London Borough of Lambeth (18 012 918)

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

Decision : Upheld

Decision date : 29 Apr 2019

The Ombudsman's final decision:

Summary: Miss B complains the Council wrongly reduced her housing benefit for seven months. Miss B says she fell into rent arrears and received a notice of possession for her home. The Ombudsman finds the Council at fault for reducing Miss B’s housing benefit. The Council agrees to apologise and pay Miss B for time and trouble, and distress caused by the fault.

The complaint

  1. The complainant, who I refer to as Miss B, complains the Council wrongly reduced her housing benefit based on information it already had. She says the Council did not accept her explanation and told her to appeal, then delayed in dealing with the appeal. Miss B says she suffered distress due to falling into rent arrears and receiving a notice of possession. Miss B says the Council also failed to pay the disability component of her housing benefit, meaning she lost out on opportunities for training.

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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 considered the initial information provided and spoke to Miss B about her complaint. I then made enquiries of the Council. I sent a copy of my draft decision to Miss B and the Council for their comments.

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What I found

  1. If someone disagrees with a decision the Council makes about housing benefit, they may appeal.
  2. The Council’s appeal policy sets out three ways it may change a disputed decision:
    • Revised – changed from date of the original decision
    • Superseded – changed from a later date than the original decision
    • Appeal – case heard by an independent tribunal
  3. The policy says that when an appeal is received, the Council must consider whether the decision can be revised.

Background

  1. Miss B has two businesses, each of which has several clients. Most of those clients pay her with invoices. However, some insist on putting the payments through their payroll system. This means she is, in effect, employed on a zero-hour contract with those clients. However, it is only an administrative technicality and, in practice, the payments all form part of her self-employed earnings.
  2. In 2014 Miss B applied for housing benefit to help pay her rent. The Council’s housing benefit form is not designed in a way that Miss B can accurately set out all her income, because of the split between clients paying her by way of invoice and payroll. For this reason, Miss B spoke in person with an advisor at the Council and submitted supporting documentation that clearly set out her earnings from each client.
  3. The Council awarded housing benefit to Miss B and continued payments with minor changes week to week until 2018.
  4. In February 2018, the Council received a ‘Right Benefits Initiative’ (“RBI”) notice from the Department of Work and Pensions (“DWP”). The notice shared information that Miss B had received payments through employment with three companies.
  5. The Council assumed Miss B had received payment for employment on top of her self-employed earnings. It re-calculated Miss B’s housing benefit and reduced it from nearly £60 per week to less than £1 per week. The Council wrote to Miss B to tell her about the reduction. The letter said that if Miss B thought the decision was wrong she could appeal in writing within a month.
  6. Miss B explained the situation and that she had already given the Council this information in 2014. She enclosed a spreadsheet of her earnings and invoices from early 2017. Miss B did not include information for 2018 as she had not yet finished her accounts for that financial year. She could not accurately set out her earnings until she had finished her accounts in late April 2018.
  7. Based on the information provided, the Council revised Miss B’s claim again and sent an updated breakdown of her entitlement. In its calculations, the Council still took the three payroll earnings into account as separate to Miss B’s self-employed earnings. It found Miss B was entitled to around £6 per week in housing benefit. The Council sent an update to Miss B and enclosed a self-employed earnings form for her to complete if she wished to appeal.
  8. Miss B responded and said she would appeal but could not do so until the end of April 2018 when she finished her accounts. Due to the nature of her earnings she could not provide an accurate figure of her average weekly hours or income until the end of the financial year. Miss B said she would need to rely on paying rent from her overdraft until that point.
  9. Miss B submitted an appeal in late April 2018. A later email and letter from the Council show the Council logged this as a revision request. In her covering letter Miss B explained she could not fit her earnings into the Council’s self-employed earnings form. Instead, she enclosed a table of her full earnings for the financial year and a breakdown of her invoice and payroll clients.
  10. Miss B regularly chased the Council by telephone and email for an outcome to her appeal up until the beginning of July 2018. Each time Miss B was either told nothing or simply that there was no update. During this time Miss B exhausted her overdraft from paying rent and fell into rent arrears. She contacted her landlord weekly to update him and made small payments when she could. However, she could provide no further information than that the Council had not yet dealt with her appeal.
  11. In July 2018, the Council sent another self-employed earnings form to Miss B and said she would need to fill it in if she wished to appeal. Miss B then made a complaint but the Council said the matter needed to be dealt with as an appeal.
  12. In August 2018, after further communication with the Council, Miss B completed and sent in four self-employed earnings forms, which set out her different types of earnings. She also included a covering letter explaining her earnings. At the end of August 2018, the Council revised Miss B’s earnings and found it had underpaid her by nearly £1,300. It paid this amount to Miss B in early September 2018.
  13. In late September 2018, Miss B found out that housing benefit had a disability element. Miss B received the disability element of working tax credits, meaning she was automatically entitled to the disability element of housing benefit. However, she had not been receiving this element. Miss B asked the Council to re-assess her earnings on this basis.
  14. The Council revised Miss B’s earnings in early November 2019 and found it had underpaid her from mid-2017 onwards. The Council has now backdated this further to 2008, and paid Miss B several thousand pounds for payments she should have received.

Analysis

  1. The Ombudsman will not normally investigate matters that took place more than 12 months before the person made a complaint. In this case, I have referred to Miss B’s application in 2014. This is because it provides background that is directly relevant to the events in 2018.
  2. It is my view the Council is at fault in how it handled this matter. It reduced Miss B’s housing benefit based on information from DWP about employed earnings. However, it already had this information, which clearly showed those earnings were part of Miss B’s already declared self-employed earnings.
  3. It may have initially appeared from the RBI notice that the earnings were on top of what Ms B had already declared. However, the Council could not have known this for certain without checking what Miss B had declared. It is therefore reasonable to expect the Council to have checked whether it already had this information on file.
  4. Miss B’s application in 2014 named the three companies in the RBI notice, as clients who insisted on putting her payments through their payroll. Miss B explained this clearly as part of her application. If the Council had checked, it would have been obvious the information in the RBI notice did not change Miss B’s entitlement. Its failure to do so is fault.
  5. When the Council wrote to Miss B, she immediately drew its attention to the information she had already provided. She also submitted further evidence of earnings. The Council conducted a revision on the evidence of earnings, but again failed to look back at the earnings Miss B had already declared and realise it had made a mistake. Miss B’s letter was very clear, so it is reasonable to expect the Council should have checked that information as part of this revision. Again, its failure to do so is fault.
  6. It was not fair to place the onus on Miss B to prove the Council made a mistake, when she had already provided all the information the Council needed. Even when she drew their attention to the evidence that already existed, it failed to recognise its mistake.
  7. The matter is compounded by the delays in dealing with Miss B’s appeal request between April and August 2018. It took nearly three months for the Council to give any response to Miss B’s request for an appeal, despite her repeatedly chasing. It then sent her a form, which she had already explained did not allow her to accurately set out her earnings.
  8. The Council already had all the information it needed to conduct a revision, but insisted on her filling out the form. It was then another month before the Council gave any guidance to Miss B about how she could do so and accurately present her information. It is clear there were significant delays in the Council dealing with Miss B’s request for an appeal. This again is fault on the Council’s part.
  9. The consequence of this fault is that Miss B no longer received the benefit she needed and was entitled to. It meant she could not afford to pay her rent, which meant she had to use her overdraft and eventually fell into rent arrears, which would have caused her significant distress.
  10. Miss B had to spend time and trouble repeatedly chasing the Council with no engagement on their part. She also spent time and trouble updating her landlord weekly, in efforts to avoid losing her property.
  11. Eventually Miss B received a notice of possession from her landlord because of rent arrears. Fortunately, the situation was resolved before Miss B was evicted but it would have caused considerable further distress to be threatened with this course of action. This would not have happened if it were not for the Council’s fault, so it is reasonable to conclude the Council’s actions caused significant injustice to Miss B.
  12. The Council says Miss B had not advised the Council she received the disability element of working tax credit until September 2018. However, I can see from Miss B’s application form in 2014 that Miss B said she was receiving the disability element of working tax credits. So, again, Miss B had supplied this information to the Council.
  13. I cannot say whether the Council had this information stretching back to 2008 and cannot investigate that far back. However, this does mean the Council is also fault for not paying Miss B the disability element of her housing benefit from 2014 to November 2018.
  14. It is more difficult to assess any injustice to Miss B resulting from this fault. The Council has now paid Miss B what she should have received. This puts her back in the position she would have been financially, had the fault not occurred.
  15. Miss B says she missed out on training opportunities and other things she could have afforded had she been financially better off. I do not contest this point. However, it is not possible for me say for certain what opportunities Miss B would have missed out on or quantify this in the form of a remedy. I therefore accept the Council’s payment of the monies she would have received suitably remedies the fault and do not recommend any further remedy.

Agreed actions

  1. The Council has agreed to, within a month of this decision:
    • Apologise to Miss B for wrongly reducing her housing benefit, failing to properly consider information she submitted and delays in dealing with her appeal request;
    • Pay Mrs B £200 for avoidable time and trouble; and
    • Pay Mrs B £300 for distress.

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Final decision

  1. The Council was at fault for reducing Miss B’s housing benefit, not paying the disability element and delays in revising her claim. The Council has agreed apologise and pay Miss B for time and trouble and distress caused by the fault.

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Investigator's decision on behalf of the Ombudsman

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