Summary: Ms X complains about the Council’s actions in recovering a housing benefit overpayment and regarding a claim for a discretionary housing payment. We found fault by the Council and it has agreed the remedy we recommended.

The complaint

1. The complainant whom I shall refer to as Ms X, complains the Council unfairly escalated recovery of a housing benefit overpayment when she was making payments. This caused her financial hardship and distress.

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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. If we are satisfied with an organisation’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

4. I have discussed the complaint with Ms X and considered the complaint and the information she provided. I have made enquiries of the Council and considered the comments and documents the Council provided. Ms X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Housing benefit overpayments

5. If a Council pays too much housing benefit to someone it will usually ask them to repay it. The law says an overpayment is recoverable unless it was caused by an official error and it was not reasonable to expect the person to realise they were receiving too much benefit.
6. Councils can recover housing benefit overpayments using direct earnings attachments (DEA). The Council asks the claimant’s employer to make deductions from their earnings. The amount is a percentage based on set income bands. (Social Security (Overpayment and Recovery) Regulations 2013)

Discretionary Housing Payments

7. A Council may award discretionary housing payments (DHP) when someone needs help with housing costs and is claiming Housing Benefit or Universal Credit which includes housing costs towards rent. (Discretionary Housing Payments guidance manual February 2021, section 1.7, as amended)

What happened

8. The Council overpaid Ms X’s housing benefit in 2021. She made some repayments of £5 per week until October 2021. But the Council had not agreed a formal arrangement with her.
9. In February 2022, the Council sent Ms X a final notice for the outstanding overpayment of £620. It said this must be paid in full or it could take legal action.
10. On 11 March 2022 Ms X emailed the Council and asked if it would accept a payment arrangement of £5 per week which she would increase to £10 per week. She said she had already paid £65.
11. The Council says it replied by email on 14 March 2022. It noted on its system that it sent a financial statement form to Ms X to complete, so that it could assess a payment arrangement. Ms X says she did not receive the Council’s email or form.
12. On 29 April 2022 the Council said that Ms X had not returned financial statement, and it did not have an agreed instalment plan. Therefore it moved the debt to the next stage of recover which was to apply for a direct earnings attachment (DEA). The Council wrote to Ms X to advise her of this.
13. Ms X complained on 9 May 2022 that the Council had not replied to her offer to pay. She said it was unreasonable for the Council to use a DEA because she was making regular payments. She said it would cause her hardship.
14. On 13 June 2022 the Council replied that Ms X’s offer to repay was outside its policy. Its policy was a first payment of 20% of the total and then six instalments. It advised Ms X that she must complete a financial statement so it could consider a payment arrangement. The Council said it had sent a financial statement on 13 April 2021 and on 14 March 2022, but Ms X had not returned them. The Council asked Ms X to return the form within one week. It would then review it and propose an arrangement. In the meantime, it said it would note her account “and request that no further action is taken regarding the direct earnings attachment to present enough time for the financial assessment to be carried out.”
15. On 14 June 2022 the Council wrote to Ms X’s employer regarding starting the DEA and it also wrote to Ms X to advise her. The Council’s copy of this letter is dated 13 June 2022.
16. On 20 June 2022 Ms X returned the completed financial statement to the Council. She also stated she was surprised the Council had sent a DEA when she was paying, and it had said it would hold action. In her view the Council had no intention of agreeing a low income arrangement.
17. On 24 June 2022 the Council emailed Ms X advising it had assessed her financial statement and setting out a payment arrangement. It said that she needed to pay two payments, on of £255 in July and a second in August of £250. The Council also said it would “advise your employers to put a hold on the DEA while we await the first payment. If no payments are received by the end of July 2022, the Service will be required to advise your employers to continue with the DEA deductions.” Ms X says she did not receive this email.
18. On 27 June 2022 Ms X complained at stage one of the Council’s procedure that:
• the Council did not reply to her email of 11 March offering to pay instalments of £5 per week.
• She did not receive a financial statement the Council claimed it sent on 14 March. She requested a copy of this and the Council’s covering email.
• Despite saying it would add a note on the account and agreeing to not progress the DEA, the Council had continued with recovery action.
19. On 8 July 2022 the Council responded to Ms X’s complaint.
• It said that it had replied to her email of 11 March, sending a response and financial statement form on 14 March. It had also sent a financial statement on 13 April 2021 but Ms X had not returned these.
• The payments of £5 per week Ms X had made were not an agreed instalment plan. The Council had moved recovery to the next stage which was a DEA sending a letter to her employer on 14 June 2022.
• It had received her financial statement form after it had sent the DEA letter. It had advised her of the outcome of its assessment, and a proposed instalment arrangement. The first payment of £255 to be paid in July and a further payment of £250 in August.
• It said it would “advise your employers to put a hold on the DEA while we await the first payment. If no payments are received by the end of July 2022, the Service will be required to advise your employers to continue with the DEA deductions”.
20. Ms X says that her employer informed her the Council had not contacted it to request it place a hold on the DEA, and that the first deduction would be taken in July 2022. Therefore, she did not make the payment according to the instalment plan.
21. On 29 July the Council received £309 from Ms X’s employer, via the DEA.
22. Ms X complained further to the Council on 26 July. She said the Council’s response had caused anxiety, its communication was poor and the information it gave deliberately misleading. She added to her complaint in August 2022 stating that the Council did not take account of the hardship that the DEA would cause her and her children. Amongst other things
• She repeated her request for a copy of the Council’s email of 14 March
• She asked why the Council had not placed recovery on hold as the officer stated in his email of 13 June.
• She asked why the Council sent a DEA letter on 14 June despite saying it would request that recovery action was placed on hold.
• She asked why the Council falsely said it would ask her employer to place action on hold for July when it did no such thing.
• She said there was a discrepancy between the amounts sought in the DEA and payment arrangement.
23. On 14 September 2022 the Council replied at stage two of its complaint procedure. It said that its debt recovery policy required payment in full or payment of 20% of the total then payment of the remainder over a period depending on size of the debt. If this arrangement could not be met, it required the customer to complete a financial statement, and make an arrangement agreement.
24. The Council repeated that Ms X’s payments of £5 pw were not an agreed instalment plan. It said that it received Ms X’s financial statement on 20 June and had replied on 24 June confirming a payment arrangement. It attached a copy.
25. The Council said that “The claim was not put on hold as the letter to your employer had already been posted out on the same day, 13 June 2022. Also, at that stage we had not received the completed financial assessment form that was issued to you in March 2022…I am sorry if you thought our correspondence to you stated we will put a hold on the deduction for July, unfortunately, our correspondence did not advise this.”
26. Ms X remained dissatisfied and complained to the Ombudsman.

Analysis

27. I have not found fault by the Council in pursuing recovery of the overpayment via a DEA. Ms X’s payments were not sufficient. As the Council received no response to the financial statements it sent, it progressed the matter to the next stage.
28. In its response to our enquiries the Council said it sent its DEA letters on 13 June 2022 to Ms X and her employer. It sent us a copy of its letter dated 13 June 2022. However, the letters Ms X and her employer received were dated 14 June 2022. It is not clear why the Council’s letter had a different date. This gave Ms X the impression the Council had gone back on its promise to hold action while it waited for a financial statement. This is fault.
29. In its response to our enquiries the Council confirmed it has no record of contacting Ms X’s employer to ask it to hold the DEA. It is not clear why, having stated on 13 June that it would request a hold on action and that it would advise the employer to hold deductions, did not do so. The Council repeated it would advise the employer to hold action in its letter of 24 June and in its 8 July complaint response. I consider this is fault and caused injustice. Ms X had a reasonable expectation that the Council to do as it had stated. If the Council had asked the employer to hold action, Ms X could have made payment to the Council via a payment arrangement.
30. The Council’s stage two response in September 2022 denied that the Council said it would hold action. I consider this was incorrect and caused Ms X frustration and time and trouble in complaining further. I have recommended a remedy.
31. In its response to my enquiries the Council provided a copy of the file note the officer made stating they sent a financial statement on 14 March 2022. However, the Council does not have a copy of the covering email because it was sent from the officer’s email address, and they are no longer employed by the Council. I consider there is sufficient evidence that the Council sent a financial statement by email to Ms X on 14 March 2022. However, as I have not seen a copy of that email, I cannot be certain it was sent to the correct address.
32. Ms X complains about discrepancies between the amounts the Council stated were outstanding. There may have been differences at certain points as some payments may not have been registered. Ms X can check the payment records and if any are missing provide evidence that she made payments. I have not found fault here.

DHP claim

33. Ms X claimed a DHP on 25 April 2022. She said she had claimed Universal Credit but this would not be paid for a month.
34. The Council acknowledged her claim on 27 April and said she should allow at least 10 working days for the Council to process her claim.
35. Ms X complained to the Council on 27 June that she had not had a response regarding her DHP claim made two months earlier.
36. The Council says it refused the DHP claim on 29 June 2022. I have not seen a copy of the Council’s decision letter.
37. The Council responded to Ms X’s complaint on 8 July 2022. It said the Council could not pay a DHP for the period Ms X was waiting for Universal Credit because she could ask for an advance from Universal Credit to cover this period. In addition, it said that she must be in receipt of either housing benefit or Universal Credit (housing costs) in order for the Council to pay a DHP. As she was not receiving either benefit during the period of her claim, the Council could not pay a DHP. It gave information about how she might request a review.
38. Ms X complained that the Council should not have included the DHP decision in its complaint response. Ms X asked for a review of the Council’s decision on 2 August 2022. She provided further information on 9 August 2022.
39. The Council says it upheld its review decision on 12 September 2022. It is not clear whether the Council sent a decision letter to Ms X. In the Council’s complaint response of 14 September 2022 it said it would respond shortly.
40. When Ms X’s complained to the Ombudsman at the end of October 2022, she said she had not received the outcome of her review request from the Council.

Analysis

41. There was delay by the Council in considering Ms X’s DHP request. The Council took more than two months. This was fault causing frustration and anxiety.
42. The Council responded after Ms X complained about the delay. There was further delay by the Council in considering her review request. This was fault. As DHPs are payments which help claimants facing financial hardship and difficult circumstances, the Council’s delays added to Ms X’s anxiety. I have recommended a remedy.

Agreed action

43. I recommended that within one month of my decision the Council
• apologises to Ms X that it failed to advise her employer to hold DEA deductions as it had stated.
• Apologises for its delay in considering her DHP request and her review request.
• Pays Ms X £150 for the anxiety caused, and her time and trouble
• Provides an action plan stating how it will reduce delays in dealing with DHP claims and review requests.
44. The Council should provide us with evidence it has complied with the above actions.
45. The Council has agreed the recommended remedy.

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Final decision

46. I found fault by the Council which caused injustice to Ms X. It has agreed a suitable remedy. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman