Summary: Mr X complains the Council unfairly sought recovery of overpaid housing benefit from him through the courts. He says the overpayment occurred because of errors made by the Council. He also complains the Council did not give him a reasonable amount of time to make payment. We find no fault in this matter and have concluded our investigation.

The complaint

1. Mr X complains the Council unfairly sought recovery of overpaid housing benefit through the courts. He says the overpayment of benefit was caused because of errors made by the Council.
2. Mr X also complains the Council unfairly sought recovery of council tax via the courts. He says the Council did not give him a reasonable amount of time to make payment.
3. Mr X says the Council’s actions caused him unnecessary upset and financial loss due to the additional court costs.

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The Ombudsman’s role and powers

4. 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)
5. 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)
6. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended)
7. 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

8. I have read Mr X’s complaint and considered the information he provided.
9. I have made enquiries to the Council and considered the information it provided.
10. Mr X and the Council have had the opportunity to comment on a draft of this decision. I have considered their comments before making a final decision.

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What I found

Housing benefit

11. Councils are responsible for administering housing benefits. People have a right to appeal most housing benefit decisions. The claimant can first ask the council to reconsider or review its decision. After a council has reviewed its decision there is then a right of appeal to the independent benefits tribunal called the ‘First-Tier Tribunal’.
12. A claimant must ask for a reconsideration and/or appeal within one month of the date of the decision. Councils can accept a late reconsideration, up to an absolute deadline of 13 months. A Tribunal Service Judge (not a council) considers late appeal requests.
13. Appealable decisions include all decisions on the amount of benefit and its calculation, treatment of income and capital, overpayments, and decisions about who to pay.
14. The Ombudsman cannot look directly at issues such as overpayment of housing benefit or recalculations of housing benefit. These can only be done by a tribunal. However, the Ombudsman can look at a council’s actions surrounding the issue complained about.
15. The Housing Benefit Regulations 2006 say that housing benefit overpayments are recoverable unless they were caused by official error and it was not reasonable for the claimant to have known they were being overpaid.
16. The law says councils can seek to recover debts up to six years from the date of the overpayment.

Council tax and council tax reduction schemes

17. The Local Government Finance Act 1992 gives local authorities the power to levy and collect a dwelling tax. This is known as council tax.
18. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt.
19. In April 2013, the council tax benefit scheme was replaced by locally determined council tax reduction schemes. Council tax reduction (CTR, also known as council tax support) is a discount, not a benefit. If someone is paid too much CTR the Council can reduce the amount of CTR and so increase the amount of council tax owed. We call these changes CTR reversals.
20. To use the various powers available to it to recover unpaid council tax, a council must apply to the Magistrates Court for a liability order against those it believes are liable. Before a council can pursue someone for council tax, it must send a demand. It must also issue at least one reminder notice before issuing a summons for a liability order in the magistrates’ court. Once a council has obtained a liability order it can take recovery action.
21. A liability order gives a council legal powers to take enforcement action to collect the money owed. The Council can decide which recovery method it wishes to use but it can only use one method for one liability order at one time.

What happened

22. Mr X received housing benefit and CTR. The Council calculated entitlement based on Mr and Mrs X’s income and on the circumstances of the family members living with him.
23. In July 2019, the Council reassessed Mr X’s housing benefit and CTR. It received notification from Her Majesty’s Revenue and Customs (HMRC) that Mrs X’s earnings had increased from April 2019. It amended Mrs X’s income details dating back to April 2019.
24. The Council also amended Mr X’s income details and assessed it as both self-employed earnings and earned income from employment. It re-assessed Mr X’s income from July 2019.
25. The Council also amended the status of one of Mr X’s children, whom I shall call Y, from a dependant to a non-dependant. The Council reassessed this change dating back to August 2018 and applied a non-dependant charge.
26. The reassessment created a housing benefit overpayment of £2,511.95 from September 2018 to July 2019. The reassessment created a further separate housing benefit overpayment of £426.00 from April 2019 to July 2019 and meant Mr X was no longer entitled to housing benefit from July 2019.
27. The Council’s reassessment meant Mr X was not entitled to CTR from April 2019. This created a CTR reversal of £1,314.11 which was added to Mr X’s council tax account.
28. Mr X disagreed with the reassessment and asked the Council to review its calculation. In August 2019, the Council reviewed its decision and found it had incorrectly used Mr X’s income details as both self-employed earnings and earned income. It amended Mr X’s claim resulting in continued entitlement to housing benefit but no entitlement to CTR.
29. Mr X asked the Council to review his entitlement to CTR. In September 2019, the Council reviewed his claim and told him he was not entitled to CTR from April 2019 because his joint income with Mrs X was too high. The Council sent Mr X a reminder for unpaid council tax.

What happened next

30. In October 2019, the Council suspended Mr X’s housing benefit because it received information from the Department for Work and Pensions (DWP) that Mrs X had changed address.
31. Mrs X told the Council she had not changed address and Mr X told it that Y was a full-time student. In October 2019, Mr X complained to the Council about the changes to his claim. He said his circumstances were largely unchanged except that Y had taken some time out of education.
32. The Council reassessed Mr X’s claim again and accepted Y’s resumed student status. The reassessment created a housing benefit underpayment of £62.40 which was offset against the outstanding overpayment.
33. The Council replied to Mr X’s complaint and reinstated his claim in November 2019. It said it had amended the claim based on the information it received from HMRC and acknowledged its error in duplicating Mr X’s income details. The Council told Mr X it would recover the remaining overpayment in instalments from his weekly housing benefit entitlement.
34. In November 2019, the Council received another notification from DWP that Mrs X had changed address. It suspended benefit entitlement again as a result.
35. Mr X complained to the Council again about the changes to his claim.
36. In December 2019, the Council received confirmation of Mrs X’s address. It reinstated the claim for housing benefit and replied to Mr X’s complaint. The Council said the overpayment of £2,511.95 was not created as a result of a change of earnings but was caused by Y’s change of status to a non-dependant.

Mr X’s complaint about CTR

37. In January 2020, the Council issued a court summons to Mr X for non-payment of council tax.
38. Mr X attended court in February 2020. He says he paid some of the outstanding council tax arrears before the hearing and attended court so that he could discuss his CTR. Mr X and the Council were unable to reach an agreement regarding the unpaid council tax and the court granted a liability order.
39. Later the same month, the Council sent Mr X a notice of enforcement for unpaid council tax.
40. Mr X complained to the Council in May 2020. He said the council tax arrears were a result of the amendments made by the Council and that he had paid his council tax on time.
41. The Council replied in May 2020. It said it told Mr X about the adjustments to his account caused by the changes to his CTR. It said Mr X had not made payments as required and issued a reminder followed by a court summons. The Council said although Mr X had attended court, he had disputed the CTR assessment and had refused to make an agreement to clear the balance.
42. Mr X escalated his complaint to stage 2 in June 2020 as he remained dissatisfied with the CTR calculation.
43. The Council replied in June 2020. It said it considered the court costs, compliance fee and enforcement action had been applied correctly.
44. Mr X remained dissatisfied with the Council’s response and brought his complaint to us.

Analysis

45. There are two strands to Mr X’s complaint, one regarding the overpayment and recovery of housing benefit and the other regarding the CTR reversal and enforcement action regarding unpaid council tax.

Housing benefit

46. Mr X was able to appeal to the First-Tier Tribunal if he remained dissatisfied with the Council’s housing benefit calculation, and I have seen no reason to suggest it would have been unreasonable for Mr X to pursue this option.
47. The Council says there are no breaks in Mr X’s entitlement to housing benefit. It acknowledges it made an error by duplicating Mr X’s income but says this did not create the overpayment disputed by Mr X. The Council says the overpayment was caused by the change in status of Y, from a dependant to a non-dependant, reducing Mr X’s applicable amount. This is the amount the government says a family needs to live on and is calculated based on the circumstances of the applicant. The Council says the lower applicable amount and the non-dependant charge applied for Y caused the overpayment. The evidence supports this explanation based on the dates of the overpayment.
48. The Council did not seek recovery of overpaid housing benefit through the courts and did not take enforcement action regarding this overpayment. Because Mr X has been in continuous receipt of housing benefit, the Council recovered the overpayment from his ongoing entitlement. The Council is permitted to recover overpaid housing benefit in this way.
49. Whilst I acknowledge the Council made an error in calculating Mr X’s income, it corrected this and amended Mr X’s entitlement once the error was identified. It also apologised to Mr X for its mistake. On this basis, and as this error did not cause the overpayment disputed by Mr X, I have found no fault by the Council regarding this matter.

CTR reversal

50. Mr X was not entitled to CTR from April 2019 based on the Council’s reassessment of Mr and Mrs X’s income. The reassessment created a CTR reversal of £1,314.11 and this was explained to Mr X in the Council’s letter dated 8 July 2019.
51. The Council sent a reminder for unpaid council tax on 11 September 2019 and a summons on 9 January 2020 for a court date in February 2020.
52. I acknowledge Mr X disputes the CTR reversal. However, the court granted a liability order which stated that the unpaid council tax was owed. As stated in paragraph 6, we cannot investigate a complaint about the start of court action or what happened in court.
53. I also acknowledge Mr X says the Council did not provide him with a reasonable amount of time in which to pay. However, the Council says Mr X did not return a form it provided to him to consider a payment arrangement. It also says it offered Mr X an opportunity to make a payment arrangement on the day of the court hearing, but Mr X declined.
54. I must consider if there is fault by the Council in taking enforcement action. The Council told Mr X about the amount of council tax owed and sent a bill. It explained how the bill had been calculated and that payment was due. The Council sent a reminder for the unpaid balance and a court summons when the bill remained unpaid. There is therefore no evidence of fault by the Council in seeking recovery of unpaid council tax via the courts.

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Final decision

55. I have found no fault by the Council and I have concluded my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman