London Borough of Merton (21 013 960)

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

Decision : Upheld

Decision date : 20 Jun 2022

The Ombudsman's final decision:

Summary: Miss X complained the Council incorrectly calculated her entitlement to housing benefit and wrongly refused to award Discretionary Housing Payment which has resulted in significant rent arears. The delays and errors in the way the Council dealt with Miss X’s housing benefit and Discretionary Housing Payment claims amount to fault. This fault has caused Miss X an injustice.

The complaint

  1. The complainant, whom I shall refer to as Miss X complained the Council incorrectly calculated her entitlement to housing benefit and wrongly refused to award Discretionary Housing Payments which has resulted in significant rent arears.
  2. Miss X complained she was assured by council officers that the benefits she received would pay the rent in full, and that she was not told she would need to make a contribution towards the rent to cover any shortfall. She also complains officers failed to assist her in claiming DHP.

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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. 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)
  3. The Social Entitlement Chamber (also known as the Social Security Appeal Tribunal) is a tribunal that considers housing benefit appeals. (The Social Entitlement Chamber of the First Tier Tribunal)
  4. If we are satisfied with an organisation’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. As part of the investigation, I have:
    • considered the complaint and the documents provided by Miss X;
    • made enquiries of the Council and considered the comments and documents the Council provided;
    • discussed the issues with Miss X;
    • Miss 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

Housing benefit and Universal credit

  1. Housing benefit is administered by local authorities to help people on low incomes with their rent payments.  It is a means tested benefit, taking both capital and income into account. Claimants are responsible for ensuring they update the council with any changes in their circumstances. Failure to do so can affect the housing benefit paid.
  2. If someone disagrees with a housing benefit decision they can ask for a review or appeal to the tribunal. If they have a review, and are unhappy with the decision, they can then appeal to the tribunal. The law says people should appeal within one month of the date of the decision they think is wrong.
  3. If a council pays too much housing benefit to someone it will usually ask them to repay it. The law says an overpayment is recoverable unless it was caused by an official error and it was not reasonable to expect the person to realise they were receiving too much benefit. If someone disagrees with a decision that they must repay an overpayment they can appeal to the tribunal. Again, the law says people should appeal within one month of the date of the decision they think is wrong.
  4. Universal credit was introduced in 2013 as a replacement for certain means-tested benefits and is administered by the Department of Work and Pensions (DWP). Universal credit includes an element for the claimant’s rent and replaces housing benefit.

Discretionary housing payments (DHP)

  1. The discretionary housing payments guidance manual issued by the Department for Work and Pensions says councils may award a discretionary housing payment (DHP) where a council considers a claimant needs further financial support. This is towards housing costs. Eligibility depends on the applicant’s entitlement to either housing benefit or the housing cost element of universal credit. The scheme is purely discretionary, a claimant does not have a statutory right to a payment.

What happened here

  1. On 30 July 2020 Miss X made a claim for housing benefit having been provided with temporary accommodation (Property 1) by the Council. Miss X contacted the Council for an update on 10 August 2020 and asked how long the process would take. As she did not receive a response Miss X chased the Council again on 17 August 2020.
  2. Miss X moved to alternative temporary accommodation (Property 2) on 24 August 2020 and made a further housing benefit claim for Property 2. The Council had not processed Miss X’s original housing benefit claim at this stage. When Miss X left Property 1 she had rent arrears of £632.50.
  3. Miss X contacted the Council again on 30 August and 10 September 2020 requesting an update on her application. She was confused about her claim for Universal credit and was concerned she would incur rent arrears as her earnings did not cover the rent. Miss X chased the Council again on 24 September 2020 as the delay in accepting her claim meant she could not afford food or living essentials.
  4. In November 2020 the Council provided Miss X with permanent accommodation at Property 3. By this time she had incurred rent arrears at Property 2 of £3,246. Miss X asked the Council to make a further housing benefit and council tax support claim for her at Property 3 as she did not have the facilities to do so herself.
  5. The Council assessed Miss X’s claim for Property 2 in December 2020 and retrospectively awarded housing benefit of £144.19 per week for the period 24 August to 12 November 2020. It credited Miss X’s rent account with £1,668.48 on 13 December 2020.
  6. In early January 2021 Miss X asked the Council for a discretionary housing payment (DHP) as she was struggling to pay her rent and bills.
  7. A benefits officer responded and advised Miss X the Council could not award housing benefit as Property 3 was not temporary or supported accommodation. They explained she would need to claim the housing element via a Universal credit award. They also noted there was no record on the system of a DHP application. The officer arranged to send Miss X a DHP application form to complete.
  8. At around the same time, the Council wrote to Miss X regarding her claim for housing benefit for Property 1. It confirmed it had awarded £62.10 per week from 30 July to 23 August 2020 and would now credit her rent account by £221.79.
  9. Miss X submitted a DHP application on 25 January 2021. The Council considered this and wrote to Miss X refusing the application on 10 February 2021. It explained that as Miss X did not receive the housing element of Universal credit she was not eligible for DHP. Miss X disputed this decision and asserted she received both Universal credit and a Personal Independence Payment (PIP).
  10. The Council reviewed its decision and advised Miss X the decision to refuse her claim was upheld but the reason for the decision had changed. The Council considered Miss X had sufficient income available to pay her rent and had done since the start of her tenancy.
  11. In April 2021 Miss X made a formal complaint, primarily about the Council’s housing services, but also in relation to the delay in dealing with her housing benefit claims. The Council acknowledged there was a delay in processing Miss X’s claims for Property 1 and Property 2 and apologised.
  12. In a further response the Council explained that at the time of Miss X’s claims neither property was on the Council’s database. Properties 1 and 2 were both out of borough and had not previously been used as temporary accommodation. The Council had to carry out checks to verify the addresses and include them on its database. It states that due to the COVID-19 pandemic it was an extremely busy period and setting up the property references took some time. It again apologised for the delay.
  13. In June 2021 Miss X moved back to temporary accommodation at Property 2. She made a further application for housing benefit. Miss X received notification of her housing benefit award and asked the Council to confirm how much she would have to pay. She stated that during her previous stay at Property 2 she had only had to pay a service charge of £10.50 as housing benefit paid the full cost of her rent. Miss X noted Property 2 was significantly more expensive than Property 3 had been and she was now left in financial difficulties.
  14. The Council advised it had calculated Miss X’s housing benefit award using her earnings for the period 1 May to 31 May 2021. Based on this assessment her entitlement was £132.16 per week. As Miss X had provided wage slips for June, the Council had recalculated her entitlement to be £87.29 per week from 3 June 2021 and £78.71 per week from 7 June 2021. This had resulted in an overpayment of £132.54 for the period 3 to 20 June 2021 which the Council would recover from her ongoing housing benefit.
  15. The Council also acknowledged a discrepancy in its system which incorrectly showed Miss X’s rent was £41.50 per night, rather than £46.50 per night. It would look into this. The Council advised Miss X to pay £258.04 towards her rent each week to ensure she did not go into arrears.
  16. Miss X maintained the Council had not correctly calculated her earnings and provided further payslips. She stated her weekly hours and wages fluctuated. The Council recalculated her award in early July 2021 and increased this to £141.17 per week from 28 June 2021.
  17. Miss X made a further application for a DHP in June 2021. The Council refused this application on 6 July 2021 as Miss X could not claim for Property 3 when she no longer lived there. Miss X appealed this decision as her claim was for Property 2.
  18. She also made a complaint about the way the Council had dealt with her claims which had caused her to accrue rent arears. She discussed her concerns with a benefits officer who subsequently confirmed:
    • Housing benefit was being paid directly to her rent account. But that due to an error in the system the payments from 3 June 2021 were being paid into Miss X’s old rent account. The Council would rectify this.
    • From 26 June 2021 Miss X would need to pay £178.83 to her rent account each week to ensure her rent was paid in full;
    • Miss X’s current rent arrears were £884.53;
    • Her outstanding housing benefit overpayment was £121.29
    • DHP could be considered from 3 June 2021 but this was separate to housing benefit. The officer would ask for this to be looked at as a priority.
  19. Miss X was unhappy with the response and asserted the overpayment was due to an error by the Council as she had consistently provided correct information. Miss X asked to appeal the Council’s decision on her entitlement. Miss X also made a further formal complaint.
  20. On 16 July 2021 the Council wrote to Miss X advising her housing benefit had been recalculated using the correct daily rental rate and taking account of the changes in her earnings. It would offset the overpayment against the underpayment and credit her rent account.
  21. The Council responded to Miss X’s DHP review request on 28 July 2021. It noted there was no record of Miss X applying for DHP in November 2020 and stated the first application it had received was in January 2021. The Council considered the application in June 2021 was the same as the earlier application in January 2021, which it had refused.
  22. The Council then responded to Miss X’s appeal regarding the overpayment and calculation of her housing benefit on 16 August 2021. It noted it had recalculated Miss X’s award based on the correct daily charge on 16 July 2021. The Council also confirmed the housing benefit overpayment for the period 7 to 20 June 2021 was £106.90. It stated the overpayment was due to changes in Miss X’s earned income from 5 June 2021. As the overpayment was not caused by the Council’s error it was entitled to recover it.
  23. Miss X asked to appeal these decisions. She stated a benefits officer had made the DHP claim on her behalf and should have realised it was a new claim for her new address. She also asserted a council officer had told her the housing benefit team would take responsibility for the error and that a DHP would cover any shortfall. Miss X considered it unfair that she was left with arears.
  24. The Council responded to Miss X’s complaint on 31 August 2021 and apologised for the delay in responding. The Council noted Miss X had received the housing costs element of Universal credit while at Property 3. However an award notification from Universal credit on 2 June 2021 showed that for the period commencing 1 May 2021 Miss X’s income was at a level that gave a zero award of Universal credit.
  25. When Miss X moved back to Property 2 in June 2021 the Council used the income information from Universal credit to calculate her housing benefit award. It acknowledged there was initially an error in the daily rental rate, but this had been rectified. The Council noted Miss X’s rent arears for Property 2 for the period 3 June to 4 July 2021 were £884.53. It noted it had advised Miss X that from 28 June 2021 she would need to pay £178.83 per week into her rent account to ensure the full rent was paid and she did not incur any arrears.
  26. The Council asserted that Miss X would have known she needed to pay a proportion of the rent herself and did not accept that the total arears were due to errors in her housing benefit, or that any officer told her this was the case.
  27. In relation to Miss X’s complaint about her DHP application, the Council provided copies of its letters regarding Property 3, and stated it had not received a claim for Property 2. It advised Miss X’s income was too high for her to receive housing benefit for the full rent and that the Council would not normally pay DHP in these circumstances. The Council asserted the arrears were due to Miss X not paying her proportion of the rent. But Miss X would need to submit a claim so that the Council could consider it.
  28. As Miss X was not satisfied by the Council’s response, she asked for her complaint to be considered further. Miss X maintained there was a DHP claim for Property 2 and that council officers had confirmed they had submitted it on her behalf. There was again a delay in the Council responding, for which it again apologised.
  29. In its response the Council stated officers were unable to make a DHP claim on Miss X’s behalf. It confirmed an officer had passed on supporting evidence for a DHP claim in June 2021. At this stage Miss X’s claim for Property 3 was outstanding and the officer did not realise the evidence was for Property 2, not Property 3. It stated it had no records of a DHP claim for Property 2 in June 2021.
  30. The Council acknowledged Miss X’s situation was complex and confusing due to changes in her addresses and her fluctuating income. These factors affected Miss X’s entitlements. She was entitled to housing benefit in temporary accommodation and was awarded Universal credit with housing costs elements in permanent accommodation. Due to Miss X’s income she was not awarded full rent and was liable to make contributions towards her rent at her various accommodations.
  31. In relation to Miss X’s appeal request, the Council asked Miss X to confirm which decision she wanted to appeal (the decision of 21 June 2021, 9 July 2021 or another decision) and the reasons she felt the decision(s) was wrong. There is no record of Miss X responding.
  32. Miss X moved to permanent accommodation at Property 4 and in October 2021 made another application for DHP. The Council refused this claim in December 2021 as it considered Miss X had alternative funds available to meet the shortfall in her rent.
  33. Miss X remains dissatisfied with the Council’s response and has asked the Ombudsman to investigate. She maintains the Council’s miscalculation of her housing benefit entitlement caused arrears of over £1400 between August and November 2020. Miss X also maintains that she was assured any shortfall in her rent would be covered by DHP, yet her each of her applications have been refused.
  34. In response to my enquiries the Council has reiterated it could not process Miss X’s initial housing benefit claims as the accommodation was outside the borough and as such the addresses were not on its data base. It had to check the addresses against the Valuation Office Agency’s data base so that they could be set up on its own data base and the claim processed. The Council states this is a paper exercise and the process was delayed due to the COVID-19 pandemic and the closure of its offices.
  35. The Council states Miss X applied for DHP at Property 3, but this was refused as her full rent was assessed as part of the Universal credit claim. The Council also refused Miss X’s DHP claim for Property 4 as she was not in receipt of Universal credit as her income was too high. The Council considered she had sufficient funds to meet her rent.


  1. There have been delays and errors in the way the Council has dealt with Miss X’s claims for housing benefit and DHP. These failings amount to fault.
  2. There were significant delays in the processing of Miss X’s housing benefit claims for Property 1 and Property 2 in the summer of 2020. I recognise the claims were more complicated as these properties were outside the borough, and validation checks were more difficult due to COVID-19 restrictions. However delays of four and five months are unacceptable and caused Miss X unnecessary distress, uncertainty and financial hardship.
  3. Miss X was a vulnerable young adult with no experience of living alone. She was unable to afford the rent on either property without assistance, and incurred significant arears. As Miss X had to contribute towards the rent at both Property 1 and 2, it is possible she would have incurred some arrears even if the Council had calculated her entitlement to housing benefit promptly. But had she been aware of her entitlement from the outset, Miss X would have been able to make informed decisions about her finances and budgeting.
  4. Miss X disagrees with the calculation of her housing benefit while at Property 2 between June and July 2021. She asked the Council to review its calculations and provided further evidence. The Council acknowledged it calculations were initially based on an incorrect daily rate which it has since rectified and accounted for the underpayment. It has also adjusted its calculations based on the information and wage slips Miss X has provided.
  5. Miss X continues to dispute the Council’s calculations and maintains she has incurred arrears as a result of the Council’s errors. Miss X had a right of appeal against the Council’s decisions. Miss X initiated this process but did not respond to the Council’s queries to allow it to proceed. I note Miss X has been advised and supported in her claims by various charities and solicitors and I consider it would have been reasonable for her to exercise her right of appeal. I do not therefore intend to investigate this issue further.
  6. The documentation shows Miss X has applied for DHP three times: in January 2021, June 2021 and October 2021. I have not received any evidence of an application in November 2020. The Council considered these applications and determined Miss X was not eligible. This is a decision it was entitled to make, and there is no evidence of fault in the way the Council considered the applications in January and October 2021.
  7. However, the Council refused Miss X’s application in June 2021 on the basis this was a duplicate of her application for Property 3 in January 2021, and Miss X was unable to claim as she was no longer living there. I consider it was clear from Miss X’s email correspondence with the Council that she was seeking DHP for Property 2, having returned there on 3 June 2021. The failure to consider Miss X’s application for Property 2 is fault. While this led to unnecessary confusion and time and trouble for Miss X, I consider it unlikely that had the Council properly considered the application the outcome would have been different, given the level of Miss X’s income.
  8. I also consider there was fault in the way the Council responded to Miss X’s complaints. The Council’s complaints policy states it will respond to complaints at stage 1 within 20 working days, and at stage 2 within 25 working days. In this instance the Council responded to Miss X’s stage 1 complaint of 5 July 2021 on 31 August 2021. It responded to Miss X’s stage 2 complaint of 9 September 2021 on 5 November 2021. I recognise that the Council has apologised for the length of time taken to respond on each occasion, but delays of this nature are clearly unacceptable. We would expect the Council to respond to complaints within its published time frame

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Agreed action

  1. The Council has agreed to apologise to Miss X and pay her £300 in recognition of the anxiety, frustration, and financial difficulties the delays and errors in dealing with her claims for housing benefit and DHP have caused.
  2. The Council should take this action within one month of the final decision on this complaint.

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Final decision

  1. The delays and errors in the way the Council dealt with Miss X’s housing benefit and DHP claims amount to fault. This fault has caused Miss X an injustice.

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Investigator's decision on behalf of the Ombudsman

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