Birmingham City Council (18 012 331)

Category : Benefits and tax > Housing benefit and council tax benefit

Decision : Upheld

Decision date : 01 Oct 2019

The Ombudsman's final decision:

Summary: Ms X complains the Council mishandled her housing benefit claim leading to rent arrears. The Ombudsman finds there was fault by the Council. The Council has agreed a remedy.

The complaint

  1. The complainant, whom I shall refer to as Ms X, complains the Council made mistakes regarding her housing benefit and it took a long time and many calls for the Council to correct this. Ms X says the Council then unfairly used a large underpayment to reduce an outstanding overpayment. She says this led to financial hardship and anxiety.

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The Ombudsman’s role and powers

  1. 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)
  2. 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

  1. I have discussed the complaint with the complainant and considered the complaint and the copy correspondence provided by the complainant. I have made enquiries of the Council and considered the comments and documents the Council provided. I have also invited the complainant and the Council to comment on my draft decision.

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What I found

  1. Ms X was claiming housing benefit based on her earnings. She had a large outstanding housing benefit overpayment from a previous decision.
  2. In September 2017 she called the Council to advise she was about to become a student. As she had children, she was eligible to claim housing benefit. The Council requested evidence of her student income on 17 October 2017. However, it did not suspend her housing benefit payments.
  3. In November 2017 Ms X provided evidence of the total student finance that Student Finance England paid to her and evidence of her earned income ending. The student finance evidence referred to a special support element of £3566.
  4. On 27 November 2017 the Council revised Ms X’s housing benefit claim following notification from the HMRC regarding her earned income. This led to an overpayment of housing benefit of £1748.
  5. The Council then suspended housing benefit payments due to Ms X’s change in income to a student grant. This was intended to prevent an overpayment. The housing benefit officer sent the case to a senior officer for assessment. However, the same day the Council lifted the suspension on payments.
  6. In December 2017 Ms X asked the Council what housing benefit she would be paid. She also asked about an overpayment notification letter she had received. The Council says an officer looked at the query but could not interpret what was required. The Council took no other action.
  7. In late March 2018 the Council’s senior benefit officer assessed Ms X’s income from student finance. This led to a housing benefit overpayment of £1628. The Council sent notification letters to Ms X.
  8. Ms X contacted the Council in early April 2018 and said she was upset that the Council had created another overpayment even though it had all the information from October 2017. She said she wanted to appeal and asked for a breakdown of the student income calculation. She also asked about how the Council had taken account of her childcare costs. The Council advised her to send in evidence of her childcare costs.
  9. Ms X’s MP wrote to the council to query the calculation of student income on her behalf. The Council replied stating that it took account of a student loan of £140 per week and a student grant of £58 per week. However, it did not say how it came to these figures. It did not refer to any disregards, or childcare costs, elements.
  10. Ms X’s MP wrote to the Council again on stated that it seemed unreasonable that the Council took five months to decide her benefit entitlement, and then advised it had overpaid her. It had not suspended her benefit. She considered Ms X had not concealed anything and the Council had not treated her fairly.
  11. Ms X contacted the Council and asked for a breakdown of its calculation again, but it did not respond.
  12. In early May the Council replied to Ms X’s MP. It acknowledged it had delayed revising her benefit, and it agreed to write off an overpayment of £1541 because it decided, Ms X could not reasonably have known she was being overpaid. It also used its discretion to write off an overpayment of £87 for a period that Ms X. Not advised the Council of the change in her circumstances.
  13. Ms X called the Council and said that she wanted to complain the Council had not assessed her benefit correctly. She said her student income covered the period of her course not 52 weeks. The Council had assessed her student income over 52 weeks. She also said that the Council’s response to her MP did not state how her student income was assessed. The Council registered her complaint and suggested that she sent evidence of her student income.
  14. In late May the Council responded to Ms X. It said that her student income was taken into account over the period of her course, which was 43 weeks, not 52 weeks. It also said that it did not give the student income calculation to her MP because the enquiry was about the length of time the Council had taken. The Council said it had apologised regarding the length of time it had taken. The Council did not provide a breakdown of how it calculated. Ms X is student income.
  15. In early August Ms X contacted Council and said that the Council was continuing to take account of her student income during the holiday, when it should not apply from July onwards. She said the Council had divided the income by 43 weeks, but had applied it to 52 weeks. The Council agreed that it had not removed the income from her student grant from its benefit calculation. It agreed to remove it for the holiday period.
  16. Shortly after this Ms X contacted the Council with the help of her university’s student welfare adviser. She requested a breakdown of her entitlement because she thought that standard disregards for books and travel may not have been taken into account. The special support element she received should not have been taken into account either. She calculated her weekly income was much lower than the Council’s assessment.
  17. The Council responded in September 2018 that it had deducted books and travel disregards and it had disregarded £3566 for the special support element of her student income. It explained how it had calculated the student loan income and the student grant income.
  18. When Ms X received the Council’s response, she contacted it and authorised the Council to access her online student finance account in order to check the details. The Council did so and was able to clarify that the income it had treated as a student grant should be disregarded because it was for the “parents learning allowance” and the remaining student grant was for child care costs. The Council revised Ms X’s benefit, removing £58 per week that it had assessed as income from a student grant. This increased Ms X’s entitlement by approximately £38 per week. It created an underpayment of £1388. However, the Council did not pay this to Ms X but use it to reduce the outstanding overpayment.
  19. When the Council advised Ms X that it was using the underpayment to reduce the overpayment, she requested that the council paid the additional benefit due to her because she said she had suffered financial hardship. She said she had spent nearly a year chasing the Council and pointing out its mistakes. She said it had caused her stress and anxiety.
  20. The Council asked Ms X to complete an income and expenditure form which she did. The Council considered it 6 weeks later. It decided it should not revise its recovery method or reduce the amount that it was recovering from Ms X.

