Summary: Ms Y complained about Council errors in her benefits payments, which it then asked her to repay. She also complained about the Council’s poor communication about the issue. We uphold Ms Y’s complaint. The Council made errors in handling her council tax support and housing benefit claims. These caused Ms Y upset, confusion and inconvenience. To remedy this the Council have agreed to give Ms Y a clear statement of where her situation now stands and confirm it will not seek to recover the discretionary housing payment of £200.

The complaint

1. Ms Y complained about Council errors in her benefits payments, which it then asked her to repay. She also complained about the Council’s poor communication about the issue including letters threatening her with bailiffs.
2. Ms Y said this has caused her confusion, upset and inconvenience and she lost confidence and trust in the Council’s management of her benefits and council tax.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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

5. I considered all the information provided by Ms Y about the complaint. I made written enquiries of the Council and took account of all the evidence and comments received.
6. I have considered the Ombudsman’s guidance on remedies when considering any injustice caused by fault and the remedy suggested by the Council.
7. I gave the Council and Ms Y the opportunity to comment on my draft decision. I considered these comments before reaching this final decision.

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What I found

Legal Background

8. Councils administer certain means-tested benefits such as housing benefit and run council tax reduction schemes, often known as council tax support.
9. An overpayment of housing benefit can occur when a claimant receives benefit or reduction which they are not entitled to and there is a delay in the council rectifying the claim. Council tax support cannot be overpaid as it is a reduction in liability but if a reduction is too high it is often termed as an overpayment of Council tax support. The overpayment can be due to a mistake by the council or the Department for Work and Pensions (DWP), or by the claimant failing to notify a change of circumstance or failing to disclose full information about their circumstances.
10. Overpayments of housing benefit are recoverable unless caused by an official error and where it was not reasonable for the claimant to have known they were being overpaid. The council has a general discretion not to recover them. Overpayments of council tax support are recoverable.
11. If a claimant disagrees with a decision, they can ask the council to reconsider it. The council must then review the decision again under the Housing Benefit Regulations 2006.
12. Claimants who qualify for housing benefit can apply for a Discretionary Housing Payment (DHP) to help with rent. The decision and payment is at the council’s discretion. Councils can recover overpayments of DHPs if the person claiming makes a mistake or misses out information when making the claim.
13. Councils have discretion under Section 13a of the Local Government Finance Act 1992 to apply a reduction of council tax. The Council’s Council Tax Reduction Scheme explains how it can make council tax reductions.
14. The Council’s complaints policy (2014) is on its website. It has a three-stage approach to complaint handling. It first tries a problem-solving approach in the first three working days, before moving to its second stage, using a formal investigation approach. A customer can then ask for a review of that decision if they remain unhappy.

