Our findings
Decision to close claim
36. The DWP’s publicly available information leaflet ‘Universal Credit and students’ explains that, as a general rule, students cannot usually claim UC. However, it is possible to do so in various situations, including some situations where students are in full-time non-advanced education. Those exceptions are set out in the Universal Credit Regulations 2013.
37. Where someone remains eligible for UC, student grants and loans will generally be taken into account when entitlement to UC is calculated. However, some student grants and bursaries will not be included in the calculation and so should not affect the claimant’s entitlement. Section 70(g) of the above Regulations explains that consideration of a grant should exclude amounts ‘intended to meet travel expenses incurred as a result of the person's attendance on the course’.
38. In line with the above Regulations, we can see Miss A’s travel bursary and the nature of her course did not affect her entitlement to UC. We are pleased to see that Miss A successfully appealed this decision through the statutory appeals route, which is separate to the complaints process.
39. We are not able to give any comment on DWP’s application of the relevant legislation, as we have no remit to consider matters which have appropriately been considered via the statutory appeals route. We are able to look at Miss A’s concerns that the DWP did not followed the applicable guidance and standards in carrying out its processes when it made the decision to end her UC claim, which is what we have done here.
40. DWP’s ADM chapter ‘H6: Students and Student income’ says that any amount of a grant which is intended to meet travel expenses incurred as a result of the person’s attendance on the course should be excluded from the figure used for a student’s income.
41. As such, the evidence indicates that in this case the DWP did not comply with its own guidance when it made its decision. This is not in line with our Principles, which say public organisations should follow their own procedural guidance and have regard to the relevant legalisation in their decision making. It is also not in line with the DWP ‘Customer Charter’, which says that the DWP will provide its customers with the correct decision, information or payment.
42. We can see there are failings here. We set out our thinking on the impact caused and our recommendations for remedy later in this report.
Telephone call on 6 May 2021
43. The ICE set out in its report that it had listened to a recording of this call, and that it appeared that ‘the agent did not appear to listen fully to or understand the matters raised and were abrupt in their manner during the call’. We can also see that the DWP response to Miss A’s complaint also upheld her complaint after listening to a recording of the call.
44. The DWP’s ‘Customer Charter’ says DWP staff will be helpful and polite to customers, treat them fairly and with respect and try to understand their circumstances. All parties are agreed that this did not happen in Miss A’s case. As such, we agree there is maladministration here.
45. We also consider that the DWP adviser failed to act in line our Principles, which set out that public organisations should deal with people fairly and with respect and provide effective services with appropriately trained and competent staff. Having reviewed the DWP complaint response, Miss A’s account and the ICE report, we consider that the DWP did not act in line with relevant standards and guidance and there are failings here. We will therefore return to our findings on impact caused and remedy later in this document.
Notification to DM
46. Miss A successfully appealed the decision to end her UC claim. She was advised that her new claim would be re-aligned to her previous claim and any arrears paid to her. The overpayment therefore was cancelled. However, the DWP did not notify DM as it should have done about the revised decision until 24 December 2021.
47. We have asked the DWP to provide us with any relevant guidance or policy which refers to the timeframes within which it should notify DM about any change in the recovery of an overpayment. It has advised that there is no specific policy or guidance setting out a commitment to a particular timeframe. We have therefore considered whether the evidence available shows DWP acted in line with our Principles of Good Administration.
48. In this case, the UC team took six months to notify the DM of the change and has not provided us with any reason why it could not have notified DM at the time or shortly afterwards. As such, we do not consider the delay reasonable and in line with our Principles, which say public organisations should deal with people promptly, within reasonable timescales. Therefore, we have found failings here.
49. We can see that that DWP did not arrange for the recovery to cease until after Miss A had contacted the UC team and DM on several occasions and submitted a formal complaint about the continued deductions.
50. We do not consider this is in line with the ‘Customer Charter’, which says that DWP staff will: • deal with a claimant’s request the first time they make contact or as soon as possible • tell claimants what will happen next, and by when • keep claimants updated of progress.
51. We also consider that the DWP failed to comply with our Principles of Good Administration, which say public organisations should behave helpfully, dealing with people promptly, within reasonable timescales. They should tell people if things take longer than people can reasonably expect them to take.
52. Taking into account the above, we find that there were administrative failings here.
Response to messages about mental health and financial difficulties
53. Miss A has explained to us that the situation resulting from the decision to close her UC claim affected her mental health and made her feel unheard and abandoned.
54. From the ICE report, we can see that she made contact with the DWP several times during May 2021 to follow up the MR and her new claim, which she had submitted on 6 May. From 6 May until 11 June when the decision to close her UC was revised and her arrears payment was made, she was waiting the standard six weeks for first payment of a UC claim.
55. On 6 May during the telephone call with the DWP adviser she explained that she had outstanding debt payments.
56. On 20 May she said she had not heard from anyone for two weeks and had not been able to pay her rent or bills and had no money to live on. On the same date she received a response to her message saying a Decision Maker was looking at her MR, but there was no response to or acknowledgement of her concerns about lack of money to meet basic needs, nor about her poor mental health.
57. On 30 May Miss A asked via her UC journal for an update and said her financial position was affecting her mental health and she had had to use food banks because she had no money to buy food. She said she was also behind with her rent.
58. Miss A has told us she was concerned about asking for an advance on her UC claim since she was anxious about incurring more debt and reducing the amount she would receive in future payments. Her understanding was that by the time she received the advance she would only be waiting a short amount of time before receiving her first actual payment. She had also been told when she made her claim on 7 May that it may be refused for the same reasons that her previous claim had been closed.
59. The ICE report tells us that the DWP advises when a customer informs their Case Manager (CM) that their mental health is affected by issues with their UC claim, the CM should contact them to see what help may be available.
60. We asked ICE where it obtained this information. It has told us that it approached DWP to enquire what action, if any, should have been taken in respect of Miss A’s journal messages.
61. The DWP advised us it could not explain why no one responded to Miss A’s journal entries. It explained that, if the claimant mentions their mental health is deteriorating as a result of issues with their UC claim, its usual process is their CM should try and contact them, to see what help may be available and appropriate. DWP advised the call handler who spoke to Miss A on 7 June 2021 referred the matter to the DWP’s Service Centre team leader, but it could not see any evidence that DWP staff had then made a call to Miss A. It advised that the journal message may have prompted progression of the MR instead, as the Decision Maker considering her request tried to contact her on 11 June 2021.
62. We initially asked the DWP to explain the difference between the role of a work coach and a CM, since we see that the ICE report refers to both roles.
63. The DWP has explained that the primary difference between the two is that the work coach is based in a jobcentre and would speak with a claimant face-to-face, whereas a CM would only communicate with a claimant via the telephone or UC journal. It is the responsibility of the work coach to discuss a claimant’s responsibilities with them and conduct in-person checks of a claimant’s evidence.
64. On the other hand, a CM is responsible for conducting reviews of a claimant’s circumstances remotely, including reviews of their finances to ensure they are still eligible for benefits. If a CM identifies that a person is no longer entitled to receive their benefit, they may request further evidence be provided, or potentially suspend the individual’s claim.
65. The DWP has advised that a claimant could approach either a work coach or CM to discuss any issues in their personal life, such as financial difficulties or homelessness. The former would more likely have a face-to-face conversation with the claimant, whereas the latter would correspond remotely via a claimant’s UC journal.
66. The DWP says there is no specific guidance which sets out the responsibilities of the CM in response to a claimant contacting them about issues in their personal life. They have guidance relating to the role of the work coach but this is limited to when a claimant is or becomes homeless.
67. We have looked further into DWP’s wider guidance to identify its responsibilities when a claimant makes it aware that they have financial and/or mental health concerns.
68. Firstly, we can see that the ‘Customer Charter’ says the DWP will try to understand a claimant’s circumstances.
69. We can also see the DWP website (both at the time of the events of the complaint and currently) encourages UC claimants to talk to their work coach about any problems. It said ‘We understand that it is sometimes difficult for you to talk to us about issues or challenges that you are experiencing, but your work coach is there to help you. It is really important that you tell your work coach about any issues you may have, including homelessness, addictions or poor mental health’.
70. Similarly, our Principles say that public organisations should treat people with sensitivity, bearing in mind their individual needs, and respond flexibly to the circumstances of the case. Where appropriate, they should deal with customers in a co-ordinated way with other providers to ensure their needs are met; and, if they are unable to help, refer them to any other sources of help.
71. The guidance ‘Mental Health: Communicating with claimants’ says that the DWP has a duty under the Equality Act 2010 to provide extra support to claimants suffering from a mental health condition. The guidance goes on to suggest how DWP advisers should best communicate with claimants who they believe have a mental health condition. This guidance is set out in the context of ensuring that a person making an application for benefit is given appropriate adjustments. However, it underlines DWP’s basic duties to respond appropriately to people who have mental health needs.
72. Specifically in respect to claimants with financial concerns, the guidance ‘Money guidance and Alternative Payment Arrangements’ refers to assistance and support available to UC claimants who are struggling to budget on a monthly basis. This is because, prior to the introduction of UC, all means tested benefits were paid weekly. One purpose of UC was to effectively introduce claimants to ‘the world of work’ by paying them monthly rather than weekly.
