Summary: Mr X complains the Council failed to prevent deductions the DWP made from his Universal Credit. Mr X also says the Council have not refunded all the moneys it owes. Mr X says that as a result of the Council’s actions, he suffered financial hardship. I have concluded my investigation and found fault in the Council’s failure to prevent and refund deductions taken from Mr X’s Universal Credit. This fault has caused Mr X an injustice, and I have proposed recommendations to the Council.

The complaint

1. Mr X complains the Council failed to prevent deductions to his benefits. Mr X says he does not know why the deductions were being made and says the Council still owes money which was paid to it, and which it has not refunded. Mr X says that as a result of the Council's action, he was put through financial hardship, and resolving the situation has been both time consuming and stressful. Mr X would like the Council to refund all the moneys owed, and to make a financial award for inconvenience.

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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. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council/care provider has done. (Local Government Act 1974, sections 26B and 34D, as amended)
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

5. I spoke with Mr X and offered him the opportunity to provide any additional information. I also considered comments and information provided by the Council. I considered the comments provided by Mr X and the Council in response to my draft decision.

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What I found

Jurisdictional considerations

6. Events in Mr X's complaint originate from September 2017, with the substantive issue of ongoing deductions beginning in March 2020. Such events would therefore normally be considered late, and our jurisdiction would prevent us from being able to consider such matters.
7. I have however exercised my discretion to consider Mr X's complaint. The issues are fairly complex given the volume of applications, the benefits and payments awarded, and how these interact with each other. Mr X suffers from anxiety and a personality disorder, and it is unreasonable to have expected him to complain in March 2020. In any event, it would appear that Mr X first became aware of ongoing deductions in November 2021 when he contacted the Council to resolve the matter.

Background

8. I have detailed below some of the key events in respect of this complaint. This is not intended to be a detailed account of what took place.
9. In September 2017, an application for Housing Benefit was made as Mr X was in receipt of income related Employment Support Allowance (ESA).
10. In December 2017, the Council received notification from the Department for Work and Pensions (DWP) that Mr X's ESA had been terminated from September 2017 as he had failed to attend an assessment. The Council consequently suspended Mr X's Housing Benefit claim, and it advised him that should it not receive a new application within one month, his claim would be terminated.
11. The Council chased a response from Mr X in January 2018 to little avail and so it terminated his claim at the end of January 2018. As a result, an overpayment of approximately £1678 was raised for the period of September 2017 to January 2018.
12. ESA was back in payment in May 2018 and so under the Payment Deduction Project (PDP) protocols, the Council made an attachment to Mr X's benefits to claw back the overpayment.
13. In January 2019, the Council received the first payment from the DWP which continued thereafter. By February 2020, the Council had received approximately £544. A further amount of approximately £32 was recovered from ongoing Housing Benefit following an application for a Homeless placement in February 2020.
14. Later in February 2020, Mr X made a Discretionary Housing Payment (DHP) application for rent arrears from 2017/2018. Given the information provided, Mr X's claim for the period September 2017 to December 2017 was reinstated and the overpayment was cleared. Mr X was notified by the Council that any payment due would be made directly to his former landlord, Worthing Borough Council.
15. In March 2020, the Council sent a PDP recall to DWP as the overpayment had been cleared. Later in March 2020, the Council refunded £576, with payment made to Worthing Borough Council to clear part of the rent arrears.
16. The Council says it was assumed at this point that as the overpayment had been cleared, and a PDP recall sent to DWP to cease deductions, that no further deductions would be made.
17. Despite the Council sending a PDP recall, in April 2020, an amount of approximately £48 was received from the DWP. The Council says it was not immediately aware of this as the process is automated. The Council says because the overpayment had been cleared, it had no reason to undertake a manual review.
18. Deductions continued to be made from Mr X's Universal Credit, and payments made to the Council from the DWP from April 2020 to December 2021. A total of approximately £542 was received with amounts ranging from approximately £20 to £62 per month.

What happened

19. In December 2020, the Council says a note was made internally, indicating that it had identified payments were still being received from the DWP. A diary note was set to check again in February 2021 before issuing a refund to Mr X.
20. Mr X called the Council in November 2021 regarding the ongoing deductions being taken from his Universal Credit. The Council advised Mr X that it could not see any evidence that deductions were still being made. Mr X sent the Council a screenshot of his Universal Credit account showing the deductions.
21. Mr X says he called the DWP who advised him that it needed a written request to stop deductions. Mr X called the Council again in November 2021 to advise it of what the DWP had informed him. An email was sent internally to the Council's overpayments team to follow up on the matter.
22. Mr X called again in November 2021 to chase an update and he was advised that the Council had already sent a request to cease deductions.
23. Later in November 2021, the Council contacted the DWP to advise it that because it had already sent a request to cease deductions in March 2020, it was not able to generate another request.
24. Toward the end of November 2021, the DWP contacted the Council to advise it that the DWP would manually cease deductions and that one final payment was still due to be made. The Council advised Ms X that it was awaiting the final payment before it would issue the whole refund.
25. In December 2021, Mr X sent the Council his bank details so it could issue the refund. The Council advised Mr X again that once it had received the final payment, it would issue the refund.
26. Mr X sent the Council an email in December 2021 requesting an update. Mr X was unhappy regarding the lack of clarity around when the final payment would be received. The Council left Mr X a voicemail agreeing to refund an amount of approximately £493, and the remainder once it received the final payment from the DWP.
27. The Council processed the refund in December 2021; however, Mr X did not receive it. Mr X emailed the Council again, advising that he was wary he would not receive the refund before Christmas.
28. Mr X called the Council later in December 2021 and it was identified that the incorrect bank details had been used to process the refund. The Council advised Mr X that the funds would first need to be returned by the bank before a replacement refund could be issued. The Council advised Mr X that no further refund would be made before January 2022.
29. Mr X contacted the Council again several times at the end of December 2021 and beginning of January 2022 to chase the refund; he was advised again that the refund would be made once it had received the funds back from the bank.
30. A refund was made in January 2022 once the funds had been written back onto the system. Later in January 2022, Mr X received a refund of approximately £542.

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Analysis

Origin of the overpayment and initial deductions

31. Mr X says he does not understand how an overpayment occurred in the first place, and why deductions were taken from his Universal Credit.
32. Mr X failed to attend an assessment and so his claim was suspended for the period of September 2017 to January 2018. Mr X was advised that his claim would be terminated if he did not submit a new application to the Council. Mr X did not submit a new application and the Council were unable to get in contact with him. Subsequently, Mr X's claim was terminated, thereby creating an overpayment of approximately £1678. After ESA began again in May 2018, the Council made an attachment to his benefits to claw back the overpayment.
33. I have not seen any evidence of fault in how the overpayment was generated or in the Council's decision to apply for an attachment of benefits.

Ongoing deductions

34. Following a DHP application made by Mr X, his claim relating to the period of September 2017 to January 2018 was reinstated, and thus the overpayment was cleared.
35. It was for the Council to advise the DWP to then cease deductions, and in March 2020, the Council sent a PDP recall to the DWP. It would appear the DWP did not action the request as the deductions continued. Whilst the Council sent a request to cease deductions in March 2020, this did not absolve the Council of its responsibility to ensure the deductions stopped.
36. The Council says it was not immediately aware that deductions were ongoing in April 2020 as the process is automated and it had no reason to undertake a manual review. However, in December 2020, the Council says it identified that payments were still being received from the DWP. The Council set a note to chase the matter in February 2021, but it did not.
37. It can be said that the Council therefore knowingly allowed deductions to be taken from Mr X and did not do anything to resolve the situation as it could have. The Council could have issued Mr X with a refund or contacted the DWP to query why payments were still being made. The Council also had a further opportunity to resolve the matter in February 2021, but it did not follow up on this. The Council could have prevented further deductions being taken from Mr X's Universal Credit had it acted on either of these occasions, and this is fault leading to an injustice.
38. Once Mr X became aware of the deductions in November 2021, he chased the Council who advised that it could not see any deductions being made. Mr X had to provide further evidence, therefore enduring further time and trouble despite the Council acknowledging itself back in December 2020 that it was still receiving payments.
39. The Council worked quickly to resolve the matter in November 2021 by calling the DWP and advising that it had already sent a PDP recall. The DWP then manually cancelled the deductions.

Subsequent delays in issuing the refund

40. The Council wanted to wait until it had received the final payment from the DWP before issuing the refund to Mr X. Following several calls from Mr X, it decided to issue a refund for the funds it held prior to receiving the final payment.
41. The refund was subsequently sent to the wrong bank account after Mr X provided the incorrect bank details. The Council advised Mr X that it would first need to receive the funds back before issuing a new refund. Once the Council received the funds, it issued the refund immediately. Mr X is therefore responsible for the delays from November 2021 to January 2022 as he provided the wrong bank details.
42. It is not clear why the Council did not immediately refund all the funds it held by November 2021, and instead wanted to wait until it had received the final payment. The Council could have provided a refund to Mr X for the funds it held at any point between December 2020 and November 2021. The Council is therefore partially accountable for any financial hardship suffered by Mr X during this period. These were funds that Mr X was entitled to as a benefit, and the Council should have made reasonable steps to refund any of the funds it held at the earliest convenience. This is fault leading to an injustice.

Outstanding funds owed

43. Mr X says the Council still owes him funds that were deducted by the DWP and paid to it directly. From the evidence available to me, it appears the Council have fully refunded Mr X.

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Agreed actions

44. To resolve and prevent similar issues occurring again, the Council has agreed to:
1. Explain what it will do to promptly identify and refund any additional payments received after an overpayment is cleared.
2. Pay Mr X an amount of £300 in recognition of any financial hardship during the period of December 2020 to November 2021. This amount is also in recognition of the time and trouble spent having to chase the Council to issue a refund and provide it with additional evidence to act.
45. Action a should be completed within two months of the Ombudsman's final decision and action b should be completed within one month of the Ombudsman's final decision.

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Final decision

46. I have concluded my investigation having fault in the Council's actions to prevent and refund deductions taken from Mr X's Universal Credit. This fault has caused Mr X an injustice and the Council have agreed to our proposed actions.

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Investigator's decision on behalf of the Ombudsman