Summary: Ms X complains the Council have not provided a sufficient remedy after it miscalculated her Housing Benefit entitlement between 2017-2021. Ms X also complains the Council overcharged her rent for almost 12 years. We have concluded our investigation having made a finding of fault. The Council failed to process Ms X’s income correctly, leading to an underpayment of Housing Benefit. Although the Council has credited Ms X’s rent account, there was scope to provide an improved remedy. We also found that the overcharge on Ms X’s rent account did not cause an injustice to her, as she was in receipt of Housing Benefit during this period. The Council has agreed to our recommendations.

The complaint

1. Ms X complains that Council have not provided a sufficient remedy to acknowledge the injustice imposed on her after it miscalculated her Housing Benefit entitlement between 2017-2021. Ms X also complains the Council breached its tenancy agreement, and that she has been overcharged rent by the Council for almost 12 years. Ms X would like the Council to provide a remedy to acknowledge the overcharge and injustice imposed on her.

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The Ombudsman’s role and powers

2. 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)
3. 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 a council’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 liaised with Ms X and considered the information she provided. I also made enquiries with the Council and considered the information it provided. Ms X and the Council will have an opportunity to comment on my draft decision before I make a final decision.

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What I found

Relevant law and guidance

Housing Benefit

6. Housing Benefit helps people on low incomes to pay their rent. 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.
7. The council must make a decision about Housing Benefit in writing. The decision notice must also advise claimants of their rights to ask for more information and to appeal. If a claimant disagrees with a decision they can ask the council to reconsider it. The council must then review the decision again. (Housing Benefit Regulations 2006)
8. If a claimant remains unhappy after a review they can ask the council to pass their appeal to the Social Entitlement Chamber of the First-Tier Tribunal (the Tribunal). Claimants must send their appeal to the council within one month and the council will refer the appeal to the Tribunal. The council can consider appeals up to 13 months from the date of its original decision. (The Tribunal Procedure (First-Tier Tribunal) (Social Entitlement Chamber) Rules 2008)
9. Where the council receives an appeal they can reconsider the decision before passing it to the Tribunal. If the decision remains unchanged they must pass the matter to the Tribunal “as soon as reasonably practicable”. (Rule 24(1A) of The Tribunal Procedure (First-Tier Tribunal) (Social Entitlement Chamber) Rules 2008)

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What happened

10. I have included a summary of some of the key events in this complaint This is not intended to be a comprehensive account of everything that took place.
11. Ms X’s rent account was set up in October 2009 following her move to Property A. Property A is a three-bedroom dwelling. In 2010, Ms X’s rent was changed from £303.80 to £375 a week. During this period, Ms X was also in receipt of Housing Benefit.
12. In January 2017, the Council says it received notification that Ms X had begun a new job and so it requested a P45 for her previous employment, and a contract for her new employment.
13. The Council says it used Ms X’s employment letter to calculate her earnings from January 2017.
14. The Council say that some of Ms X’s payslips were provided in October 2021 and November 2021, and in February 2022, it requested further earnings information so it could review the claim from 2017.
15. In February 2022, Ms X wrote to the leaders’ office, raising concerns that her income had not been processed correctly when calculating her Housing Benefit entitlement, and that she had been charged rent at the four-bedroom rate, rather than the three-bedroom rate.
16. Ms X received a response in March 2022, informing her that the Council would review her earned income from January 2017, as it had not processed her net income using payslips as it should have done. Ms X was also advised that whilst it acknowledged her rent had been charged incorrectly, as Housing Benefit is a means tested benefit, this would not have impacted her contribution to rent.
17. In March 2022, the Council received the earnings information it needed and corrected Ms X’s Housing Benefit claim. The Council’s reassessment found that Ms X had been underpaid Housing Benefit for the period January 2017 to October 2021, for an amount of approximately £13,000. The Council paid this amount into Ms X’s rent account. The Council wrote to Ms X informing her of the outcome of its reassessment.
18. Unhappy with how it resolved matters, Ms X wrote to the Council, expressing that the Council’s actions were not unacceptable, and that she should be recompensed for the impact its miscalculations had on her. The Council offered Ms X an amount of £200 in recognition of the distress and frustration caused.

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Analysis

Housing Benefit

19. In order to process Ms X’s claim correctly, the Council should have used Ms X’s payslips. The Council says it should have been proactive in requesting this information from Ms X, and that it missed opportunities to request this information sooner. The Council also acknowledges that Ms X would not have known to provide copies of her payslips and that the onus was on its service to make this clear and request the information from Ms X at the time of the initial assessment.
20. This is fault which has caused an injustice to Ms X. This is because the Council did not process Ms X’s earnings correctly, thus causing Ms X financial hardship. Ms X was already in receipt of Housing Benefit, but was not receiving the full entitlement, thus placing additional stress on her finances. In recognition of this, the Council credited Ms X’s rent account and offered Ms X an amount of £200 to acknowledge the distress and frustration caused. I don’t consider that this is a sufficient remedy and there is scope for an improved remedy to acknowledge the injustice imposed on Ms X.
21. The Council says it now has access to additional information which enables it to accurately assess claims. The Council also says that benefit assessors have been reminded to request payslips when in receipt of a new employment contract so it can correctly assess earnings.
22. I do not consider this is scope to propose any further service improvements, this is because the Council has acknowledged the processes that led to miscalculating Ms X’s Housing Benefit entitlement and has addressed its staff to ensure the correct information is always requested. The Council has also since gained access to further information that enables it to process claims accurately.

Rent overcharge

23. The Council says an administrative error led to Ms X’s rent account being set up incorrectly. The Council says Ms X should have been charged an amount of £310 instead of £375.
24. The Council says that whilst it acknowledges the administrative error, as Ms X was in receipt of Housing Benefit throughout, she has not been overcharged. This is because Housing Benefit is means tested, and so a higher rental charge would have resulted in an increase in Housing Benefit entitlement.
25. I agree with the Council’s comments that the administrative error that led to the rent overcharge has not caused Ms X an injustice. This is because Ms X’s would not have been impacted by the overcharge in rent, as this would have increased her Housing Benefit entitlement, rather than the amount she as contributing to her rent.
26. I asked the Council whether other service users had been impacted by a similar error. The Council says it checked other three-bedroom tenancies set up at a similar time, and did not observe any similar errors. The Council also says it is not aware of any complaints received from our service users relating to these matters.

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Agreed action

27. As per our guidance on remedies, where we decide it is appropriate, we will normally recommend a remedy payment for distress of up to £500. I consider that due to the length of time, and financial hardship imposed on Ms X as a result, that an award at the highest end of the recommended payment is suitable.
28. To remedy injustice caused in this complaint, the Council has agreed to:
1. Provide an apology to Ms X. The apology should be in line with our guidance on remedies.
2. Pay Ms X an amount of £500, as a symbolic payment to acknowledge undue significant distress caused when it miscalculated her Housing Benefit entitlement.
29. The Council will complete actions a and b within one month of the Ombudsman’s final decision. The Council will provide the Ombudsman with evidence is has completed the above actions.

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Final decision

30. I have concluded my investigation having made a finding of fault. The Council failed to process Ms X’s income correctly, leading to an underpayment of Housing Benefit. Although the Council has credited Ms X’s rent account, there was scope to provide an improved remedy. I also found that the rent overcharge on Ms X’s rent account did not cause an injustice to her, as she was in receipt of Housing Benefit during this period. The Council has agreed to our recommendations.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman