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DEPARTMENT OF SOCIAL SECURITY

Case No. C.258/95

Errors and delays in the payment of supplementary benefit and income support

7.1 Mrs X complained about delays and errors by the Benefits Agency (BA) of the Department of Social Security (DSS), including those relating to the calculation and payment of her son's supplementary benefit (Supp Ben) and income support (IS) entitlements and related compensation payments.

7.2 My investigation began in October 1995 once the Parliamentary Commissioner's predecessor had obtained comments from a director of BA after the former constituency Member's referral of the complaint. I have not put into this report every detail investigated by the Commissioner's staff; but I am satisfied that no matter of significance has been overlooked. An annex to this report lists and explains the initials used in it.

Background

7.3 Supp Ben was a non-contributory means tested benefit which up to 10 April 1988 was payable to those who were not in full time work and whose income was insufficient for their needs. Extra allowances, known as additional requirements, could also be paid where a claimant had regular extra expenses to meet special needs such as for clothing, laundry, heating and diet. In the case of dietary needs, additional requirements could be paid at a higher or lower rate, or on the basis of the whole cost if a particularly expensive diet had been prescribed for a medical condition. From 11 April 1988 Supp Ben has been replaced by IS. (On 7 October 1996 IS was itself replaced by jobseeker's allowance for those claiming benefit on the grounds that they are unemployed and looking for work, but that change is not relevant to Mrs X's case.) Additional premiums may be paid to IS claimants in certain circumstances. A person who is disabled may receive a disability premium (DP) or, if he or she fulfils the criteria laid down in regulations, a severe disability premium (SDP). The regulations require that a claimant must live alone to be eligible to claim SDP, but both the validity and interpretation of that requirement have been subject to appeals to the Social Security Commissioners and challenges in the courts. A person who receives IS may also be eligible to receive other forms of help, including free NHS prescriptions. As IS is awarded on a different basis from Supp Ben, on the introduction of IS transitional arrangements provided for the level of a claimant's previous total entitlement to benefit to be safeguarded by the award of a transitional addition (TA), the TA being eroded by any subsequent increases in the claimant's IS award, including annual upratings, until his or her IS entitlement reaches the amount of the previous total benefit entitlement.

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7.4 If a person is unable to look after his own affairs, for example as a result of mental or physical disability, DSS may appoint some other person (an appointee) such as a parent to act on the claimant's behalf in claiming benefit, obtaining payment and notifying changes of circumstances. A person receiving IS in circumstances such as those pertaining to Mrs X's son is paid by means of a book of weekly orders (an order-book) encashable at a post office nominated by the claimant or his appointee. Actions relating to IS claims are normally undertaken through the IS computer system (ISCS) but can also be dealt with clerically. It is normally possible for a claimant to encash up to two of the orders in a book at different post offices, but that facility is cancelled when an order book is issued under clerical procedures rather than through ISCS. IS is administered through BA's district offices (DOs), and the DO which handled Mrs X's IS claim on her son's behalf is referred to in this report as the DO.

7.5 Decisions on entitlement to benefit are made by adjudication officers (AOs). Such decisions may be reviewed at the request of the claimant or his representative if an AO is satisfied that the original decision was given in ignorance of, or was based on a mistake as to, some material fact. In reviewing a decision, an AO may decide whether an overpayment of benefit has occurred and, if so, whether it is recoverable because the claimant misrepresented, or failed to disclose, a material fact. AOs' decisions carry a right of appeal to a Social Security Appeal Tribunal (SSAT) and thereafter, with leave, on a point of law to a Social Security Commissioner. Appeals to a SSAT must normally be made within three months of the date of the notification of the decision being appealed against, but that time limit may be extended with the agreement of the chairman of the relevant SSAT. If, following a review or an appeal, arrears of one benefit become payable in place of a different benefit which has already been paid, the benefit already paid may be offset against the arrears insofar as both sets of payments relate to the same period of time. The decisions of AOs and the appellate authorities are outside the Parliamentary Commissioner's jurisdiction. I refer to such matters in this report only to place in context the administrative actions of DSS in dealing with Mrs X's case.

