Mr K’s complaint about Jobcentre Plus
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Jobcentre Plus gave Mr K misleading advice about how the money he had received on redundancy would be treated for benefit purposes, causing him not to claim the benefit to which he was entitled. The failure to get things right at the outset was exacerbated by Jobcentre Plus’s subsequent poor handling of Mr K’s complaint, which meant they then delayed putting right their mistake.
Background to the complaint
Mr K was made redundant in July 2002, and received a redundancy payment of about £16,000 and three months’ salary in lieu of notice. On 16 July Mr K attended an interview at his local job centre to claim income-based jobseeker’s allowance. After he had signed a jobseeker’s agreement, he said he would put the redundancy money into an offset account (that is, a flexible current account). According to Mr K, the officer sought advice about the implications of that. She then advised him that the deposit against his mortgage counted as savings and, because his capital would be above a threshold, he would not be entitled to income-based jobseeker’s allowance, and did not need to sign on as he would automatically receive National Insurance credits. Mr K decided not to claim contribution-based jobseeker’s allowance instead because it was taxable and normally paid for only six months. He also expected to start a new job soon.
In March 2004 Mr K’s capital fell below the threshold, and he contacted Jobcentre Plus about claiming income-based jobseeker’s allowance. He said an adviser told him that he had been given wrong advice in 2002, as money in an offset account did not count as savings. On 5 March 2004 Mr K claimed income-based jobseeker’s allowance. While Jobcentre Plus were considering his claim, they obtained technical advice that Mr K had no capital that could be taken into consideration. Mr K attended a new claim appointment on 27 March and asked for his claim to be backdated for the period 15 July 2002 to 4 March 2004 on the basis that he had been misadvised in July 2002. Jobcentre Plus told Mr K that jobseeker’s allowance could only be backdated three months; he would need to request a compensation payment instead.
On 24 May 2004 Mr K complained to Jobcentre Plus and asked for compensation for the jobseeker’s allowance, help with mortgage costs, and the National Insurance credits he had lost. In August the job centre asked Mr K for information about his redundancy, and sent his compensation claim to the special payments team. In January 2005 the special payments team asked the job centre why they thought they had given Mr K incorrect information. The job centre manager said it was thought likely that Mr K had been misadvised because staff had had no knowledge of the rules about offset accounts. The special payments team then asked the job centre if they had similarly misdirected other customers. The job centre replied saying that there were no records of that happening. Jobcentre Plus refused Mr K’s request for compensation as they did not accept that an error had been made.
After Mr K asked for the decision to be reconsidered, the special payments officer asked for further information from the job centre and for further technical advice. On 16 November 2005 the special payments officer asked the job centre whether, given the jobseeker’s agreement, Mr K had made a valid claim. On 22 November the job centre said Mr K made a valid claim but had chosen not to pursue it. The same day the special payments officer said a formal decision was needed on whether Mr K had made a claim. On 28 November the job centre said there was no doubt he had.
On 17 January 2006 the special payments officer sought advice from DWP. They suggested that a decision-maker be asked to determine whether Mr K had made a valid claim. On 28 March a decision-maker in the Technical Section said that Mr K had made a valid claim, and that the money deposited into his offset account should not have been treated as capital. He said that it was likely that Mr K had been given the wrong information: there had been much confusion about offset accounts and he knew of a similar case. On 26 April the special payments officer asked DWP’s Adjudication and Constitutional Issues Division whether that view was reasonable. They replied saying that Mr K’s redundancy payment should not have been treated as capital once he had paid it into his account. In July the special payments officer refused Mr K’s request for compensation, on the grounds that there was no clear and unequivocal evidence of error, and he considered, on balance, that it was more likely Mr K had misunderstood the July 2002 advice. He acknowledged that Mr K had made a claim for benefit, which should then have been formally determined.
In August 2006 Mr K complained to the Ombudsman. In October we referred his complaint to Jobcentre Plus’s Chief Executive. A Director responded on 22 November saying that he was unable to confirm or deny Mr K’s account of what he had been told in July 2002. However, he should have been advised to claim income-based jobseeker’s allowance so that they could formally decide his entitlement. He said there were special rules about how to treat payments into accounts such as Mr K’s. The Director said the special payments officer had considered that, on the basis of the information he had, there was not enough evidence that maladministration had occurred.
What we investigated
We investigated whether Jobcentre Plus had misled Mr K about his entitlement to, and failed to consider his application for, jobseeker’s allowance. We also looked at their handling of his complaint about that. By way of remedy, Mr K sought financial redress for the jobseeker’s allowance, council tax benefit and mortgage interest he had lost. He also wanted compensation for the inconvenience and distress caused.
What our investigation found
Jobcentre Plus told us initially it was unlikely they had misadvised Mr K as standard practice was to refer complex enquiries to a specialist team. After we asked Jobcentre Plus to reconsider that view (given the Technical Section’s advice and the Director’s letter of 22 November 2006), they conceded that they probably had given Mr K poor advice, which had prevented him from making a fully informed choice about pursuing a claim for jobseeker’s allowance. We found that the most likely reason for Mr K not pursuing his claim is that Jobcentre Plus told him that he had no entitlement. If Jobcentre Plus had told Mr K that he was not initially entitled because he was covered by pay in lieu of notice, but after that had expired he might be entitled, he would probably have acted differently. We were satisfied that Jobcentre Plus misdirected Mr K and had given him information that was not sufficiently clear, accurate and complete. Had they formally determined his benefit entitlement, as required by law, they might have spotted the error sooner. Under the Principles of Good Administration (‘Being open and accountable’) the Ombudsman expects public bodies to be open and clear about policies and procedures and to ensure that information and any advice provided is clear, accurate and complete.
Turning to Jobcentre Plus’s handling of Mr K’s complaint, we saw no evidence which justified them taking around seventeen months to refuse his compensation claim in the first instance, and a further eight months to refuse his claim for a second time. While officers needed technical advice, there were periods of inactivity which led to excessive delays in reaching a decision. Jobcentre Plus missed a further chance to put things right when we referred Mr K’s complaint to the Chief Executive. Taken in the round, Jobcentre Plus failed to put their mistakes right quickly and effectively, and their complaints procedure was not effective. That was not in line with ‘Putting things right’, another of the Principles of Good Administration.
We concluded that Jobcentre Plus’s handling of Mr K’s jobseeker’s allowance claim and his subsequent complaint was maladministrative. As a result he did not receive jobseeker’s allowance until March 2004, when he should have done so from October 2002 (after his three months’ pay in lieu of notice had expired), and suffered inconvenience, frustration and distress.
We upheld Mr K’s complaint and concluded our investigation in July 2008.
Outcome
At our recommendation Jobcentre Plus:
- apologised to Mr K;
- paid him £9,023.38 (plus £1,682.13 interest) to compensate him for his lost benefits;
- credited Mr K with the National Insurance credits he would have received; and
- paid him £600 compensation for the worry, distress and inconvenience caused.
