Summary: Mr and Mrs Y have made a complaint about the Council wrongly suspending their right to housing benefit. The Council was acting on the reliance of information from the Department for Work and Pensions, but it reasonably should have known the information was wrong. This caused Mr and Mrs Y distress and temporary rent arears. The Ombudsman has therefore recommended specific actions to remedy the injustice.

The complaint

1. The complainants, who I refer to as Mr and Mrs Y, are making a complaint about the Council repeatedly suspending their right to housing benefit without merit. They say this has resulted substantial rent arrears which has led to threats of eviction and distress. As a desired outcome, Mr and Mrs Y want the Council to accept accountability for the alleged fault and make service improvements.

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The Ombudsman’s role and powers

2. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
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. We investigate complaints about councils and certain other bodies. We cannot investigate the actions of bodies such as the Department for Work and Pensions (DWP). (Local Government Act 1974, sections 25 and 34(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).

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How I considered this complaint

6. I have reviewed Mr Y’s complaint to the Ombudsman and Council. I have also had regard to the responses of the Council and supporting documents. Both Mr Y and the Council were given the opportunity to comment on a draft of my decision before I reached a final determination.

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What I found

Background

7. Housing benefit helps people on low incomes to pay their rent. It is a means tested benefit, taking into account both capital and income. Universal credit has been rolled out across the country for most new claims.
8. A council may suspend payment of all or part of a claim in some defined circumstances. The most common of these is when a council has asked for information the claimant has not supplied. Benefit may also be suspended if someone’s DWP benefit ends, pending information. There is no right of appeal against a decision to suspend benefit.
9. If a council reviews a claim and decides it has paid too much benefit, this is an overpayment. Some overpayments are always recoverable. A council has discretion to not recover any overpayment. 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.
10. Most housing benefit decisions (e.g. an overpayment calculation) have appeal rights. The claimant can first ask the local authority to 'reconsider' (internally review) its decision. There is then a right of appeal to the independent benefits tribunal (the First-Tier Tribunal) administered by the Ministry of Justice, through its HM Courts and Tribunal Service.
11. Attendance Allowance helps with extra costs if a person has a disability severe enough that they need someone to help look after them. This includes physical disability (including sensory disability, for example blindness), a mental disability (including learning difficulties), or both. If the person has a carer, they could get Carer’s Allowance if the affected person has substantial caring needs.

Chronology of events

12. In August 2020, Mr Y made a claim for attendance allowance. The claim was accepted by DWP. Mrs Y later made a claim for carers allowance. However, as Mrs Y was already in receipt of her state pension, she was not eligible to receive a carers allowance.
13. In October 2020, the Council updated Mr and Mrs Y’s claim for housing benefit when it received notification from the DWP that Mrs Y was in receipt of carers allowance. This meant the claim for housing benefit was suspended. This is because a payment of carers allowance would reduce Mr and Mrs Y’s entitlement to housing benefit. An overpayment in housing benefit was calculated for the period of August to October 2020 and the Council afterwards billed Mr and Mrs Y.
14. In November 2020, the Council received further information from the DWP and again suspended Mr and Mrs Y’s claim for housing benefit. This resulted in Mr and Mrs Y owing rent arrears to their landlord. This led Mr and Mrs Y to make a complaint to the Council.
15. In December 2020, the Council upheld Mr and Mrs Y’s complaints. It said the information received from the DWP was inaccurate which in turn led to incorrect overpayment calculations. The Council accepted its staff should have known it was not possible for Mrs Y to be in receipt of carers allowance and her state pension. It therefore apologised for the error and created an underpayment to balance Mr and Mrs Y’s housing benefit account.
16. In January 2021, Mr and Mrs Y submitted an escalated complaint to the Council. They said the Council apology was insufficient and dismissive that the alleged fault had occurred for the previous four months resulting in distress. The Council responded to again apologise for the fault.

My findings

17. The principal matter of Mr and Mrs Y’s complaint is the Council suspended their entitlement to housing benefit between October and November 2020. The Council suspended the benefit claim by acting on the reliance of information provided by the DWP that Mrs Y was in receipt of carers allowance. This is because any added benefit would in effect reduce their entitlement to housing benefit, therefore resulting in the Council making an overpayment.
18. In normal circumstances, it is reasonable for local authorities to suspend a benefit entitlement where there is a risk of overpayments being made. This is because local authorities have a duty to safeguard public money. Further, I recognise the challenges the Council faces given the reliance it must have on information from the DWP and the practicality of verifying all the data it receives for every claimant.
19. However, in this case, it is evident the DWP provided incorrect information to the Council. Further, the Council has conceded that it reasonably ought to know this information was incorrect given it is well established a claimant cannot claim carers allowance if in receipt of their state pension. For the avoidance of doubt, the DWP is not a body I have the legal authority to investigate. That said, there was minor fault by the Council and I must have regard to whether Mr and Mrs Y suffered an injustice.
20. I recognise the distress this matter would justifiably have caused Mr and Mrs Y, particularly considering the benefit suspension led to rent arrears. However, the Council has remedied their rent arrears and offered an apology for the distress they experienced. On balance, I do not consider the remedy sufficient and so I have recommended the Council take specific actions.
21. A further aspect of Mr and Mrs Y’s complaint is that the suspension of their housing benefit led to them receiving bills for overpaid housing benefit. By law, I cannot investigate a complaint in circumstances where the complainant has a right of appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. Though there does not exist a right of appeal for the suspension of housing benefit claims, there does with respect to overpayments created by the Council. I have seen no evidence it would have been unreasonable for Mr and Mrs Y to exercise their right of appeal. Further, the Council signposted Mr and Mrs Y to this appeal right in its correspondence to them on the subject. For these reasons, I do not have jurisdiction to investigate this part of the complaint.

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Agreed action

22. In light of the injustice identified above, I recommend the Council take the following actions:

• Within a month of this final decision, it will pay Mr and Mrs Y £150 each for distress and uncertainty.
• Within three months of this final decision, it will undertake a review of its processes with respect to the suspension of housing benefit claims. This review should be targeted at identifying service improvements for claims suspended due to the customer also claiming carers allowance.

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Final decision

23. The Council was at fault for not verifying information from the DWP it reasonably ought to know was incorrect. This caused Mr and Mrs P an injustice and so I have recommended specific remedies.

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Investigator's decision on behalf of the Ombudsman