Analysis

  1. I consider that the Council should have suspended Ms X’s housing benefit from 26 September 2016 when it knew she was a student. This was fault. If it had suspended her claim it could have prevented the overpayment. But I do not consider this fault caused injustice to Ms X because she received more than she was entitled to and the Council has written off the overpayment. In addition, if it had suspended her benefits, there would have been an interruption in payments which could have caused hardship.
  2. The Council delayed assessing Ms X’s student income from November 2017 to March 2018. This was fault. I consider it caused frustration and uncertainty for Ms X. However, the Council’s decision to write off the overpayment has mitigated much of this injustice.
  3. The Council did not respond properly to Ms X’s enquiries and requests for a breakdown from December 2017. It did not respond at all to her enquiry about an overpayment in December 2017. Ms X specifically raised the issue of how her student income was calculated three times in April and May 2018 and asked for a breakdown. She also referred to her childcare costs. The Council provided details of her entitlement to her MP but did not give a breakdown of how it calculated her student income. When Ms X raised this, the Council said Ms X’s MP had not asked for a breakdown, when in fact the MP had asked how the figures used were calculated. The Council then failed to provide a breakdown. This was fault. I consider this caused injustice because it prolonged the period Ms X was unclear about exactly what student income the Council took into account and how.
  4. Ms X and her representatives did not raise the matter for a further 10 weeks. When Ms X did raise the matter in August the Council responded in September providing further details about the student grant and loan it used and the elements it disregarded. This enabled Ms X to understand the calculation. At this point she provided access to her student finance information. The Council was able to identify further elements that it should disregard from its calculation. I do not consider that the Council could have identified this earlier as Ms X had not provided sufficient evidence regarding of the breakdown of her grant. There was no fault by the Council in this respect.
  5. Ms X asked the Council not to use the underpayment of £1388 it created in September 2018 to reduce the outstanding overpayment. She said it had caused her financial hardship as the Council was paying the incorrect housing benefit. The Council considered this and also considered whether it should reduce the weekly deductions of £11. But it refused her request. The method of recovery of a housing benefit overpayment is not a matter that can be appealed to a Tribunal. I have therefore considered it. The Ombudsman cannot criticise the merits of a decision if it is taken without fault. I have not found fault in the way the Council considered this. The Council took account of the overpayment of £1628 that it had written off. The overpayment was paid up to the end of March 2018. The Council also looked at Ms X’s current income and expenditure. I find that these were relevant factors which were properly considered. The Council also gave Ms X the opportunity to ask for a reconsideration of its decision. However, it does not appear that she requested this.
  6. Ms X pointed out in May 2018 the Council was continuing to apply student income for a period she did not receive it from July 2018. But the Council did not revise this until mid August despite responding to her complaint in May 2018. This was fault and led to Ms X having to contact the Council again.

Agreed action

  1. The Council was at fault for the reasons I explained above. This caused Ms X anxiety and time and trouble. I recommended the Council apologises and pays £150 to Ms X within 6 weeks of my decision. The Council has agreed.

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Final decision

  1. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman

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