Summary: The Council was at fault for incorrectly telling Mr and Mrs X to apply for Universal Credit in order to continue receiving Council Tax Support. As a result, Mr and Mrs X were unnecessarily moved onto Universal Credit and financially worse off, however they have now been re-awarded Income Support and received a backdated payment. The Council agreed to apologise to Mr and Mrs X and review the information it sends to mixed age Council Tax Support claimants who reach pensionable age.

The complaint

1. Mr and Mrs X complain they were incorrectly told by the Council to claim Universal Credit in order to continue to receive Council Tax Support.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
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)

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How I considered this complaint

4. As part of this investigation, I considered the information provided on behalf of Mr and Mrs X by their representative Ms Y. I discussed the case with Ms Y. I made some enquiries to the Council and considered the response received. I sent a draft of this decision to Ms Y and the Council and considered comments received in response.

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What I found

5. Council tax is a system of local taxation collected by councils. It is a tax on domestic property. Every domestic property has a council tax band. This is set by the Valuation Office.
6. Council Tax Support (sometimes called council tax reduction) are local schemes to help those on a low income with payment towards all or part of their council tax. Each council has its own rules for what it will pay working age claimants.
7. Universal credit was introduced in 2013 as a replacement for certain means-tested benefits and is administered by the Department for Work and Pensions (DWP). 

What happened

8. Mr and Mrs X were claiming Income Support. They were also in receipt of Council Tax Support.
9. In September 2021, the Council wrote to Mr X to tell him that in order to keep claiming Council Tax Support he needed to make a claim for Universal Credit. This was on the basis Mr X was reaching pensioner age but his partner, Mrs X was not.
10. Mr and Mrs X made a claim for Universal Credit after receiving the Council’s advice to do so. After making the claim they realised that the amount of money they received from Universal Credit was less than what they received when claiming Income Support.
11. In November 2021, Mr and Mrs X complained to the Council with the help of Ms Y. They complained the Council wrongly told them to claim Universal Credit and as a result they were £60.80 per week worse off. They argued they did not have to claim Universal Credit and could have stayed on their existing legacy benefits.
12. The Council sought advice from the DWP in November 2021. In February 2022, the DWP confirmed to the Council it was correct to tell Mr and Mrs X to apply for Universal Credit. The Council then contacted Ms Y and provided the response it received from the DWP.
13. Ms Y contacted the Council again on 5 August 2022 and said the Council wrongly told Mr and Mrs X to claim Universal Credit. Ms Y provided the Council with details to show how their income now differed under Universal Credit compared to Income Support.
14. The Council responded on 11 August 2022 and attached the email it received from the DWP saying the Council acted appropriately when it told Mr and Mrs X to apply for Universal Credit.
15. Ms Y contacted the Ombudsman as Mr and Mrs X remained dissatisfied with the Council’s response. Following this the Council agreed to put the matter through its complaints procedure.
16. On 23 September 2022, the Council provided its response to Mr and Mrs X’s complaint. The Council did not uphold the complaint on the basis it sought advice from the DWP in November 2021, who confirmed the Council was correct to tell Mr and Mrs X to apply for Universal Credit.
17. After receiving this response Ms Y contacted the DWP to raise a complaint. This resulted in the DWP acknowledging the advice it gave to the Council in February 2022 was wrong. The DWP said Mr and Mrs X should not have been told to apply for Universal Credit and could have remained on legacy benefits.
18. Ms Y asked the Council to review its response at the next stage of its complaints process in October 2022. Ms Y said:
• The DWP apologised and were making a special payment to Mr and Mrs X of £100 to recognise the wrong advice it provided to the Council in February 2022.
• The DWP also said it does not tell claimants to make a claim for Universal Credit as part of their service and always tell claimants to seek advice before claiming. As the Council told Mr and Mrs X to claim Universal Credit, the Council bears the responsibility for the mis-advice.
• Mr and Mrs X have lost in the region of £3,000 in benefit income and asked for compensation.
19. On 6 December 2022, the Council provided its final response. The Council said it acted correctly based on the advice it received from the DWP. While it has come to light that this advice was incorrect from DWP and Mr and Mrs X should not have been told to claim Universal Credit, the Council said it was obliged to follow the guidance from the DWP. The Council said this information was given in good faith to Mr and Mrs X.
20. Mr and Mrs X remained dissatisfied and complained to the Ombudsman.
21. Following their complaint to the Ombudsman the Council told the ombudsman that it asked for the DWP to carry out a mandatory reconsideration of Mr and Mrs X’s claim in November 2021, but this was not done. The Council said it has since been in contact with the DWP who agreed to carry out a mandatory reconsideration. After completing this the DWP transferred Mr and Mrs X back onto Income Support and gave them a backdated payment to put them in the position they would have been in had they remained on Income Support.
22. The Council also confirmed that this re-awarding of Income Support created an outstanding council tax bill for Mr and Mrs X from September 2021 totalling £448.97. The Council said it would not seek to receive this council tax from Mr and Mrs X as a gesture of goodwill.

Analysis

23. Before writing to Mr X in September 2021, the Council did not seek advice about whether it was appropriate to advise Mr and Mrs X to claim Universal Credit in order to continue to receive Council Tax Support. This was fault.
24. I acknowledge the Council did seek advice from the DWP, in November 2021, who confirmed, in February 2022, the Council’s advice was correct, however the Council had already told Mr and Mrs X to claim Universal Credit at this stage and they were already in receipt of this benefit.
25. Had the Council contacted the DWP for advice before telling Mr and Mrs X to apply for Universal Credit, it would have either received the correct advice from the DWP and not told Mr and Mrs X to claim Universal Credit or, it would have been able to rely in good faith on the advice from the DWP even if this was incorrect.
26. As I have found fault I need to consider what injustice this caused Mr and Mrs X. Initially Mr and Mrs X were around £60.80 worse off per week as they were transferred onto Universal Credit. However they have now been re-awarded Income Support and a back payment has been paid to them to cover the difference between Income Support and Universal Credit from September 2021. I am therefore satisfied Mr and Mrs X are no longer any worse off.
27. Mr and Mrs X have suffered distress and uncertainty as a result of this ongoing process and initially had to face the prospect of living on a lower income. Normally we would recommend a financial payment to reflect this distress and uncertainly, however the Council has decided to waive £448.97 of council tax Mr and Mrs X would have been liable to pay had they not moved over to Universal Credit. I am satisfied this is a sufficient gesture to remedy the distress and uncertainty Mr and Mrs X suffered.

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Agreed action

28. Within one month of my final decision the Council agreed to carry out the following:
1. Apologise to Mr and Mrs X for telling them to claim Universal Credit in order to continue to receive Council Tax Support.
2. Review the information it sends to mixed age Council Tax Support claimants when one claimant reaches the state pension age. The Council should ensure it provides these claimants with the appropriate advice and where necessary seek advice before advising claimants to change their benefit claim.
29. The Council should provide us with evidence it has complied with the above actions.

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Final decision

30. I have completed my investigation and found the Council was at fault for incorrectly telling Mr and Mrs X to claim Universal Credit. This caused injustice. The Council agreed to the above actions to remedy the injustice caused.

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Investigator's decision on behalf of the Ombudsman