Summary: Miss X complained about the Council’s actions in recovering a housing benefit overpayment. There was fault in how the Council communicated with Miss X about the recovery action. It also delayed responding to Miss X’s complaint and failed to consider her request for reasonable adjustments. Although it did not affect the decision to recover the overpayment, fault by the Council caused Miss X avoidable distress, time, and trouble. The Council agreed to apologise, agree reasonable adjustments it will make for Miss X, and pay her a financial remedy. It will also share our decision with, and issue reminders to, relevant staff.

The complaint

1. Miss X complains about the Council’s actions in recovering a housing benefit overpayment it made in 2015. Miss X says:
• she did not receive an overpayment as the Council paid the money to her landlord. The Council wrongly decided to pursue her for this as an overpayment;
• the Council was at fault in its recovery action from 2015 to 2022. There were significant gaps in contact, and it did not communicate with her properly; and
• in 2022 the Council decided to use a direct earnings attachment (DEA) to recover the money directly from her salary via her employer. It did not properly consider this decision, or her complaint about it.
2. Miss X says because of this she experienced:
• financial loss and hardship; and
• distress and frustration. Her mental health has worsened, and the issues have had a greater effect because she is neurodivergent.
3. Miss X wants the Council to:
• apologise;
• refund the money she has lost to pay back the overpayment, including the processing fees which were part of the DEA; and
• improve its services to prevent the same issues occurring in future.

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The Ombudsman’s role and powers

4. 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. 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 has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal about the same matter. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
7. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
8. 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

9. I considered:
• information and documents provided by Miss X, and discussed the complaint with her;
• relevant law and guidance; and
• the Ombudsman’s Guidance on Jurisdiction and Guidance on Remedies.
10. Miss X and the Council had opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

What should have happened

Housing benefit

11. Housing Benefit helps eligible people on low incomes pay their rent and the Council manages and pays this. The Housing Benefit Regulations 2006 (the Regulations) set out the rules councils must follow for calculating and paying Housing Benefit. Usually, the Council pays housing benefit to the tenant. However, Councils can pay direct to landlords in limited circumstances, as set out in the Regulations.
12. If a council pays too much housing benefit to someone, it will usually ask them to repay it, but the decision to recover is discretionary. Councils can recover an overpayment from the claimant or the person to whom it made the overpayment, for example the claimant’s landlord. The law says the council can recover overpayment 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.
13. The Social Entitlement Chamber of the First Tier Tribunal (also known as the Social Security Appeal Tribunal), is a tribunal that considers housing benefit appeals. If someone disagrees with a housing benefit decision, including a decision that they must repay an overpayment, they can appeal to the tribunal. The law says people should appeal within one month of the date of the decision they think is wrong. The tribunal can accept a late appeal up to 13 months from the date of the decision. Because of this opportunity for appeal, we would not normally investigate complaints about these decisions.
14. There is government guidance which sets out good practice for councils in how to recover overpaid housing benefit. This says the following.
• Councils may use a direct earnings attachment (DEA) to recover overpaid housing benefit from a claimant. This means it recovers the money directly from the claimant’s salary via their employer.
• DEAs are intended as a “last resort” recovery option, used where the claimant fails to engage with the Council and make a reasonable repayment offer, or defaults on an agreed arrangement.
• It is good practice to send a “letter before action” before starting a DEA, to give the claimant opportunity to arrange payment first.
• If following good practice, the Council should issue the letter before action within 31 days of identifying an overpayment. The whole process up to issue of the DEA letter to the claimant’s employer should take 52 days.
• Where a claimant claims financial hardship, councils should ask them to complete an income and expenditure form. There should be a set procedure for reducing repayment amounts once the claimant provides a completed form.

The Equality Act and reasonable adjustments

15. The Equality Act 2010 protects the rights of individuals and supports equality of opportunity for all. It offers protection in employment, education, the provision of goods and services, housing, transport, and the carrying out of public functions.
16. The Equality Act makes it unlawful for organisations carrying out public functions to discriminate on any of the nine protected characteristics listed in the Equality Act 2010. They must also have regard to the general duties aimed at eliminating discrimination under the Public Sector Equality Duty. The ‘protected characteristics’ referred to in the Act are: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation.
17. We cannot find that an organisation has breached the Equality Act. However, we can find an organisation at fault for failing to take account of its duties under the Equality Act.
18. The reasonable adjustment duty is set out in the Equality Act 2010 and applies to any body which carries out a public function. It aims to make sure that a disabled person can use a service as close as it is reasonably possible to get to the standard usually offered to non-disabled people. Service providers are under a positive and proactive duty to take steps to remove or prevent obstacles to accessing their service. If the adjustments are reasonable, they must make them. The duty is ‘anticipatory’. This means service providers cannot wait until a disabled person wants to use their services, but must think in advance about what disabled people with a range of impairments might reasonably need.
19. In May 2022 we published a focus report, “Equal access: Getting it right for people with disabilities". This set out what we expect from bodies we investigate in considering and implementing reasonable adjustments. This said a relevant body should:
• be proactive in asking every person who approaches the service whether they need any changes to be made in the way they are dealt with;
• where it is aware of a person’s disability, anticipate their needs and make any necessary reasonable adjustments in consultation with them or their representative. The service should not wait for the person to tell them what adjustments they require; and
• where a person asks for reasonable adjustments to be made, put these in place unless the request is not considered reasonable.

The Council’s complaints procedure

20. The Council says when dealing with a complaint it will respond at:
• Stage 1 within 10 working days; and
• Stage 2 within 20 working days.

Summary of key events

21. In 2015, the Council received information directly from the Department of Work and Pensions (DWP) which showed Miss X had received Employment Support Allowance (ESA). ESA is a benefit which helps with living costs for people who have a disability or health condition that affects how much they can work. Based on this information from DWP, the Council decided Miss X was eligible to receive housing benefit. However, the information from DWP was not up to date. Therefore, the Council made an overpayment of housing benefit for five months. It paid Miss X’s landlord directly, so she says she was not aware of this.
22. Later in 2015, the Council checked updated DWP records and discovered it had made an overpayment. It wrote to Miss X to tell her she had to repay this, along with a smaller overpayment of housing benefit it said it had made to Miss X in 2013. Miss X accepted the 2013 overpayment was correct and repaid this. However, she queried the 2015 overpayment as she said she had not made a claim for housing benefit or received any money.
23. In late-2015 Miss X agreed over the phone to a payment plan for the 2015 overpayment, but says she was “bullied into this” and did not understand what she was agreeing to. She made a small repayment in mid-2016 but did not make any further repayments.
24. In 2020, after four years without contact, the Council contacted Miss X to chase recovery of the 2015 overpayment. Miss X sought independent advice about the issues, and in early-2021 asked the Council for more information about the reasons for the overpayment. The Council responded to explain the dates of the overpayment. Miss X then contacted a local councillor for help with the issue. The councillor told her they would look into this and contacted the Council’s finance team. The Council finance team responded to the councillor and explained the next stage of debt recovery would be a direct earnings attachment (DEA) to recover the money directly from Miss X’s salary via her employer. It said Miss X should arrange a payment plan if she wanted to avoid this. There was no evidence the councillor relayed this information to Miss X, and Miss X says she did not hear further from the councillor.
25. In December 2022, nearly two years after the Council last sent Miss X a final reminder about the money, it wrote to her again. It said it would use a DEA to recover the money and would contact Miss X’s employer within 21 days if it did not hear further from Miss X to arrange payment.
26. Miss X contacted a local councillor, within 21 days, to ask for help with the issue. She then contacted the Council’s benefits team in January 2023, and says it told her she could appeal against the DEA. Miss X made an appeal to the Council and asked it to provide evidence she had made a housing benefit claim in 2015. She also provided evidence she was in employment during the disputed period and so not in receipt of ESA.
27. In late-January 2023, Miss X had not received a response to her appeal so made a complaint. She asked the Council to pause the DEA until it had completed consideration of her appeal and complaint. The Council’s benefits team said it would not pause the DEA and suggested she contact her landlord to seek the overpaid money. It told Miss X she could no longer appeal to the Social Security Appeal Tribunal because she should have done this in 2015, within one month of the original decision to recover the overpayment. However, it told her to contact the Council within one month if she thought its decision was wrong.
28. The next day, Miss X came to the Ombudsman. We told Miss X we could not consider the complaint until the Council completed its complaints process.
29. Shortly after this, Miss X spoke to the Council’s debt recovery team over the phone. It told her that based on her salary it would collect 20% of her monthly earnings using the DEA, until the overpayment was recovered. It said it could consider whether this was affordable for her if she completed and returned a financial assessment within two weeks, and it sent her the form for this. The Council spoke to Miss X again the next day. She said she had received the financial assessment form but would not be completing this and would instead accept the DEA as proposed, which would clear the debt in two months.
30. A week later, the Council responded to Miss X’s complaint at Stage 1 of its complaints procedure. It said its position on the overpayment remained the same and it would not withdraw the DEA. However, it said it would consider any information Miss X could provide about her ESA to show the Council created the overpayment in error. It directed her to Stage 2 of its complaints procedure.
31. Three weeks later, Miss X escalated her complaint to Stage 2 and provided further evidence of why she thought the Council was at fault. She also explained she is neurodivergent and asked it to provide reasonable adjustments for this. She asked for all correspondence going forwards to be by email, in ‘bionic text’; this means some text is in bold to make it easier to process.
32. Three months later, the Council had not responded to Miss X’s Stage 2 complaint, so she chased this. By this time, the Council had started the DEA and recovered all the overpayment direct from Miss X’s salary, in two monthly instalments.
33. The Council responded to Miss X at Stage 2 in July 2023. Its position remained the same and it directed Miss X to contact us, so we began our investigation.

My findings

What I have and have not investigated

34. Miss X complained about the Council’s actions from 2015 to 2023. The law says we cannot investigate events which happened more than 12 months before somebody complained to us, unless we decide there are good reasons to. Miss X came to the Ombudsman in February 2023, so we would usually only look at what happened after February 2022.
35. I accept significant gaps in contact from the Council caused confusion to Miss X, and meant these issues remained unresolved. However, each time the Council failed to resume contact, Miss X assumed the issue was resolved despite no confirmation from the Council that this was the case. Miss X has been aware of the issues since 2015 and, although infrequent, there was repeated contact from the Council over a period of seven years. I am satisfied Miss X could have complained to the Council about events before 2022 earlier, and there are no good reasons to investigate those earlier events now.
36. Therefore, I have only considered what happened after the Council sent the DEA letter in December 2022. This means I have looked at:
• recovery action taken by the Council since 2022; and
• how it considered information Miss X provided in 2022 and 2023 about its decision to use a DEA, including her complaint about these issues.

Direct Earnings Attachment (DEA)

37. The Council told Miss X delays in recovery were because it previously lacked the resources and capacity to pursue historic debts. There is no time limit by which councils must recover a housing benefit overpayment. Therefore, the Council’s decision to continue recovery in 2022, seven years after it identified the overpayment, and two years after its last reminder to Miss X, was not fault. However, government guidance indicates the whole process from identifying an overpayment to issuing a DEA letter to the claimant’s employer should take 52 days. Therefore, although not fault, I consider this delay showed a lack of good practice.
38. I considered whether there was fault in the process the Council followed when it decided to use a DEA in 2022.
39. The Council sent Miss X a letter before action in December 2022 in line with the relevant guidance. Miss X then made contact within the 21 days specified.
40. After Miss X complained, the Council told her, before the DEA began, that it would consider any information she wanted to provide to show why she thought the Council was mistaken to create the overpayment. Miss X escalated her complaint to Stage 2, and provided further evidence for consideration. However, the Council then delayed in responding to the complaint until five months later, by which point it had recovered the money in full via the DEA.
41. There was no requirement for the Council to suspend recovery action while dealing with a complaint through its corporate complaints process. However, given it had offered to consider further evidence from Miss X, I consider it should have done so in good time, before it wrote to her employer and began the DEA. Its failure to do so, was fault.
42. I considered whether, had the Council considered this in good time, it would have changed anything for Miss X. When the Council responded to Miss X’s complaint at Stage 2, although late, this confirmed its position had not changed based on the information she provided. I have considered the evidence Miss X provided, and am satisfied that had the Council considered this before it began the DEA, it would not have exercised discretion to cancel the recovery, or the DEA.
43. When Miss X escalated her complaint to Stage 2, she told the Council the DEA would cause her financial hardship. The Council did not respond to this specifically when it issued its final complaint response, by which time it had already recovered the overpayment in full. However, I am satisfied the Council had already considered affordability before it began the DEA. It offered Miss X the opportunity to complete a financial assessment and she declined to do so, opting instead for the Council to continue with the proposed salary percentage of 20%.

The Equality Act and reasonable adjustments for Miss X

44. We cannot decide if an organisation has discriminated against an individual, or if it has breached the Equality Act. However, we can find an organisation at fault for failing to take account of its duties under the Equality Act. The Council failed to properly take account of its duties under the Equality Act in how it communicated with Miss X.
45. As described at paragraph 19, our “Equal access” focus report says where someone asks for reasonable adjustments to be made, these should be put in place unless the request is not considered reasonable. The Council did not consider or respond to Miss X’s request for reasonable adjustments when she escalated her complaint to Stage 2, which was fault. Because of this, the Council did not communicate with Miss X in the way she needed it to, which caused her distress and confusion. The Council should remedy the injustice caused.

Complaint handling

46. The Council took 20 weeks to respond to Miss X’s complaint at Stage 2. This was a delay of 16 weeks, which was fault. This delayed the Ombudsman in being able to investigate the complaint, by which time the Council had already actioned the DEA and taken the money from Miss X. The Council should provide a remedy for the time and trouble caused to Miss X by its delay in complaint handling. However, although frustrating for Miss X, I do not consider this delay changed the outcome in terms of the Council’s decision to continue with the DEA.

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Agreed action

47. Within one month of our final decision the Council will:
1. apologise to Miss X for the faults identified and the impact of those faults. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The Council should consider this guidance in making the apology;
2. agree, in consultation with Miss X, any reasonable adjustments it will provide to help her use its services, then ensure it implements these across its services;
3. pay Miss X a total of £250, comprising of:
1. £150 to recognise the avoidable distress caused by the Council’s faults; and
2. £100 to recognise the avoidable time and trouble caused to Miss X by failings in complaint handling.
48. Within three months of our final decision the Council will share a copy of our final decision with all staff who work in its benefits, debt management, and complaints teams. It will also remind them of the Council’s duties under the Equality Act 2010, including the reasonable adjustment duty.
49. The Council will provide us with evidence it has complied with the above actions.

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Final decision

50. I have completed my investigation. There was fault by the Council which caused Miss X avoidable distress, time, and trouble. The Council agreed to our recommendations to remedy this injustice and share our decision with/issue reminders to relevant staff.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman