Summary: Ms B complained about the Council’s actions in respect of recovery of an overpayment of housing benefit from 2016. We have not found fault with the Council.

The complaint

1. Ms B complained that the London Borough of Richmond upon Thames (the Council) in respect of an overpayment of housing benefit from 2015/16:
• took nearly five years to identify that the debt was not being recovered by deductions from her universal credit;
• demanded payment for the whole amount in threatening letters;
• ignored Ms B’s poor health and financial difficulties; and
• has asked her to repay too much per month.
2. Ms B says this has caused and continues to cause her significant distress and concern as she cannot afford to pay it back.

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The Ombudsman’s role and powers

3. 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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

5. I have considered the complaint and the documents provided by the complainant, made enquiries of the Council and considered the comments and documents the Council provided. Ms B 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

A guide to Billing, Collection & Recovery for Housing Benefit Overpayments 

6. The Council’s policy on recovery of housing benefit overpayments says that at all stages of the process, the Council will give customers the opportunity to make individual arrangements to pay according to their financial circumstances.
7. In cases where the claimant has moved to another borough but is still in receipt of benefits such as universal credit, the Council will request the Department for Work and pensions (DWP) make a third party deduction from their current benefit award.
8. The DWP will advise if the application is not successful but will not confirm to the Council when payment will be made to the Council. If the claimant has other priority debts the housing benefit debt will remain on their account waiting in turn for recovery to begin. The policy says that cases with no recovery are reviewed by the Council and a decision made whether to allow the debt to remain with the DWP or whether to recall it and pursue recovery by invoice.
9. In considering whether to write off a debt the Council will take into account factors including health and financial considerations and the age of the debt.

What happened

10. In 2016 the Council reviewed Ms B’s housing benefit claim creating an overpayment of around £10,000. Ms B was aware of the debt. The Council offered a payment arrangement, but Ms B said she was in the process of applying for Universal Credit. In July 2016 the Council asked the DWP to make deductions from her benefit. The DWP refused due to deductions for other debts. The Council applied again in early 2017. It also traced a new address in another borough but left the debt with the DWP.
11. There was no further action until December 2022 when the Council recalled the debt from the DWP due to no successful recovery. The Council sent an invoice for the debt via email and post to Ms B. In February 2023 Ms B contacted the Council to say she had approached National Debtline for advice and wanted a statement of reasons for the overpayment.
12. The Council sent a letter to Ms B at her current email address explaining the reasons for the overpayment and the recovery it was seeking. A month later it sent a final reminder. Ms B made a complaint saying the Council was sending threatening letters and ignoring poor health, financial circumstances and her communications.
13. In April 2023 the Council replied to Ms B’s complaint at stage one of its procedure. It said the actions it had taken in respect of the debt were lawful and the debt remained payable. It apologised for not responding to her email about her health and debt situation. It suggested she complete the registration process with National Debtline as it could affect the Council’s decision on recovering the debt. It suspended recovery of the debt for eight weeks to allow her to do this.
14. In May 2023 Ms B told the Council she had instructed a representative. In June 2023 the Council sent an invoice to Ms B suggesting a repayment plan of £51 per month (the recommended amount for benefit recipients). In July 2023 Ms B’s representative wrote to the Council asking it to consider waiving the debt due to Ms B’s financial circumstances. It said it had attached details of her income and expenditure. The Council wrote back saying the financial details were not attached and asked them to resend.
15. The Council did not receive any more communication from either Ms B or the representative. It sent a reminder to Ms B in May 2024 and Ms B complained to us.
16. In response to my enquiries the Council has explained it left the debt with the DWP in the hope that the recovery would start in the near future. It pointed out that the DWP suspended all deductions from benefit for almost two years during the COVID19 pandemic. When it reviewed the case in December 2022 it decided to recall the debt. It said it has carried out a recent review of cases sent to the DWP and has introduced new processes to prevent this length of time elapsing in the future It also said it would consider writing off the debt if Ms B provided evidence of her financial circumstances and health conditions.

Analysis

17. The Council raised an overpayment in 2016 following a review of Ms B’s claim and receipt of new evidence. Ms B was aware of the debt and could have appealed against it if she disputed it.
18. The Council intended to recover the debt from the DWP and as the DWP did not return the debt after the second request the Council assumed it was in line and the deductions would start at some point.
19. The Council accepts it left the debt with the DWP for a long time (five years) but since early January 2023 it has given Ms B plenty of opportunity to provide details of her financial/health circumstances to enable it to consider a write-off. However, Ms B has not provided any information, so the debt remains payable. I do not consider sending invoices and reminders at infrequent intervals amounts to threatening Ms B.
20. The Council has also suggested a reasonable payment plan in line with the amounts recommended by the DWP and the Council for debt recovery.
21. I have not found fault with the Council’s actions and note it would still consider writing off the debt if Ms B provided the necessary information.

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Final decision

22. I have completed my investigation into this complaint as I am unable to find fault causing injustice in the actions of the Council towards Ms B.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman