.
35. A recovery officer wrote back to Miss X on the same day and said the outstanding amount for the invoice was £563.87. The officer also said the Council could seek a reduced payment rate from her employer if the recovery would cause her hardship.
36. Miss X complained to the Council. She said that she believed she repaid all the housing benefit overpayment in 2018.
37. The Council responded. It said that in April 2018, she contacted the Council and asked it to move three DEA payments of £125.65, £158.10, and £156.44 from her housing benefit account as they were meant for her council tax account. The Council said it did that again in July 2019 when it transferred a further £252.05 and £311.82 to Miss X’s council tax account. In reply to Miss X’s hardship claim, the Council asked her to fill out a Statement of Means form for it to consider a fixed rate deduction.
38. At the end of July 2020 Miss X called the Council to ask for help as she said the money deducted from her pay was causing her hardship. The officer gave her the recovery team’s telephone number and advised her to send in her bank statements. On the same day the Council sent out a Statement of Means form to Miss X and asked her to return it within 10 working days.
39. Mrs X wrote to the Council and said that she did not ask it to move payment from her housing benefit account to the council tax account. She asked the Council to investigate further.
40. In September the Council wrote to Miss X and told her that it was still considering her complaint and apologised for the delay in the response to her complaint.
41. In mid-September 2020 the Council wrote back to Miss X and explained why the overpayment occurred. The Council apologised for the misunderstanding about the request to transfer the payment from her housing benefit and her council tax account and said that it could transfer them back.
42. Miss X was not happy with the Council’s response and complained to the Ombudsman

Analysis

The Council sent the letters to the wrong address

43. In response to my enquiries the Council provided me with copies of all the letters that it sent to Miss X in 2018 and 2020 about the housing benefit overpayment. I can see the Council addressed all the letters correctly. This does not mean that Miss X received all of those letters, but I cannot criticise the Council for something that it does not have control over. The Council acted without fault when it sent the letters to Miss X.

The Council did not explain its calculations and Miss X overpaid

44. Between September 2017 and October 2017 there were three payments credited to Miss X’s housing benefit account. The Council did not have the housing benefit DEA in place until February 2018, therefore it is reasonable to think the Council wrongly credited these payments from Miss X’s council tax account, to her housing benefit account. That was fault. From reviewing a copy of the employer notification letter the Council uses, it is ambiguous. It asks the employer to use the invoice number as reference, but on the payment schedule it refers to a National Insurance number as the reference. On the balance of probabilities, this is what most likely led to the incorrect allocation of the payment.
45. On two occasions, in April 2018 and July 2019 the Council moved money between Miss X’s housing benefit overpayment account and council tax account. The Council said that Miss X requested the money to be transferred between the accounts. Miss X disputes this. As I was not present, I cannot know what was said. However, the Council has not provided me with case records evidencing this call. The failure to record the details of reasoning behind the transfers amounts to fault. There is no evidence the Council confirmed in writing the changes to the overpayments. In combination with the fault identified in paragraph 45 this has contributed to Miss X’s confusion and caused her avoidable uncertainty.

Miss X believes she may have repaid more housing benefit than she should have.

46. I considered Council’s calculations and I found no calculation errors. In 2020 the Council told Miss X the correct outstanding amount. The difference between the 2018 and 2020 amount arises from the transfers between Miss X’s housing benefit and council tax account. As the amount is calculated correctly, I do not consider that Miss X suffered a financial injustice.

The payments were too high, and they caused Miss X financial hardship.

47. The Council sent a Statement of Means to Miss X on two separate occasions. I have not seen any evidence to suggest that she returned a completed Statement of Means to the Council for it to consider fixed amount deductions. There is no fault in the Council’s actions.

Delay in reply to Miss X’s complaint

48. Miss X said the reply to her complaint was late. I looked at the Council’s complaints procedure and the policy time frames that it sets out. The first response came after four working days, which is in compliance with the policy.
49. Miss X escalated her complaint and the Council told her that it will reply within 25 working days. The Council’s policy allows it to take longer than the 25 days, if it sends out a holding letter. The Council sent Miss X a holding letter one day late. I do not consider this to be a significant delay, and I do not think that this has caused Miss X any significant injustice.
50. The Council sent out the final complaint response eight working days after the holding letter, which complies with the Council’s complaint policy.

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Agreed actions

51. Within one month of the date of our final decision, the Council has agreed to:
• Pay Miss X £100 for the avoidable confusion and uncertainty caused by its faults in processing her DEA repayments and for failing to notify her when changes to repayments were made to the account.
• Remind relevant staff to record any conversations with customers and where changes to repayment are agreed, these are confirmed in writing (i.e via text, email or letter).
• Review the employer notification letter the Council sends when it requests an employer to set a DEA up. The letter should clearly state what number, the invoice on the National Insurance, the employer should give as a reference number.

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Final decision

52. I have completed my investigation and uphold Miss X’s complaint. There was fault in the Council’s actions, and it agreed to remedy the injustice this caused to Miss X.

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Parts of the complaint that I did not investigate

53. Miss X raised concerns about how the Council calculated her housing benefit overpayment in 2013-2014. I see no good reasons why we should go back in time this far, and Miss X had a statutory appeal after the Council told her that it overpaid her housing benefit.

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Investigator's decision on behalf of the Ombudsman