Summary: Mr X complained the Council took too long to assess his housing benefit entitlement which resulted in large benefit overpayments. The Council was entitled to reassess Mr X’s entitlement based on new relevant evidence and Mr X had a right of appeal if he disagreed with the decision. But it failed to take action promised in response to Mr X’s complaint and that was fault and caused continued uncertainty. The Council should now discuss with Mr X how it will assess his future income.

The complaint

1. Mr X complains the Council takes too long to assess his housing benefit entitlement due to fluctuations in income resulting in large benefit overpayments.
2. Mr X says this has caused distress and uncertainty and makes it difficult to properly manage his money.

Back to top

The Ombudsman’s role and powers

3. 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)

Back to top

How I considered this complaint

4. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

Back to top

What I found

Housing benefit – overpayments

5. If a council pays too much housing benefit to someone, it will usually ask them to repay it. The law says the council can get this money back unless it was caused by the council’s mistakes and it was not reasonable to expect the person to realise they were receiving too much benefit.
6. If someone disagrees with a decision about 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 the person can appeal, we would normally decide not to investigate complaints about these decisions.

Housing benefit – treatment of earnings

7. The Housing Benefit Regulations 2006 set out how a claimant’s income from employment earnings will be estimated. Regulation 29 says the average weekly earnings will be estimated over a period immediately preceding the benefit week in which the claim is made and will average five weeks if paid weekly or 2 months if paid monthly.
8. The regulations go on to say that were a claimant’s earnings fluctuate then an average over any other period preceding the benefit week can be used to enable the average earnings to be more accurately estimated.

Key facts

9. This section sets out the key events in this case and is not intended to be a detailed chronology.
10. Mr X was employed on a zero hours contract. This meant his hours of work fluctuated each week. Mr X therefore claimed housing benefit to supplement his income.
11. In April 2024, the Council sent a benefit determination notice to Mr X. It said that he had been overpaid housing benefit by £3,448.59 over a 33 week period from September 2023 to April 2024. It said the overpayment had occurred because he had failed to report a change in his income. It said that it may be able to reduce the overpayment if Mr X sends evidence of income and savings for the period. The decision notice also detailed Mr X’s appeal rights if he disagreed with the decision.
12. In response Mr X made a formal complaint. He said that he had been providing payslips every fortnight and had previously been told the Council would use a longer period to assess his benefit entitlement because of the fluctuation in order to make it fairer for him. He said despite sending in all his payslips since September 2023 he was again facing a large benefit overpayment which was causing anxiety.
13. The Council response stated there was a mismatch between the information Mr X provided and that provided by the Inland Revenue directly to the Council. It acknowledged the anxiety caused to Mr X when receiving an overpayment even though he provided fortnightly wage slips. It explained it did not assess housing benefit entitlement every two weeks due to the amount of correspondence and notification letters this would generate.
14. The Council partially upheld Mr X’s complaint saying that it could have worked more closely with him to find an acceptable period to use to assess his income. It said that he could still receive overpayments if there were extreme fluctuations in his income. It said it would review the last assessment which resulted in the £3,448.59 overpayment and contact him to agree a way forward to provide a fair assessment of his income. It said it would contact him within the next 10 working days.
15. On 21 June the Council sent Mr X another benefit overpayment notice. This stated Mr X had been overpaid £104.97 for the three week period from 3 June to 23 June. This was based on payslips dated from 31 May to 14 June. The notification letter included what Mr X could do if he considered the decision was wrong.
16. Mr X escalated his complaint to stage two of the complaints process in July 2024. He was unhappy that despite sending in a total of 30 weeks of payslips, it took the Council eight months to process them. Mr X said he was crippled with debt and didn’t know how he would ever get out of it.
17. The Council responded on 30 July. It said while it empathised with Mr X’s situation, the Council had explained why monies were owed. It said the cause of the issue was Mr X’s zero hours contract. It provided a link to a money advice service and suggested Mr X contact his GP for support. The response made no reference to the time taken to assess Mr X’s entitlement.
18. Dissatisfied with the response, Mr X complained to the Ombudsman.

Analysis

19. Mr X was employed on a zero hours contract meaning he did not work the same hours each week and as a result his income fluctuated. This made it more difficult for the Council to assess his entitlement to housing benefit because his income was not the same for each payment period.
20. The Housing Benefit Regulations 2006 set out how a Council should calculate average weekly earnings in order to assess entitlement. While the regulations do not make specific reference to zero hours contracts, they do give the Council discretion to determine what is a suitable period to work out average weekly earnings.
21. Mr X was paid fortnightly and from September 2023 sent in payslips for each two week period. I have not seen anything to suggest the Council requested Mr X to do this or that after he began sending them, it told him not to. Mr X was aware his income fluctuated and so wanted to provide information to the Council of his actual earnings and believed this would enable the Council to calculate his benefit entitlement on a fortnightly basis. In response to Mr X’s complaint, the Council explained it was not able to do this but I have seen nothing prior to April 2024 that the Council ever confirmed with Mr X how it would assess his average income.
22. In April 2024, the Council sent Mr X an overpayment notification. The letter said the overpayment occurred because Mr X had failed to notify a change in income. However, it later transpired that the recalculation of Mr X’s entitlement was because of new information provided by the Inland Revenue which differed from the information Mr X had provided. I find no fault in the Council acting on the information provided by the Inland Revenue which then resulted in a backdated overpayment.
23. It is not the role of the Ombudsman to calculate how much benefit Mr X is entitled to. This is a decision for the Council. If Mr X disagreed with the overpayment decision, then he could have used the rights of appeal. I have seen nothing to suggest Mr X disagreed with the Council’s assessment or that he appealed. If the information used by the Council to calculate the overpayment was wrong, then the appropriate route would be for Mr X to request a review and/or appeal.
24. While I find no fault in respect of the overpayment, I note the Council did uphold Mr X’s complaint saying that it should have worked with him to agree a suitable period for assessing his income. I have not seen any evidence to show the Council did this. This is fault and a suitable remedy would be for the Council to now do what it promised.

Back to top

Action

25. Within one month of my final decision, the Council should contact Mr X as promised in its stage one complaint response dated 29 May 2024 to discuss how it will fairly assess his income.
26. The Council should provide us with evidence it has complied with the above actions.

Back to top

Final decision

27. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

Investigator’s decision on behalf of the Ombudsman

Back to top

Investigator's decision on behalf of the Ombudsman