Department for Work and Pensions

3. Mr N complains that on 2 March 2017 DWP did not properly act on his request that it pay him directly as the landlord of Property A. This is a property he let to Universal Credit recipients.

4. He also complains that in May 2018 he asked DWP to pay him directly as the landlord of Property C, but it took until September for it to act on this request.

5. Mr N says that as a result, DWP wrongly paid the housing element of University Credit to his tenants. In turn, his tenants did not pay their rent to him. He says this means he has lost approximately £2,300 in unpaid rent at Property A and £1,990 at Property C. Mr N says he has spent a long time trying to resolve this, and that DWP’s actions have caused him many sleepless nights. He says its actions have caused him annoyance and he feels stressed most of the time.

6. As an outcome he would like service improvements so similar events do not happen again in the future. He would also like compensation in recognition of the emotional impact on him.

7. Universal Credit is a benefit administered by DWP to help people with their living costs. It replaced several other benefits including Housing Benefit. This was a benefit paid by local councils to help some people afford their rent. Universal Credit is designed to imitate an income from employment and so is usually paid monthly.

8. Some recipients of Universal Credit are unable to manage their own income effectively. Under Section 58 of the Universal Credit legislation DWP can pay the housing element of a Universal Credit claim to someone else if it is in the claimant’s best interest. This means DWP can pay the housing element of Universal Credit directly to a claimant’s landlord if they are at risk of eviction. This is called an Alternative Payment Arrangement (APA).

9. If the claimant wants DWP to set up an APA they should tell their work coach or call the Universal Credit helpline. They need to provide the landlord's contact details, and evidence of their rent and any arrears. This can take the form of a tenancy agreement or a letter from their landlord.

10. At the time of the complaints we have investigated, a landlord could also request a managed payment by sending a UC47 form to DWP. The form asks for the tenant’s name and address details to confirm rent is taken from the correct claim. They should also provide the amount their tenants pay in rent, and any arrears they are in.

Property A

13. Mr N complains that on 2 March 2017 DWP did not act on his UC47 form appropriately. This form asked DWP to set up an APA to pay him the housing element directly as the landlord of Property A, which he let to benefit recipients.

14. DWP’s Personal Budgeting Support and Alternative Payment Arrangements guidance says a landlord can ask it to pay a claimant’s housing element directly to them if their tenant is in two months’ rent arrears, or they have a history of underpaying.

15. The guidance does not set out a timescale for how long DWP should take set up an APA but it does explain their importance. As these alternative payments are designed to protect tenants from eviction, the requests for managed payments to landlords should be treated as a priority. As such, DWP should make all reasonable attempts to act on these requests and, where possible, create the payments before the claimant’s next pay date.

16. DWP’s Record Management Policy from the time sets out how it should handle records relating to a claim. It separates documents into two categories. Firstly, there are ‘supporting’ documents. These are records on which DWP bases its benefits decisions and include claim forms and records which determine the amount of payments. These records should be retained for 14 months after DWP no longer has any interest in the case.

17. If a document does not match the criteria for a supporting document, then it is considered to be ‘ephemeral’. DWP should destroy documents like these within four weeks from the date it receives them.

18. Our Principles of Good Administration say organisations should deal with people promptly and tell them if things take longer than they can reasonably expect. Our Principles set out that if an organisation cannot do what it intended then it should explain the reasons why.

19. When Mr N submitted the UC47 to DWP on 2 March there was no active Universal Credit claim in place for his tenants. This meant it was impossible for DWP to create an APA and pay him under Section 58 of the Act. We are satisfied that DWP was right not to create an APA at this time.

20. The UC47 did not determine a benefit decision as there was no claim at that time to alter. As such, DWP deleted the form from its system in line with its Record Management Policy

21. DWP did not inform Mr N that it declined to set up an APA or that it deleted his UC47. We understand it had privacy concerns about sharing the personal information of Mr N’s tenants - namely their benefit status. We recognise this is a valid concern. However, in the interest of being been open and accountable, DWP should have told Mr N that it could not process the UC47 and had deleted it. It could have done so without sharing any private information. This fell so far short of our Principles, and what should have happened, that it amounted to a failing.

22. Mr N told us that because of what happened he lost out on rent he was entitled to. He also explained that DWP’s actions have caused him stress and annoyance.

23. We cannot agree that what happened resulted in Mr N losing rent. This is because there was no Universal Credit claim in place for the tenants at Property A when he requested an APA. As his tenants were not receiving the housing element of Universal Credit at the time Mr N was therefore not legally entitled to receive it on their behalf.

24. We do recognise the frustration caused by DWP’s decision not to update him on the status of his UC47 form. If DWP told Mr N it deleted his UC47 then it would have kept him appropriately informed. In doing so, this would have helped to reduce the frustration he experienced.

25. We have looked at DWP’s response, and its improvements to the APA process, to see if these have put right the impact of what happened. DWP’s Complaints Resolution Team and acting Universal Credit Operations Director acknowledged it had made mistakes and apologised for these. ICE also made recommendations to put this right. It decided an apology did not go far enough and asked DWP to make a consolatory payment of £75 to Mr N.

26. DWP’s guidance on financial redress for maladministration sets out the principles which decide how much it should pay where things go wrong. It says that individuals should not be disadvantaged by maladministration, and the impact of any maladministration should be considered on a ‘case by case’ basis. The decisions about redress should be fair and justifiable, and be timely and appropriate. The amounts usually range from between £25 to £500.

27. When making consolatory payments DWP should also consider HM Treasury’s guidance Managing Public Money. This says that public funds, like those DWP administers, should be managed responsibly. Decisions about financial remedies should also take account of the other party’s legal rights.

28. ICE acknowledged the emotional impact these events had on Mr N, and made a recommendation in respect of that. The payment is in line with the range set out in the guidance. Having considered what went wrong, and the impact of this, we are satisfied the apology and £75 payment DWP made have put things right.

29. Since the events Mr N complains about DWP has changed its APA process for landlords. DWP no longer requires them to submit a UC47 and they can use an online service instead. DWP automatically updates this service with the outcomes of APA requests and whether they were successful or not. This improvement therefore minimises the likelihood of the failing above from happening in the future.

Property C

30. Mr N complains that in May 2018 DWP did not act on his UC47 appropriately. He says it did not set up the APA he wanted, and as a result did not pay him the housing element of Universal Credit on behalf of his tenants at Property C. He says it took until September for DWP to act on his request.

31. As set out above, the Act allows DWP to pay someone other than the Universal Credit claimant if it is done to protect their interests. DWP’s guidance Personal Budgeting Support and Alternative Payment Arrangements explains this further. It says that where a claimant is in two months’ rent arrears then DWP can pay the housing element of their Universal Credit claim to the landlord directly.

32. When setting up an APA a DWP case manager follows a series of on-screen prompts. These instruct the case manager what to do based on the information available. Step 1.4 says that if the details on the UC47 are a partial match to those held on the system for the Universal Credit claim then the case manager should seek further information from the tenants.

33. Section 4.2 says that if a private landlord sends an APA request to DWP then the case manager should contact the claimants and ask them to provide confirmation of their rent arrears.

34. Mr N sent a UC47 to DWP dated 28 May 2018. He asked DWP to pay him directly as his tenants had failed to pay him the previous two months’ rent. On 30 May a case manager at DWP contacted the tenants and advised them the information on their claim was different to information Mr N gave in his UC47. The case manager asked them to update their address accordingly. This was consistent with the on-screen prompts at the time.

35. By 8 June the tenants had fulfilled the case manager’s request and updated their address. In line with the on-screen prompts, DWP then needed details about the tenants’ rent payments and their landlord’s contact information. The tenants provided this on 14 June and asked DWP to pay rent directly to Mr N as their landlord. They also gave the case manager permission to speak to Mr N if he called.

36. On 20 June the case manager contacted the tenants and explained the details they gave on their rent agreement did not match those on Mr N’s UC47. The case manager asked for clarification and express consent to discuss details of their claim with Mr N. The case manager explained they could not proceed until the tenants had provided this information.

37. The next day the case manager asked the tenants to make an appointment at their local Jobcentre to provide the necessary evidence of their housing costs. They sent the tenants a reminder on 3 July, and they provided the evidence eight days later. Based on this DWP created the APA and it paid the housing element directly to Mr N for the tenants’ July assessment period.

38. The DWP case manager was right to ask Mr N’s tenants for more information before it put the APA in place. This was in line with the on-screen prompts at the time relating to a partial match of information. We recognise this did delay creating the APA Mr N wanted, but it was necessary so that DWP could complete the required checks. We cannot be critical of this but recognise how frustrating it was for Mr N to wait for the APA he wanted.

39. The payment arrangement DWP created meant the housing element of the tenants’ claim should have gone directly to Mr N. This should have stayed in place until they asked for an alteration, their entitlement to the housing element changed or they left his property. However, on 24 August DWP paid the housing element for the preceding assessment period directly to the tenants. The case manager also sent the tenants a message that advised it had paid the housing element to Mr N.

40. DWP explained it mistakenly paid the tenants due to an administrative decision which ensured the tenants were paid that day. As there was an APA in place at the time the housing element should have gone to Mr N directly in line with DWP’s guidance. This did not happen and is a failing.

41. Mr N told us that this mistake meant he lost out on rent that he would otherwise have received. Consequently, this has also caused him stress and frustration. We agree with Mr N that had DWP fulfilled the APA in place then he would have received the rent for August directly from DWP. We agree that what happened would reasonably cause stress and frustration to Mr N. We understand that as a professional landlord Mr N relies on these rent payments for his livelihood, and appreciate how the impact of missing a payment is amplified.

42. In response to what happened DWP acknowledged something went wrong. It explained that it was unwilling to make another rent payment to cover the money Mr N lost but advised him to submit another UC47 instead. This would allow it to set up an APA on his tenants’ Universal Credit claim to recover the arrears. This was an entirely reasonable offer by DWP. If Mr N had accepted this offer, then it would have put things right for him financially. Mr N did not submit another UC47. Whilst DWP provided an opportunity to recover the rent, that does not put right the stress and frustration identified above.

43. In its report, ICE agreed with Mr N that his complaint about the August housing element was ‘justified’. It took a similar view to DWP that it would be inappropriate to make another rent payment to Mr N, and as a result made no recommendations.

44. DWP has since made service improvements to how it administers APA requests. As explained above, there is now an online system where landlords can submit and monitor managed payments. It has also distributed updated guidance amongst its case managers to help them accurately administer claims.

45. Despite these service improvements not enough has been done to put right the stress and frustration. With this in mind, we have partly upheld the complaint and made recommendations below in respect of it.

1. We have found a failing with how DWP acted on the UC47 Mr N submitted in respect of Property A in March 2017. This resulted in frustration and annoyance for Mr N. The compensation and service improvements DWP has made since put this right.

2. We also found a failing with how DWP acted on Mr N’s application that it pay him as the landlord of Property C. This also caused him frustration, but the actions DWP has taken since do not put this right. Whilst its service improvements go some way to resolving the problem, we recommend that it pay him £100 in recognition of what went wrong.

46. We have set out the recommendation we are making below. We have also explained why we did not recommend anything further.

47. Our Principles state that public organisations should ‘put things right’ and, if possible, return the person affected to the position they would have been in if the poor service had not occurred. If that is not possible, they should compensate them appropriately.

48. In considering our recommendations, we have referred to our Principles for Remedy. These state that where poor service or maladministration has led to injustice or hardship, the organisation responsible should take steps to put things right. DWP and ICE have declined to pay Mr N the housing element that it sent to his tenants instead of him. DWP offered a reasonable way to put this right, but Mr N chose not to accept it.

49. Moreover, Mr N has the option to take his former tenants to court to recover the rent he says they owe him. We consider that is the most appropriate way to retrieve this money, and it is reasonable for him to pursue such action. As such, we have not recommended DWP reimburse any financial loss. Our recommendation is solely in respect of the emotional impact.

50. We recognise Mr N feels this is unfair due to precedents set by decisions from the Local Government Ombudsman and tribunals. In these cases, they considered problems with the administration of Housing Benefit by councils. Whilst we do sometimes consider the views of other organisations, we make our own decisions based on the facts of the individual case before us. We also follow our own investigative process to understand what should happen, based on the relevant legislation and guidance, and what did happen. We have looked at the cases Mr N has told us about. As they were decisions about a different benefit administered by a different organisations to they are not directly relevant to our decision.

51. We recognise Mr N feels this is unfair due to precedents set by decisions from the Local Government Ombudsman and tribunals. In these cases, they considered problems with the administration of Housing Benefit by councils. Whilst we do sometimes consider the views of other organisations, we make our own decisions based on the facts of the individual case before us. We also follow our own investigative process to understand what should happen, based on the relevant legislation and guidance, and what did happen. We have looked at the cases Mr N has told us about. As they were decisions about a different benefit administered by a different organisations to they are not directly relevant to our decision.

52. To determine a level of financial remedy, we review similar cases where similar injustice has arisen – in this instance, stress and frustration - along with our severity of injustice scale. Following this review, we recommend that DWP should pay Mr N £100 in recognition of the frustration that has arisen from it not paying him the housing element for Property C in August 2018. It should do this within two weeks of the date of this report.

53. Our Principles say that public organisations should seek continuous improvement, and should use the lessons learnt from complaints to ensure they does not repeat maladministration or poor service.

54. When DWP recognised it made an error in August 2018 it acknowledged this and accurately advised Mr N how to recover the rent he had lost. It also updated guidance for staff managing Universal Credit claims, and replaced its process for landlords to apply for an APA. We are satisfied these changes improved its service in line with what we expect. For this reason, we are not recommending service improvements.