Mr C's complaint about The Pension Service and Debt Management
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In Mr C’s case, The Pension Service’s delay in updating his aunt’s records, and delays by Debt Management, led to problems after her death. It meant that they were not able to make a timely and accurate decision about whether she had been overpaid and caused Mr C to incur avoidable legal costs.
Background to the complaint
In October 1999 Miss E’s income support claim started. Her nephew, Mr C, regularly sent copies of her bank statements to the then Benefits Agency to show the changes in Miss E’s capital. In August 2002 Miss E’s file was sent to a storage centre. In December 2003 the file was requested by an office of The Pension Service, but it was not returned subsequently to storage. The Pension Service were later unable to identify who had requested the file and where it had been sent.
Miss E died in October 2004, and in July 2005 the solicitors looking after her estate told Mr C that they expected to be able to distribute the estate soon. Debt Management then wrote to the solicitors advising them not to distribute the estate as there might have been a benefit overpayment. In August and September Mr C contacted Debt Management and provided further information. In October Debt Management requested information from the solicitors about Miss E’s bank accounts and shares.
In March 2006 Debt Management and the solicitors agreed that, as not all the information requested could be obtained, they would use the amounts in Miss E’s accounts at the date of her death. Debt Management then issued a decision calculating the overpaid benefit at £2,918.30. In April Mr C wrote to Debt Management and asked to appeal (his letter was filed in error and not dealt with). Between May and July Mr C chased progress by telephone and letter. In July Debt Management replied, noted that Mr C wished to appeal, said that recovery of the overpayment would be suspended until the issues were resolved, provided some further information in response to Mr C’s earlier letter and apologised for the lack of an earlier reply. Between July and September Debt Management and Mr C exchanged further correspondence. Mr C believed, despite the March 2006 agreement, that the exact figures should be used and offered to provide relevant information.
In October 2006 Debt Management wrote to the solicitors requesting payment of £2,918.30 (this letter was attributed to a computer error). Later that month Debt Management wrote to Mr C with a revised overpayment calculation of £518.80 and asked for his comments before a formal decision was made. Mr C discussed the matter by telephone with Debt Management and the decision was then sent to Mr C (despite a request that it go to the solicitors) without the supporting calculations and schedule of assets. In November Debt Management apologised for the earlier omission, and provided the missing information. The solicitors subsequently made the repayment of £518.80.
In June 2007 an appeal tribunal decided that there was no recoverable overpayment due, as DWP had not produced any evidence to establish that Mr C had failed to make the disclosure (about Miss E’s assets) that they required.
What we investigated
In November 2007 Mr C asked for his complaint to be referred to the Ombudsman. He complained that The Pension Service had failed to maintain proper records. He also complained that Debt Management:
- had taken too long to tell Miss E’s estate that there might be an overpayment and throughout that time omitted to explain that they did not have her file;
- failed to reply to correspondence; and
- provided inaccurate calculations once they had reviewed the case.
We did not investigate Mr C’s complaint that Debt Management’s final overpayment calculation was unlikely to be correct (he had sought a refund of the £518.80), as he had a right of appeal against the overpayment decision. That appeal was successful, and Mr C was refunded the £518.80, and paid interest for loss of use.
Mr C said that he had suffered an injustice because the errors and delay caused the estate to incur an unnecessary £1,445.25 in legal fees and caused him unnecessary trouble.
What our investigation found
Although Mr C had provided information about Miss E’s savings throughout the period of her claim, The Pension Service acted maladministratively by not updating Miss E’s electronic records (with the result that the information was not available to Debt Management after Miss E’s death). We also found that maladministration by The Pension Service caused the absence of Miss E’s clerical file and the record of its movements. This meant that Debt Management did not have access to information that would have allowed them to make a timely and accurate decision in 2005 about any overpayment.
We found that Debt Management’s failure to tell Mr C that the case papers were missing was, in this case, maladministrative. This delayed Debt Management’s work and caused injustice to Mr C, who engaged in unnecessary correspondence and incurred avoidable legal costs (only a small proportion of the legal fees incurred related to work required regardless of any maladministration).
We found that Debt Management acted maladministratively by failing to reply to Mr C’s correspondence in April 2006 (and to his follow-up contacts) until his July 2006 letter was identified as a possible complaint.
We did not uphold the complaint that Debt Management had provided inaccurate calculations when they reviewed the case. The officer dealing with Mr C at that time had exemplified two of the Principles of Good Administration: ‘Being customer focused’ and (as soon as Mr C provided his records) ‘Putting things right’. Two further minor errors (issuing a payment request for the wrong amount and omitting enclosures) were put right promptly and apologised for. Our report also highlighted the importance of a third Principle (‘Being open and accountable’); particularly the disproportionate effect on individuals of missing files and the cost to individuals and to public bodies of failing to be clear about the reasons for their decisions.
The investigation concluded in December 2007 and overall we partly upheld Mr C’s complaint.
Outcome
As a result of our recommendations The Pension Service and Debt Management:
- apologised to Mr C for the errors and omissions that our report had identified;
- awarded compensation of £250; and
- paid £1,160 towards the legal costs he incurred, plus interest of £58.83.
Debt Management also explained that improvements had been made to their file-handling and storage procedures including: wider access to more accurate information about file location; the ability to identify earlier if case papers cannot be found; and the setting up of a single storage facility which would eventually hold all Debt Management files. Debt Management also said that, in instances where case papers are not available, they would make general enquiries of executors who were in contact with them, to seek documents which might help them rebuild details of claims.
