Summary: Mr X complained about how the Council handled his application for Housing Benefit and Discretionary Housing Payment. We find no fault in how the Council considered capital, corrected payments, responded to his reasonable adjustment request, or handled his complaint. However, we do find fault in delays, failure to notify him when his claim was suspended, and poor communication which caused him distress, uncertainty, and time and trouble. The Council has agreed to apologise, make a payment to Mr X, complete an outstanding review of the October 2024 earnings, and take action to improve its services.

The complaint

1. Mr X complains about how the Council handled his application for Housing Benefit and his requests for a Discretionary Housing Payment (DHP). In particular, he says the Council:
• delayed processing his Housing Benefit claim;
• used incorrect figures for his income and capital when calculating his entitlement;
• failed to correct resulting underpayments;
• stopped his Housing Benefit without giving him notice;
• failed to respond to his DHP requests for several months; and
• did not act on his request for reasonable adjustments.
2. Mr X also complains about delays in the Council’s handling of his complaint.
3. He says the Council’s actions caused him financial hardship, stress and anxiety, and damage to his reputation.

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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. 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(1), as amended)

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How I considered this complaint

6. I considered evidence provided by Mr X and the Council as well as relevant law, policy and guidance.
7. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Relevant guidance and regulations

Housing Benefit

8. The Council manages and pays Housing Benefit which helps eligible people on low incomes pay their rent. Regulations set out the rules councils must follow for calculating and paying Housing Benefit. Usually the Council pays the tenant housing benefit. The tenant is then responsible for paying the rent to their landlord.

Housing benefit – payments to landlords

9. Regulations set out when councils:

• must pay housing benefit directly to the landlord. This includes where a claimant owes eight weeks or more rent; and
• should not pay housing benefit straight to the landlord.
  (Housing Benefit Regulations 2006, section 95 (1)(b))

10. Rent is overdue (in arrears) once the date it is due has passed, regardless of whether the tenant pays in advance or in arrears. The council’s duty to pay housing benefit directly to a landlord only arises if the landlord tells the council about arrears of eight weeks or more.

Housing benefit – overpayments

11. 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.

Housing benefit - appeals

12. If someone disagrees with a housing benefit decision they can ask the council for a review. If they have a review, and are not happy with the decision, they can then appeal to the tribunal. The law says people should appeal within one month of the date of the decision they think is wrong. Because the person can appeal, we would normally decide not to investigate complaints about these decisions.

Discretionary Housing Payments

13. A council can award discretionary housing payments (DHP) when someone needs help with housing costs and is claiming Housing Benefit or Universal Credit which includes housing costs towards rent. (Discretionary Housing Payments guidance manual May 2022, section 2.3)
14. Government guidance allows councils to choose (discretion) when to offer a DHP; there is no statutory right to payment. However guidance says DHP decisions must follow the ordinary principles of good decision making. This means councils must act fairly, reasonably, and consistently, and must decide each case by considering individual circumstances. Councils can decide:

• what questions to ask applicants;
• what award to make (if any); and
• how long to make payments for.
  (Discretionary Housing Payments guidance manual May 2022, sections 4.24 and 2.14)

15. The council must tell the applicant about its decision and explain its reasons if the decision is not to make a payment. The guidance says councils should make a decision as soon as it can and avoid unnecessary delay. The decision should tell the applicant how to ask for a review. (Discretionary Housing Payments guidance manual May 2022, section 4.30 to 4.32)

Reasonable adjustments for people with disabilities

16. 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.
17. 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.

What happened

18. Mr X applied for Housing Benefit in August 2024. At that time, he was already in rent arrears. The Council requested supporting evidence, which Mr X provided by mid-September.
19. In October, the Council assessed the claim using information available from HMRC, which indicated Mr X had earnings in September and October. Based on this, the Council awarded Housing Benefit and backdated payments to May 2024.
20. Mr X queried the calculation, saying the income figures were incorrect. The Council advised that it relied on HMRC data and that any corrections would need to be made by HMRC before it could reassess the claim. Around this time, Mr X also asked about support through a Discretionary Housing Payment (DHP).
21. In late November, HMRC updated its records to remove the September earnings, but October earnings remained. The Council revised the claim and notified Mr X in December.
22. In December, the Council suspended Mr X’s Housing Benefit and requested further information about financial transactions between his business and personal accounts. Mr X provided information in January 2025 and further details in March, including evidence of an eviction notice. He continued to request DHP support during this period and was eventually directed to make a formal application.
23. In April, after reviewing additional information, the Council noted Mr X had used Housing Benefit and pension back payments to support his business rather than his living costs. It decided he had deprived himself of capital and applied notional capital in its assessment. The Council also refused his DHP application and maintained the suspension of his benefit.
24. The Council referred Mr X’s case to its homelessness service to help prevent eviction.
25. Mr X requested a review of the DHP refusal. During this process, the Council became aware that Mr X’s child had left his household in October 2024 which had not been reported. The Council upheld its decision not to award DHP.
26. The Council then contacted Mr X’s landlord, confirmed the level of rent arrears, and arranged for Housing Benefit payments to be made directly to the landlord. In May, it reassessed the claim, removing the child from the calculation and identifying errors in how Mr X’s pension income had been treated. This resulted in both overpayments and underpayments. The Council decided not to recover the overpayments and paid the underpayment to the landlord.
27. In June, Mr X complained to the Council about delays, unclear communication, and the handling of his Housing Benefit and DHP requests. He also asked for a full statement of his claim, including a clear breakdown of payments made, and requested that Housing Benefit decision letters be provided as PDFs with a white background and black text.
28. The Council responded in July. It acknowledged delays and some communication shortcomings but maintained that its decisions were correct overall. It provided further explanation of how Mr X’s Housing Benefit had been calculated and clarified what payments had been made. It also explained it could not provide letters in the format requested, but that Mr X could access them via its online portal or request large print versions if needed.
29. Mr X escalated his complaint. In August, the Council issued its final response. It upheld its decision not to award a DHP but revised its position on deprivation of capital, deciding the pension back payment should not be treated as deliberate deprivation and would therefore remove the notional capital from the assessment. The Council also confirmed it would not recover any overpayments and that any underpayments had been paid.
30. The Council later issued a detailed reconsideration of Mr X’s Housing Benefit entitlement, providing a full breakdown of calculations and confirming payments had been made correctly. The underpayment resulting from the removal of the notional capital was paid to his landlord.
31. Mr X brought his complaint to the Ombudsman. The Council has continued to correspond with him and provide further explanations of its calculations.
32. In response to my enquiries, the Council acknowledged that Mr X’s Housing Benefit had been suspended on four occasions without issuing notification letters. It said it was taking steps to address this system issue.

My findings

Delay in processing Housing Benefit

33. The Council has acknowledged there were delays in processing Mr X’s Housing Benefit claim. The evidence shows the claim involved complex circumstances and required repeated requests for further information. However, overall the Council took longer than it should have to progress the claim. This was fault.
34. This delay caused Mr X avoidable distress, uncertainty, and time and trouble in pursuing the Council for updates while his financial situation remained unresolved.
35. The Council has apologised for the delay. Given the complexity of the case and that the Council ultimately corrected the claim, paid the correct entitlement, and did not seek to recover overpayments, I am satisfied this apology is a proportionate remedy for the injustice caused. There is no outstanding injustice requiring further remedy.

Use of incorrect income and capital figures

36. The Council based its calculations on HMRC data and information provided by Mr X. It was entitled to rely on this information unless and until it was corrected.
37. The Council also decided to treat certain funds as notional capital. This was a decision it was entitled to make. Although it later revised its position, this does not in itself indicate fault.
38. Overall, I am satisfied the Council explained its approach and acted in line with its powers. I find no fault.
39. However, I note the position regarding Mr X’s October 2024 earnings remains under review between the Council and HMRC. The Council should endeavour to resolve this as soon as possible.

Failure to correct underpayments

40. The Council identified and corrected underpayments and paid these to Mr X’s landlord.
41. However, there was a delay between identifying changes (following HMRC updates) and making payments. This delay was fault.
42. The Council has since corrected the position and ensured payments were made. I am therefore satisfied there is no outstanding financial injustice. However, the delay contributed to Mr X’s avoidable distress and time and trouble.

Suspension of Housing Benefit without notice

43. The Council has confirmed it suspended Mr X’s Housing Benefit on four occasions without notifying him.
44. While the reasons for the suspensions were appropriate, the failure to issue notification letters was fault. This caused Mr X confusion and required him to spend time contacting the Council to understand what was happening, leading to avoidable distress and frustration.
45. I also note this failure occurred multiple times. This indicates a wider systems or process issue rather than an isolated error. The Council has acknowledged this and said it is working to resolve the problem. This is important to prevent similar issues affecting other claimants.

Delay in responding to DHP requests

46. The Council did not clearly explain that it could not consider a DHP until Housing Benefit entitlement had been determined.
47. This lack of clear and timely communication was fault. It led Mr X to continue making requests that could not yet be progressed, causing frustration, uncertainty, and avoidable time and trouble.

Reasonable adjustments

48. Mr X requested documents in a specific format to assist him. The Council considered the request and explained why it could not provide documents exactly as requested but offered alternative ways to access the information.
49. There is no evidence Mr X was unable to access the service as a result. I do not find fault in how the Council responded to this request.

Complaint handling

50. The Council’s stage one response was slightly outside its standard timescale but within its extended timeframe for complex cases. Given the complexity of the issues, it was reasonable for the Council to take this additional time.
51. While it would have been preferable for the Council to keep Mr X updated about the delay, I do not consider this amounts to fault. The stage two response was provided within timescales.

Conclusion

52. There is evidence of broader shortcomings in the Council’s communication with Mr X. These include unclear explanations of decisions, delays in providing full information, and failure to clearly explain processes, particularly in relation to DHP and suspensions.
53. Taken together, these amount to a fault in communication. As a result, Mr X experienced avoidable distress, frustration, and uncertainty. He also spent time and trouble pursuing the Council for information and clarification.
54. Mr X has also said the Council’s actions caused reputational damage. However, I have not seen sufficient evidence to demonstrate this, and I therefore make no finding on that point.
55. There is no remaining financial injustice, as the Council has corrected entitlement, paid underpayments, and decided not to recover overpayments.

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Action

56. To remedy the injustice caused by the above faults, within four weeks of my final decision, the Council has agreed to:
• apologise to Mr X in line with our guidance on Making an effective apology; and
• pay Mr X £300 to recognise the distress, frustration, and uncertainty caused.
57. Within three months of the date of my final decision, the Council has agreed to:
• complete its review of the inclusion of earnings for October 2024 in Mr X’s Housing Benefit claim and notify him of the outcome; and
• implement the necessary system changes to ensure notification letters are automatically issued when Housing Benefit claims are suspended.
58. The Council should provide us with evidence it has complied with the above actions.

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Decision

59. I find fault causing injustice. The Council has agreed actions to remedy injustice.

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Investigator's decision on behalf of the Ombudsman