Home > Publications > Selected cases— Parliamentary > Selected Cases and Summaries of Completed Investigations: April 2001 to September 2001 > Benefits Agency cases
Selected Cases and Summaries of Completed Investigations
PCA 6th Report – Session 2001-2002
Chapter 2
DEPARTMENT FOR WORK AND PENSIONS
Benefits Agency and Employment Service: handling of a claim for Work Based Learning for Adults training premium
In September 1998 Mrs P was interviewed at a jobcentre as part of the consideration of her application for a training premium. Her husband was then receiving certain benefits in respect of an incapacity which in turn provided a gateway to other benefits administered by a local authority. As well as the standard premium of £10 a week, which was not treated as income, Mrs P subsequently received an allowance of £51.40 a week, based on her own national insurance contributions. That had an adverse impact upon some of Mr P’s benefits. The Ombudsman did not uphold Mrs P’s main complaint that the interviewer had failed to explain the operation of the scheme properly, but he criticised the failure to obtain a contemporary statement from the interviewer and the Employment Service’s use of a loosely-worded stock letter. As a result the Employment Service agreed to make changes to a future print of an information booklet about Work Based Learning for Adults, and to make consolatory payments totalling £150 to Mrs P. In responding to the complaint the Benefits Agency found that they had failed to award benefit of £66.75 to Mr P between 27 October and 2 November 1999. The Agency paid those arrears and accepted that they had contributed to the confusion and inconvenience that had given rise to the complaint, in recognition of which they made a separate consolatory payment of £50.
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Benefits Agency: Alleged mishandling of a claim to income support involving payment of mortgage interest direct to lenders
In November 1996 the Benefits Agency (BA) decided that Mr B was not incapable of work. He appealed against the decision and, pending the conclusion of the appeal process, BA continued to pay income support, including mortgage interest payments direct to two lenders, but excluding the disability premium. On 18 April 1997 an appeal tribunal confirmed BA’s decision. Mr B appealed against the tribunal’s decision and the Independent Tribunal Service (now known as the Appeals Service) asked a tribunal Chairman to consider setting it aside. On 19 August the Chairman refused to do so. Neither BA nor Mr B received notifications of that decision and BA did not learn of it until 15 September 1998 when they telephoned the Independent Tribunal Service. As a result, income support wrongly continued in payment from August 1997 until 21 July 1998. In October 1998 Mr B made a new claim for income support from August 1997 on the basis of a different incapacity. BA accepted the claim as valid from 17 June 1998 but on 9 March 1999 they disallowed it on the grounds that Mr B’s wife was working full-time. Mr B appealed and a tribunal hearing took place on 25 May 1999. However, the tribunal’s decision was subsequently set aside because of a careless error made by BA in submitting the papers to them. One of Mr B’s lenders began legal action against him in June 1999 which led to the sale of his house in March 2000.
The Ombudsman found BA at fault for not discovering earlier the outcome of the setting aside application in August 1997 and that Mr B had lost statutory entitlement to income support as a result. BA agreed to make Mr B an extra-statutory award of income support and accordingly cancelled the overpayment of £9,179.66 which he had previously been asked to pay. They offset £1,322.60 arrears of disability premium plus interest of £175.23 against an earlier recoverable overpayment; and they made Mr B a consolatory payment of £50. The Ombudsman found that there had been some avoidable delays in sending mortgage interest payments to the lenders; but he found no evidence of adverse effect on Mr B. The Ombudsman found unjustified Mr B’s contention that maladministration by BA had led to the legal action taken against him. The Chief Executive of BA apologised for shortcomings in BA’s performance.
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Benefits Agency: mishandling of a claim to the care component of disability living allowance and delay in processing requests for compensation
The Benefits Agency (BA) lost Mr H’s requests for a review of their refusal to award him the care component of disability living allowance. When BA reviewed their decision and awarded Mr H the middle rate care component they failed to explain clearly why his benefit could not be backdated by more than a month from 18 December 1997 (the date of the review request which they held). After the Ombudsman’s intervention BA accepted that Mr H had requested a review in October 1997 and paid arrears of benefit, with interest, from 17 September to 18 November 1997, totalling £342.32. BA also considered Mr H’s solicitors’ request of September 1999 for compensation for administration errors and awarded Mr H £150 for gross inconvenience, £125 for severe distress and £11.45 for telephone costs.
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Benefits Agency: misdirection about entitlement to incapacity benefit and a social fund crisis loan
Ms S complained that the Benefits Agency (BA) had misdirected her client, Miss M, when, having been found fit for work, BA told her that she could make a fresh claim for incapacity benefit instead of advising her to claim jobseeker’s allowance. She also complained that BA denied Miss M the opportunity to make an application for a social fund crisis loan. The Ombudsman was unable to make a finding on the allegations of misdirection because there was insufficient evidence to determine exactly what BA had told Miss M. However, he found that BA had taken longer than they should to determine Miss M’s claim for incapacity benefit; given contradictory information about her case; failed to deal promptly and fully with correspondence; failed to keep adequate records; and failed to make sufficiently clear that a person may claim both incapacity benefit and jobseeker’s allowance simultaneously, but may be entitled to only one of those benefits. In recognition of those errors, BA apologised and made Miss M a consolatory payment of £100 for the gross inconvenience they had caused her.
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Benefits Agency: alleged failure to pay full entitlement to reduced earnings allowance following an appeal tribunal decision
In August 1987 the Benefits Agency (BA) awarded Mr X reduced earnings allowance from August 1986. That award continues. In June 1996 BA awarded Mrs X family credit and in November 1996 BA renewed that award for a further 26 weeks. In February 1997 BA awarded income support to Mrs X and in September BA transferred that claim into her husband’s name.
In March 1998 BA’s fraud section began investigations as they believed Mr and Mrs X had failed to declare Mr X’s award of reduced earnings allowance when they made their applications to family credit and income support. In August 1998 BA decided that they had overpaid income support to Mrs X for the period 4 February to 22 September 1997 and that they had overpaid income support to Mr X for the period 23 September 1997 to 9 March 1998. In September 1998 BA decided that they had overpaid family credit to Mrs X for the period 18 June 1996 to 16 June 1997. In November 1998 Mr and Mrs X appealed against those decisions.
In October 1999 an appeal tribunal upheld Mr and Mrs X’s appeals as BA had not shown that Mr X had received reduced earnings allowance during the periods in question.
The Ombudsman noted that the tribunal had needed to be satisfied that Mr X had cashed payments of reduced earnings allowance and as BA had not proved that, the tribunal had found in Mr and Mrs X’s favour. However, the Ombudsman identified evidence indicating that BA had paid Mr X reduced earnings allowance continuously since August 1987. The Ombudsman did not uphold Mr X’s complaint that BA had not paid him his full entitlement to reduced earnings allowance.
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Benefits Agency: mishandling of a claim to incapacity benefit and providing inaccurate and misleading information
Mrs B was awarded incapacity benefit in June 1997. As she was already receiving widows’ pension, only the balance between the basic rate of widows’ pension and the amount of the incapacity benefit award was payable to her. The Benefits Agency (BA) miscalculated the amounts due to her, and their replies to the enquiries she made in attempting to resolve the discrepancies between the amounts paid into her bank account and what BA told her they had paid, were inadequate. BA delayed issuing forms P60 at the end of each fiscal year and, when she finally received them, they showed the wrong amounts of taxable benefit. Resolving that took a great deal of time and effort on Mrs B’s part, compounded by the fact that BA misled her by referring to their own tax liaison section as the “Inland Revenue”, which led her into fruitless enquiries with that department. BA corrected her case, apologised for their mistakes, paid her the arrears together with compensation by way of interest on their late payment, made her a consolatory payment and offered to reimburse her expenses. BA issued revised instructions to their staff and instituted training sessions in order to avoid a recurrence of the administrative errors manifested in Mrs B’s case.
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Benefits Agency: delays and mishandling during the course of a fraud investigation
Mr W was the subject of a Benefits Agency (BA) fraud investigation between July 1998 and January 2000. In October 1998 BA suspended and then disallowed his benefit. In November and December 1998 BA interviewed Mr W under caution. They eventually decided, following protracted internal deliberations, that they could not uphold the disallowance of benefit. In November 1999 they paid substantial arrears to Mr W. In January 2000 BA formally told Mr W that he would not be prosecuted.
The Ombudsman did not uphold the complaints about the conduct of BA’s fraud investigator. He did, however, find that BA had issued contradictory information, caused unnecessary delays and failed to issue appealable decisions in writing.
BA apologised to Mr W, made ex gratia and consolatory payments totalling £708.39, offset a further £158.39 against an existing overpayment and agreed to consider reimbursement of legal costs on the submission of appropriate evidence.
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Benefits Agency: alleged mishandling of a claim to reduced earnings allowance including giving misleading advice
Mr F, who had previously been employed in the mining industry, received reduced earnings allowance at the maximum rate from 15 November 1995 to 10 November 1998. From 11 November 1998 for the next 12 months it became payable at a reduced rate. On 6 January 1999, before putting the reduced rate into payment, the Agency telephoned Mr F to explain the basis on which the allowance had been awarded and the reason for the imminent reduction from the maximum rate. According to the Agency’s record of the telephone call, Mr F was content with the latest award. On 26 November 1999 the Agency again awarded maximum rate reduced earnings allowance from 10 November 1999 to 13 November 2000, based on new earnings figures which they had obtained from the mining industry. On 16 December Mr F made a late appeal against the award for the period from 11 November 1998 to 9 November 1999. He said that on 6 January 1999 he had agreed to accept the reduced award pending further investigation by the Agency; and that he had not appealed earlier against the award because he had been awaiting the outcome of that promised review. The appeal tribunal chairman refused to admit the late appeal. The Ombudsman found no maladministration in the Agency’s handling of Mr F’s claim, and concluded that Mr F had misunderstood what the Agency had told him on 6 January 1999.
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Benefits Agency: belated discovery that incapacity benefit had been incorrectly awarded leaving customer who had taken early retirement no opportunity to secure fresh employment
In March 1996 the Benefits Agency mistakenly awarded Mr P incapacity benefit. Meanwhile Mr P had taken early retirement. The mistake was not discovered until February 1999. His benefit was stopped from March 2000, by which time he was no longer in a position to seek re-employment by his former employer. He maintained that, if he had not been awarded benefit, he could and would have found alternative employment in March 1996 and could then have preserved his pension rights. The Ombudsman found that Mr P had taken the decision to retire early because he had failed to secure re-certification as a pilot launch skipper. That had been before the award of incapacity benefit and the award did not of itself prevent his re-employment. The Agency had not sought to recover the overpayment and, at the Ombudsman's instigation, offered Mr P a consolatory payment of £100 for worry and distress.
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Benefits Agency: errors and delays in handling a claim to invalid care allowance
The Benefits Agency (BA) disallowed Mr H’s claim to invalid care allowance in 1997 because they calculated that his earnings as a company director exceeded the statutory limit of £50 per week. On review, BA awarded him invalid care allowance, backdated to the start of his claim. Having received the accounts for the financial year 1997/98, BA reviewed the decision again and disallowed Mr H’s claim. BA first said that an overpayment of £2,125.35 was recoverable but later decided that it was not recoverable. An appeal tribunal upheld BA’s decision, including the decision that the overpayment was not recoverable. Despite that BA took court action to pursue recovery and Mr H had to apply to the court to have an order against him set aside. When Mr H claimed again in June 1999 BA disallowed his claim because his earnings were over £50 per week. An appeal tribunal decided that Mr H’s earnings did not exceed the limit and awarded him invalid care allowance. Mr H applied to the Social Security Commissioners for the first tribunal decision to be set aside. BA supported Mr H’s application because, at BA’s instigation, the tribunal had based their decision on a regulation which was not appropriate for determining earnings for the purposes of benefits. A Commissioner set aside the tribunal’s decision as being erroneous in law. He determined that Mr H was not entitled to invalid care allowance from 1 September 1997 to 5 April 1998 because his earnings exceeded £50 per week, but was entitled to the allowance from 6 April 1998 to 10 January 1999. The Commissioner decided that the overpayment was not recoverable.
The Ombudsman found inconsistent BA's treatment of Mr H’s employment status and earnings, and that BA’s submission to the appeal tribunal had introduced an inappropriate regulation into the decision making. BA awarded Mr H a consolatory payment of £150, paid his solicitors’ costs of £763.08 for the court hearings, and reimbursed Mr H’s expenses of £779.95.
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Benefits Agency: recovery of overpayment that had allegedly arisen as a result of maladministration
In 1994, while in receipt of income support, Miss S made a claim for industrial injuries disablement benefit. She declared that she was in receipt of income support. On subsequent income support review forms Miss S did not declare that she was either waiting to hear about her application, or that benefit had in fact been awarded. An overpayment of income support therefore occurred. The Benefits Agency (BA) sought recovery of the overpayment. The Ombudsman found that BA ought to have acted on the information provided by Miss S on her original application form and should have offset one benefit against the other; but, equally, Miss S ought to have declared receipt of the new benefit on her income support review forms. There was no evidence that BA’s decision to recover the overpayment was maladministrative and no grounds on which the Ombudsman could ask for such action to be waived. However, BA undertook to reconsider the position if Miss S could demonstrate that recovery would result in her experiencing excessive hardship.
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Benefits Agency: initial failure to identify a complaint and later failure to address medical questions raised
Medical Services, who provide a national medical service for the Benefits Agency (BA), examined Mr T for the all work test. The examining doctor awarded him nil points (he had been awarded 41 points at an all work test 16 months earlier) and BA decided that he no longer qualified for incapacity benefit. Mr T wrote to BA asking to appeal, enclosing a letter saying that their doctor had been impolite, and had not treated him well during the examination. BA left that letter unactioned because he had not complained explicitly. A month later Mr T wrote to Medical Services complaining that the medical report was false. Medical Services replied to that as a complaint about clinical findings; they did not reply to a second similar letter from Mr T. A tribunal dismissed Mr T’s appeal. On his behalf his local Citizens’ Advice Bureau appealed to the Social Security Commissioners and referred to the Ombudsman a detailed complaint about the medical examination. The Commissioners directed that the appeal should be heard by another tribunal, which found that the doctor had failed to take into account in his examination the chronic and progressive nature of Mr T’s condition. The tribunal also found that BA had incorrectly ended Mr T’s entitlement to benefit without considering all the evidence. They awarded Mr T 15 points on the all work test and his entitlement to incapacity benefit was reinstated. The Ombudsman was not able to make a finding on the doctor’s conduct of the examination because of insufficient evidence and the lapse of time. The Ombudsman found that Medical Services had handled Mr T’s original complaint to them adequately but had failed to answer Mr T’s second letter. The Ombudsman criticised BA for failing to identify Mr T’s initial complaint and for shortcomings in their handling of his benefit claims. BA paid Mr T £250 in recognition of the inconvenience he had been caused.
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Benefits Agency: failure to follow correct procedures after identifying a claimant as potentially violent
Following an incident, during which an interviewing officer felt threatened by Mr F, the officer completed a form PV1. The Ombudsman found that while that action was correct, the officer had failed to record in sufficient detail the events that had led to the completion of the form. The details became further distorted when the Benefits Agency (BA) failed to follow their own procedures for the transfer of papers for a person classified as potentially violent. When Mr F became aware of his classification as potentially violent, BA failed to handle his complaint properly.
BA apologised to Mr F and paid him £10 compensation for out-of-pocket expenses, £200 for gross inconvenience, £50 for gross embarrassment and undertook to consider a claim for severe distress.
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Benefits Agency: improper handling of a change of address and inadequate notice of a telephone interview
Mrs and Miss J complained that the Benefits Agency (BA) had mishandled their claims for income support. In particular, BA notified the local authority that Miss J’s housing benefit claim had ended when she did not have such a claim, contributing to confusion about Mrs J’s housing benefit and council tax benefit entitlements. BA also sent Mrs J an incomplete notification of their intention to interview her by telephone and did not telephone her when they said that they would. The Ombudsman found evidence of poor record keeping, that BA had tried to contact Mrs and Miss J at the wrong address and had used the wrong telephone number, and that they had not carried out a routine case check when it had first fallen due. Although the local office manager had apologised to Mrs and Miss J when they first complained, BA had not offered a proper explanation after their internal investigation of the complaint. In the light of the Ombudsman’s findings, BA apologised to Mrs and Miss J for the poor handling of their case.
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Benefits Agency: failure to notify rights to a review, poor handling of requests for information and delay in deciding to review under the special rules for the terminally ill
The Benefits Agency (BA) checked Mr L’s entitlement to disability living allowance under the Benefit Integrity Project and decided that his benefit entitlement should be reduced, but they did not send Mr L details of his right to ask for a review. Mr L asked to appeal but his request arrived after the expiry of the three-month timescale then allowed. BA decided to treat his request as an out-of-time review; they sent him the appropriate forms to complete, but with no explanation. Mr L reiterated his request for an appeal, asked why the forms had been sent and requested guidance on reviews and appeals. BA gave no guidance in their reply or in subsequent telephone conversations with Mr L. They also failed to comply with Mr L’s request that because he was so ill, they should send all correspondence to his son, and sent no answer to a letter from his son. When Mr L’s son asked for his father’s claim to be reviewed under the special rules for the terminally ill, BA took four months to reach a decision, mainly because they failed to pursue medical reports in good time. By the time they made the decision Mr L had died. BA paid the arrears to his son. As a result of the Ombudsman’s intervention, BA accepted that they had not notified Mr L of his review rights, a failure which meant that the decision which they had notified to him had no standing. They decided that Mr L had been entitled to the highest rate of the disability living allowance care component from the date of the review. They paid to Mr L's son the arrears with interest, and a consolatory payment of £150. The Chief Executive sent a letter to Mr L’s son apologising for BA’s failings.
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Benefits Agency: mishandling of benefit payments made to a resident of a residential care home
Mr P complained about the handling of Mrs I’s claim to benefit. The Ombudsman found that the Benefits Agency (BA) had been responsible for a number of serious shortcomings in dealing with Mrs I’s case. It had only been after regular promptings from Mr P that it was brought up to date. BA acknowledged that they made basic procedural errors which had led Mrs I to receive incorrect payments of benefit. They also accepted that a clerical error had led the manager of the residential home where Mrs I resided being incorrectly recorded on BA’s computer system as an appointee instead of a standing agent; that had resulted in payments being issued to the manager instead of to Mrs I. Mr P’s intervention enabled BA to take remedial action to ensure that Mrs I did not suffer any unremedied injustice and BA staff were reminded of the difference between an agent and appointee and the appropriate action required in each case. The Chief Executive apologised for BA's poor performance and awarded Mrs I a consolatory payment of £100 for the gross inconvenience she had suffered. The Ombudsman found no evidence of any systemic fault in BA’s procedures governing appointees.
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Benefits Agency: misleading information about the duration of an award of disability living allowance
The Benefits Agency (BA) awarded Mrs G the mobility component of disability living allowance for a period up to June 2000. In Autumn 1999 Mrs G was considering taking out a loan to purchase a car, and she asked BA for confirmation of the duration of her award. BA told Mrs G that her award was ‘for life’. Mrs G complained that on the strength of that assurance she had taken out a loan, and had suffered financial hardship when BA subsequently reduced her disability living allowance.
The Ombudsman found that BA had made an error when they told Mrs G that she was entitled to the higher rate mobility component `for life’, but he did not uphold her complaint that that had caused her financial hardship. Awards of disability living allowance which were made ‘for life’ were in fact subject to review by BA at any stage. That meant that even if Mrs G’s award had indeed been made ‘for life’, BA might still have reduced it subsequently if her circumstances changed.
The Ombudsman criticised BA for misinforming Mrs G about the duration of her award and for other errors and delays.
After the Ombudsman’s intervention BA apologised to Mrs G for their error and paid her £100 in recognition of the gross inconvenience they had caused. They also agreed not to recover an overpayment of benefit totalling £1,120.70.
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