7.6 DSS operate a non-statutory compensation scheme, the scope of which the Commissioner and his predecessors have accepted, under which claimants can be compensated in accordance with a defined formula if their benefits are delayed because of official error. Where an AO's decision has been overturned on appeal compensation for that is only considered if the decision appealed against was clearly wrong in light of the evidence available at the time it was made. Subject to certain criteria, DSS may reduce the amount of the compensation payable to take account of any overpayment of benefits.

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Investigation

7.7 1984: Mrs X's son reached his 16th birthday on 5 July 1984 and so became entitled to claim Supp Ben in his own right. As Mrs X's son was (and remains) severely disabled his mother was appointed to act on his behalf and, during a home visit by a BA visiting officer (VO) on 19 July, she made a claim to Supp Ben for him including additional requirements (paragraph 7.3) for clothing, laundry and heating.

7.8 1987: On 20 February 1987 Mrs X told a VO that her son's additional requirements had increased as he had been put on a special high-fat diet and she was having to do more washing. As a result, an AO awarded a dietary additional requirement at the lower rate and increased the laundry additional requirement with effect from 29 January 1987. On 22 May Mrs X submitted a new claim to Supp Ben on her son's behalf, after moving to a new address. She referred to the special diet on the claim form, and also said that she was having to do between 21 and 28 wash loads a week. BA made no change to the Supp Ben assessment.

7.9 1988: Mrs X's son's Supp Ben claim was converted to IS. He was awarded DP and, as the amount of IS payable was less than the Supp Ben he had been receiving, he was also granted a TA (paragraph 7.3).

7.10 1990: On 17 October 1990 Mrs X's son's IS claim details were entered on to ISCS.

7.11 1991: On 2 January 1991 Mrs X appealed against the non-payment of SDP from 11 April 1988 on the grounds that the regulations used to decide her son's entitlement to SDP were ultra vires (paragraph 7.3). The appeal was out of time but on 5 August a SSAT chairman admitted it for hearing (paragraph 7.5). An AO then asked the SSAT to hold the appeal in abeyance until the outcome of a relevant Court of Appeal decision was known. (In the event the Court of Appeal hearing did not take place until 16 May 1996, by which time the SSAT had heard Mrs X's appeal (paragraph 7.15).) Mrs X also applied on 23 April for a review (paragraph 7.5) of her son's Supp Ben entitlement for the period between 5 July 1984 and 10 April 1988: she said that DSS had made a mistake as to a material fact, in that her son's circumstances had meant that he had always needed a higher level of additional requirements than that assumed in previous benefit awards.

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7.12 1992: On 18 November 1992 the DO replied to Mrs X's request for a review of her son's Supp Ben entitlement by asking her for details of his circumstances before 11 April 1988. In replying, Mrs X made it clear that she was seeking the backdating of all the additional requirements to 5 July 1984.

7.13 1993: The DO told Mrs X on 29 January 1993 that an AO had decided that there were no grounds for reviewing her son's entitlement to Supp Ben because the original decision had not been based on a mistake as to a material fact, and Mrs X appealed against the AO's decision on 12 February. In her appeal statement Mrs X said that her son's needs had been consistent since 1984, that she had told a VO about the amount of additional washing she needed to do for him, the number of baths he needed each day and his special dietary requirements; but that the VO had said that her son would only be allowed some of those needs. The SSAT hearing arranged for 20 May had to be adjourned as Mrs X was unable to attend because she was ill. A reconvened SSAT heard the appeal on 28 October and decided that there were grounds for reviewing the original award of Supp Ben as it appeared that the VO might not have reported properly on the extent of Mrs X's son's needs. The effect of the SSAT's decision was that Mrs X's son was entitled to increased additional requirements for laundry needs from 5 July 1984 to 28 January 1987 and for bathing from 5 July 1984 to 10 April 1988, along with actual costs for dietary needs from 5 July 1984. The SSAT directed the AO to establish the cost of Mrs X's son's requirements and issued an interim notice of award. In the meantime, TA had ceased to be payable from 6 April as it had been eroded by the annual upratings of Ms X's son's IS entitlement (paragraph 7.3).

7.14 1994: On 19 January 1994 an AO recalculated Mrs X's son's entitlement in accordance with the SSAT's decision and authorised payment of arrears of Supp Ben (additional requirements) of £1,421.61. The DO then wrote on 20 January to tell Mrs X that, because DSS considered that the VO had made an error on 19 July 1984 in recording the extent of her son's needs (paragraph 7.7), she would also be receiving an ex gratia payment of £1,000.53 in compensation for the late payment of the arrears (paragraph 7.6). After failing to obtain suitable advice from BA's medical services about the cost of Mrs X's son's special diet, the DO contacted Mrs X's representative who responded on 16 February by providing details of her actual costs, on the basis of which further arrears of £5,737.15 were paid to Mrs X on 21 February. Those arrears meant that TA had to be recalculated. DSS paid the resulting arrears of TA of £9,211.18 to Mrs X on 29 March, and revised the ISCS record to include the need to pay TA at £25.13 per week from 12 April 1994.

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7.15 On 12 April a SSAT heard Mrs X's appeal against the non-payment of SDP (paragraph 7.11). They decided that her son was entitled to SDP from 11 April 1988 to 30 September 1990, and BA paid arrears of £3,326.20 on 11 May. Meanwhile, on 19 April, Mrs X had queried the amount of TA arrears paid to her as she considered that she had been underpaid TA by £10 per week for 312 weeks. BA recalculated the TA and paid further arrears amounting to £1,884.38 on 4 May. On 9 June BA sent Mrs X ex gratia payments of £4,122.98 in compensation for the late payment of arrears of Supp Ben and £2,587.37 in compensation for the late payment of TA arrears.

7.16 On 29 June, Mrs X's representative asked for a review of the amounts of Supp Ben which had been awarded for her son's additional laundry and dietary requirements. As a result, BA paid arrears of £606.50 to Mrs X on 6 July for the period from 5 July 1984 to 4 July 1994 (including further TA adjustments). They then made two ex gratia payments in compensation for the late payment of those arrears: one (on 20 July) for £100.49 for the period up to 31 March 1994; the other (on 24 August) for £94.37 for the period from 1 April 1994. Also on 24 August, Mrs X told the DO that she thought the orders in her newly issued order-book were for the wrong amount and, having found that she was correct, the DO decided that it would be safer to remove her son's claim from ISCS and to make future payments under clerical procedures, so that full and frequent checks could be made. After Mrs X had asked them how she could encash the orders while away from home, the DO asked her on 1 September to return her order-book to have the post office restriction (paragraph 7.4) removed from it. The DO issued a replacement order book on 7 September, but it subsequently transpired that they had failed to authenticate the order book.

7.17 1995: On 18 January 1995 the DO issued another clerically-produced order book. The orders in that book had not been authenticated and so the DO delivered a replacement book to Mrs X by hand. A renewal order book was then posted to Mrs X on 19 April in an unfranked envelope and she had to pay an excess postage charge. The DO volunteered to reimburse her for that, but Mrs X declined the offer. On 31 August Mrs X complained to the DO that she had received a bill for £15 for prescription charges as the DO had told the local area health authority that her son was not receiving IS. The DO said that that problem had arisen because the health authority's query had been checked against ISCS, from which they had removed his claim (paragraph 7.16); and the officer who had made the mistake apologised personally to Mrs X the next day. On 5 September the DO decided to enter Mrs X's son's claim on ISCS again, but to continue making the payments clerically; and the district manager wrote to apologise to Mrs X for the latest error and to invite her to a meeting to discuss the payment arrangements. Mrs X, her son and their representative met the district manager and other officers at the DO on 18 September. The district manager apologised to Mrs X for the many errors that had been made and gave her a list of named officers to contact if she encountered any further problems.

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DSS response to the complaint

7.18 In her comments to the Commissioner's predecessor, the director of BA offered her unreserved apologies for the fact that Mrs X had not received the standard of service she had a right to expect. She explained that the delay in acting on Mrs X's application in April 1991 for a review had been due to a combination of staff shortages caused by illness and maternity leave and a high volume of work generated by a welfare rights organisation, and she said that staffing problems and increased workloads had also delayed the implementation of the SSAT decision of 28 October 1993. She acknowledged that, although the decision to transfer the handling of Mrs X's son's claim from computer to clerical operation had been taken with the best of intentions, it had in fact caused all of the payment errors that had occurred after that date; and she said that the payment of compensation due to Mrs X in 1994 had been held up by a delay in the updating of computer software. She concluded by saying that the accuracy of the payments made to Mrs X would be checked and consideration given to the payment of further compensation if appropriate.

