Summary: Ms C says the Council maliciously recalculated her housing benefit entitlement, then recovered an overpayment without warning and at too high a weekly rate. Ms C has a right of appeal to the Tribunal so we cannot look at the calculation of benefit paid. The Council was not malicious but did delay in dealing with her requests which was fault causing injustice. However, the Council paid her several sums in recognition of fault and has employed more staff which has reduced delays. Therefore, the Ombudsman makes no further recommendations to remedy the fault.

The complaint

1. The complainant, who I have called Ms C, says the Council was at fault for ‘failures about the handling of her complaints and appeals and not sending her complaint to the independent tribunal’. She says the Council:
1. incorrectly calculated overpayments of her housing benefit (HB);
2. recovered the HB overpayments without first informing her;
3. recovered the HB overpayments at too high a weekly rate;
4. recovered the HB overpayments without suspension pending appeal;
5. failed to pass her challenges of overpayment calculations to the tribunal;
6. recovered money while she was subject to a debt relief order;
7. asked her to repay money she did not owe;
8. failed to investigate her requests fairly and in a timely fashion; and
9. posted misleading material about disputes, appeals and complaints online.
10. She also accuses the Council of acting maliciously.

Back to top

What I have investigated

2. Those disputing a HB calculation can appeal to the Tribunal. This is therefore beyond our jurisdiction. I have investigated whether the Council was at fault for the way it dealt with Ms C’s claim.

Back to top

The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. 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)
4. 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)
5. We cannot investigate a complaint if someone has appealed to a tribunal or a government minister or started court action about the matter. (Local Government Act 1974, section 26(6), as amended)
6. 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)

Back to top

How I considered this complaint

7. I spoke to Ms C and wrote an enquiry letter to the Council. I considered the Council response along with the relevant law.
8. I sent a copy of my draft to Ms C and the Council and invited their comments and wrote a further draft before reaching my final decision.

Back to top

What I found

What should happen

Housing benefit

9. In 2017, people of working age who were unemployed or on a low income could claim housing benefit (HB) to cover or help with their rent (it has since been replaced in some areas by the housing element of universal credit).
10. Councils were required to reach decisions on applications for, and changes to, HB, if made with the necessary supporting evidence, within 14 days, or as soon thereafter as practicable.
11. R.88 of the Housing Benefit Regulations 2006 required recipients to tell the council of any change of circumstances, e.g. a new job, within one month.
12. R.101 of the same regulations says, where a person receives an overpayment of HB or council tax support, the council could recover that overpayment from the claimant.
13. The power to recover was discretionary. When deciding whether to recover, the Council should consider factors such as the claimant’s age, state of health, financial position and any negative impacts on them.
14. The same regulations say the amount of an overpayment that can be recovered is set by the Department of Work and Pensions. The current standard recovery rate is £11.10 per week and, where a claimant is working, an amount equal to no more than half of the claimant’s disregarded income.
15. R.29(1) of the same regulations says:
16. 29.(1) Where a claimant’s income consists of earnings from employment as an employed earner his average weekly earnings shall be estimated by reference to his earnings from that employment—
1. over a period immediately preceding the benefit week in which the claim is made or treated as made and being a period of—
1. 5 weeks, if he is paid weekly; or
2. 2 months, if he is paid monthly; or
2. whether or not sub-paragraph (a)(i) or (ii) applies, where a claimant’s earnings fluctuate, over such other period preceding the benefit week in which the claim is made or treated as made as may, in any particular case, enable his average weekly earnings to be estimated more accurately.
17. The Housing Benefit (Decisions and Appeals) Regulations 2001 say a council can suspend housing and council tax benefit if there is reason to doubt whether the recipient is entitled to the benefit.

Council policy

18. The Council has a Housing Benefit Overpayments Policy dated 2013 which was in force at the time of this dispute. There is no reference in it to a 14-day waiting period before the recovery of an overpayment can take place. Neither is there any mention of such a delay on the Council website page dealing with overpayments.
19. The Council website says that, where the Council made an HB overpayment, it could recover it from the recipient except where the overpayment was the Council’s fault and the recipient could not reasonably have been expected to know they had been overpaid.

Notification

20. Before recovery can commence, the Council must write to the claimant and tell them. The notification letter must set out
1. That there is a recoverable overpayment;
2. The reason for the overpayment;
3. The amount of the recoverable overpayment;
4. How that has been calculated;
5. The period of the overpayment;
6. Where recovery is to be made from future entitlement, the letter must state that this will happen and how much will be deducted each week;
7. The fact that the claimant has a right of appeal; and
8. The fact that the claimant has a right to ask for a written statement of reasons.

Delay

21. Where a Council delays in making a decision about HB, a service user may be able to complain to the Ombudsman.
22. The Council says that it generally aims to respond to notifications of housing benefit disputes within 10 days though, due to increased volumes of customer contact, it currently aims to respond within 20 days.
23. It accepts there were delays in dealing with requests for reconsiderations and recalculations at the time of Ms C’s complaint. It said that, in order to prevent this, it has employed and trained more staff which has reduced delays.

Disputes and appeals

24. Claimants who disagree with a HB decision can either:
1. Ask the Council to reconsider the decision; or
2. Appeal the decision to an independent tribunal.
25. Claimants can only appeal on the following grounds:
1. The calculation was incorrect;
2. The overpayment should not be recoverable; and
3. The overpayment is not recoverable from the person it is being recovered from.
26. Recovery action should be suspended while any appeal is decided. Fraudulent overpayments will be treated with maximum priority.
27. Where a claimant requests a reconsideration, the Council may, if it requires it, request further information. It should reach a decision within 14 days.
28. To apply to the tribunal, a claimant should ask the Council to refer the case to the first-tier tribunal. An appeal can take between three and eight months to be decided by the first-tier tribunal.

Debt relief orders

29. A debt relief order (DRO) is an alternative to bankruptcy suitable for those with few assets and little disposable income. Someone in this position can apply to the court for a DRO. Once it is issued, case law says councils cannot recover overpaid HB from the holder.

What happened

30. Ms C is a mother-of-three who receives HB from the Council. In 2017, she was working on a self-employed basis. In July 2017, she began employment with an employer, Company A, which paid her for four weeks work eight months a year and for five weeks work in the remaining four months. She continued to do some self-employed work until January 2018.
31. In late December 2017, the Council wrote to Ms C saying Her Majesty’s Revenue and Customs (HMRC) had provided evidence that Ms C had earned more than she said she had in the previous months. It said she had been paid £140.46 between 19 June and 2 July 2017 and her income was also higher than previously stated during September 2017. She had told the Council her income was £301.40 per month but HMRC said she had earned £510.44 in September.
32. The Council had calculated, therefore, there had been overpayments of £382.06 HB and £310.13 council tax support from June to October 2017.
33. The Council said It would recover the amount overpaid at the rate of £23.60 per week. It asked her to complete and return an underlying entitlement form which could see the overpayment reduced.
34. As required by law, it sent her an overpayment notification, advice on what steps to take to query the decision and an underlying entitlement form asking her to return it as soon as possible and, in any event, within a month.
35. Ms C responded in January 2018. She said:
• The Council had miscalculated her income and artificially inflated it to make it look higher than it was;
• The Council had stated her other income was £342 a week whereas, in fact, inclusive of tax credits, it was closer to £199 per week;
36. She requested detailed calculations and the Council’s breakdown of what other income she had. The Council responded to this email in two ways., it treated it firstly as a request for a recalculation and secondly as a complaint. I have dealt with these in two sections for the sake of clarity.

Calculation dispute

37. The Council responded with a 9-page letter in January 2018. This explained the Council’s calculations of October and December 2017. The letter asked Ms C to send further information including payslips, P45 bank statements and, if applicable, an up-to-date self-employment declaration.
38. On 13 January 2018, Ms C complained about this letter. The Council wrote back in late January 2018 again explaining the calculations and how they had been altered each time Ms C provided further information. The letter again requested further information:
• Payslips from new employer; or
• Bank statements evidencing payments from new employer;
• New contract of employment.
39. Ms C sent further evidence. The Council reassessed her claim in late January 2018. In light of the further payslips, the Council found the current HB rate would be £93.93 per week and that the Council had overpaid Ms C £414.71 between October and December 2017. It said this would be recouped from future payments. At Ms C’s request, the Council reduced the rate of recovery of the overpayments from £23.60 to £11.10 per month.
40. As far as the remainder of the complaint went, the Council was happy that it had acted properly and would not pay the compensation requested. It said the Council would continue to recoup the money owed until the total outstanding balance of £618.40 had been repaid.
41. On 4 March 2018, Ms C sent a notice of appeal against the decision to the Council. In the Reasons for dispute box, she said, ‘My housing benefit and council tax support has already been looked at again by one of your officers but the decision has not changed in my favour. I still disagree with the assessment’.
42. In the Details of dispute box, she said:
1. The Council had not waited 14 days before commencing recovery, contrary to its own policy;
2. The way in which her income had been calculated was incorrect and maliciously done to create overpayments.
3. She was self-employed and so her income should be calculated over a year. Instead, the Council had calculated her eligibility according to weekly and monthly pay slips;
4. The Council had recovered the overpayment at too high a rate.
43. Ms C received a confirmation of receipt email in which the Council said it would get back to her in 10 days. It did not do so. In fact, she had an email on 21 April 2018 saying there was a backlog. She did not receive a dispute response until 8 May 2018.
44. Council Officer Q responded to Ms C’s dispute in early May. he said:
1. The Council had never said it would wait 14 days before recouping overpayments; and
2. The recovery rate was properly calculated at £26.60: the £11.10 statutory recovery rate and 50% of Ms C’s earnings disregard. However, he said the Council had reduced the rate to £11.10 at Ms C’s request in January 2018.
45. Officer Q also said, incorrectly, that there was an outstanding balance on the account of £3692.74. Ms C wrote back on 20 May 2018. She repeated her claims that there should have been a 14-day grace period and demanded repayment of all money so far recouped. She also denied she owed £3693.74.
46. Officer Q replied in late May explaining that the majority of the debt was incurred in 2005/6 and 2008/9. In fact, the Council accepts, the debt was not owed. In June 2018, the evidence suggests Officer Q wrote to Ms C and apologised.
47. Ms C continued to ask that the Council respond to her dispute raised in January 2018. She repeated that she had not received a 14-day grace period and this had led her to fall into rent arrears and obliged her to apply for a debt relief order (DRO). She said the Council should return money recouped from her as there had been no grace period and the rate of recovery had been too high. She also requested compensation because the Council had failed to respond to her initial dispute of the debt within 10 days.
48. In a response of July 2018, Officer Q again stated that there was no 14-day grace period that the Council had recouped money at the correct rate according to the regulations. The Council had stopped recovering the overpayment at £23.60 having learnt of Ms C’s DRO.
49. Ms C contacted the Council again on 6 August 2018. She said that this was another complaint. She complained that Officer Q had again dealt with her complaint in July. She restated her case. She said she wanted the matter dealt with as a stage three complaint.
50. The case notes show the reviewing officer said, ‘The payslips do not make any sense as income is not for the whole month in a payslip’. Consequently, the officer used the ‘year to date gross’ figure from the August payslip; £3480.04 and calculated a monthly pay rate for April to August. The officer now calculated an underpayment of £107.10 from 2 July 2018 to 5 August 2018. The Officer then found an overpayment of £66.42 for 6 August 2018 to 16 August 2018.
51. Ms C emailed the Council on 19 August 2018 and complained formally again on 3 September 2018. She provided further information. She also said her pay was not calculated monthly but weekly though she was paid monthly, she was sometimes paid for four weeks and sometimes for five.
52. The Council responded on 11 September 2018. Using her July 2018 payslip, it recalculated her entitlement. It reduced her HB to £70.94 per month.
53. Ms C again disagreed with the calculation. The Council calculated her entitlement again. This time, the Council calculated there had been a £194.94 underpayment for the August 2018. Ms C continued to dispute the overpayment for July 2018.
54. It then classed this as a local authority error which was, therefore, irrecoverable because ‘the customer has repeatedly told us that her payslips are not showing her monthly income’.
55. Ms C continued to dispute the alleged overpayment in January 2018. The Council sent the underpayment from July 2018 to the landlord and referred the matter to the tribunal.
56. On 3 September 2018, Ms C wrote to the Council again to dispute the assessment of her council tax in August 2018.

