Summary: We will not investigate this complaint about the Council’s decision not to pay compensation in relation to a housing benefit overpayment the complainant successfully challenged at the tribunal. This is because there is insufficient evidence of fault by the Council.

The complaint

1. The complainant, whom I refer to as Mr X, says the Council delayed telling the tribunal that an overpayment was caused by official error. Mr X wants compensation for the stress he endured.

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The Ombudsman’s role and powers

2. The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start an investigation if we decide there is not enough evidence of fault to justify investigating. (Local Government Act 1974, section 24A(6))

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How I considered this complaint

3. I considered information provided by Mr X and the Council. This includes the complaint correspondence. I also considered our Assessment Code and comments Mr X made in reply to a draft of this decision.

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My assessment

4. 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. Once someone has appealed the hearing date is set by the tribunal service. The Council cannot control how long someone waits for the appeal hearing.
5. In June 2021 the Council asked Mr X to repay a housing benefit overpayment. It was aware the overpayment had been caused by a problem in the automated system but it did not know what exactly had gone wrong.
6. Mr X appealed to the tribunal. Shortly before the appeal hearing the Council found out there had been a failure in the way the Department for Work and Pensions (DWP) sent information about the Mr X’s income to the Council. The Council updated the tribunal with this new information on the day of the hearing.
7. The tribunal upheld Mr X’s appeal. It decided the overpayment had been caused by an official error and Mr X could not reasonably have been expected to know he was being overpaid. The decision meant Mr X did not have to repay any of the overpayment.
8. Mr X complained to the Council and asked for compensation. The Council declined. The Council explained that while it knew there had been an error it was still appropriate for the case to be heard by the tribunal because the tribunal had to determine whether it was reasonable for Mr X to have known he was being overpaid. The Council said it has a duty to protect public money and it did not find out the precise nature of the technical error until the day of the hearing.
9. Mr X disagrees with the Council’s decision not to pay compensation. He found the process very stressful and there was a negative impact of his health. He also says the Council knew, from the outset, there had been an official error. Mr X says the Council deliberately withheld the information and prolonged the process to wear him down.
10. I will not start an investigation because there is insufficient evidence of fault by the Council. The Council knew for some time there was a problem with the automated system but whether an overpayment is recoverable is not solely determined by whether there has been an official error. Regardless of when the Council got more information about the error, the case still needed to be determined by the tribunal to assess the reasonableness of Mr X being aware he was getting too much benefit. And, while Mr X had to wait for a hearing date, this was not within the Council’s control. Mr X says it was obvious he could not have known about the overpayment but it is not fault for a council to want the tribunal to make that decision.
11. The tribunal is the appropriate body to consider appeals about the overpayments and there is nothing in the regulations which say councils must pay compensation if someone successfully challenges an overpayment. I appreciate Mr X found the process stressful but it is also relevant that, through no fault by Mr X, he has benefited from money he was not entitled to.

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Final decision

12. We will not investigate this complaint because there is insufficient evidence of fault by the Council.

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Investigator's decision on behalf of the Ombudsman