Summary: Miss X had to keep providing information to the Council because of a problem with its online system. As it did not think Miss X had provided the information, the Council ended Miss X’s benefit claims. It then wrongly advised Miss X to claim Universal Credit so she lost her working tax credit. The Council has since made up the financial difference to Miss X through Direct Housing and Hardship payments. However, from March to late September Miss X was in dire financial circumstances. The Council will apologise to her and provide a payment for the distress, time, and trouble it caused.

The complaint

1. Miss X complains the Council lost information she sent it and wrongly ended her claims for housing benefit and council tax reduction. She says the Council told her to claim Universal Credit instead, which resulted in a drastic drop in income, including the loss of working tax credits and a threat she might lose her home.

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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. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
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 Miss X and discussed it with her. I asked the Council for information and considered what it provided.
8. Miss X could appeal to different tribunals about the Council’s decisions to end her claims for housing benefit and council tax reduction. I have exercised discretion to consider the complaints as Miss X says she did not get a decision letter and then the Council did not deal with her appeal.
9. Miss X and the Council had an opportunity to comment on a draft version of my decision. I considered their comments before making a final decision.

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What I found

Universal Credit

10. Universal Credit (UC) is gradually replacing six different benefits for working age claimants. These are Income Support, Income Based Jobseeker’s Allowance, Income Based Employment and Support Allowance, Housing Benefit and Child Tax Credit and Working Tax Credit. These six benefits are now called legacy benefits.
11. Anyone making a new claim for help with their rent in Newcastle will need to make a claim for UC, instead of Housing Benefit.
12. Claimants already in receipt on Housing Benefit do not currently need to move to UC unless they have a change in circumstances.
13. If someone makes a claim for UC, their claim for any legacy benefit ends and will not be reinstated.
14. The DWP apply a minimum income floor to self-employed people claiming UC. The DWP expects single people of working age to work 35 hours a week. It calculates the income floor by multiplying 35 hours at the minimum wage and taking off £92.95 for tax and national insurance. The DWP then use this figure to calculate UC, even if the claimant does not earn this amount and does not work full time.
15. The Council’s website provides information on UC and legacy benefits. This says:

“If someone is on one or more of the ‘legacy benefits' and has a change in circumstances which would have meant a claim for another 'legacy benefit', they may have to claim Universal Credit instead unless an ‘exception’ below applies. There are also many circumstances where they do not have to claim Universal Credit and can remain on their ‘legacy benefit(s)’. In which case some may have the option to choose but this will require a better off comparison calculation between ‘legacy benefits' and Universal Credit.” 

16. The Council has also produced an information sheet entitled: “What can lead to a claim for universal credit,” This advises people if they have a legacy benefit such as housing benefit or working tax credit they can stay on these benefits if they would be better off. It says an experienced advisor should ideally do the “better off” calculation.
17. The Council has a Welfare Rights Team for certain disadvantaged groups and those offered a job who need a “better off” calculation.
18. The Council still deals with claims for council tax reduction.
19. The Council can pay a discretionary housing payment to claimants who have housing benefit or a housing element of UC.

What happened

20. Miss X is a self-employed part-time worker. She received housing benefit and council tax reduction from the Council and working tax credits from HMRC. Miss X is a tenant of Your Homes Newcastle (YHN) an arms-length company managing council housing on behalf of the Council.
21. In 2018 the Department for Work and Pensions asked councils to review housing benefit claims for self-employed claimants.
22. In December 2018 the Council asked Miss X for some information. Miss X agreed an extension with the Council to provide the documents as she was suffering from depression and going on holiday.
23. The Council uses a digital process for claims and documents. Claimants upload the items the Council wants.
24. Miss X provided a completed self-employed form in early January 2019. She telephoned the Council and said she was still waiting for a copy of her working tax credit award letter and would provide this and her bank statements to the Council when she had them. The Council says Miss X did not give up-to-date information on the self-employed form.
25. Ms X contacted the Council at the beginning of February to say she had the documents and would upload them. Miss X says she could not upload her financial documents. She says she contacted the Council to tell it. The Council does not have a record of this.
26. On 14 February 2019 the Council sent Miss X a text asking her to fill in another self-employment form and provide the supporting information within a month. On 17 February the Council suspended Miss X’s benefits.
27. Miss X says she uploaded the missing documents on 1 March 2019. She says she used her brother’s computer and he is a witness.
28. The Council says it did not receive the information from Miss X and so cancelled her claims on 18 March. It sent her a letter to tell her this. Miss X says she did not get this letter. All the letters and other documents the Council posted to Miss X do not have her full address. The Council missed the word House from the first line of her address and the name of the street.
29. In March 2019 Miss X says YHN said her housing benefit had stopped. She contacted the Council on 19 March and provided the reference number for the information she had uploaded on 1 March. The Council told her this was her claim reference number and not a document submission reference.
30. Miss X uploaded the documents again on 20 March. She has an automated receipt for this. The receipt says it could take up to 28 days for the Council to deal with documents.
31. The Council says it received the self-employed form but not the other documents. It says it was not aware Miss X had uploaded evidence on a separate online form to support her claim. It says document files larger than 5MB may not upload. It says it can appear to the customer that the information was successfully submitted as it may provide a reference number. It has now checked; and Miss X did submit the information on a separate form which exceeded 5MB and so did not upload but Miss X did receive a reference number.
32. The Council says it has reported this problem to its provider and has introduced a work around for the problem. It says this is not ideal as it relies on the customer giving it the reference number and date of submission so it can manually retrieve the information. It says it is implementing a new online system with a new provider which should be live later this year.
33. On 29 March the Council calculated Miss X’s housing benefit and council tax reduction on the information in her self-employed form. It decided on her income she was not entitled to housing benefit but was entitled to some council tax reduction. It sent Miss X a notification dated 1 April telling her this and giving her appeal rights. Miss X says she did not receive this.
34. In May YHN contacted Miss X again about the rent arrears. YHN said Miss X’s housing benefit had stopped and she might lose her home.
35. Miss X contacted the Council on 30 May. It said it had received a form but no documents from her on 20 March. It said it had calculated her benefits from what was on the form and she was not entitled to housing benefit. The Council said it had written to Miss X on 1 April to tell her this.
36. Miss X said she had not received the letter. The Council said as she had no current claim for housing benefit and had not disputed the Council’s decision to end her benefit, she could not make a new claim for housing benefit and should claim UC.
37. On 31 May 2019 Miss X claimed UC. Miss X lost her working tax credits. The DWP applied the minimum income floor to her claim and said she was not entitled to UC and only paid her a small amount towards her rent.
38. On 5 June Miss X asked YHN to submit her letter of appeal against the Council’s decision to end her housing benefit and council tax reduction. YHN again included the supporting information. As she heard nothing Miss X posted the information to the Council on 11 July.
39. Miss X’s letter gave the history of the claim from December 2018 onwards. She listed all the times she had submitted the evidence and said she had received no letters about her housing benefit and council tax reduction. She said the first she knew her benefits had stopped was an arrears letter form YHN on 29 May 2019.
40. The Council did not treat Miss X’s letter as an appeal as it says she was out of time and she did not give reasons for a late appeal. It decided to reconsider her claim. On 31 July the Council reassessed Miss X’s housing benefit from February to May 2019. It awarded housing benefit. It sent Miss X a notification of this on 1 August with review rights. Miss X says she did not get this letter.
41. The Council did not respond to Miss X’s points that she had submitted information and had not received letters from the Council.
42. On 21 August 2019 Miss X applied for a discretionary housing payment (DHP) to help with her rent. She said she was claiming UC but it only paid a small proportion of her housing costs, and she could not afford the balance from her earnings. The Council refused her application on 23 August saying she was not in receipt of housing benefit or the housing element of UC. On 15 September Miss X wrote to dispute this.
43. Miss X made a complaint about her housing benefit claim on 14 September, asking the complaints department to contact YHN for the details.
44. Miss X had written to YHN to explain why she could not pay more towards her rent. She said because the Council had told her to claim UC she had lost £300 a month income in working tax credits and housing benefit. She said she had other debts and now had to use food banks and sell her belongings. She said she was overwhelmed by the situation was losing her hair, not sleeping and feeling sick. She said because of this she had worked less hours, which made things worse.
45. The Council reconsidered Miss X’s DHP request on 23 September and awarded her £10 a week from 30 August 2019 to 20 February 2020.
46. The Council replied to Miss X’s complaint on 2 October. It said Miss X did not return the self-employed review form and evidence. It said on 20 March it got the form but not the evidence. It said it assessed her claim on what the form said she was not entitled to housing benefit. It said it wrote to her 1 April saying this. It said the officer she spoke to 30 May told her as she had no current housing benefit claim, and she had not disputed this, she should claim UC. It said by this time Newcastle was a UC full-service area so no could not take new housing benefit claims for working age people. It said if she made a late review request, there was no guarantee she would succeed, and UC was not usually backdated. It acknowledged Miss X was not receiving UC. It did not uphold her complaint.
47. The Council did increase Miss X’s DHP to £30 a week and sent £1,145.72 to her rent account.
48. The Council also said from 4 June to 4 August 2019 it gave Miss X council tax reduction at 85% of her liability for council, increasing to 90% from 5 August.
49. Miss X replied it was the Council’s fault it did not get her evidence; she had sent it twice and had a witness. She said she did not get the Council’s letter of 1 April. She said the Council gave her bad advice to go on UC as she lost her working tax credits and most of her housing element.
50. The Council replied on 5 November. It said as Miss X has claimed UC by law it could not reverse this and reinstate her housing benefit. It apologised for Miss X’s loss of income when she claimed UC but said the advice it gave her in May was correct at the time. The Council raised Miss X’s discretionary housing payment to £68 a week until 6 April 2020. It said this would clear her arrears.
51. The Council did not respond to the other points Miss X raised.
52. The Council considered a new application for a DHP in April 2020. The Council paid Miss X £30 a week from April to June 2020 when UC started to cover the full rent.
53. On 6 April 2020 the Government suspended the minimum income floor level for self-employed people in its response to the coronavirus pandemic. Until April 2021 the DWP will assess Miss X’s entitlement to UC on her actual earnings.

The Council’s response to our enquiries

54. The Council says it is not permitted to carry out a “better buy” calculation. It says its advice to Miss X to claim UC was based on the information it had at the time, that Miss X was not entitled to housing benefit. It says Miss X told it she had provided evidence on 30 May but did not pursue this until 6 June when she had already claimed UC. It says Miss X only provided the refence number for her submissions on 2 October and that was when the Council could retrieve her information. It says if it had this before, its advice might have been different.
55. The Council says there are errors on both sides. It says Miss X delayed in providing information. It says its online system let Miss X down and it did not address all the issues in her complaint.
56. It says to help Miss X, as well as the DHP, it has awarded Miss X a hardship payment on her council tax account of £182.86, leaving her with a credit of £195.45 which it has refunded.

Findings

57. The Council says Miss X delayed in providing information. Miss X kept the Council informed of the reasons why she had problems providing the information. She provided information on 1 March 2019 and got a reference number. She provided the information again on 20 March when the Council said it had not received the information she sent on 1 March. It is the Council’s fault in did not receive the information.
58. The Council says Miss X did not give it a refence number until 2 October so it could not trace her documents. The Council never asked Mis X to do this or tell her about the problems with its software. The Council should have asked Miss x for the reference number. Miss X did provide a reference number on 19 March. The Council did not check if there were any documents she had uploaded using this reference. It only told her this was a housing benefit reference number.
59. Once aware that the Council was not receiving her uploads Miss X did what she could to counteract this by asking YHN to send her documents and sending hard copies.
60. Miss X says she did not receive most letters the Council sent her, including the decision to end her claim and then to award her nil housing benefit. I accept this as the Council did not use the full address.
61. When Miss X became aware the Council had ended her claim, she immediately contacted it. The Council told her to claim UC instead. This advice was against Miss X’s best interests as she lost her working tax credits. The Council says the advice was right based on the information it had at the time and it is not permitted to give “better buy” advice.
62. The Council based its advice on it ending Miss X’s housing benefit claim and that she had not appealed against this. The Council did not consider that Miss X told it she had not received the decision letter. Miss X told the Council she received working tax credits. The Council did not take this vital information into account before telling her to claim UC. If the officer could not do a “better buy” calculation, he should have advised Miss X to seek welfare rights advice. That the Council gave Miss X poor advice is fault.
63. The Council’s own website gives advice about “better buy” and its welfare rights team will give advice about this. I can see nothing that prevents a Council giving “better buy” advice. The Council has provided no evidence to back its claim that it is prevented from giving this advice.
64. The Council did not treat Miss X’s letter of appeal of 5 June 2019 as an appeal. It says Miss X did not give a reason for the late appeal. She did. She said she had not received the decision letter and had only found out about it on 29 May 2019. The Council is at fault for not considering if it should accept a late appeal.
65. The Council accepts it is at fault for not responding to Miss X’s points she had provided the information and had not received letters from the Council.
66. The Council is at fault for turning down Miss X’s original claim for a DHP on the incorrect grounds she did not get a housing element from UC.
67. I must consider what injustice the Council’s faults caused Miss X.
68. Because of failures in the Council’s online system Miss X was put to considerable time and trouble resending information. The Council did not check if Miss X had sent the information, even when it sent her complaint responses.
69. Because of fault by the Council Miss X claimed UC and lost about £300 a month in income. From September 2019 onwards the Council has mitigated her losses with DHP’s and hardship payments. However, Miss X was left from March to the end of September in dire financial straits, using food banks, selling her possessions, this affected her health.
70. Although the Council did not treat Miss X’s appeal as an appeal it did reconsider and 8 weeks later reinstated her housing benefit from February to May 2019. Although the Council delayed in the reconsideration and did not tell Miss X it had rejected her appeal, I consider, as it reconsidered, the injustice this caused is limited to further distress.
71. We publish guidance on remedies. Where fault by a council has caused distress, we anticipate the council should provide a distinct remedy for the distress it caused. We usually recommend a “modest” amount of between £100 and £300. We recommend more if the distress is greater, for example the severity of the distress, the length of time, and, if the complainant is vulnerable. In this case Miss X’s health suffered and she was in severe financial difficulties. I consider this case merits double our usual highest amount.
72. The Council also caused Miss X unnecessary time and trouble. We usually recommend a payment between £100 and £300 for time and trouble. I consider the unnecessary time and trouble the Council Miss X merits the high end of our scale

Agreed action

73. To put matters right for Miss X within one month of my decision the Council will

• Apologise to Miss X; and
• Pay her £900 for her distress, time and trouble.

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Final decision

74. The Council is at fault and has 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