Summary: Ms X complained the Council mismanaged her Council Tax account from June 2018 to May 2020. Ms X says the Council failed to apply the relevant reductions to her Council Tax she was entitled to. Ms X also complained the Council delayed in handling her contacts and providing a refund of the overcharges. Ms X says this caused her financial hardship, stress and distress. The Ombudsman found fault with the Council’s management of Ms X’s Council Tax Account. The Council applied Ms X’s Council Tax Support exemption in March 2020 from June 2018 and offered Ms X £650. The Ombudsman considers this suitable to reflect the Council’s fault and the injustice Ms X experienced.

The complaint

1. Ms X complained the Council mismanaged her Council Tax account from June 2018 to May 2020 by not applying her eligible Council Tax Support. Ms X says the Council failed to process her applications for Council Tax Support and the Severe Mental Impairment (SMI) form she provided to the Council.
2. Ms X complained the Council’s mismanagement of her account resulted in her paying extra Council Tax charges. Ms X says the overcharges caused her to become overdrawn and significantly impacted her already strained financial situation.
3. Ms X says the Council delayed in refunding her £789.05 in overcharges.
4. Ms X says the Council ignored her contacts from June 2018 to May 2020. She also complained the Council delayed in recording her complaint and repeatedly missed deadlines for responses. Ms X says the Council sent court letters and bailiff threats which further impacted on her mental health.

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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 question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
7. 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

8. I have considered all the information Ms X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
9. Ms X and the Council commented on my draft decision. I considered their comments before making my final decision.

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What I found

Council Policy and legislation

10. Council tax is a combination of tax on the value of property and a tax on individuals living in the property.
11. A council has discretion to apply reductions and exemptions for Council Tax. A council will detail what reductions and exemptions it applies. Councils are under a duty to “take reasonable steps to ascertain” whether any discounts or exemptions should apply to taxpayers. (Council Tax (Administration and Enforcement) Regulations 1992 (regulation 14))
12. The Council outlines in its policy that any person who wishes to make a claim for Council Tax Support must do so through its Council Tax Support claim form.
13. The Council will review a person’s individual circumstances on receipt of the Council Tax Support claim and decide the level of support a person is entitled to. The Council outlines the maximum level of Council Tax Support a person will receive when they are of working age and receiving Universal Credit is an 82.5% reduction.
14. If a person is late in claiming Council Tax Support, the Council will backdate the support for six months.
15. The Council outlines that any changes to a person’s Universal Credit may impact their entitlement to Council Tax Support. If a person’s earned income outside of their Universal Credit entitlement increases this could reduce a person’s Council Tax Support. Where Council Tax Supports is reduced to nil entitlement, the claim ends.
16. The Council says where the claim has ended as a result of Council Tax Support entitlement reducing to nil, a person should make a new claim for Council Tax Support if their circumstances change justifying an increase to their Council Tax Support.
17. The Council also outlines a household may be exempt from Council Tax if the sole adult living in the household has a Severe Mental Impairment (SMI). In order to qualify for this exemption a person’s condition must be confirmed by a doctor and the person must qualify for an associated benefit including the ‘limited capability for work’ or ‘the limited capability for work related elements’ of Universal Credit.
18. The Council’s Debt recovery Policy says it will send a person a reminder letter if a person misses a Council Tax instalment. If a person does not pay the reminder, the Council will issue a summons to the Magistrates’ Court.
19. If the Magistrates’ Court is satisfied the Council has followed its policy, it will issue a liability order. A liability order gives the Council powers to recover the Council Tax owed including an attachment of earnings. The Council can also issue additional fines and instruct bailiffs to collect outstanding charges.

Our guidance on remedies

20. We expect bodies in jurisdiction to treat people fairly and with respect, and not to expose the public to unnecessary distress, harm or risk as a result of their actions or inactions. Such injustice cannot generally be remedied by a payment, so we usually seek a symbolic amount to acknowledge the impact of fault on the complainant. The amount depends on the circumstances of the case.
21. When we assess distress, we consider the complainant’s individual circumstances (such as their state of health and age). In reaching a view on remedy we will consider all the circumstances including:
• the severity of the distress;
• the length of time involved;
• the number of people affected (for example, members of the complainant’s family as well as the complainant);
• whether the person affected is vulnerable and affected by distress more severely than most people; and
• any relevant professional opinion about the effects on any individual.
22. A remedy payment for distress is often a moderate sum of between £100 and £300. In cases where the distress was severe or prolonged, up to £1,000 may be justified. Exceptionally, we may recommend more than this.

What happened

23. Before May 2018, Ms X was not working and received Universal Credit payments. The Council applied a Council Tax reduction of 82.5% to Ms X’s Council Tax account as Council Tax Support.
24. Ms X completed a short period of work in May 2018.
25. The Department for Work and Pensions told the Council about Ms X’s employment and increased income. The Council reassessed Ms X’s Council Tax Support considering this information.
26. The Council wrote to Ms X on 27 June 2018 to advise it had reduced her Council Tax support to nothing because of her increased income. The Council advised Ms X to claim for Council Tax Support again if her circumstances changed.
27. In October 2018, Ms X completed an “Occupied Property Exemption” form (signed by her GP). Ms X sent this form along with information from her GP and her universal credit award statement showing a standard universal credit allowance to the Council in October 2018. This form was an application for exemption from Council Tax due to a Severe Mental Impairment.
28. Shelter also contacted the Council on 12 October 2018 to enquire on Ms X’s behalf about the reduction to her Council Tax Support.
29. The Council responded to Ms X and Shelter on 22 October 2018 to advise Ms X started earning which put her income too high to qualify for Council Tax Support.
30. Ms X emailed the Council on 1 November 2018. Ms X told the Council she was the only adult at the property, she had two children and was in receipt of Universal Credit. Ms X said she completed the “Occupied Property Exemption” form on the advice from Shelter. Ms X asked the Council to investigate why it had stopped Council Tax Support and asked how she could claim for support.
31. The Council reviewed Ms X’s application for SMI Council Tax exemption. The Council provided Ms X with a certificate for her doctor to sign which would confirm she had Severe Mental Impairment.
32. The Council also wrote to Ms X on 14 November 2018 providing information about Council Tax Support and provided her with an application form.
33. Ms X continued to pay her full Council Tax until June 2019. Ms X stopped her Council Tax payments in July 2019.
34. The Council sent Ms X a letter on 23 July 2019 asking for payment of the unpaid Council Tax instalment for July 2019. The Council sent a summons request on 22 August 2019 for the unpaid Council Tax and set a court date for 12 September 2019.
35. The Court granted the Council a liability order for unpaid Council Tax on 12 September 2019. The Council wrote to Ms X on 13 September 2019 explaining the Court’s decision and asked for payment within 14 days.
36. Ms X contacted the Council on 17 September 2019 explaining she could not afford the Council Tax payments. Ms X reiterated her concerns about losing her Council Tax Support and asked how she could get this reinstated.
37. The Council provided Ms X with information about Council Tax Support on 27 September 2019 and told her where she could apply for Council Tax Support.
38. The Council sent Ms X a reminder to pay her Council Tax on 30 September 2019 advising of potential enforcement action. The Council applied a deduction of earnings to Ms X on 7 October 2019.
39. The deduction of earnings had no effect because Ms X had no income outside of Universal Credit. The Council wrote to Ms X again on 29 November 2019 asking for payment of Council Tax within 14 days.
40. Ms X completed a Council Tax Support claim form. In December 2019, Ms X complained to the Council about the removal of her Council Tax Support in June 2018 and the financial strain this placed on her. Ms X attached photographs to her complaint email showing the completed Council Tax Support claim form. The Council advised it did not receive return of the form in its entirety and the photographs Ms X provided did not constitute a valid claim form.
41. Ms X chased the Council on 3 January 2020 for a response to her claim for Council Tax Support. The Council told Ms X she needed to provide further information to support her application for Council Tax Exemption because of her SMI. The Council also sent Ms X a link to the Council’s website to complete the Council Tax Support claim.
42. Ms X contacted the Council on 28 January 2020 to complain about the Council’s lack of action to provide her with Council Tax Support. Ms X confirmed she would speak to her GP about the SMI form.
43. The Council investigated Ms X’s complaint about Council Tax Support. The Council noted Ms X qualified for Council Tax Support but said Ms X had not submitted the correct claim forms. The Council sought internal advice about whether it could apply Council Tax Support from June 2018.
44. The Council liaised with Ms X about the Council Tax Support in February 2020 and the start of March 2020. On 10 March 2020, the Council applied Council Tax Support to Ms X’s account from June 2018. The Council sent a letter to Ms X on 11 March 2020 detailing that it had applied the full Council Tax Support reduction of 82.5% to 26 June 2018. The Council outlined the following balances on her Council Tax account:
• For the period 1 April 2018 to 31 March 2019 a credit balance of £754.58.
• For the period 1 April 2019 to 31 March 2020 a debit balance of £45.03 (but this included a court cost of £79.50 which the Council was considering for removal).
• For the period 1 April 2020 to 31 March 2021 a debit balance of £226.37.
45. The Council said it could either provide Ms X with a full refund of the credit balance or offset the next year's charges and refund the remaining balance.
46. The Council removed the court costs of £79.50 on 12 March 2020. The Council also sent Ms X a new copy of the SMI certificate for her doctor to sign.
47. On 13 March 2020, Ms X confirmed she would like a refund of the full credit balance on her account up to 31 March 2020. Ms X also advised she would be making a complaint to the Council and requesting compensation.
48. Ms X complained to the Council on 27 March 2020. Ms X said the Council had not processed her SMI application she made in November 2018. Ms X also complained the Council had not provided the refund she requested.
49. The Council told Ms X it would provide the refund by 9 April 2020 and would respond to her complaint by 14 April 2020.
50. Ms X complained the Council had not issued the refund on 9 April 2020. The Council apologised for delay and said payment should reach her by 14 April 2020. The Council also said it would provide complaint response by 17 April 2020 rather than 14 April 2020.
51. Ms X confirmed she received the refund but did not get a complaint response. The Council provided its Stage 1 complaint response on 22 April 2020. The Council said:
• It has issued a refund of £789.05 for the overcharges on her Council Tax account going back to June 2018.
• It apologised for any confusion over Council Tax Letters sent in March 2020 following the revision to her Council Tax Support.
• It apologised for failing to handle Ms X’s concerns about Council Tax Support in 2018 and 2019 despite contacts from Ms X.
• It offered Ms X £650 as compensation for the delays, stress and frustration Ms X experienced.
• The information Ms X provided in November 2018 for her SMI exemption was insufficient. Ms X needed a letter from a medical practitioner saying Ms X qualifies for SMI exemption. The Council said it could consider backdating any exemption to a date Ms X’s medical practitioner provided.
52. Ms X asked the Council to escalate her complaint to Stage 2 on 13 May 2020.
53. The Council provided its Stage 2 response on 5 June 2020. The Council confirmed its stance from the Stage 1 response and maintained its offer of £650 along with an apology and removal of court fees. The Council directed Ms X to the Local Government Ombudsman.
54. Ms X complained to the Local Government Ombudsman in February 2021.

Analysis

Council Tax Support

55. Ms X complained the Council removed Council Tax Support from her account and failed to reapply this despite her contacts.
56. When a Council receives information about a change in a person’s income, whether from a person directly or a relevant third party, it must consider the impact of this change on a person’s benefits or tax.
57. The DWP told the Council Ms X had begun earning an income above her Universal Credit in May 2018. The Council assessed Ms X’s entitlement for Council Tax Support on receipt of this information. Since Ms X’s income had increased beyond the threshold for Council Tax Support it removed this reduction from her Council Tax Account. The Council acted in line with legislation and its policy, I do not find fault.
58. The Council invited Ms X to advise it about any future changes in her circumstances. Ms X did not contact the Council until October 2018. I do not find fault with the Council for its actions until 18 October 2018.
59. The Council provided Ms X with information about how to claim for Council Tax Support and provided her with claim forms on many occasions from October 2018 until December 2019. Ms X only returned the photographs of the Council Tax Support claim form in December 2019. The delay in completion and return of the form is not the fault of the Council.
60. However, the Council does have a duty to “take reasonable steps to ascertain” whether any discounts or exemptions should apply to taxpayers. The Council provided Ms X with the relevant forms but did not provide any additional assistance to Ms X until 2020 in making her Council Tax Support claim.
61. Ms X also provided the Council with information which demonstrated her entitlement to Council Tax Support when she applied for the SMI exemption in November 2018. The Council did not take reasonable steps to consider that Ms X was entitled to Council Tax Support based on this information even if she did not qualify for the SMI exemption. This is fault.
62. I consider the Council has already remedied this fault by applying the relevant Council Tax Support to Ms X’s account in March 2020. The Council used its discretion to apply Ms X’s Council Tax Support from June 2018. This meant Ms X has not missed out on Council Tax Support because of the Council’s fault.

Severe Mental Impairment

63. Ms X complained the Council has not applied an exemption to her Council Tax Account for Severe Mental Impairment.
64. Severe Mental Impairment can exempt a person from their Council Tax charges. The Council sets out that it needs confirmation from a medical practitioner that a person qualifies for the Severe Mental Impairment exemption. The Council’s policy also says that a person must also qualify for an associated benefit.
65. The information Ms X provided to the Council does not show confirmation from a medical practitioner that she qualifies for the Severe Mental Impairment exemption. Ms X has also only demonstrated she receives a standard Universal Credit allowance and not one of the associated benefits detailed by the Council.
66. The Council decided it had insufficient information that Ms X qualified for the Severe Mental Impairment exemption. The Council made this decision in line with its policy and I do not find fault.

Collection and court activity

67. Ms X complained the Council sent court letters and threatened her with collection activity.
68. The Council sent Ms X a chaser letter when she stopped paying for her Council Tax. The Council escalated chasers by sending a court summons and obtaining a liability order from the courts. It was not until after the Council sent Ms X the outcome of the court hearing that Ms X contacted the Council again to advise about the Council Tax Support.
69. The Council acted in line with its policy based on the information it had in June 2019. The Council acted correctly to follow its collection policy based on Ms X stopping payments. I do not find fault with the Council.
70. Following the Court hearing the Council arranged an attachment of earnings. The attachment of earnings had no impact on Ms X. The Council sent further reminders to Ms X after this but did not take any formal collection action. I do not consider the Council’s actions after the court summons presented any significant injustice to Ms X.
71. The Council has also removed the Court charges from Ms X’s account. This means Ms X has not been financially disadvantaged through the Council following its debt recovery policy.

Overcharges, refund and delays

72. Ms X complained the Council’s overcharges caused her financial hardship and the Council added to this by delaying the refund of these overcharges. Ms X also complained the Council delayed in responding to her contacts and complaints.
73. The Council overcharged Ms X for her Council Tax from June 2018 until March 2020 because it did not apply the relevant exemption. I have addressed the fault related to this in paragraphs 58 to 62.
74. Ms X continued to pay the Council her full Council Tax from June 2018 until June 2019. Payment for her Council Tax without the relevant reduction would have caused Ms X financial hardship.
75. The Council took until March 2020 to apply the Council Tax Reduction to Ms X’s account. This delay is fault by the Council.
76. The Council also failed to meet its timescales set for the refund. While this is fault, the delay in refund from the original promised date was only one working day because of the easter bank holiday. I do not consider this particular delay presented a significant injustice to Ms X.
77. The Council has already acknowledged within its complaint response it failed to respond to Ms X within its complaint timescales. This is fault.
78. The Council has acknowledged the financial hardship and distress Ms X experienced through its delays and handling of both her complaint and Council Tax account. The Council offered Ms X £650 to reflect the issues and distress Ms X experienced.
79. The issues in Ms X’s complaint and the distress experienced was not severe or prolonged in line with the Ombudsman’s remedies guidelines. The offer of £650 by the Council exceeds what the Ombudsman would normally consider suitable in the circumstances of Ms X’s complaint. The Council’s offer of £650 is appropriate to reflect the fault and injustice in Ms X’s complaint.

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Agreed action

80. Within one month of the Ombudsman’s final decision the Council will:
• Pay Ms X £650 to reflect the distress, frustration and inconvenience she experienced because of the Council’s actions.

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Final decision

81. There was fault by the Council, as the Council has agreed to my recommendation I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman