Summary: Mr B complained that the Council had repeatedly tried to recover a housing benefit overpayment from him since 2015, despite agreeing he did not owe the money. In 2021 it recovered some of the debt directly from his wages and then delayed in refunding the money, causing Mr B frustration, distress and time and trouble. We found the Council at fault. It has agreed to pay Mr B £400 and to improve its recovery procedures for the future.

The complaint

1. Mr B complained that Birmingham City Council (the Council) repeatedly tried to recover an overpayment of housing benefit from him since 2015 despite agreeing that he did not owe the money. It implemented an attachment of earnings order in August 2021 recovering nearly £300 of Mr B’s earnings. It then delayed refunding the money. Mr B has been caused distress, time and trouble and financial hardship.

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The Ombudsman’s role and powers

2. 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)
3. 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

4. I have considered the complaint and the documents provided by the complainant, made enquiries of the Council and considered the comments and documents the Council provided. Mr B 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

5. Mr B lived in Birmingham claiming housing benefit until June 2015, when he left to live in a different part of the country. Since April 2015 the Council had been paying the housing benefit to Mr B’s landlord because Mr B was in rent arrears. Neither Mr B nor his landlord informed the Council that he had left the property and the Council continued to pay housing benefit to the landlord. In July 2015 Mr B started working.
6. In December 2015 the council tax department updated Mr B’s records showing his new address and ending his liability for council tax at the Birmingham address from June 2015
7. In January 2016 the Council received information from HMRC that Mr B had been working since July 2015. There was no indication he was in a different part of the country and so the Council calculated that it had overpaid Mr B housing benefit since July 2015. It sent a letter to Mr B at his old address in Birmingham saying he owed nearly £1400.
8. The Council sent an invoice for the debt to the same address in June 2016 and another letter asking him to make contact the following month. This letter was returned to the Council in September 2016 as undelivered.
9. In November 2016 the benefits service reviewed the case, noted his new address and sent him an invoice for the debt. Mr B telephoned the Council on receipt of the letter. The Council noted he had moved and started work in July 2015. It decided to recover the payment from the landlord.
10. In March 2017 the landlord telephoned the Council and after this the Council changed the recovery to Mr B. It has no records explaining why. It notes that the officer asked when Mr B moved and established that he moved before he started working. Mr B telephoned the Council again in March 2017 to say he moved away from Birmingham before he started working. The Council advised him to put this in writing so the dispute could be considered. Mr B sent a letter in April 2017 and in May 2017 the Council decided to continue recovery from the landlord.
11. The debt remained unpaid. In October 2020 an officer reviewing outstanding debts only looked at the original reason for the overpayment and not the subsequent exchanges. They decided that the overpayment should be recovered from Mr B and sent him another invoice. Mr B telephoned the Council to query the invoice and was told to provide proof that he started his job after he moved away for Birmingham. Mr B did not provide any further evidence.
12. The Council found details of Mr B’s employer and sent them a request for details to set up an attachment of earnings (to recover the debt from Mr B’s wages before he received them). On receipt of the details the Council set up the deductions which started on 17 September 2021 (taking £65 out of Mr B’s wages).
13. Mr B called the Council to query this and was again asked to provide proof of when he vacated the property. Mr B provided this information, and the Council wrote to his employer to cancel the deductions. It also invoiced the landlord for the debt. Mr B’s employer made another deduction from Mr B’s wages in October 2021. The Council sent another request to stop the deductions.
14. Mr B complained to the Council. It apologised and said the debt was now being correctly recovered. Mr B pursued his complaint as he had not still received a refund of the money incorrectly recovered from him. The Council responded in November 2021. It apologised again for the delay and said his refund had now been processed. Mr B complained to us in January 2022 as he had still not received a refund of the money.

Council’s response to my enquiries

15. In responding to my enquiries, the Council has accepted multiple faults in dealing with this matter. Once the Council had spoken to Mr B in November 2016 and established that he moved away from Birmingham before he started working and that the landlord had continued to receive housing benefit payments, it should only have recovered the debt from the landlord.
16. The Council was wrong to change that decision in March 2017 and seek recovery from Mr B again. It corrected the decision in May 2017. But the debt remained unpaid, and the Council was at fault again in October 2020 when it failed to properly check the history of the case and sought recovery from Mr B once more.
17. The Council was also at fault insisting that Mr B provide further evidence that his employment began after he moved away: the Council had already established this in November 2016 and May 2017. When Mr B did not provide the evidence requested the Council proceeded along its incorrect path and sought an attachment of earnings in August 2021.
18. The Council said it processed the first refund at the end of November 2021 and the second at the beginning of February 2022.

Analysis

19. Mr B should have notified the Council’s council tax and benefit services when he moved away from Birmingham in June 2015. But the Council established in November 2016 that Mr B had moved away before he started working and his landlord had received the money so the debt was recoverable from them.
20. I welcome the Council’s detailed response and its acceptance of continuing fault for the next five years (albeit sporadically) in repeatedly trying to recover this debt from Mr B, exacerbated by further delay in processing the refunds. I agree with Council’s assessment of fault.
21. It caused Mr B significant frustration, distress and time and trouble over a lengthy period of time. While I note the Council has apologised to Mr B, I consider a payment is also appropriate.

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Agreed action

22. In recognition of the injustice caused to Mr B I recommended the Council, within one month of the date of my final decision) pays Mr B £400.
23. I also recommended that within two months, the Council reviews its recovery procedure to ensure it contains sufficient guidance for staff on checking the complete history of a case before pursuing recovery and that staff are aware of the correct recovery procedure.
24. The Council has agreed to my recommendations.

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Final decision

25. I consider this is a proportionate way of putting right the injustice caused to Mr B and I have completed my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman