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DEPARTMENT OF SOCIAL SECURITY

Case No. C.787/95

Delay in submitting an income support claim to an adjudication

9.1 Mr X complained that the way in which the Benefits Agency (BA) of the Department of Social Security (DSS) handled his claim to income support (IS) and his request for a crisis loan from the social fund caused him distress and severe financial hardship.

9.2 My investigation began in October 1995 once the Parliamentary Commissioner's predecessor had obtained comments from the Permanent Secretary of DSS after the 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 gives the meaning of the initials used in it.

Background

9.3 IS is a non-contributory means-tested cash benefit payable to those who are not in full-time work and whose resources are insufficient to meet their needs as assessed under the scheme. It is administered through BA's local offices. (In the case of persons seeking such benefit on the grounds that they are unemployed and actively seeking work, IS has since October 1996 been replaced by Jobseeker's Allowance, but that change is not relevant to Mr X's complaint.) The regulations provide that IS should normally be claimed on the first day of the period in respect of which the claim is being made, but a claim may be backdated for up to 12 months if the claimant can show continuous good cause throughout that period for the delay in making the claim. A claimant is required to notify BA of any change of address and he may then be required to submit a fresh claim to IS to the appropriate local office if his entitlement is likely to have changed as a result, for example, of a change in the nature of his tenure.

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9.4 Decisions on entitlement to IS are made by adjudication officers (AOs). An AO's decision may be reviewed by another AO if the latter is satisfied that the original decision was given in ignorance of, or was based on a mistake as to, some material fact or that it was erroneous on a point of law. There is no provision for a decision to be reviewed on the basis that a claimant's identity has been insufficiently verified. All AOs' decisions on IS carry a right of appeal to a Social Security Appeal Tribunal (SSAT). SSATs are administered by the Independent Tribunal Service (ITS). Thereafter, with leave, a further appeal may be made on a point of law to a Social Security Commissioner (SSC). 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 handling Mr X's case.

9.5 Regulation 7 of the Social Security (Claims and Payments) Regulation 1987 enables the Secretary of State for Social Security to require any person making a claim to IS to provide such evidence as may be deemed necessary. That may include evidence as to a claimant's identity, if he does not have a national insurance number. Regulation 7 requires such evidence to be produced within one month ‘or such longer period as the Secretary of State may consider reasonable'. BA's ‘Evidence of Identity Guide' tells officers administering the IS scheme however that, as the conditions for entitlement to IS have no regard to a claimant's identity, a claim to IS may not be refused solely because of a lack of documents relating to a claimant's identity or because a claimant fails to provide relevant evidence. An officer receiving an IS claim must put it to an AO as soon as the information needed to determine it is available, and should not delay doing so while attempting to verify the information provided on the claim form. It is the AO's responsibility to make any further enquiries he considers necessary to enable him to determine entitlement.

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9.6 The Regulations also enable the Secretary of State to suspend payment of IS awarded to a claimant while investigating whether the conditions relating to entitlement remain fulfilled. The suspension continues until the matters at issue are determined by an AO, but the claimant must be notified of a decision to suspend benefit and the conditions of entitlement in doubt.

9.7 Regulation 2 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 enables the Secretary of State to make an interim payment of IS on grounds of hardship if it appears to him that a person is likely to be entitled to IS but has either not yet made a claim or has made a claim which cannot immediately be determined. When or before such a payment is made, a claimant has to be notified in writing of his liability to have it brought to account and to repay any overpayment.

9.8 The social fund is a scheme to help individuals with needs which are difficult to meet from their regular income, and applications are determined by social fund officers. The range of assistance available includes discretionary crisis loans which are intended to meet short-term needs in an emergency, where such financial assistance is the only means of preventing serious risk to the health or safety of the applicant or a member of his family.

9.9 DSS operate a non-statutory compensation scheme which provides for claimants to be compensated in cases where they have suffered a measurable financial loss as a result of a clear and unambiguous official error. Such compensation may be paid to cover the loss in value of benefit payments which have been delayed for more than a prescribed period which, at the time relevant to Mr X's complaint, was 12 months in the case of IS. Where an AO's decision is overturned on appeal, leading to a backdated award of benefit, compensation is only considered if the decision appealed against was clearly wrong in the light of the evidence available at the time it was made. Compensation for other than actual loss (for example relating to distress) may also be paid in exceptional circumstances.

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Investigation

9.10 1994: Having moved out of the hostel accommodation from which he had claimed IS through local office A (office A) up to 3 May, Mr X submitted a completed claim to IS to local office B (office B) on 18 May along with a police acknowledgement that he had reported the loss of unspecified property. A BA officer at office B recorded that Mr X had lost his passport and birth certificate, and that office A should be contacted as they had previously satisfied themselves as to his identity. The next day Mr X told office B that he had moved and they transferred his papers to local office C (office C), the local office responsible for his new address. Mr X visited office C on 23 May and was advised to obtain some form of identification if he wished to pursue his IS claim. On 7 June, and again on the following day, Mr X made further claims to IS at office B. He gave a new address on both forms and said that he had become a council tenant. Mr X made a statement to BA on 9 June saying that he had lost his passport and had reported the loss to the police, and that he wanted his most recent IS claim to be regarded as continuing on from his previous claim through office A. On 14 June Mr X's local advice centre (the advice centre) wrote to office B on Mr X's behalf. They said that they considered that Mr X's recent claim should be treated as a continuation of the claim previously paid by office A and asked that he be sent an interim payment (paragraph 9.7) or, if that was not possible, assessed for a crisis loan (paragraph 9.8). On 21 June BA made an interim payment of £176.27 to Mr X representing IS for the period from 4 to 30 May. In determining that payment, the AO recorded that further payments should be withheld pending verification of either Mr X's passport or his birth certificate. On 22 June Mr X's claim of 18 May was closed at office C on the grounds that he had made no further contact with them and that he had moved away from the address which had led to his papers being transferred to them on 13 June.

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9.11 On 12 July Mr X attended an interview at office B, accompanied by a welfare rights representative. BA recorded that they had told Mr X that he was not entitled to benefit, after which his representative had asked the officers conducting the interview to sign a form confirming that they had been presented with an electricity bill, a rent card and a number of forms giving the dates of previous benefit payments. According to BA's record Mr X's representative had refused to accede to the interviewing officers' request that the form which the representative had provided be amended to indicate that the electricity bill had not been paid, and that the rent card was handwritten, and so the officers had not signed the form. Further acrimonious discussions had followed until the interview had been terminated by the officers. On the same day, office B wrote to tell Mr X that his claim to IS had been disallowed under the provisions of regulation 7 (paragraph 9.5) because he had failed to provide the AO with sufficient proof of identity; and the AO recorded that the interim payment of 21 June 1994 (paragraph 9.10) had been awarded on the premise that some of the money would be used to resolve the identity issue.

9.12 On 13 July the Member wrote to office B asking whether another interim payment could be made to Mr X while he was obtaining further proof of his identity, and requesting clarification of the circumstances in which a rent book would be accepted as proof of identity. The Member wrote again to office B on 21 July asking them to make an interim payment while Mr X's identity was being investigated. On 28 July the advice centre wrote to office B appealing on Mr X's behalf against the decision that he was no longer entitled to IS (paragraph 9.11) and asking for that decision to be reviewed. Office B replied to the Member's two letters on 29 July. They said that Mr X had been uncooperative in refusing to obtain acceptable identification, and that no payment could be made until he had satisfied regulation 7 (paragraph 9.5).

9.13 On 23 August Mr X told office B that, if his appeal was not adjudicated on and a payment sent to him within seven days, he would start proceedings in the county court on the ground that DSS had denied him his rights by withholding his appeal. His appeal was passed to the appeals section at office B on 24 August, but it was not until 26 October, after several internal reminders had been sent, that the AO who had determined his IS application prepared a report setting out the history of Mr X's claim. The AO subsequently sent ITS the submission on Mr X's appeal on 3 November, concluding that, in the absence of evidence of Mr X's identity, the presumption must be that he was not entitled to IS. The submission was sent with an attachment from the advice centre pointing out that evidence of identity was a matter for the Secretary of State and that failure to produce it did not affect entitlement to IS, which was awarded by the adjudicating authorities on the basis of a claimant's declared circumstances rather than his identity. Office B replied to Mr X's letter of 23 August on 4 November. They apologised for the delay and said that the AO had decided that he was no longer entitled to IS as he had failed to satisfy regulation 7. The Member wrote again to office B on 12 December to ask whether there would be any possibility of Mr X obtaining benefit without providing a copy of his birth certificate. The Member said that he had been very closely involved with Mr X in his attempts to obtain proof of his birth but that they had not met with any success. He said that Mr X had been left without money, was facing hardship and had been consistently seeking work. The customer services manager at office B replied on 19 December that Mr X's case was with a SSAT and that the decision to refuse IS could not be reviewed unless Mr X provided evidence of his identity. On 20 December the Member wrote to office B to ask what contingency plan BA employed when dealing with cases such as Mr X's, as it did not appear that he would have any success in obtaining proof of his birth.

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9.14 1995: On 11 January office B replied to the Member's letter of 20 December 1994. They said that Mr X had been refused IS because he could not provide any evidence of identity but that lack of documentary evidence of birth would not necessarily bar a claimant from receiving IS. On 20 January the advice centre made a formal complaint to office B about their handling of Mr X's claim. They said that office B had given incorrect and contradictory advice to Mr X, had delayed in answering letters and had been responsible for a delay of 14 weeks in processing his appeal. Office B replied to the advice centre on 3 March. They said that the difficulties in Mr X's case had been caused by his failure to provide evidence of his identity despite having been awarded an interim payment on the understanding that he would do so; and they apologised for the delay in forwarding his appeal to ITS, which they said had been caused by problems they had encountered in processing the appeal. A SSAT heard Mr X's appeal on 17 March and upheld the AO's decision on the basis that the evidence required to substantiate Mr X's claim was a matter for the Secretary of State. Notification of the SSAT decision was issued on 11 April. The Member submitted Mr X's complaint to the Parliamentary Commissioner's predecessor on 29 May. Mr X sought leave to appeal to a SSC (paragraph 9.4), which was granted on 21 August.

9.15 Meanwhile Mr X had been pursuing his case through the courts. On 6 January he secured a judgement against DSS and on 8 March a county court served a notice on office B demanding payment of £1,737.78 by 23 March as they had failed to make the payment ordered under the judgement. On 11 April the court issued an order requiring a named officer from office B to attend a hearing about the non-payment of the judgement award, but DSS sought to have the judgement set aside on the basis that the SSAT had confirmed that benefit was not properly payable to Mr X. The court hearing was arranged for 20 June, but it had to be adjourned because the nominated DSS officer failed to attend.

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The DSS response to the complaint

9.16 In her comments to the Parliamentary Commissioner's predecessor, the Permanent Secretary acknowledged that Mr X's claims to benefit had not been handled well and apologised for the errors and delay which had occurred and for the hardship which Mr X must have been caused as a result. She confirmed that benefit could not be refused because documentary evidence of identity could not be provided (paragraph 9.5), and that there was no provision for an award to be reviewed on the issue of identity. She said that the decision taken by office C to close Mr X's claim of 18 May 1994 on 22 June 1994 (paragraph 9.10) appeared to have been made on behalf of the Secretary of State but that there was no record of Mr X having been notified of a decision to suspend benefit (paragraph 9.6). She also said that DSS had no record of Mr X having been informed of the conditions which had been attached to the interim payment made to him on 21 June 1994 (paragraph 9.10). She apologised for office B's failure to realise that the AO's decision of 12 July 1994 (paragraph 9.11) had been erroneous in law and for their subsequent failure to seek a decision on Mr X's entitlement in the light of his stated circumstances. She also apologised for office A's apparent failure to confirm Mr X's identity (paragraph 9.10); for office B's failure to respond to Mr X's request of 23 August 1994 (paragraph 9.13) for a review; and for the 14-week delay in referring his case to ITS. She said that that delay had arisen partly because, instead of seeking Mr X's written confirmation that he wished to pursue the appeal submitted on his behalf by the advice centre, office B had taken no immediate action; and partly because his casepapers had been withheld by the officers at office B dealing with his complaint of 23 August 1994.

9.17 DSS subsequently told the Parliamentary Commissioner's staff that, on 21 December 1995, a SSC had set aside the SSAT's decision (paragraph 9.14) as it was erroneous in law and had decided that Mr X was entitled to IS from 8 June 1994 (the date of his second claim at office B -paragraph 9.10). Arrears of IS amounting to £3,724.77 had therefore been paid to him for the period from 8 June 1994 to 25 December 1995 and an order to pay IS on a regular basis had been put into effect. On 19 June 1997 DSS told the Commissioner's staff that an ex gratia payment of £153.10 was to be made to Mr X in recognition of the loss of use of the benefit arrears paid to him, and they subsequently confirmed that it had been paid to him on 11 July 1997.

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Findings

9.18 At the heart of Mr X's complaint is the interpretation of regulation 7. Once an officer acting on behalf of the Secretary of State had received a valid claim form and had submitted it to an AO for determination, regulation 7 should no longer have applied and should not have been used as justification for the delay in considering, and ultimately rejecting, Mr X's claim. It is not for the Commissioner to comment on the decisions of the AO or the SSAT (paragraph 9.4), but I do criticise office B for their continuing failure to differentiate properly between the functions of the Secretary of State and the adjudication authorities, as a result of which Mr X's claim was held up unnecessarily and erroneous advice about the basis on which the claim could be rejected was given to Mr X, the advice centre and the Member. I welcome the Permanent Secretary's apologies for that poor performance, which I now pass on to Mr X.

9.19 Some eight weeks elapsed after Mr X had submitted his first claim to office B (paragraph 9.10) before an AO disallowed his claim to IS on 12 July 1994 (paragraph 9.11) and thus opened up the way for Mr X to appeal. Worse delays then followed. The advice centre appealed on Mr X's behalf on 28 July 1994 (paragraph 9.12) and, at the same time, asked for the AO's decision to be reviewed. As the Permanent Secretary has acknowledged (paragraph 9.16), office B should have sought Mr X's written confirmation that he wished to pursue that appeal but, instead, they took no immediate action. Furthermore, despite the fact that Mr X himself wrote to office B on 23 August 1994 (paragraph 9.13) threatening to take action through the courts if they continued to deny him his rights by withholding his appeal, it took office B until 3 November 1994 to send a submission to ITS. The Permanent Secretary attributed that delay partly to the fact that office B had been dealing with Mr X's complaint of 23 August 1994, but I see no reason why that complaint should have been dealt with as a separate matter at the expense of progressing the appeal which was, after all, at the heart of Mr X's complaint. All those delays I criticise.

9.20 The numerous other administrative errors made by office B in their handling of Mr X's case did not contribute so directly to the protracted interruption in the payment of his IS, but they nonetheless demonstrate a worrying lack of understanding of the legislative framework within which office B were required to operate, and poor control over the progress of claims submitted to them. The Permanent Secretary has acknowledged (paragraph 9.16) office B's failure to follow the correct procedures in handling the requests which the advice centre made on Mr X's behalf on 14 June 1994 (paragraph 9.10) for an interim payment. In that context I consider it particularly reprehensible that, having failed to tell Mr X about the conditions attached to his interim payment, office B should then have cited his failure to comply with those conditions as an explanation for the difficulties which Mr X was encountering (paragraph 9.14). The Permanent Secretary also accepted that office B had been at fault in failing to respond to the advice centre's request of 28 July 1994 (paragraph 9.12) for a review of the AO's decision to reject the IS claim. Had they done so office B would have been provided with an early opportunity to discover that the AO's decision had been erroneous on a point of law (paragraph 9.4), and all the subsequent difficulties experienced by Mr X could have been avoided.

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9.21 What of Mr X's complaint about the way in which BA handled his request for a crisis loan? The only record I have seen of a request for such a loan is in the letter of 14 June 1994 from the advice centre to office B (paragraph 9.10), asking that Mr X be assessed for a crisis loan if it was not possible for him to be given an interim payment of IS. As office B made an interim payment of IS in response to that letter, I do not consider that they acted maladministratively in failing to take further action on the request for a crisis loan.

9.22 I turn finally to consider the matter of compensation (paragraph 9.9) for Mr X. Following the SSC's decision to allow Mr X's appeal (paragraph 9.17), DSS paid him full arrears of IS from 8 June 1994 totalling £3,724.77; and I welcome the fact that they subsequently made an ex gratia payment of £153.10 to compensate him for the loss of use of those arrears. However I find it unacceptable that it took DSS a further 18 months to send him that compensation and so I asked the Permanent Secretary whether BA would consider compensating Mr X for the loss of value of that payment between the date on which it fell due and the date on which it was made. In reply she said that DSS had agreed to make a further ex gratia payment of £8.31 in that respect. I also noted that, although Mr X had received an interim payment of IS of £176.27 on 21 June 1994 to cover the period from 4 to 30 May 1994 (paragraph 9.10), he appeared not to have received any recompense for IS forgone from 31 May to 7 June 1994. I appreciate that that gap may have been intended to reflect the fact that office C closed Mr X's claim of 18 May 1994 on 22 June 1994. However, given that the Permanent Secretary had acknowledged (paragraph 9.16) that that decision was not implemented in the proper manner, I asked her whether BA would also consider making an ex gratia payment to Mr X to compensate him for the IS which he had lost from 31 May to 7 June 1994. In reply she said that the arrears of £52.23 due for that period had been paid to him on 16 October 1997, and that a further ex gratia payment of £6.44 would be made to compensate him for the loss of use of that money.

9.23 I was also concerned about the hardship and distress which Mr X clearly experienced as a result of having been continuously refused IS for more than 18 months as a result of official error, hardship which the Permanent Secretary accepted Mr X had suffered (paragraph 9.16). Given the exceptional nature of this case I therefore asked the Permanent Secretary to consider awarding Mr X an additional solatium in recognition of the protracted and serious consequences BA's error had had for him. DSS subsequently agreed to make a consolatory payment of £250 to Mr X in recognition of the gross inconvenience to which he had been subjected, and said that they would be willing to consider the possibility of further compensation should he provide objective evidence of a significant deterioration to his health as a result of the way BA had handled his case.

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Conclusion

9.24 Mr X was treated extremely poorly by BA over a long period of time, causing him considerable hardship and distress. The Permanent Secretary has apologised for the errors which were made, and Mr X has now been paid all the arrears due to him. He has also been awarded ex gratia payments of £167.85 to reflect the loss in value of those arrears, and of £250 in recognition of the distress he was caused. Finally BA have agreed to consider the possibility of further compensation on production of appropriate evidence. I regard all that as a very suitable outcome to my investigation of a fully justified complaint.

29 January 1998

Summary

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Last updated: 26 April 2006