Summary: Mr X complains the Council is wrongly taking recovery action regarding a Housing Benefit overpayment and hasn’t dealt with his complaint properly. The Council is at fault because Mr X was not advised of his appeal right and it delayed dealing with Mr X’s complaint. Mr X was not able to exercise his appeal rights. The Council has agreed to pause its recovery action and re-issue the overpayment letter to Mr X.

The complaint

1. Mr X complains the Council are wrongly taking recovery action for Housing Benefit overpayments that he does not owe and haven’t dealt with his complaint properly because it didn’t follow the complaints process, didn’t consider his request to pause recovery action while his complaint was investigated and has started to deduct money from his earnings before considering his complaint.
2. Mr X says he is suffering financial loss as deductions are being taken from his earnings and he has suffered distress at work.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this report, we 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. We 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)
4. When considering complaints, if there is a conflict of evidence, we make findings based on the balance of probabilities. This means that we will weigh up the available relevant evidence and base our findings on what we think was more likely to have happened.
5. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), 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 have spoken to Mr X about his complaint and considered the information he has provided to the Ombudsman. I have also considered the Council’s response to his complaint and its response to my enquiries.
8. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Benefit overpayments

9. If a council reviews a claim and decides it has paid too much benefit, this is an overpayment.
10. Councils can recover an overpayment from the claimant or the person to whom it made the overpayment, for example the claimant’s landlord if a council has made a direct payment. The person from whom the authority decides to recover an overpayment can appeal.
11. Housing Benefit regulations state the minimum information that should be included in a decision notice about overpayments, including the right to apply for a revision of the decision or appeal against it and the manner and time to do so.
12. A person who has received an overpayment decision notice has a right of appeal to a First Tier Tribunal (FtT) against some relevant decisions (whether as originally made or as revised or superseded) that the Council makes on a claim, or on an award of Housing Benefit.
13. The Department for Work and Pensions publishes a Housing Benefit overpayments guide. Paragraphs 4.240-4.243 says it is good practice to not start recovery until the end of the one-month appeal period. Recovery action should also be suspended if a claimant appeals.
14. The Government published a Good practice guide titled, “Pursuing Housing Benefit overpayment recovery effectively”, in 2015. This sets out the powers to recover Housing Benefit debt through a Direct Earnings Attachment (DEA) without County Court action and an effective recovery timeline.

What happened

15. Mr X lived in rented accommodation. He applied for and received housing benefit while he lived there.
16. Mr X moved out of his accommodation in October 2008. The Council continued to pay housing benefit to him until June 2012.
17. The Council then sent notification to Mr X about the overpayment of £14,000 Housing Benefit including a final demand for the overpayment in July 2012.
18. The Council took no further action about the overpayment until November 2018, when it restarted recovery action. Mr X responded to the Council saying he disagreed that there had been any overpayment of housing benefit.
19. A year later, in November 2019, the Council sent Mr X another final demand for housing benefit overpayment. Mr X again disputed the overpayment.
20. In December 2019, the Council took further recovery action by Direct Earnings Attachment (DEA) with Mr X’s employer.

Analysis

Housing Benefit overpayment

21. Mr X says he thought he had applied for Incapacity Benefit, not Housing Benefit. I am not persuaded by the argument that he did not apply for Housing Benefit because he completed a Housing Benefit claim form and received letters from the council asking for more information. Mr X did apply for Housing Benefit.
22. I have seen records from the Council showing Housing Benefit payments made to Mr X. Mr X disputes those payments and says due to the delays he is now unable to obtain bank records to disprove the Housing Benefit overpayment.
23. The Council became aware of the Housing Benefit overpayment to Mr X in 2012. I have seen a copy of the overpayment notification the Council sent to Mr X in 2012. It contained the required information and outlines Mr X’s right of appeal.
24. The Council missed opportunities to identify the apparent overpayment at an earlier time because:
• The Council agrees Mr X’s landlord contacted the Council in 2009 to advise Mr X’s tenancy had ended.
• The Council agrees Mr X informed its Council Tax department that he had moved house in June 2009.
25. The Council accepts it did not pass this information to its Housing Benefit department and has apologised for this. I note that Mr X also had a duty to inform the Housing Benefit department himself. There is no evidence to show he did this. Mr X says he telephoned the Council in June 2009 to say he had moved out.
26. Mr X says he did not receive the overpayment notification in 2012 because the Council sent it to the wrong address. Mr X says he told the Council about his change of address and he was contactable at that address until 2016. The Council says it wrote to Mr X at his last known address provided by the Department of Work and Pensions.
27. Mr X contacted the Council to dispute the overpayment quickly, after the Council restarted recovery action and contacted him in 2018. The letter before action sent to Mr X in November 2018 does not contain information about a right of appeal. On the balance of probabilities, Mr X did not receive the original overpayment notification from the Council in 2012. This is fault by the Council. Mr X has not been able to exercise his right of appeal.
28. The Council accepts that there was significant delay between it becoming aware of the overpayment and recovery action being taken. It says this was initially due to lack of resources between 2012 and 2018 and then further delayed for a year due to a backlog in correspondence. There is no time limit on recovery action and so this is not fault by the Council. However, I note that the timescale outlined in the Housing Benefit overpayment recovery good practice guide published by the Government indicates that recovery action should be taken after 52 days. Although not fault, the seven year delay by the Council between 2012 and 2019 does not constitute good practice and the length of delay has impacted on the availability of evidence.

Complaint handling and suspension of recovery action

29. Mr X disputed the Housing Benefit overpayment in November 2018 and again in November 2019. The Council accepts that it did not deal with Mr X’s correspondence from November 2018 until a year later. This is fault by the Council. It did not respond to Mr X’s complaint in 2018.
30. The Council responded to Mr X saying the overpayment was still recoverable and it initiated recovery action in late November 2019. These actions, (although not the timescales as noted in paragraph 28 above), are in accordance with the Housing Benefit overpayment recovery good practice guide. This is not fault by the Council.
31. The Council also dealt with Mr X’s complaint through its corporate complaints procedure. Mr X asked the Council to suspend the DEA while it dealt with his complaint. The Council had not issued a corporate decision to stop all debt recovery process but had decided that any request to temporary suspend recovery would be dealt with on individual basis taking into account how the current issues have affected the debtor.
32. The Council considered Mr X’s request to suspend recovery action because it decided to send a financial assessment to Mr X for him to complete and return with supporting evidence. The Council noted that the DEA would remain in force but that any reduction in Mr X’s earnings before the assessment would be reflected in the amount of deduction that was applied.
33. The Housing Benefits overpayment guide says recovery action should be suspended if a claimant appeals. There is no requirement for the Council to suspend recovery action while dealing with a complaint through its corporate complaints process. This is not fault by the Council.

Agreed action

34. To remedy the injustice caused by the fault I have identified, the Council has agreed to take the following action within 4 weeks of this decision:
• Re-issue the overpayment notification to Mr X, advising him of his appeal right.
• Suspend recovery action from Mr X until the time period for an appeal to be made has expired without Mr X exercising that right, or the outcome of any appeal is known, whichever is sooner.

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Final decision

35. I have found fault by the Council causing Mr X injustice. Subject to further comments by Mr X and the Council, I intend to complete my investigation.

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Investigator's decision on behalf of the Ombudsman