Summary: Ms X complained about how the Council applied the benefit cap to her housing benefit claim and dealt with an increase to her rent. There was fault in the way the Council responded to Ms X’s query about how the benefit cap and rent restrictions applied to her. This caused Ms X avoidable frustration, time and trouble. The Council agreed to apologise, pay Ms X a financial remedy, explain the rent restriction rules to her and review its processes. This was a suitable remedy, so we completed our investigation.

The complaint

1. Ms X complained the Council failed to:
• remove the benefit cap from her housing benefit claim when it stopped applying to her;
• explain other restrictions it applied to her rent when deciding her housing benefit claim; and
• respond to her requests for information and explanations.
2. She said this meant she received less housing benefit than she should, and it caused her avoidable anxiety and upset. She wanted the Council to apologise, backdate her last rent increase and explain the restrictions to her.

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What I have investigated

3. I have investigated:
• how the Council responded when Ms X told it that she should no longer be subject to the benefit cap; and
• whether the Council provided enough information about the restrictions it applied to her rent as part of her housing benefit claim.
4. The final section of this statement contains my reasons for not investigating the rest of the complaint.

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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. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
7. 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)
8. 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)
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)

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How I considered this complaint

10. I considered the information Ms X provided and discussed her complaint with her.
11. I considered the Council’s comments on Ms X’s complaint and the supporting evidence it provided.
12. Ms X and the Council had an opportunity to comment on my draft decision. I considered the comments I received before making a final decision.

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What I found

Law and guidance

The benefit cap

13. The benefit cap is a limit on the total amount of benefits most people can get. If the total benefits a housing benefit claimant would receive is more than the cap, councils must reduce their housing benefit so the claimant does not get more benefit than the cap allows. Benefits covered by the cap include child benefit, child tax credit and housing benefit.
14. The Department for Work and Pensions (DWP) is responsible for telling councils if the benefit cap applies, and how much the cap is, for individual claimants. For housing benefit claimants, councils are responsible for applying the cap.
15. Instructions from the DWP say that councils should:
• tell the DWP if claimants report a change of circumstances which affects any benefits paid by the DWP or HM Revenue and Customs (HMRC). This includes child tax credit;
• wait for a new benefit cap notice from the DWP before making any changes; and
• use a standard form, called an ‘email notification template’ to report changes of circumstances or where a claimant queries the cap calculation.

(Housing Benefit Circular HB A10/2016 2nd revision)

16. A standard paragraph about the benefit cap in the housing benefit decision letters the Council sends says:

“The amount of the other benefits you receive is set out below. You should let us know if you disagree with any of the amounts. The council will then contact the DWP to check the amounts are correct.”

Housing benefit rent restrictions

17. Some housing benefit claimants are subject to rules which limit the maximum amount of rent considered in their housing benefit claim.
18. For claimants whose private tenancy started before April 2008, the ‘local reference rent’ rules apply. Under these rules, the Rent Officer, part of the Valuation Office Agency (VOA), decides the maximum rent allowed (‘eligible rent’) for each tenancy.
19. Councils can only usually ask the Rent Officer to reassess the eligible rent once every 12 months unless specific exceptions apply. (Housing Benefit Regulations 2006, regulation 14 and schedule 2, paragraphs 2 and 4, as amended)

Information in housing benefit decision letters

20. The law sets out the information Councils must include in housing benefit decision letters. This does not include an explanation of any rent restrictions that apply to the claimant. (Housing Benefit Regulations 2006, schedule 9, as amended)

What happened

21. Ms X receives housing benefit. Her tenancy started in 2003 and her claim is subject to the ‘local reference rent’ rules.
22. Ms X used to be subject to the benefit cap. The Council said the last benefit cap notice it received from the DWP was in September 2018. According to the DWP, at that time Ms X had benefit income of £214 a week.
23. In April 2019, the Council referred Ms X’s rent to the Rent Officer as it had been 12 months since the last Rent Officer decision. At the time, Ms X’s rent was £700 a month and the Rent Officer decided this was Ms X’s eligible rent. The Council reviewed Ms X’s housing benefit in May 2019 and said, in the decision letter, this was because “you have an anniversary rent referral”.
24. In late August 2019, the Council reviewed Ms X’s housing benefit because her Child Tax Credits had reduced. The housing benefit decision the Council sent to Ms X said it received this information from the DWP. From September 2019, the Council said Ms X had benefit income of £145 a week. However, the benefit income the Council used to apply the benefit cap was still £214 a week from the September 2018 notice.
25. Also in late August 2019, Ms X’s landlord increased her rent to £850 a month. Ms X told the Council about the increase and asked it to increase her housing benefit.
26. The Council wrote to Ms X in early September 2019 and told her it could not refer her claim to the Rent Officer yet, because it had not yet been 12 months. It said it thought none of the exceptions applied and told Ms X she could ask for a review if she did not agree.
27. Ms X did not ask the Council to review its decision. She says this is because she “read between the lines” of the letter and decided there was no point asking for a review.
28. Ms X then called the Council and asked why it was still applying the benefit cap to her. She thought this was wrong and her benefits were below the cap. The Council advised Ms X to contact the DWP since the DWP was responsible for calculating the benefit cap.
29. Ms X contacted the Council again in May 2020. She asked the Council to refer her claim to the Rent Officer, since it had been more than 12 months since the last referral. The Rent Officer accepted Ms X’s rent of £850 a month and the Council backdated this change to early April 2020.
30. In early June, Ms X emailed the Council asking it to review her benefit claim. She said her income was below the benefit cap level and the Council should not be applying the benefit cap to her. She set out her current income and showed it was lower than the benefit income the Council had used for the benefit cap calculation.
31. The Council wrote to Ms X upholding its decision. It told Ms X that it was using the figures provided by the DWP and that she should contact the DWP if she thought they were wrong. The Council told Ms X she could ask for an independent appeal if she did not agree with the Council’s decision.
32. Over the next two months, Ms X and the Council exchanged several emails. In these, Ms X told the Council why the income it had used was wrong and that she had contacted the DWP. She said the DWP had told her the benefit cap had not applied to her since November 2018. She also asked the Council to explain the restrictions it applied to her rent and why it had only taken her rent increase into account from April 2020. In her letters, Ms X repeatedly asked to speak to someone at the Council about her claim.
33. The Council responded to Ms X’s emails by telling her again that she should contact the DWP about the benefit cap. It also sent her another copy of its September 2019 letter refusing to backdate her rent increase. I have seen no evidence the Council provided Ms X with further explanation of the rent restrictions or arranged to speak to her.
34. In August 2020, Ms X complained to the Council about its handling of her dispute about the benefit cap and lack of explanation of the rent restrictions.
35. Following Ms X’s complaint, the Council contacted the DWP which confirmed the benefit cap no longer applied to Ms X. Since the DWP could not tell the Council when the benefit cap stopped applying, the Council removed the benefit cap from Ms X’s claim from November 2018. It then paid her arrears of housing benefit and apologised for the delay in resolving the problem.

My findings

The Council’s response to Ms X’s queries about the benefit cap

36. The Ombudsman cannot decide if the Council correctly calculated Ms X’s entitlement to housing benefit; that is the role of the Tribunal. However, I have considered whether the Council followed the correct process when Ms X raised concerns about how it applied the benefit cap.
37. The Council’s note of a telephone call shows Ms X first told it the benefit cap should no longer apply to her in September 2019. According to what the Council says in its benefit award letters, the Council should not have told Ms X to contact the DWP. Instead, it should have considered whether to check with the DWP itself. Its failure to do this was fault.
38. By June 2020, Ms X had given the Council detailed reasons to cast doubt on the benefit income it was using to apply the cap. I am satisfied that, had the Council properly considered this information and the statement in its award letters, it would have referred to the DWP sooner than it did. The failure to do this was also fault.
39. Had the Council checked with the DWP sooner, it would have removed the benefit cap from Ms X claim sooner and Ms X would not have needed to complain. Although the Council has apologised to Ms X for the delay and has paid her the arrears, I am not satisfied this remedies the avoidable frustration, time and trouble caused to Ms X.

The information the Council provided about Ms X’s rent restrictions

40. As with the benefit cap, the Ombudsman cannot decide if the Council correctly applied the rent restriction rules. However, I have considered whether the Council provided enough information to Ms X about the restrictions that apply to her.
41. The law does not require councils to explain, in detail, the restrictions that apply to someone’s rent in its decision letters. I am satisfied the Council’s explanation, in its benefit decision letters, of having “an anniversary rent referral” suggested there was some yearly process which applied to Ms X’s rent.
42. Although the timing of Ms X’s rent increase fell between Rent Officer referrals, this was not because the Council failed to give Ms X information it should have.
43. After the Council refused to refer her rent to the Rent Officer in September 2019, Ms X asked the Council to explain how it had restricted her rent and the rules that applied to her. She told the Council she did not understand the explanation it had given and asked to speak to someone. However, the Council repeated the explanation it had already given and did not offer to provide a more detailed explanation to Ms X.
44. The Council failed to provide a clear explanation of the restrictions that applied to Ms X’s rent after she asked it to in June 2020. This was despite Ms X asking for this several times. This was fault. This led to Ms X feeling confused and losing trust in the Council’s ability to manage her benefit claim.

Agreed action

45. Within one month of my final decision the Council will:
• explain the local reference rent rules and process to Ms X. It should do this in a manner agreed with Ms X;
• apologise to Ms X for not providing this explanation when she asked for it; and
• pay Ms X £150 for the avoidable frustration, time and trouble caused by having to make her complaint.
46. Within three months of my final decision, the Council will:
• review its process when someone queries the income used to apply the benefit cap, particularly where it is using income figures that differ from those in the last benefit cap notice it received; and
• review any current housing benefit claims subject to the benefit cap. The Council should check the benefit income used matches that supplied by the DWP for the benefit cap calculation and that there is an up-to-date benefit cap notice from the DWP.

The Council will provide a copy of the reviews and any actions identified to the Ombudsman.

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Final decision

47. I have completed my investigation and uphold parts of Ms X’s complaint. There was fault in the way the Council responded to Ms X’s query about how the benefit cap and rent restrictions applied to her. The Council agreed to apologise, pay Ms X a financial remedy, explain the rent restriction rules to her and review its processes.

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Parts of the complaint that I did not investigate

48. I did not investigate Ms X’s complaint that the Council paid her too little housing benefit because of how it applied the benefit cap to her or that it should have backdated her rent increase.
49. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. Ms X had the right to appeal both these decisions to the Social Entitlement Chamber of the tribunal service.
50. We have discretion to set aside this rule where we decide there are good reasons. I have decided not to exercise discretion in this case because:
• only the tribunal can decide someone’s entitlement to benefit;
• in both cases, the Council told Ms X, in writing, of her right to ask for a review or appeal; and
• although Ms X said she felt there was no point in appealing, this is not the result of fault by the Council.

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Investigator's decision on behalf of the Ombudsman