Summary: Ms X complains the Council failed to advise her to claim Universal Credit. Instead, she pursued a claim for housing benefit, to which she is not entitled, and now has rent arrears. We found there was fault by the Council. It has agreed an increased remedy.

The complaint

1. The complainant whom I shall refer to as Ms X, complains the Council failed to advise her to claim Universal Credit (UC) instead of housing benefit (HB). As a result, she has rent arrears, causing financial hardship and affecting her transfer request.

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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 discussed the complaint with the complainant and considered the complaint and the copy correspondence provided by the complainant. I have made enquiries of the Council and considered the comments and documents the Council provided. I have listened to telephone call recordings between Ms X and the Council. Ms X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Housing benefit and Universal credit

5. 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.
6. 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)

7. 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

8. Ms X had claimed HB in the past but was not entitled in 2020. In early 2021 her income decreased as she went from full to part time work. On 3 March 2021, Ms X emailed the Council explaining her income had changed and she was struggling to pay her rent. She sent some evidence of pay, tax credits and childcare costs.
9. The Council’s housing income officer called Ms X in March and the notes of the call show she advised her to claim UC. Ms X said that she was only receiving child tax credits. The officer noted this and asked for advice from her manager. The officer then called Ms X back and advised her to claim UC. She noted Ms X agreed to do this.
10. In a further call from Ms X in March 2021 the housing income officer noted Ms X said the tax credits office (HMRC) advised her she could not claim UC until the start of the new tax year. The officer said she had not heard of this.
11. On 25 March 2021 the Council’s housing benefit team sent Ms X a letter with its decision that she could not claim HB. This was in accordance with the Welfare Reform Act 2012. The Council said Ms X should make a claim for UC and gave her a number to call. The Council noted its system that it sent the letter. Ms X says that she did not receive this letter.
12. Ms X emailed the Council’s housing benefit team and housing income officer on 20 April 2021 and stated that the Council had not updated her rent account since her email of 3 March. She said that the Council had put her into very high rent arrears. The Council did not respond to this.
13. On 6 May 2021 Ms X called the Council’s housing benefit team and discussed her claim. She said that she was not on UC but was on the “old system” because she was receiving child tax credits. The officer advised Ms X to make a claim for housing benefit. She also noted Ms X “will apply for Discretionary Housing Payment due to the level of her rent arrears”.
14. Ms X made a claim for housing benefit which the Council received on 11 May 2021. The Council contacted Ms X on 12 May 2021 and advised her that it could not pay housing benefit and that she should claim UC.
15. Ms X claimed UC on 12 May 2021 and asked for backdating to February 2021. However, the DWP paid UC from 12 May 2021 and refused to backdate her claim.
16. In mid July 2021 Ms X made a claim for DHP, with the assistance of the Citizen’s Advice Bureau. She said the Council’s misleading advice about housing benefit had led to rent arrears.
17. Ms X then complained to the Council that it failed to advise her to claim UC and incorrectly advised her to claim housing benefit. The Council considered Ms X’s complaint through its complaints procedure. It initially advised there was no fault by the Council because it had written to her on 25 March 2021 to say it could not pay housing benefit and she should claim UC. It agreed it had incorrectly advised her on 6 May 2021 to claim HB, but it did not consider this led to her losing out on benefit. However, in its final response the Council accepted that Ms X may have lost out on a week’s benefit. It offered Ms X financial remedy of £130 or the equivalent of one week’s rent and £50 for her time and trouble. It also offered her £75 in view of its delay in responding to her stage two complaint.

Analysis

18. I do not consider there is fault by the Council before 20 April 2021. The Council promptly advised Ms X to claim UC on 25 March 2021. Ms X did not receive this letter, but I do not consider that this was due to a fault by the Council. Ms X disputes the letter was sent. However, the Council has a copy of the letter and it noted its system that it was sent. I consider this is sufficient evidence of it being sent. I note the Council’s housing income officer had also advised Ms X to claim UC on 17 March.
19. However, it does not appear that Ms X attempted to claim UC at this point or to call the UC service for advice. She says that the tax credit service advised her not to claim UC. Tax credits are administered by HMRC, and this scheme is not within the Local Government and Social Care Ombudsman’s jurisdiction. Ms X may wish to enquire further or complain to the HMRC about the advice she says it gave her.
20. I have not seen evidence that Ms X contacted the Council about housing benefit between 25 March and 20 April 2021, when she emailed the Council.
21. The Council accepts it wrongly advised Ms X to claim housing benefit on 6 May 2021. It has offered Ms X a financial remedy of £255. This was based on one week’s rent, £75 for delays in responding and £50 for her time and trouble. However, I consider Ms X alerted the Council two weeks earlier than 6 May 2021. Ms X emailed the housing benefit service on 20 April 2021 saying she was in high arrears and the Council had not updated her account. It was apparent in my view, that she was trying to claim housing benefit and had not received a response to her email of 3 March 2021. I consider the Council’s benefit team should have contacted Ms X promptly to advise her to claim UC. This was fault and caused injustice to Ms X because she lost out on benefit.
22. The Council was also at fault in its call 6 May 2021 regarding claiming a DHP to help with rent arrears. DHP cannot be used to assist with rent arrears. I can see Ms X asked the Citizens Advice Bureau to help her claim a DHP. The claim was not valid as it was not completed correctly. It also referred to rent arrears caused by the Council. In my view Ms X was put to avoidable time and trouble because the Council gave the impression she could claim a DHP for rent arrears.
23. The Council’s remedy of £75 for delay is sufficient, but I consider the Council should also provide a further remedy for Ms X’s time and trouble.

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Agreed action

24. I recommended that within one month of my final decision the Council should pay Ms X an additional:
• £260 (the equivalent of two weeks rent)
• £100 for her time and trouble.
25. The Council has agreed.

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Final decision

26. I found fault causing injustice by the Council. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman