Summary: The Council was at fault when it paid housing benefit to the tenant and not to Mrs C, the landlord. This meant Mrs C missed out on rental payments. The Council has agreed to pay Mrs C in recompense for the fault and for the part this fault played in contributing to the stress and financial strain Mrs C and her husband were already experiencing.

The complaint

1. Mrs C complains about the Council’s actions in paying housing benefit to her tenant, Ms D, rather than to her as the landlord. Ms D has since left Mrs C’s property without notice and still in arrears. Mrs C feels the Council has treated her unfairly as it continued to pay housing benefit to Ms D when it knew she still owed Mrs C considerable rent arrears. This situation has put a lot of strain on Mrs C and her husband’s health. Mrs C had to take out a loan to cope with the financial strain of the rent arrears.

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The Ombudsman’s role and powers

2. 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)
3. 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

4. I have spoken to Mrs C and considered the information she provided about her complaint. I have considered the information the Council provided in response to my enquiries.
5. I have written to Mrs C and the Council with my draft decision and given them an opportunity to comment. I have considered any comments received.

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What I found

6. Housing Benefit is a means tested benefit which helps people on low incomes to pay their rent. The default position is that councils pay housing benefit direct to the tenant. Councils can pay housing benefit direct to landlords in limited circumstances. If a tenant has rent arrears of eight weeks, the council must pay the landlord directly unless:

• it is in the overriding interest of the tenant not to pay housing benefit to the landlord; or,
• if the council decides a landlord is not a fit and proper person to receive housing benefit for their tenant.

7. Councils cannot make the same benefit payment twice. They cannot make the same payment of housing benefit to a landlord where it has already been paid to a tenant.

What happened

8. Mrs C’s tenant, Ms D, moved into the property in October 2015. The Council paid housing benefit to Ms D from the start of her tenancy.
9. Mrs C contacted the Council on 12 January 2018 as her tenant was over five months in arrears of rent from August 2017 and was continuing to accrue arrears. Mrs C provided the Council with a rent statement, which showed the balance of rent arrears owed to be over £6,000.
10. Mrs C called the Council on 9 February 2018 to ask if the Council would now make housing benefit payments to her for Ms D’s rent as the arrears continued to accrue. The Council told Mrs C it would need to investigate before it could make housing benefit payments directly to her and this process could take up to 30 working days to complete.
11. Mrs C contacted the Council on 6 March 2018. She emailed written authority from her tenant giving permission for the Council to discuss the tenant’s housing benefit claim with Mrs C. The letter from Ms D (Mrs C’s tenant) also confirmed she was in arrears of rent and authorised payment of housing benefit to her landlord, Mrs C. Mrs C gave the Council details of the bank account she wanted it to make housing benefit payments to. Mrs C told the Council her tenant was now over £7,000 in arrears of rent.
12. The Council emailed Mrs C on 13 March 2018. The Council told her it did not have an active housing benefit claim for Ms D. The Council advised Mrs C to contact her tenant directly about the rent arrears. Mrs C called the Council and it told her it had suspended Ms D’s housing benefit payments from January 2018, but had made fortnightly payments of housing benefit to Ms D up to this point.
13. Mrs C contacted the Council in May 2018. Mrs C asked the Council to make Ms D’s housing benefit payments directly to her, as the tenant was now over ten months in arrears on her rent. Mrs C has told us she was aware her tenant had challenged the Council’s decision to suspend housing benefit and was due to receive a backdated payment of housing benefit for more than £2,400 from January 2018. Mrs C sent the Council two letters dated 21 January and 26 February 2018 from her tenant, in which Ms D gave permission for her housing benefit to be paid directly to Mrs C. Mrs C also provided her bank account details to the Council so it could make the backdated payment to her.
14. On 11 June 2018, the Council wrote to Mrs C about Ms D’s housing benefit claim. The Council sent two benefit notification decisions to Mrs C on the same date. These letters set out the weekly housing benefit amounts payable and the total amount of benefit to be paid for the following periods:

• £1,448.08 for the period from 24 November 2017 to 31 March 2018, and,
• £2,391.15 for the period from 14 May 2018 to 9 July 2018.

The notification also confirmed that the Council would make future payments of housing benefit for Ms D to Mrs C and the next payment would be made on 9 July 2018.

15. The Council wrote to Mrs C on 13 June 2018 to notify her Ms D’s housing benefit payments had been suspended from 12 June 2018. Mrs C contacted the Council on 17 June 2018 to inform it Ms D had vacated Mrs C’s property and posted the keys through Mrs C’s letterbox. Mrs C said the tenant had left without notice and was still in rent arrears. The Council advised Mrs C it would suspend payments while it made further enquiries about the tenant vacating Mrs C’s property.
16. Mrs C and her husband continued to contact the Council at the beginning of July 2018 to check on the Council’s progress. The Council made two payments of housing benefit to Mrs C of £724.04 and £25.86 for the period from 14 May 2018 to 11 June 2018 – this was the date the Council established Ms D left Mrs C’s property. The Council informed Mrs C it would not be making any further payments to her as it had already made payments of backdated housing benefit to her tenant.
17. Mrs C complained to the Council. In its responses at stages one and two, the Council apologised for the confusion caused by the two letters it sent to Mrs C on 11 June 2018. The Council explained the £1,488.08 represented the housing benefit payment due to Mrs C from 14 May 2018 to 9 July 2018. The Council said the second letter stating a payment of £2,391.15 included an underpayment of £943.07 for a period when it had already made some payment to Ms D. The Council explained that it made the two payments to Mrs C totalling £749.90, for the period from 14 May 2018 to 11 June 2018, because the tenant had left Mrs C’s property before the next payment date on 9 July 2018.
18. In the Council’s stage two complaint response it explained that the situation of rent arrears may have changed from January 2018 to May 2018, when Ms D asked the Council to reinstate her housing benefit. The Council advised Mrs C her tenant had asked for housing benefit to be paid to her directly when her claim was reinstated. The Council said it was not able to contact Mrs C at the time because her tenant had withdrawn consent for Mrs C to have information about the housing benefit claim.

Was there fault causing injustice?

19. The Council is not responsible for the tenant’s failure to pay their rent. That is a matter between the tenant and the landlord. However, the Council had been aware since January 2018 that the tenant was in rent arrears. When a tenant is in arrears of over eight weeks rent the Council must make the housing benefit payment direct to the landlord.
20. In this case, the situation was complicated by suspension of Ms D’s housing benefit after Mrs C notified the Council Ms D was in rent arrears. Ms D asked the Council in April 2018 to reinstate her housing benefit. The Council asked Ms D in April 2018 to provide evidence that she was no longer in arrears with her rent while assessing her housing benefit reinstatement claim. Although Ms D responded, she did not provide evidence to show she was no longer in arrears. The Council failed to pursue this issue further before making a backdated payments of housing benefit to Ms D in May and June 2018.
21. During this time, Mrs C was in contact with the Council and had confirmed Ms D was still in rent arrears. While the Council was unable to share information about Ms D’s housing benefit claim with Mrs C without her tenant’s consent, it could still have obtained evidence from Mrs C to show the extent of Ms D’s rent arrears. Instead it informed Mrs C it did not have an active housing benefit claim for Ms D when she notified the Council of the rent arrears in January 2018. The Council should have reconsidered this position when it later decided to reinstate Ms D’s housing benefit for the same period.
22. The tenant received £2,215 in backdated benefit from the Council for the period from 22 January to 13 May 2018, which it should have paid to Mrs C. This is fault. The tenant did not pass this on to Mrs C. Mrs C is unable to pursue the tenant for the housing benefit and lost rent as she is unable to trace her. Mrs C has lost out on £2,215 which would have reduced the arrears.
23. Mrs C has told us this situation has exacerbated her and her husband’s existing health conditions. Mrs C had to take out a loan to cover the mortgage on her rental property while her tenant was not paying the rent. This put Mrs C and her husband under further financial strain. The Council’s fault caused injustice as it no doubt contributed to the stress and difficulties Mrs C and her husband were already experiencing because their tenant had not been paying rent for some time. While the Council cannot pay housing benefit twice for the same period, Mrs C should be recompensed for the money she did not receive due to the Council’s fault.

Agreed action

24. Within one month of the final decision, the Council has agreed to:

• pay Mrs C £2,215 for the housing benefit it should have paid to her rather than her tenant; and,
• pay an additional £100 for the part the Council’s fault played in contributing to the distress and frustration Mrs C and her husband were experiencing.

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Final decision

25. I have completed the investigation and uphold Mrs C’s complaint. Mrs C and her husband been caused an injustice by the actions of the Council and it has accepted my recommendations to take action to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman