Summary: In dealing with a Housing Benefit claim the Council made many significant mistakes. In particular, it failed to consider relevant information, delayed, and failed properly to deal with an appeal. It caused injustice to the complainant in unnecessary distress, time and trouble. To put this right the Council will reassess the claim for the time the complainant was not employed and pay her £600 for the injustice it caused her.

The complaint

1. Ms X complains the Council:

• failed to act on information she provided;
• delayed responding to her;
• did not give a decision on two appeals;
• unfairly decided she should pay back an overpayment and did not tell her she had a right of appeal about this.

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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. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
4. The Social Entitlement Chamber (also known as the Social Security Appeal Tribunal) is a tribunal that considers housing benefit appeals. (The Social Entitlement Chamber of the First Tier Tribunal)
5. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, 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)

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How I considered this complaint

7. I considered the complaint made by Ms X and discussed it with her. I asked the Council for information and considered what it provided.
8. I have considered Ms X’s complaint from 2016 when the matters complained of started. This is because Ms X has consistently raised the issues with the Council since 2016.
9. I have considered the complaint although some decisions by the Council carried with them a right of appeal to Tribunal. This is because Ms X alleged the Council did not deal with her attempts to appeal.
10. I gave the Council and Ms X the opportunity to comment on my draft decision.

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What I found

Housing Benefit overpayments

11. A council assesses and awards claims for Housing Benefit.
12. If a council decides it has paid too much Housing Benefit which the claimant should repay, it must tell the claimant the following:

• why there is an overpayment;
• the overpayment is legally recoverable;
• how much the overpayment is;
• how the council calculated this;
• which benefit weeks the overpayment occurred in;
• the claimant’s right to ask for a statement of reasons and appeal rights.

13. Overpayments are recoverable unless they were caused by official error and it was not reasonable for the claimant to have known the council had overpaid them. The council does have a general discretion not to recover the overpayment but there is no right of appeal against a refusal to exercise this discretion.
14. The council must decide who it can recover an overpayment from. The council must notify anyone it considers it can legally recover the overpayment from. The person it notifies has a right of appeal against the decision.
15. When a council calculates an overpayment of housing benefit, it first decides the dates between which it overpaid the claimant. It then must calculate the benefit it paid for those dates. The council must then consider if the claimant was due housing benefit during the overpayment payment, even if the claimant did not provide the information at the time. If the claimant was due some benefit the Council must then deduct this from the overpayment. (Housing Benefit Regulations 1987 reg 104)

Housing Benefit appeals

16. If the claimant disputes the decision, they should do this within one month of the date of the decision. If the claimant asks for a statement of reasons, they should appeal within 14 days of the date of the statement of reasons. They can ask the council to reconsider or say they want to go straight to appeal.
17. If the claimant asks the council to reconsider it will send a new notice with its decision following its reconsideration. Whether it changes its decision or not, it must tell the claimant they have a fresh right of appeal within one month to the First Tier Tribunal.
18. If the claimant asks to go straight to appeal the council will still reconsider its decision before passing the appeal to the Tribunal. If it changes its decision it will send a new notice with a fresh right of appeal. If it does not change its decision it will send the appeal directly to the Tribunal without the need for the claimant to submit a new appeal.
19. The LGSCO expects a council to refer an appeal to the Tribunal within one month, unless there is a very good reason for not doing so. The Tribunal Procedure Rules (rule 2 (4)) expect a council to assist a Tribunal in the overriding objective to deal with cases fairly and justly and avoid delays.

The benefits cap

20. Since April 2013, there has been a cap limiting the total amount in some benefits that working-age people can receive, even if their full entitlement would otherwise be higher. If the cap applies the maximum weekly total benefits a couple with children outside London can receive is £384.62. It the benefit cap applies the Council applies the reduction to the housing benefit claim.

What happened

21. Ms X and her partner Mr Y claimed housing benefit between 2010 and 2017. The claim was in Mr Y’s name. They asked the Council to make the payments to Ms X as Mr Y had problems with his bank account.
22. The payments the Council made varied as sometimes Ms X was employed and sometimes Mr Y was employed. The Council accepts from August 2014 it overestimated Ms X’s income by £3.38 a month. In July 2015 Mr Y told the Council he was now claiming Job Seekers Allowance (JSA).
23. In April 2016 Mr Y told the Council Ms X was now employed. In September Mr Y told the Council he now had a job, but Ms X stopped working on 10 August 2016.
24. On 5 October 2016 Mr Y gave the Council his payslips and Ms X’s final payslip for August 2016. He gave the Council the couple’s new award of Child Tax Credit. In his covering letter he said he had made a complaint a few months earlier but had no response. The Council says it does not have a record of a complaint from Mr Y. It did not ask Mr Y to send it a copy of the complaint.
25. In late October 2016 Her Majesty’s Revenues and Customs (HMRC) told the Council Mr Y was employed from March to June 2015 by company A, and again in April and May 2016 for company B. The Council says Mr Y had not told it about these jobs. Ms X says he did.
26. A note made a benefits officer says the officer rejected the files sent by HMRC for Ms X as the Council already had details of her income.
27. On 7 November 2016 the Council sent an overpayment notice to Mr Y saying he owed £980.47 in overpaid Housing Benefit for March to June 2015 and April to May 2016 (overpayment 1). It started to recover this from Mr Y’s ongoing benefit at £11.10 a week. The Council has not kept a copy of its notice.
28. Ms Y did keep a copy. The reason given for the calculation is that “you/your partner’s wages have changed.” The Council calculated the overpayment due to Mr Y’s earnings from March 2015. It also included earnings for Ms X for 23 March to 5 July 2015. From April to July 2015 it reduced Mr Y’s previous benefit payments of around £60 a week to £0.
29. The Council says the reason it gave means you and/or your partner’s wages have changed.
30. On 22 November Mr Y told the Council he was made redundant on 27 October but Ms X had a new job from 14 November. In December he provided payslips for him and Ms X.
31. On 9 January 2017 the Council cancelled Mr Y’s claim backdating this to 31 October 2016. It said Mr Y had not provided the information it asked for. It sent another overpayment notice to Mr Y for £707.40 from October 2016 to January 2017 (overpayment 2). The Council has not kept a copy of this notice.
32. On 11 January 2017 the Council reinstated Mr Y’s claim from October 2016 as it realised Mr Y had provided the information. It had underpaid Mr Y £884.95. It used this to pay off the £836.39 Mr Y still owed on overpayment 1. It used the remainder to reduce overpayment 2 to £658.84. It continued to take £11.10 a week from Mr Y’s ongoing benefit.
33. On 18 January 2017 Ms X emailed the Council to ask it to look again at the claim. She referred to her previous letter and the Council’s response. The Council does not have copies of the previous correspondence referred to. The Council also says it had not kept a copy of the 18 January email. It has a record of receiving it and replying to it. The Council obtained a copy from Ms X when she wrote to it in February 2019.
34. On 25 January 2017 the Council responded and said what actions it had taken on the claim since October 2016.
35. Ms X wrote to the Council the same day. She told the Council she left her job on 24 April 2015. She said she was sure they had told the Council about Mr Y’s jobs. She said the Council had got the information wrong. She said Mr Y only worked for company A for 1 week and then moved to company C, until he was made redundant on 28 June 2015.
36. She said Mr Y worked for company A for 1 week in March 2016. She said he worked 1 week in April 2016 and 1 week in May 2016 for company B.
37. Ms X provided what wage slips and P45s she had for Mr Y’s employment with companies A, B and C. She also sent both of their wage slips from February 2016 onwards. She sent her current Child Tax Credit award showing it was lower than the Council thought.
38. The Council replied to Mr Y on 17 February 2017, saying it had treated their correspondence as a review request. It said the information Ms X provided had increased overpayment 1 by £39.70. It told Mr Y he could appeal to a tribunal.
39. On 17 February the Council re-assessed the claim. It awarded an extra £126.72 for July to August 2016 as Ms X’s income included wage slip showing a reduction in her income for those months. The Council says it should not have done this as she had not told it about the reduction at the time.
40. The Council accepts it did not consider the information about the new Child Tax Credit against ongoing benefit entitlement. It says on 10 January 2017 HMRC had also notified it of a decrease in Ms X’s Child Tax Credit and she no longer received Working Tax Credit. It says it failed to add this information to the case or accidentally deleted it. The Council says if it had acted on the information it would have paid an extra £7.26 a week housing benefit. Mr Y and Ms X missed out on £141.63.
41. The Council continued to include Working Tax Credit in its assessments.
42. On 13 March 2017 Ms X’s MP asked the Council to look at the claim again. The Council replied including the income it based the assessments on. This still included £282.64 weekly income for Ms X from 25 April to 5 July 2015, when Ms X had told it she was not working then and had provided her final wage slip.
43. In May 2017 Ms X claimed JSA and Mr Y received full housing benefit. On 12 June 2017 Ms X got a new job. Mr Y sent the Council her first wage slip and contract of employment showing her annual salary. The Council says it used this first wage slip to assess Ms X’s weekly income. It says it should not have done this as it was for a part of a month and resulted in too low a figure. It says this did not make a difference to what it paid. If it had used the right figure Mr Y was still entitled to full housing benefit.
44. On 14 August 2017 the HMRC told the Council to apply the benefit cap to Mr Y’s claim. HMRC erroneously said Ms X was still in receipt of £128.73 weekly maternity allowance. Ms X last received this in 2012. The Council reduced Mr Y’s housing benefit by £23.89 a week.
45. Ms X and Mr Y both questioned the inclusion of a maternity allowance. The Council told them it had not included this in its calculations since 2012. It accepts it did not tell them they needed to contact the DWP to get the allowance removed from the information it gave to HMRC and this would remove the benefits cap.
46. The Council received a new HMRC notice about Ms X’s Child Tax Credits. On 27 August 2017 it reassessed the claim and removed the Working Tax Credit. This meant the couple’s income reduced below the benefits cap, even thought it still wrongly included the maternity allowance. The Council paid full housing benefit from 27 August.
47. On 14 September 2017 Mr Y told the Council he had started work in July 2017. The Council asked for his wage slips. The Council received a notice from HMRC giving details of Mr Y’s earnings for August and September 2017. On 11 October 2017 the Council told Mr Y he was not entitled to housing benefit from 27 August 2017 because of his income. It told Mr X it had overpaid him £967.68 from July to September 2017 (overpayment 3).
48. The Council also reassessed for the period of overpayment 1. For reasons it cannot explain an officer removed the income details for Mr X’s jobs with companies A and B. It says it should not have done this. It says because it did it created two underpayments of £88.58 and £172.80 which it used to reduce underpayment 3.
49. As the Council could no longer recover money from Mr Y’s Housing Benefit, it sent him an invoice for £990.13, for what it said he still owed in overpaid Housing Benefit.
50. On 16 November 2017 Ms X wrote to the Council to appeal as she said it still had her 2015 income wrong.
51. On 25 January 2018 Ms X and Mr Y both signed a letter to the Council asking for a response. They included Ms X’s P45 for the job she left in April 2015 and a copy of the overpayment notice of 7 November 2016.
52. The Council says it replied to Mr Y on 23 May 2018. This letter says it raised overpayment 3 in October 2017 because the HMRC told it of a change in Ms X’s income. It said it would review the claim if Mr Y provided Ms X’s wage slips for July to September 2017 by 23 June 2018. Ms X says they did not get this letter.
53. On 31 May 2018 Ms X made a formal complaint. She said the Council had not responded to her letter of November 2017.
54. The Council drafted an undated email response to Ms X. The draft apologises for the delay. It says the Council treated her letter of November 2017 as a request for a reconsideration. It says it has attached a copy of its letter of 23 May 2018 asking for more information. The letter is not attached. The Council has no evidence it sent the email.
55. The Council now says it could not treat Ms X’s letter of November 2017 as an appeal as she was not the claimant and she did not have Mr Y’s authority to act on his behalf. It says even if she did have authority, she was not clear what decision she was appealing against, so it was not a valid appeal.
56. The Council says it asked Mr Y in its letter of 23 May 2018 to provide his wage slips for July to September 2017. It says this might have given evidence to allow it to reduce the overpayment. It says Mr Y did not take this opportunity. Ms X says Mr Y did not get this letter. The letter did not ask for Mr Y’s wage slips, it asked for Ms X’s, which were not disputed.
57. The Council acknowledges it should have explained why it had included Ms X’s wages from April to July 2015. It also acknowledges it had evidence Ms X was not working and should have recalculated the underlying benefit and reduced overpayment 1. It also acknowledges it could have told Mr Y he could appeal against overpayment 3 or give his permission for Ms X to do this.
58. In July 2018 Ms X and Mr Y parted and Ms X and the children moved out of the area.
59. In August 2018 the Council decided to recover the full overpayment from Ms X. It says it did this as she received the Housing Benefit and took significant responsibility for the claim. It sent invoices for £990.13 to Ms X. It did not send a decision notice to her and so did not tell her she had the right of appeal.
60. On 17 August 2018 Ms X emailed the Council. She said she was not the claimant so why was the Council asking her to pay. She also said the Council had not yet responded to her complaint about her income in 2015. There followed a series of emails between Ms X and the Council. The Council told Ms X she could appeal against the decision to make her liable for the overpayment.
61. On 29 August 2018 Ms X appealed. She also said the Council still had not dealt with the wrong income for 2015 and the Council had not responded to her letters.
62. The Council replied on 15 October 2018. It said all the overpayments were correct and recoverable. It said overpayment 1 arose because a notice from the HMRC showed a change to her and Mr Y’s earnings. It said overpayment 2 happened because they did not provide information when requested.
63. The Council now says both statements are wrong. It says overpayment 1 arose solely because of a change in Mr Y’s income. It says Ms X and Mr Y did provide the information requested.
64. The letter did not address Ms X’s appeal against the Council making her liable for repayment. It also did not give her further appeal rights. The Council accept these failings and say as it had not changed the decision, it should have passed the appeal to the Tribunal. In response to our draft decision the Council has added it could not make Ms X liable for the overpayment as she was not Mr Y’s partner in August 2018. It says it will make sure managers and officers are aware of the correct regulations for recovering overpayments.
65. Ms X wrote to the Council on 17 October 2018 to dispute what it said and asking what income figures it had for her and Mr Y in 2015. The Council responded but would only give her what income it had for her.
66. Ms X responded with her disappointment the Council had still not removed her income from April to July 2015. On 31 December 2018 the Council responded. It said it had a record she was employed until 3 July 2015. It said it could not trace evidence Ms X said she had provided. It asked her to provide proof of her income from 23 March 2015 to 24 April 2018, and specifically for 25 April to 3 July 2015. Ms X replied she was reluctant to send more information as it appeared the Council had lost information she sent. The Council replied that she needed to provide the information it had asked for or proof that she already provided it.
67. Ms X replied on 7 February. She provided information and documents she had previously provided.
68. The Council reassessed the claim on 14 February 2019. The Council calculated it had underpaid Mr Y by £917.98. As this left a balance owing of £72.26 the Council wrote this off.
69. The Council says the officer who did the assessment made many mistakes. It says the officer reassessed the whole claim from August 2014 and underestimated Ms X’s earnings. The Officer did not remove Ms X’s earnings for April to July 2015. The Council says the Officer should only have looked at the period from April to July 2015 and removed Ms X’s income. It says if done correctly the officer would have established the Council had underpaid Mr Y £401.71, leaving a balance of £588.42; which it would not have written off.
70. The Council says Ms X and Mr Y did not tell it about some changes in income and advised it late at other times. It says this is what lead to the overpayments. It accepts it has made several errors on the claim. It says Ms X and Mr Y had an overall financial benefit from this. It says it does not have to assess a decrease in income the claimant has not notified it about in time, unless it is subject to an overpayment. It says it could raise new overpayments for this but does not intend to do so.

Fault and injustice

Failure to act on information provided

71. The Council says Ms X and Mr Y did not tell it about their changes in income in 2015. On the balance of the evidence I consider they did. I say this because:

• The Council has lost other evidence and information on the case. The Council says there is no evidence it has lost information. My investigation shows otherwise. It has lost letters to and from Ms X; for example, the complaint correspondence of January 2018. It lost the HMRC notification of a decrease in Ms X’s Child Tax Credit and removal of Working Tax Credit in January 2017. In October 2018 the Council said it could not trace evidence Ms X said she provided and asked for it again.
• If they were trying to hide Mr Y’s income from March 2015, they would have expected to receive full housing benefit from April 2015 when Ms X left her job.
• The information the Council received from HMRC about Mr Y was wrong.
• The Council has given contradictory responses on the information it had about Ms X’s income in 2015. Overpayment notice 1 of November 2016 said the Council had recalculated based on new income details for “you/you partner”. In October 2018 it said it raised overpayment 1 because the October 2016 HMRC notice showed a change in Ms X’s income. In December 2018 the Council said it had a record Ms X was employed until 3 July 2015. The Council now says both these statements were incorrect. It says it only had new information about Mr Y’s income. It said its notice meant there had been a change in either Ms X’s or Mr Y’s income. However, I must assume the officers who wrote the letters of May and December 2018 had seen some evidence on which they based their statements.

72. The Council’s failed to act on information Ms X and Mr Y provided in November and December 2016. It then wrongly cancelled the claim in January 2017 and raised an overpayment. It quickly reversed this decision but It caused injustice as it added more confusion.
73. On 27 January 2017 Ms X told the Council it had her income wrong from April to July 2015 and provided evidence. She told the Council again in November 2017 and January 2018, again including evidence. She told the Council again in August 2018, October 2018 and February 2019, again with evidence. The Council never acted on this information. This is fault. It caused injustice due to a failure to properly assess underlying entitlement. This went on for over two years and caused unnecessary time and trouble to Ms X who had to keep repeating the information.
74. The Council failed to act on information about a decrease in Child Tax Credits and the end of Working Tax Credits that Ms X and the HMRC told it about in January 2017. It did not make this change until it received a new notification from HMRC in August 2017. This is fault. It caused injustice as Ms X received less Housing Benefit than she should have.
75. The Council correctly says it is not responsible for the mistake made by HMRC when it imposed the benefit cap on Ms X and Mr Y. However, the Council did not tell Ms X how to challenge this. If it had done Ms X could have contacted HMRC and got it to remove the £128.73 maternity allowance she did not get. Mr Y would then have received and extra £46.78 in Housing Benefit in August 2017.
76. The Council asked Ms X for information she already provided. From April 2016 Mr Y provided ongoing wage slips to the Council Council. In January 2017 Ms X provided wage slips and P45s for her and Mr Y from March 2015 to January 2017. In May 2017 Mr Y provided a wage slip and contract for Ms X’s new job.
77. On 31 December 2018 the Council told Ms X it could not trace the evidence she said she had provided. It wanted evidence of Ms X’s income from 23 March 2015 to 24 April 2018. The Council already had Ms X’s income details from March 2015 to August 2017. It did not need Ms X’s income from August 2017 to April 2018 as neither Ms X nor Mr Y claimed Housing Benefit for this period. When Ms X questioned this the Council refused to reconsider unless she provided the information. This is fault. It caused Ms X injustice as she had to find the information and send it again.

Delays in responding

78. Ms X wrote to the Council on 16 November 2017 and sent a reminder on 25 January 2018. The Council says it responded on 23 May 2018. This is a significant delay amounting to fault. Ms X says neither she nor Mr Y received this letter. I accept this. Ms X complained about the lack of response on 31 May 2018. She told the Council she was still waiting for a response in August 2018. The Council did not offer to send her another copy.
79. If Ms X had received the letter it would not have helped. It did not address the issues she raised. It also asked for proof of her income in 2017 instead of Mr Y’s
80. The Council did not respond to Ms X’s complaint of 31 May 2018. It intended to but failed to send the email. This is fault.

The November 2017 appeal

81. The Council says Ms X’s letter of 16 November 2017 was not a properly made appeal. This is probably correct, but it did not tell Ms X this. As said above it did not draft a reply asking for more information until 6 months later. This is fault. It did not send her a copy of the letter when Ms X said she had heard nothing. This is fault. By this time Ms X and Mr Y were out of time to appeal. I cannot know if any appeal would have succeeded but Ms X lost the opportunity for this.

The decision to demand payment from Ms X and her appeal against this

82. The Council failed to tell Ms X about her right of appeal when it decided it could recover the overpayments from her. This is fault
83. Ms X sent a valid appeal against making her responsible for the debt on 28 August 2018. The Council’s response of 15 October 2018 fails to address the subject matter of the appeal. This is fault. The officer then failed to forward the appeal to the Tribunal. This is fault. This caused injustice as Ms X had the threat of recovery hanging over her until February 2019 when the Council reassessed the claim.
84. The Council now accepts it could not make Ms X liable for the overpayment. This is fault. This caused further injustice as Ms X would have won her appeal if the Council had dealt with it.
85. The Council accepts it has made many mistakes and sometimes not paid enough benefit. It says despite this, Ms X (and Mr Y) have benefitted from this. It points to payments it made when it should not have done. It says it could now raise new overpayments for these periods but will not.
86. I will address each of these in turn.
87. The underpayment of £126.72 created on 17 February 2017 for July to August 2016. The Council says it should not have paid this as Ms X did not tell it about the decrease in her income at the time, so this payment was an overpayment. This means Ms X did benefit from the mistake but not financially as the Council only paid her what she would have been entitled to if she reported it at the time. As the Council lost other information it is possible she did report it at the time.
88. An overpayment due to officer error is recoverable only if it is reasonable for the claimant to know there was an overpayment. In my view neither Ms X nor Mr Y could reasonably know this was an overpayment. In any event if the Council raises an overpayment it would have to consider underlying entitlement. When it did this it would need to consider Ms X’s actual income at the time. This would wipe out the overpayment.
89. The calculations of February 2019 where the Council says the Officer should not have calculated the whole claim back to August 2014, but only looked at April to June 2015. The Council says on top of this the officer used too low an income for Ms X. The same arguments apply. Ms X could not have known this was an overpayment. If the Council did raise an overpayment now it would have to consider underlying entitlement. Even considering the income used this would substantially reduce the overpayment.
90. Therefore, I conclude the Council has no grounds for saying it could recover the above payments as overpayments. Instead the Council still needs to calculate the correct underlying benefit for April to July 2015.
91. The officer error of July 2017 when assessing Ms X’s income and the reassessment of October 2017 when the Council removed some income earned by Mr Y. With all the mistakes made by the Council I do not consider it was reasonable to expect Ms X or Mr Y to know the Council had overpaid them. I also consider these overpayments balance out the underpayments the Council accepts it made.
92. The Council says it needs to take action to improve its level of service. It also says it will review its procedures.
93. We provide guidance on remedies. Where a council has caused avoidable distress we usually recommend a payment of between £100 and £300. Whine a council has caused unnecessary time and trouble we also recommend a payment of between £100 and £300. I consider the distress, time and trouble the Council caused Ms X merits the highest end of both these payments.

Agreed action

94. To put matters right for Ms X within one month of my final decision the Council will:-

• Apologise to Ms X.
• Reassess the Housing Benefit claim for April to July 2015.
• Pay Ms X £600 for the avoidable distress, time and trouble it has caused her.
• Provide us with evidence it has reviewed its procedures.

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Final decision

95. The Council is at fault and had caused injustice. The Council has agreed to provide a remedy for this. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman