Summary: Mr X complained that the Council lost payments he made towards repaying a housing benefit overpayment and placed the onus on him to provide evidence of the payments. He also said the Council delayed in sending him an income and expenditure form and applied for an attachment of benefits order without giving him time to complete the form. We found find the Council was at fault in that it failed to tell Mr X about the missing payments. However, it has agreed to resolve the matter if Mr X provides bank statements. This is a satisfactory remedy for the injustice caused.

The complaint

1. Mr X says the Council lost payments he made towards repaying a housing benefit overpayment and placed the onus on him to provide evidence of the payments he made. He also says the Council delayed sending him an income and expenditure form and failed to allow him enough time to respond before applying for an attachment of earnings order.

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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 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)
3. 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)
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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What I have and have not investigated

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. I have decided there are good reasons to investigate back to March 2020. This is because Mr X first became aware of the missing payments in December 2022 and he has pursued the matter with the Council ever since. (Local Government Act 1974, sections 26B and 34D, as amended)

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How I considered this complaint

6. I have considered all the information provided by Mr X, made enquiries of the Council and considered its comments and the documents it provided.
7. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Legal and administrative background

Housing Benefit

8. 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.
9. If a council pays too much housing benefit to someone, it will usually ask them to repay it. The law says the council can recover an 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.
10. If someone disagrees with 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. Because of this opportunity for appeal, we would not normally investigate complaints about these decisions.

Universal Credit

11. Universal Credit includes an element for the claimant’s rent and replaces housing benefit. The Government administers Universal Credit.

Key facts

12. Mr X was overpaid housing benefit because of increases in his income. He began re-paying the overpayment by standing order in 2015 at the rate of £48 per month. The last payment received into Mr X’s housing benefit overpayment account was in May 2020.
13. In March 2021 the Council sent Mr X a final notice for the outstanding balance of £3519.95. The letter said the overpayment remained unpaid and Mr X had failed to contact the Council to discuss the matter. It said full settlement was expected within 14 days.
14. On 5 July 2022 £15 was paid into Mr X’s housing benefit overpayment account by standing order.
15. In August 2022 another £15 was received into Mr X’s account. The Council sent Mr X another invoice for £3519.95.
16. In September another £15 was received. The Council wrote to Mr X about the outstanding amount again. He responded saying he had paid £48 every month by standing until July 2022 when he reduced the payment to £15 as he had become unemployed. He said he would increase the payment back to £48 per month.
17. The Council sent Mr X a financial statement to complete. It asked him to return this with proof of income and expenses. Mr X returned the completed form together with three months’ bank statements. He said he wanted to pay £48 per month.
18. On 17 October the Council told Mr X it would accept instalments of £48 per month but a review would take place in April 2023 and he would have to increase the payments or submit another financial assessment form.
19. Mr X increased the standing order to £48 per month in November 2022.
20. In December the Council sent Mr X another letter regarding the outstanding balance. Mr X sent an email to the overpayment team asking why a letter had been sent as he had been making the payments.
21. An officer responded explaining she had looked at Mr X’s account and it appeared that his payments were going to the Council’s suspense account and then had to be manually allocated to his account. She explained the Council had not received a payment since 4 March 2020.
22. Mr X provided a screenshot showing that further payments had been made. The officer said that, for the Council to locate these payments, Mr X would need to provide official bank statements showing all the payments made since March 2020 and confirm the reference used on the payments. She explained the Council could not accept screenshots of bank statements.
23. Mr X argued he had been paying by standing order since 2014 and the only difference was that in 2021 he reduced the payments from £48 per month to £15 per month.
24. On 24 December Mr X complained to the Council.
25. An officer responded to Mr X’s complaint on 4 January 2023 explaining that, when payment was made without a clear and correct reference number, it could be difficult to locate it. To avoid missing payments, the overpayments team required all payments to be made using either their reference number or invoice number. The officer confirmed these numbers. She explained that the last instalment received from Mr X by the overpayment team was on 4 March 2020 for £48. She said that, if he had made payments since that date, he should provide official bank statements so the Council could see what reference was used when the payments were made. The officer explained she had contacted the cashier’s department to begin an investigation but they would need the bank statements showing all payments made after March 2020 to locate the missing payments. She explained that if Mr X was not willing to provide this information the Council would not be able to locate the instalments and the current outstanding balance would remain due.
26. On 27 January an officer sent Mr X a statement of account showing all payments received in relation to his overpayments. She requested the bank statements by 13 February.
27. Mr X explained he did not have access to bank statements back to 2020 but he would try to obtain these from his bank. In the meantime, he provided bank statements from July 2022 onwards.
28. On 31 January an officer informed Mr X that, from the statements he had provided, it was clear that he had not included a reference on the standing order. This had caused the payments to go to the Council’s suspense account instead of Mr X’s overpayment account. The officer explained that incorrectly made or incorrectly referenced payments automatically go into the suspense account which receives hundreds of payments every day. For the Council to identify payments in the account it needed proof of each payment including the amount, date and reference number used. The officer said that, once Mr X had provided this information, the payments could be located and allocated to his account. The officer said, “we are willing to find the payments and resolve this issue but we require evidence from yourself first in order to locate them”.
29. Mr X responded saying the Council had provided him with its bank details for the standing order while and he had been making payments since 2014.
30. In March the Council wrote to Mr X again explaining that his payments were received into the suspense account because no reference was quoted. It again asked him to provide bank statements so it could locate the payments. It explained that his bank would be able to provide historic statements.
31. On 6 June the Council wrote to Mr X saying that the arrangement to repay the overpayment by instalments of £48 per month was now due for review. It said he either needed to increase his payment to £180 per month or complete and return the enclosed income and expenditure form by 6 July together with the requested documentation.
32. Mr X responded the same day saying the Council needed to investigate the missing payments. He said he would reduce his payment to £1 because he was now unemployed.
33. The Council again explained it could not investigate the missing payments until Mr X provided bank statements. It said failure to increase payments to £180 per month or complete the income and expenditure form would result in further action being taken to recover the outstanding balance.
34. On 9 June Mr X again said he would reduce his payment to £1.
35. On 15 June the Council applied for an attachment of benefits to recover the outstanding balance from Mr X’s Universal Credit award.
36. The overpayments team leader wrote to Mr X explaining that the Council had requested bank statements to locate any payments he had between March 2020 and July 2022 several times but he had not provided them. She said that, as Mr X had explained that he was not in employment and would be reducing his payment to £1 per month, an application had been made to recover the outstanding balance via deductions from his Universal Credit award. So Mr X was no longer required to make any payments manually.
37. Mr X responded on 19 June saying he had sent the completed income and expenses form on 8 June by post. He said the Council had taken the decision to apply for an attachment of benefits without considering the form.
38. An officer considered the income and expenditure form submitted by Mr X. She noted that an attachment of benefits had been completed before the information was received. She also noted that not enough supporting evidence had been provided as the council required three months bank statements and proof of income. However no further action would be taken because the attachment of benefits was already in place. If the monthly deduction was not affordable, Mr X could negotiate this with the DWP.
39. The Council wrote to Mr X on 7 July explaining that an attachment of benefits was set up because he had failed to comply with its requests and instead stated he would be reducing his payments to £1. It said the decision to recover the overpayment via an attachment of benefits could not be reconsidered until Mr X provided the requested evidence.

Analysis

Missing payments

40. Mr X says the Council lost payments he made towards repaying the overpayment between March 2020 and July 2022 and then placed the onus on him to provide evidence of the payments he made. He says the standing order continued uninterrupted from 2015 and he made no changes to the reference number or bank details (although he reduced the amount in April 2021) and the money left his account.
41. The Council says that between March 2020 and July 2022 no payments were received into Mr X’s overpayment account. Having investigated, it says Mr X did not include a reference number on the standing order so the payments went into its suspense account. It says it was Mr X’s responsibility to ensure the correct reference was included on the standing order so the payments went into the correct account.
42. Although the standing order was Mr X’s responsibility, I would have expected the Council to inform him about the missing payments sooner.
43. The Council has explained that, although the last payment was received in March 2020, it did not write to Mr X until March 2021 because of the COVID-19 pandemic. It says that, during 2020, the overpayments team was limiting notices for repayment and was not consciously reviewing repayment plans because doing so was causing many people severe stress and financial worry during an already difficult time. The Council therefore decided to place all active recovery on hold during this timeframe. I accept the Council’s explanation.
44. However, when the Council finally wrote to Mr X in March 2021, it simply sent an overpayment final notice. It did not explain that it had not received any payments from him for the previous 12 months. It then failed to pursue the matter further until July 2022 when it sent another overpayment invoice. Again, it did not explain to Mr X that no payments had been received since March 2020. Failure to do so was fault. If the Council had explained this to Mr X, he would have had an opportunity to resolve the matter sooner. He did not find out about the missing payments until December 2022. However, I would also have expected Mr X to take some action after receiving the overpayment final notice in March 2021.
45. The Council has offered to search for the payments in its suspense account and move them to Mr X’s overpayment account. I am satisfied that this is an appropriate remedy for any injustice caused by the Council’s fault. It is now open to Mr X to provide bank statements to enable the Council to locate the payments and credit them to his account.

Attachment of benefit

46. The Council wrote to Mr X on 6 June 2023 stating that the payment arrangement was due for review and he should either increase his payments to £180 per month or complete and return an income and expenditure form by 6 July 2023. It said failure to do so would result in action being taken to recover the outstanding balance in full.
47. Mr X says the Council did not enclose an income and expenditure form with its email. He says he explained this and the Council sent one to him by email on 26 June. However, in the meantime, he found a copy of the form online and sent a hardcopy by post on 8 June 2023.
48. I have seen no evidence to confirm when the Council sent Mr X the form. But, even if the Council did delay in sending it, this did not cause Mr X an injustice because he found a copy of the form shortly after receiving the Council’s email of 6 June 2023.
49. Mr X says the Council was wrong to apply for an attachment of benefits before the deadline of 6 July 2023 and failed to consider his income and expenditure form. He says he also sent a copy by email on 5 July 2023.
50. The Council says it decided to apply for an attachment of benefits because it had been corresponding with Mr X for some time about this matter and he had made it clear he was not going to adhere to any repayment plan request and intended to lower his instalments to £1 per month. The Council says the Government would then decide how much it was reasonable to deduct from Mr X’s benefits.
51. I find this was a decision the Council was entitled to reach. In the absence of fault in the way the decision was made, there are no grounds to question it.

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Final decision

52. I find the Council was at fault in that it failed to notify Mr X about the missing payments within a reasonable timeframe. However, it has proposed an appropriate remedy for any injustice caused.
53. I do not uphold the remainder of Mr X’s complaint.
54. I have completed my investigation on this basis.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman