Summary: The Ombudsman does not find fault with the way the Council handled Mr B’s housing benefit overpayment debt that was listed on a Debt Relief Order (DRO).

The complaint

1. Mr B complains the Council wrongly made deductions from his pension for an unpaid Housing Benefit debt covered by a Debt Relief Order (DRO). Mr B also complains the Council sent him an invoice for the debt after it was already aware of the DRO.
2. Mr B says this caused him financial hardship, anxiety and distress.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. I considered the information provided with Mr B’s complaint. I made enquiries with the Council and considered its response with the relevant law and guidance.
6. Mr B and the Council had the opportunity to comment on my draft decision. I carefully considered the comments I received.

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What I found

Debt Relief Orders (DRO)

7. The Insolvency Service is responsible for administering Debt Relief Orders (DROs). A DRO is a simplified, cheaper alternative to bankruptcy. People who have debts of less than £20,000, assets of less than £1,000 and under £50 per month disposable income can apply for a DRO.
8. Companies and organisations cannot recover debts from the DRO applicant if the debt is listed on the order. After a year the debts listed on the DRO are written off.

What happened

9. Mr B had a housing benefit overpayment debt from 2008/9. He successfully applied for a DRO and the housing benefit debt was listed on the order.
10. In November 2019 the Department for Work and Pensions (DWP) told Mr B it would be making weekly deductions from his state pension to recover the debt.
11. On 25 November 2019 Mr B emailed the Council to say it should not make the deductions because the debt was listed on the DRO.
12. The next day the Council sent a request to the DWP to stop the pension deductions.
13. Despite the Council’s request the DWP made three deductions from Mr B’s pension in December 2019.
14. Mr B asked the Citizen’s Advice Bureau (CAB) to help him resolve the issue.
15. Between the 10 and 16 December the Council was in contact with the DWP, Mr B and the CAB. It followed up the request it made to the DWP in November. The DWP said it had been unable to stop three of the deductions. It refunded the money it deducted and stopped any further deductions. The debt was sent back to the Council.
16. In December the Council sent Mr B an invoice for the full debt to be paid by January 2020.
17. Mr B complained to the Council but it did not uphold his complaint.
18. Mr B remained unhappy. The CAB complained to the Ombudsman on his behalf.
19. The Council says the debt invoice was sent automatically. It apologised it did not clearly explain to Mr B he was not required to pay the amount in the invoice, because it was covered by the DRO order.

My findings

20. I do not find fault with the way the Council handled Mr B’s Housing Benefit overpayment debt listed on the DRO.
21. The DRO listed the debt as “DWP (benefit overpayment)”. The addresses listed on the order are not in the Council’s borough. The Council were not aware of the DRO before Mr B emailed in November 2019.
22. When Mr B told the Council about the DRO it acted straight away. I understand the pension deductions caused Mr B worry and financial hardship but that does not mean the Council was at fault.
23. When the Council found out the deductions were taken in December it acted to resolve the issue as quickly as possible. The Council is not responsible for the DWP actions. It is unfortunate the DWP made the deductions, but that does not mean the Council is at fault. It clearly requested the debt be recalled the day after Mr B emailed about the DRO.
24. The Council apologised for the debt invoice it sent Mr B in December. It says this was sent automatically when the debt was returned. Its stage two response confirms the Council would not be taking any action to recover the debt. The Councils actions also support this.

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Final decision

25. I do not find fault with the Council.

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Investigator's decision on behalf of the Ombudsman