North Devon District Council (19 021 236)

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

Decision : Upheld

Decision date : 22 Feb 2021

The Ombudsman's final decision:

Summary: Miss B complained the Council wrongly told her she would be able to claim housing benefit when she moved to North Devon. Miss B said she could not claim housing benefit when she moved, and this put her in financial difficulty. The Council was at fault for implementing the Amendment of the Universal Credit (Transitional Provisions) Regulations 2014 in June 2018 before the ruling came into effect in January 2019. The Council incorrectly told Miss B her benefits would be unaffected if she moved and wrongly paid her housing benefit. This caused injustice to Miss B. The Council agreed to make a financial payment to Miss B to acknowledge the impact of its fault.

The complaint

  1. Miss B complained the Council wrongly told her she would be able to claim housing benefit when she moved to North Devon. Miss B said she could not claim housing benefit when she moved, and this put her in financial difficulty.

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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. We cannot investigate a complaint if someone has appealed to a tribunal. (Local Government Act 1974, section 26(6)(a), 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

  1. I considered:
    • Miss B’s complaint and the information she provided;
    • documents supplied by the Council;
    • relevant legislation and guidelines; and
    • the Council’s policies and procedures.
  2. Miss B and the Council had the opportunity to comment on a draft decision. I considered any comments before making a final decision.

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What I found

Legislation and Guidance

  1. Housing benefit helps people on low incomes to pay their rent. It is a means-tested benefit linked to both savings and income.
  2. Universal credit is a payment to help with people with their living costs. Universal credit is replacing other benefits including housing benefit and income-related Employment and Support Allowance (ESA). The benefits replaced by universal credit are referred to as legacy benefits.
  3. Severe Disability Premium (SDP) is an extra amount included in some means-tested benefits to help with the cost of disability. There is no equivalent to the Severe Disability Premium in universal credit. (Department for Work and Pensions, (revised) HB gateway: severe disability premium and claimants with 3 or more children guidance, 2019)
  4. In June 2018, the Secretary of State for Work and Pensions set out the government’s plans to provide for claimants who receive the SDP as part of their income-related benefits. (Department for Work and Pensions, (revised) HB gateway: severe disability premium and claimants with 3 or more children guidance, 2019)
  5. From January 2019 to January 2021, claimants entitled to an award of SDP were/are prevented from making a new claim to universal credit. These claimants would/will continue to receive the relevant legacy benefit(s) appropriate to their change of circumstance and only move to universal credit via managed migration (Amendment of the Universal Credit (Transitional Provisions) Regulations 2014). This safeguards claimants existing benefit entitlement and is referred to as the SDP gateway. (Department for Work and Pensions, (revised) HB gateway: severe disability premium and claimants with 3 or more children guidance, 2019)
  6. Until these regulations came into force, claimants entitled to an award of SDP who had a change of circumstance were legally required to make a new claim to universal credit. (Department for Work and Pensions, (revised) HB gateway: severe disability premium and claimants with 3 or more children guidance, 2019)

Council’s complaint procedure

  1. Stage one - The feedback team will acknowledge receipt of the complaint within three working days. An Investigation Officer will respond to the complaint within eight weeks. If the complaint is lengthy or complex, the Council may need longer to investigate the issues. The Council will keep the complainant updated with an expected response date.
  2. Stage two - The feedback team will acknowledge the escalation of the complaint within three working days. The feedback team will do a further independent investigation into the complaint within four weeks. The Council may need longer to investigate if the complaint is lengthy or complex.

What happened

  1. This chronology includes key events in this case and does not cover everything that happened.
  2. Miss B considered moving to North Devon. She says she spoke to the Council in June 2018 and asked if it was a universal credit area. She says the Council told her it was not, and there was no date set for it to become one. She said the Council confirmed if she moved, she would be able to apply for housing benefit. Miss B said she did not want the added stress of having to move to universal credit alongside a house move given her health difficulties. The Council does not have a record of these telephone calls because Miss B was not a resident in their area at the time.
  3. North Devon became a full-service universal credit area in July 2018.
  4. Miss B moved to North Devon in August 2018 and made a housing benefit application. The Council accepted Miss B’s application and awarded housing benefit.
  5. The Council cancelled Miss B’s housing benefit claim in November 2018. It wrote to her to explain its decision. It told her in June 2018 the High Court ruled the absence of transitional protection for SDP claimants who had to claim universal credit instead of housing benefit following a move to a new local authority was unlawful. And in response, the Department for Work and Pensions developed the SDP gateway, and it was on this basis it accepted her housing benefit application. However, the SDP gateway did not come into effect until January 2019 and therefore it should have refused her application for housing benefit in August 2018 and told her to make a claim for universal credit. It said it would not seek to recover the housing benefit it paid her in error.
  6. In December 2018, Miss B complained to the Council. Miss B said she would not have moved to this Council if it had given her correct information about housing benefit. She explained she moved to North Devon because she was having problems with her landlady, always wanted to live in the area and had a support network nearby. However, she stressed she would not have moved if she had known it would have affected her benefits. She said she would appeal its decision to cancel her housing benefit. The Council told her it would forward her appeal to Her Majesty’s Courts and Tribunals Service and sent her a copy of its appeal papers.
  7. The Council responded to Miss B’s at stage one of its complaint procedure in February 2019. The Council apologised for wrongly telling her she would be able to claim housing benefit when she moved to North Devon. It explained it incorrectly interpreted the new legislation and wrongly introduced the SDP gateway from June 2018, which meant it awarded her housing benefit in error. It advised because the SDP gateway did not come into effect until January 2019, and at this time she was not receiving SDP, she was not eligible for the SDP gateway and could not remain on her legacy benefits. The Council said there were many reasons Miss B chose to move to North Devon and her decision was not just based on the housing benefit advice it gave her.
  8. The Council confirmed it would not seek to recover the housing benefit overpayment because it was an official error. The Council advised her to make a claim for universal credit immediately to avoid losing out on any entitlement.
  9. In March 2019, Her Majesty’s Courts and Tribunals Service told the Council Miss B had withdrawn her appeal. Miss B told the Council when she received the tribunal paperwork her health had worsened, and it was impossible to continue with her appeal.
  10. Miss B made an application for a discretionary housing payment in April 2019. Miss B said she had lost her entitlement to housing benefit and would not have moved to North Devon if the Council had given her the right information about her benefits. Miss B’s MP supported her application. The Council decided Miss B was not eligible for a discretionary housing payment.
  11. Miss B complained to the Council again in September 2019. The Council responded to Miss B’s concerns while the feedback team were undertaking the stage two investigation.
  12. The Council replied at stage two in October 2019. It apologised for the delay. It told Miss B it did not understand how its staff had given her the wrong information about the Council becoming a full-service universal credit area in July 2018 because they had all received training in advance. It said it could not make a judgement about the advice she had been given, because there were no records for the telephone calls she referred to.
  13. The Council explained it introduced the SPD gateway in June 2018, rather than January 2019, in error. The Council said because Miss B was receiving SDP when she made her housing benefit claim in August 2018, it accepted her application. However, this was a mistake because the SDP gateway did not come into effect until January 2019. When it realised, it cancelled her housing benefit claim. When the SDP gateway came into effect in January 2019, Miss B was not receiving SDP and therefore not eligible to apply for housing benefit. The Council confirmed it would not seek to recover the housing benefit overpayment it made in error.
  14. It appreciated Miss B said she would not have moved if it had given her the right information, but it understood there were several reasons why she moved.

Analysis

  1. The Council was at fault for misinterpreting the Amendment of the Universal Credit (Transitional Provisions) Regulations 2014 and implementing this in June 2018 before the ruling came into effect in January 2019. It gave Miss B advice and paid her housing benefit based on its misinterpretation of the regulations and this was fault.
  2. The Council wrongly paid Miss B housing benefit for six weeks. This resulted in an overpayment of housing benefit. The Council did not seek to recover this overpayment because the payments were the result of an official error.
  3. Miss B said she would not have moved to North Devon if the Council had given her the right information about the impact on her benefits. She says she cannot afford to pay her rent without housing benefit. The Council said there were several reasons that influenced Miss B’s decision to move which is supported by the letter it received from Miss B in December 2018. Therefore, there is uncertainty about what decision Miss B would have made if the Council had given her the right information. Because of the Council’s fault, Miss B lost the opportunity to make an informed choice.
  4. The Council’s stage two response was delayed by three weeks. The Council apologised for the delay. This delay is not considered to have caused Miss B significant injustice because the Council was in contact with her throughout the period of delay.

Agreed action

  1. Within one month of the final decision the Council will pay Miss B £300 for distress caused by uncertainty and lost opportunity.
  2. The Council should provide the Ombudsman with evidence these actions have been completed.

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Final decision

  1. I have completed my investigation and uphold Miss B’s complaint. Miss B has been caused an injustice by the actions of the Council. The Council has agreed to take action to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman

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