Summary: There was no fault in how the Council handled the recovery of overpaid housing benefit from Mr X.

The complaint

1. Mr X complains that the Council has not considered its discretion to not recover overpayments of benefit at various times since a Tribunal asked it to in 2018. He also complains that it has not credited all the money he has paid to his account and it has not recovered money continuously.

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What I have investigated

2. We would not normally investigate complaints made 12 months after the person knew that the Council had done something wrong. The events complained of here date back for some years. However having explored the issues with Mr X’s representative it is not clear what Mr X understood at the time. In addition, he complains of more recent events that I cannot separate from the earlier actions. For this reason, I have exercised discretion to investigate these matters.

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The Ombudsman’s role and powers

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. 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 considered the information provided by Mr X and discussed the issues with his representative. I considered the information provided by the Council including its file documents. I also considered the law and guidance set out below. Both parties had the opportunity to comment on a draft of this statement.

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What I found

6. If a council pays too much housing benefit to someone it will usually ask them to repay it. Only certain overpayments are recoverable. If someone disagrees with a decision that they must repay an overpayment they can appeal to a tribunal.
7. The Council has a discretion not to recover an overpayment even if it is entitled to do so. Government guidance says the Council must consider each case on its merits, and should have regard to the individual taking note of health and financial circumstances so as not to cause hardship. The guidance says the Council should document its reasons for its decisions.
8. Mr X was in receipt of Housing Benefit. In 2018, the Council decided that it had paid him too much benefit and that it should recover an amount of £1,125. Mr X appealed against the Council’s decision with the help of his advocate. The Tribunal found that the debt was recoverable. However, the Tribunal suggested the Council should use its discretion not to recover the overpaid benefit due to the circumstances in which it arose.
9. The Council’s file shows that it considered whether it should recover the overpayment. It says the Council is sympathetic to the circumstances, but that Mr X could have given the correct information to avoid an overpayment or asked for clarification if he was not sure. The Council also noted that Mr X had not given any hardship or medical reasons that the overpayment should not be recovered and so the Council decided not to exercise its discretion to write it off. It carried on recovering the overpayment each month from Mr X’s ongoing housing benefit. Mr X understood the monthly reduction of his Housing Benefit meant the sum should have been paid off by March 2020. He says he also paid a large one-off sum of money to the Council in December 2018.
10. In 2019, Mr X, with the help of an advocate sent the Council notice that he intended to apply to the court for a judicial review of its decision to recover the overpayment. The Council suspended recovery while it considered its decision. Its file note shows that it again considered whether it should recover the overpayment. It said it was sympathetic but would only write off the debt on the basis of financial, hardship or medical grounds, and Mr X had not given any such details that would warrant the Council not collecting. The Council said it would consider a lower repayment instalment, but it seems Mr X did not pursue this.
11. The Council resumed recovery via deductions from Mr X’s benefits. In July 2020, Mr X’s housing benefit stopped and his housing costs were met by the DWP via universal credit. At that time, the Council suspended deductions as part of the COVID-19 measures. This restriction was lifted in January 2021 when the Council passed details of the overpayment to the DWP who continued recovery via deductions from his universal credit. At that stage Mr X owed £825.
12. Mr X complained to the Council. He says he had asked several times for information about what he owed and what payments had been made to the debt, but had received no reply. Mr X said he made a cash payment in 2018.
13. In response to Mr X’s complaint:
• the Council said there had been two overpayments of housing benefit totalling £1,125
• It set out the amounts it had deducted from his housing benefit to pay back the debt.
• The Council had investigated the separate payments he said he had made. He had paid £1296 and £75 at its customer service centre in 2018. However, both these payments had been allocated to his Council Tax debt and not his housing benefit debt. The Council could not trace any other payments made by him.
14. Mr X asked the Council to write off the debt, particularly as under the arrangement notified to him, he had thought it would have been paid off by now. The Council explained:
• it stopped the deductions in 2018 to allow him to appeal. It decided to recover the overpayment following the Tribunal decision.
• It then halted the deductions again in 2019 to consider whether it should use its discretion to write off the debt, but it decided not to do so. It reinstated the deductions at that point.
• The Council halted the deductions for a third time in August 2019, when Mr X’s advocate notified the Council that he intended to seek a judicial review in the court of its decision to recover the debt.
• The Council responded to the advocate giving reasons why it decided to continue with recovery. It then failed to reinstate the deductions. In 2020, the debt was passed to the DWP as it was now responsible for administering Mr X’s benefits.
• It had considered his most recent request to write off the debt given that it had not been recovered in good time. The Council commented that recovery had mainly ceased due to challenges by him. It had notified him each time it had decided to restart deductions, and it had written to him in 2020 when his housing benefit ended to tell him that he still owed £825. It said that it had considered its discretion in 2019, but that now this was a decision for the DWP as the debt had transferred.
15. In response to my investigation, the Council has explained that when Mr X made cash payments in 2018, he would have quoted the reference number. He must have quoted his council tax reference for the cash payment to be allocated to that account rather than his overpayment.
16. I asked the Council whether it had revisited its decision to recover the overpayment each time that it resumed deductions from Mr X’s benefits. The Council explained it had done so when it had first decided to recover the debt, when the Tribunal had made its decision, and when Mr X had threatened to apply to the court for a judicial review.
17. The Council also says that Mr X has not provided it with any further evidence that recovery from him is causing hardship on financial or health grounds. However, it will consider the matter again if he does so.

Was there fault by the Council?

18. There was no fault by the Council. Its file notes show that it properly considered its discretion to write off the overpayment. The Council could have reviewed its decision when it passed the debt to the DWP to recover. However, there is some basis to the Council’s explanation that this is not a fresh decision to recover the overpayment, and only a change of the recovery methods. As such, it is not fault for the Council not to revisit its decision at that stage.
19. The Council did not recover the overpayment continuously which meant that Mr X did not pay it off as quickly as he had originally intended. However, the Council was following the government advice which says that councils should consider suspending recovery if a person challenges the overpayment. The Council did so when Mr X appealed to the Tribunal, when he threated court action, and exceptionally, during the COVID-19 restrictions.
20. I have considered whether the Council was wrong to allocate the cash payments to Mr X’s council tax account. Clearly, Mr X did not intend this to happen, but it does seem likely that Mr X did instruct the Council (perhaps unknowingly) to pay the money to the council tax account using that reference. As such, there was no fault by the Council here.

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Final decision

21. I have completed my investigation. There was no fault by the Council.

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Investigator's decision on behalf of the Ombudsman