7.19 On 3 June 1996 DSS told the Commissioner's staff that after recalculating the laundry component of her son's additional requirements they had paid Mrs X further arrears of Supp Ben of £383.62 on 17 April 1996. They had also rechecked Mrs X's son's entitlement to TA and had found that Mrs X had been overpaid £11,217.54 for the period from 11 April 1988 to 21 April 1996. TA had been paid at too high a rate from 11 April 1988 to 10 April 1994, and should not have been paid at all from 11 April 1994. They confirmed that the overpayment was not recoverable as it had occurred as a result of official error. On 15 July 1996 DSS told the Commissioner's staff that they had made an ex gratia payment of £111.98 to Mrs X to reimburse the incidental expenses she had incurred in pursuing her case. They also said that Mrs X would normally have received an ex gratia payment of £203.78 in compensation for the late payment of the arrears paid to her on 17 April 1996 but that that had been offset (paragraph 7.6) against the overpayment of TA. On 9 July 1997 DSS told the Commissioner's staff that there had been an error in calculating the amount of compensation paid to Mrs X on 9 June 1994 following the late payment of Supp Ben (paragraph 7.15), giving a further overpayment of £147.70. They also confirmed that compensation paid incorrectly to a claimant was not recoverable.

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Findings

7.20 I turn first to Mrs X's complaint of delay. Some 19 months elapsed before BA took any action whatsoever (paragraph 7.12) on her request of April 1991 (paragraph 7.11) for a review of her son's Supp Ben entitlement, and I criticise them for that. The first SSAT hearing (that considering her appeal against the refusal to review her son's entitlement to Supp Ben – paragraph 7.13) was then delayed at Mrs X's request, rather than through any fault of BA. However although the SSAT issued an interim notice of award on the day of the hearing it was some ten weeks before BA took steps to implement the SSAT's decision, and a further three months before the cost of her son's diet was finally calculated and the arrears and compensation relating to that were paid. I therefore find that element of Mrs X's complaint made out, and I welcome the BA director's apologies (paragraph 7.18) for that. Mrs X also complained about delays in the handling of her son's claim to IS. The delay in convening the SSAT hearing (paragraph 7.11) was due principally to BA's reasonable wish to be guided if possible by a relevant Court of Appeal decision concerning SDP. Given also that the DO implemented the SSAT's decision of April 1994 (paragraph 7.15) within the following month, I have found no grounds for criticising BA on that account.

7.21 Mrs X was further inconvenienced by other careless mistakes. Although the decision to deal with Mrs X's claim clerically (paragraph 7.16) was taken with the best of intentions, as the BA director has acknowledged (paragraph 7.18) that action gave rise to more problems than it solved. Elementary errors made it impossible for Mrs X to encash some of the orders she received (paragraphs 7.16 and 7.17), she had to pay an excess postage charge because an order-book was sent in an unfranked envelope, and she received a bill from the local area health authority for prescription charges because there was no record of her son's claim on ISCS.

7.22 What of Mrs X's complaint about errors made by BA in determining her son's benefit entitlement? That is not a matter for the Commissioner (paragraph 7.5), but I note that as a result of BA errors Mrs X has received net non-recoverable overpayments of benefit totalling £11,217.54 (paragraph 7.19). Against that background I make no criticism of BA's decision to withhold the ex gratia payment of £203.28 (paragraph 7.19) which Mrs X could otherwise have expected to receive in compensation for the late payment of Supp Ben arrears.

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Conclusion

7.23 BA's handling of Mrs X's claims to Supp Ben and IS left much to be desired. The case was beset with delays and mistakes which caused significant inconvenience to Mrs X and her son at the time even though, in the end, they ultimately benefited significantly from BA's errors. Mrs X has now received ex gratia payments totalling £7,905.74 to compensate for the late payment of benefit (paragraphs 7.14, 7.15 and 7.16) and £111.98 for her incidental expenses (paragraph 7.19). I believe those payments, along with the BA director's apologies for the agency's poor handling of the case, to represent a satisfactory outcome to my investigation of a fully justified complaint.

11 November 1997

Summary

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Last updated: 26 April 2006