Complaint

57. In early February, the Council responded to Ms C’s complaint. It said that the Council had conducted a recalculation of her claim and said disputes of this sort are usually taken to the tribunal as there is a right of appeal.
58. Ms C’s dispute was dealt with as a stage 2 complaint on 21 March 2018. A senior complaints officer said the Council did not deal with disputes about the level of HBs through its complaints procedure as there was a right of appeal. The officer offered Ms C £50 in compensation in recognition of the fact that her email had gone to the wrong email address.
59. On 7 August 2018, the Council responded to Ms C and told her a senior complaints officer would deal with her complaint.
60. On 14 September 2018, Ms C received a final review of her complaint from a senior council officer. She accepted that the Council had been at fault and offered £50 compensation. It told Ms C that there was a statutory procedure for disputes about the calculation of HB.

Application for Debt relief order

61. Ms C says that, because of the Council’s decision to recoup her overpayments without giving her a grace period, she fell into rent arrears and, because it kept recouping money from her HB, she found it impossible to catch up. She says this led her to apply for a debt relief order (DRO).
62. Ms C notified the Council of the DRO on 23 April 2018. This should have prevented the Council from recovering overpayments of housing and council tax benefits.
63. However, in August 2018, due to a Council error, the Council sent Ms C a summons to court for a failure to pay £88 council tax.
64. Ms C complained to the Council. The Council first dealt with her complaint on 14 September 2018 (see paragraph 66). It said it had investigated and found that an officer had inadvertently failed to register her DRO. The Council apologised and offered her £50 compensation.
65. Ms C did not accept the explanation offered and said that the Council had deliberately manipulated her account to trigger a summons and complained again.
66. The Council responded on 28 September 2018. It said she had received a reminder on 20 April 2018, before the Council had learned of the DRO. The Council did not normally issue second or third reminders unless the applicant has entered into a payment arrangement which has failed.
67. The Council apologised and offered her a further £50 compensation. It said it would remind all council tax and debt recovery officers of the importance of following procedures.
68. In July 2019, Ms C’s appeal was dismissed by the court. The court held that, having originally calculated her benefit on a monthly basis, as the regulations said it should, it then calculated it over a longer period and reached a more accurate view of her average earnings.

Was there fault causing injustice?

Incorrectly calculated overpayments of her HBs

69. The amount of HB paid is a matter for the tribunal and therefore beyond the Ombudsman’s jurisdiction. The Council referred one of Ms C’s HB decisions to the tribunal in 2018 but, as it was decided in Ms C’s favour, the appeal lapsed. Another is currently awaiting a court date.
70. In any event, Ms C has never explained how the Council’s assessments of her entitlement was wrong. She has merely said that she disagrees with it. On one occasion, she said this was because ‘the decision has not changed in my favour’. The Ombudsman cannot find fault with a council on this basis.

Period over which HB calculated

71. Ms C says the Council has created artificial over and underpayments by calculating her HB entitlement over inappropriate periods. The Council said, in its response to me, that it has no choice because of Regulation 29(1) of the HB Regulations 2006.
72. In its response to my enquiries, the Council provided the text of R.29(1)(a) to justify its position.
73. However, the Council did not include R.29(1)(b) which says, where it is sensible, whether 29(1)(a)(i) or 29(1)(a)(ii) applies, council should calculate ‘over such other period preceding the benefit week in which the claim is made or treated as made as may, in any particular case, enable his average weekly earnings to be estimated more accurately’.
74. The assessor in this case did, having received several queries from Ms C, recalculate her entitlement using the ‘year to date gross’ figure from the August payslip; Therefore, I accept that the Council did comply with R.29(1)(b), even if unknowingly and was not, therefore, at fault.

Recovery without warning

75. Ms C says the Council should have given her a 14-day grace period before recovering any overpayment. I have seen no evidence of any such period being agreed by the Council. It is not in its policy, on its website or in any letter that I have seen which the Council sent her. I do not find fault.

Recovery at too high a rate

76. The Council’s rate of recovery was permissible and in line with the law and guidance. At the relevant time, Ms C was working. The Council was, therefore, entitled to recoup the statutory rate of recovery - £11.10 per week – and up to 50% of her disregarded income. This it did.
77. In January 2018, Ms C asked the Council to reduce the rate of recovery to £11.10 per week, which it did. When Ms C informed the Council that she had received a DRO in April 2018, it ceased recovery altogether. I do not find fault.

Failure to suspend recovery pending appeal

78. By the time Ms C’s cases got to appeal, the Council had ceased recovery action.

Failure to refer case to tribunal

79. Ms C did not at first provide all the relevant evidence to enable the Council to calculate her entitlement. It wrote to her on several occasions in late 2017 and early 2018 asking her for further evidence. After receiving the further evidence on each occasion, it recalculated her entitlement. The Council cannot be at fault for a failure to send the appeal to the Tribunal before it was in a position to have reached a final determination.
80. Then, in March 2018, the Council referred Ms C’s dispute to the Tribunal.

Failure to heed debt relief order

81. The Council received notice of Ms C’s DRO on 19 April 2018 but did not process it until 27 April 2018 after which it ceased all recovery action against her. Unfortunately, this allowed the Council to send out a reminder about outstanding council tax on 20 April 2018. Ms C did not reply. This, unfortunately, meant that a summons was issued for unpaid council tax in August 2018.
82. I do not find fault given the timeframe involved. Ms C presented her DRO to the Council on 19 April 2018 and the Council sent out the reminder letter on 20 April 2018. In any event, the Council has already paid Ms C £50 compensation and has reminded all officers of the importance of following DRO procedures.

Request for payment of money not owed

83. In his letter of 8 May 2018, Officer Q said, incorrectly, that Ms C owed the Council £3693.74. He reached this figure by looking at her record and seeing a record of her having been overpaid more than £3000 in 2003/4 and 2008/9.
84. This was fault but it caused Ms C no injustice as, after investigating, Officer Q realised his error, apologised to Ms C and told her the true balance.

Failure to investigate fairly and in a timely fashion

85. While the Council was scrupulously fair to Ms C throughout, there were delays in dealing with her complaint. This was fault and caused her injustice. However, the Council has already apologised for this and paid her a sum in recognition.

Confusing materials online

86. Ms C says the Council’s information online is confusing and this meant she was unaware of the difference between an appeal, a dispute and a complaint. I have examined the Council’s web pages and guidance on housing and council tax benefit which appear clear and well laid out.
87. The Council says that any confusion was caused by Ms C’s insistence that she would not use the Council’s online system for disputing HB awards. It also said it responded appropriately to all her various emails.
88. I find that Ms C might have contributed to any confusion by referring to her ‘complaint’ her ‘dispute’ and her ‘appeal’ interchangeably but that the Council interpreted her emails appropriately, sometimes sending emails to the complaints department and, at others, sending them to reassessment. I do not find fault.

Malice

89. Ms C has said many times that Council officers lied, were rude or malicious or deliberately entrapped her. There is no evidence to support these claims.

Delay

90. There was some delay during the course of this dispute. This was fault. However, the Council has already apologised and made several payments to Ms C in recognition of its failures during this dispute. It has also taken on extra staff which has reduced delays. Therefore, it has already remedied the fault. I have made no further recommendations.

Back to top

Final decision

91. I have investigated Ms C’s complaint and have reached a decision. I have found that the Council was not at fault. I have closed my investigation.

Back to top

Parts of the claim I did not investigate

92. I have not considered whether the Council’s HB calculations are correct. This is a matter for the Tribunal which considered the matter and dismissed the appeal.

Back to top

Investigator's decision on behalf of the Ombudsman