What happened

15. In June 2018 Ms Y applied and received housing benefit and a discount in her council tax liability through the Council’s Council Tax Support scheme (CTS) after she became too ill to work. The Council assessed Ms Y’s statutory sick pay from her employer as her income. She also received a Discretionary Housing Payment (DHP) of £200 to help with the shortfall between her housing benefit payments and her rent.
16. The Council then received information from Her Majesty’s Revenue and Customs (HMRC) which suggested Ms Y was earning more than she had said. The Council consequently adjusted Ms Y’s benefit and CTS allowances based on the average amounts HMRC suggested Ms Y was earning for July and August. Ms Y says she provided all her payslips to the Council. The Council has said it has not received the payslips and so used the averages provided by HMRC.
17. The assessment showed the Council had overpaid Ms Y in housing benefit by nearly £500. It recalculated her CTS allowance finding she owed roughly a further £400 for council tax as it had applied too high a discount. She would also be ineligible for the DHP payment amounting to £200.
18. The Council apologised for the inconvenience caused and explained that due to changes in Ms Y’s income it had overpaid her. It now needed recover this.
19. Ms Y asked the Council to reconsider her complaint and review her claims as an appeal. The benefits office asked Ms Y to provide evidence of payslips for her claim to be reviewed.
20. At appeal, the Council increased Ms Y’s benefit entitlement. The appeals officer found there had been an official error in the housing benefit calculation and recommended that the overpayment was written off. The Council recalculated Ms Y’s CTS entitlement as its previous discount had been incorrectly applied. The appeals officer followed a recommendation to waive the remaining CTS (£134.45) under its discretionary powers to reduce Ms Y’s council tax liability, so it was in line with the decision made for the overpayment of housing benefit. This meant there was no longer an overpayment.
21. As she was now receiving a higher rate of housing benefit, Ms Y was no longer entitled to the DHP and had effectively been overpaid by £200. While this is recoverable, the Council decided that it would not recover the DHP due to the time and trouble Ms Y had spent in successfully appealing her claim.
22. Ms Y says she remains confused about her payments and has lost confidence in the Council’s ability to calculate her benefits and CTS accurately. She is worried the Council will recalculate her payments again and then be chased by bailiffs for non-payment of amounts she is unaware of. The Council has said it did not receive the payslips Ms Y says she provided. It used the information provided by HMRC for its calculations. It has said it made mistakes handling Ms Y’s claims for both housing benefit and CTS, including delays.
23. Ms Y has also complained that she has found it difficult to contact the Council about the issues. I have seen mobile phone screenshots of Ms Y being on hold for about 30 minutes to the Council. She has provided emails where she has tried to contact the Council about her issues. The Council says increasing demands on its services, including by telephone and email, caused these delays.

Analysis

24. The Council made mistakes handling Ms Y’s housing benefit and CTS claims. This was fault. Most of the direct injustice from this was addressed by the Council’s subsequent decision to write off overpayment of housing benefit and to waive repayment of the outstanding amount of council tax liability. It was also remedied by the Council’s decision not to recover the DHP. However, the mistakes also led to Ms Y feeling uncertain and frustrated about her claim.
25. While Ms Y has said she provided her payslips directly, the Council has said it has not received them. I cannot make a finding on what happened regarding the payslips. So, when HMRC provided information to the Council suggesting Ms Y’s income was higher than she had claimed, the Council used the average figure to calculate Ms Y’s claim. This was not fault as the Council was entitled to use this information to process the claim.
26. While ideally Ms Y would not have needed to appeal, she had that opportunity and, on appeal, was found to no longer owe the Council for CTS and housing benefit once the payslips were considered. Consequently, while the figures changed on appeal, the Council were not at fault as it considered the available relevant information about Ms Y’s income.
27. Following her appeal, Ms Y’s higher entitlement meant she was no longer entitled to have received the DHP award of £200. However, the Council have waived any repayment of the DHP to recognise the confusion, time and trouble Ms Y went to in making an appeal to have the entitlement reconsidered and amended.
28. It has also offered through this investigation to apologise to Ms Y for the distress and confusion caused. It says the bills sent were correct when issued but used differing amounts because of changing calculations as the Council received and considered information. These are appropriate actions to remedy outstanding injustice from the fault.
29. The Council says it has no record of letters to Ms Y referring to bailiff action. It has not issued her with a summons. We can only investigate actions that have happened, rather than what might happen in the future. The Council has offered to consider any of its correspondence causing Ms Y concerns. Given the earlier confusion, it should give Ms Y a clear statement of where her situation now stands and confirm it will not seek to recover the DHP of £200.

Agreed action

30. To remedy the injustice caused to Ms Y, the Council has agreed that within one month it will:

1. Send Ms Y a written apology for the avoidable uncertainty, inconvenience and trouble caused by its fault in handling her council tax and housing benefit claims;
2. Confirm in writing Ms Y does not owe payments for recovery of housing benefit or additional council tax following her CTS discount; and
3. Confirm in writing that it will not seek to recover the DHP overpayment of £200 it made before Ms Y’s appeal.

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Final decision

31. The Ombudsman has upheld Ms Y’s complaint. There was fault by the Council which caused injustice to Ms Y. The Council’s actions and the agreed actions are sufficient to remedy her injustice.

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Investigator's decision on behalf of the Ombudsman