73. This guidance suggests claimants: • seek advice from the Money Advice Service, either online or by telephone. This service also provides a debt advice locator tool which signposts to free, confidential non-judgments and impartial debt advice in their local area • can access the online ‘Money Manager’. This is an external website providing various budgeting tools and advice to which UC guidance linked at the time of the claim. DWP has since advised that it now signposts claimants to another external website which is called Money Helper.
74. Lastly, the DWP has also provided various guidance relating to different payment advances for UC claimants. The only one that applies to Miss A is the ‘new claim advance’, which is intended to support claimants whilst they are waiting for a new claim to go into payment.
75. We have next looked at whether there is any evidence that DWP did not act in line with any of the above guidance in its response to Miss A’s concerns about her mental health and financial situation.
76. In terms of support for her concerns about her mental health, we have not seen any evidence that DWP acted in line with its guidance ‘Mental Health: Communication with claimants’ when it failed to respond to Miss A’s statements about her deteriorating mental health.
77. There is no specific guidance to tell us what a work coach or CM should do when a UC claimant expresses concerns about their mental health. However, having reviewed the information set out on the website as above and the DWP’s evidence regarding the role of the CM and work coach, it appears that there is an understanding at the very least that either individual should provide support to a claimant who approached them to discuss their mental health. From the available evidence, we cannot see that this happened in Miss A’s case.
78. We consider that DWP did not provide the appropriate support in response to Miss A’s concerns about her mental health. This is because we have not seen any evidence that it responded to her in line with the above DWP guidance on communication, nor the Charter and our Principles.
79. In respect to the DWP’s response to Miss A’s concerns about her financial situation, we see that she was aware that she could obtain a ‘new claim advance’, from her account of what happened. She has also explained her reasons for not doing so. We have looked at what she told us in more detail below.
80. We have not seen that DWP provided any signposting to sources of financial advice and support, in line with its ‘Money Guidance and Alternative Payment Arrangements’ set out above.
81. Although we can see Miss A was made aware of the option to apply for an advance loan when she reclaimed UC, in the absence of any other response to her concerns as explained above we consider DWP’s lack of response to her repeated statements regarding the impact of the closure of her claim on her mental health and financial situation was so significant as to amount to service failure.
Impact
82. We have next considered how the failings we have identified impacted on Miss A.
Decision to close UC claim 83. We note Miss A’s UC claim was closed on 3 April but she did not know about the decision or experience any impact until 29 April. We have therefore only considered the impact on her from this date. The decision was revised on 21 June 2021.
84. She tells us that the period from 29 April to 21 June 2021, during which she was not paid UC, was very stressful and frustrating. She says she felt like her life was in the hands of someone else who was making the wrong decision.
85. Since Miss A’s normal UC payment was not paid into her bank account, she received a default notice from the bank because her regular standing orders and direct debits had not been paid. This resulted in an unauthorised overdraft fee of £70 and Miss A tells us it also affected her credit score, which dropped from 800+ to 295.
86. In order to manage her loss of income, Miss A says had to rely on family and friends for financial support, which was stressful and embarrassing. Her family was out of work at the time so this made things even more difficult. She also had to use food banks and lost weight as a result.
87. Miss A says her mental health deteriorated because she did not know if her UC was going to be reinstated and she was very worried about paying back the overpayment. She describes this as ‘a horrible time’. It was also during the COVID-19 lockdown and her exam period. She says her grades dropped so that she was just getting passes instead of her usual distinction. She says these lower marks affected her final grade.
88. The evidence indicates that as a result of the DWP’s incorrect decision making, Miss A experienced avoidable upset and stress for nearly two months during the time she was not paid UC. This was due to both her financial worries and because she did not know if the matter would ever be resolved. We consider that the worry about what was happening caused her to experience anxiety and distress.
89. We can see that the DWP’s actions directly caused the bank to charge an unauthorised overdraft fee. We can also see that Miss A’s credit rating may have dropped as a result of unpaid bills at this time, but we are not able to give any view based on the evidence available to us that this drop was caused by DWP’s error, nor that it led to any direct financial loss.
90. Equally, we can see that Miss A’s exam results may have been affected to some degree by the anxiety she was experiencing about her UC, but we cannot give any view on the balance of probabilities that other factors did not also influence her results, such as COVID-19. What we can say is that DWP’s error caused her a two-month period of continuous stress and frustration.
Response to mental health and financial difficulties 91. We have explained above that it does not appear that the DWP provided appropriate support to Miss A, in line with its own standards and our Principles, when she told it about her deteriorating mental health and financial hardship on more than one occasion in May 2021. We consider that as a result she missed the opportunity to explore and receive support which may have helped to reduce her anxiety and upset.
92. We have taken into account that Miss A could have applied for a payment advance. She has explained to us why she chose not to do so and we understand her reasoning. We must explain that we cannot hold DWP accountable for her choice, and therefore we cannot say Miss A had no recourse to financial support at this time.
93. However, we still consider that she clearly expressed her concerns about her mental health and the DWP failed to respond. We consider that making her aware of appropriate support at this stage may have led to a reduction in her stress and the feeling that nobody was listening to her. The failure to respond appropriately meant Miss A missed out on an opportunity to reduce the stress she was experiencing as a result of the incorrect closure of her claim.
Telephone call 94. Miss A has told us that when she spoke to the adviser on the telephone on 6 May, she felt dismissed and as if her concerns were not important.
95. We recognise that if this incident had happened on its own, we would likely not consider the impact on Miss A of that poor service to be significant. However, we acknowledge that since it came during a time when she was already struggling with the outcome of the decision to close her UC claim and was feeling helpless and distressed, it likely had greater emotional impact on her than if it was one single example of poor customer service.
Overpayment recovery and failure to respond to enquiries 96. Miss A says when her appeal was successful and her UC reinstated, she felt ‘over the moon with relief’. Then, when she discovered that DM had started to make deductions even though there was no longer a recoverable overpayment, she says she felt ‘ignored and small’ because nobody would sort the matter out for her, despite all her enquiries. She says she felt as if she was spending all her time trying to fix a problem that she had not been responsible for in the first place. She describes it as affecting all of her life and says she felt depressed as if there was a big weight weighing down her on her. She remembers her flat mate worrying about her because she did not want to do anything or go out anywhere.
97. As above, we consider that the DWP’s poor management of the ongoing recovery of the overpayment caused greater upset and distress than if it had been a single event, since it followed on from a period of intense anxiety and worry resulting from the incorrect decision.
98. We recognise that Miss A tried to put things right by explaining on several occasions that she only had a travel bursary, by using her right of appeal, by making enquiries about the ongoing recovery of an overpayment that no longer existed and by engaging in the complaints procedure. We do not consider there was anything more she could have done to change what happened during the timeline of her complaint. She says that she felt as though the DWP was controlling her. We have thought about this carefully in considering remedy.
Remedy
99. We have next considered what DWP has already done to put right the impact on Miss A caused by its errors.
Financial remedy for distress 100. Firstly, we have looked at the ex-gratia payment of £50 agreed prior to the ICE review to recognise the poor customer service Miss A received during the telephone call on 5 May. We can see the DWP also apologised for any upset caused.
101. We are pleased to see that ICE further recommended the DWP issue an apology to Miss A and pay an additional £150, which is also intended to recognise the upset caused to her by the incorrect decision to close her claim, the delay in ending the recovery from her ongoing benefit and the poor response to her repeated requests to DWP to do so.
102. We have therefore considered whether £200 and apology provided is sufficient to put right the cumulative stress and frustration caused by the service failings we have identified. Taking into account the available evidence, we consider that the financial remedy offered is not sufficient to put right the upset caused to Miss A by the failings identified above.
103. To decide on a level of financial remedy, we review similar cases where the person has experienced similar injustice. We also use our ‘severity of injustice scale’, taken from our ‘Guidance on Financial Remedy’, to determine the degree of impact on an individual. This ensures any recommendations we make are consistent and transparent for everyone who uses our service. The scale contains six different levels of injustice which increase in severity.
104. Following this review, we recommend that the DWP should pay Miss A a further £200.
105. Our thinking is that the impact on Miss A sits around the top of level two on our scale. A level two emotional impact at that end of our scale would typically be moderate distress, upset or worry lasting for a relatively short period.
106. We can see that the circumstances of the complaint have caused Miss A stress and frustration, and that this was continuous and more pronounced during the period she was not paid UC. We can see that although her UC claim was reinstated after around two months, during that time she experienced avoidable anxiety about her financial affairs. This was exacerbated by the poor handling of her communication with DWP, including lack of appropriate signposting when she reported her poor mental health.
Financial remedy for costs: 107. We can also see that Miss A has referred to the costs incurred from overdraft fees. We asked DWP how it had considered the request for reimbursement these costs, which had resulted from failure to transfer her regular UC payment into her bank account and direct debits not being paid.
108. The DWP explained that when it dealt with Miss A’s complaint at Tier One of its internal complaint process, she did not mention these costs, although it acknowledged that the ICE report did refer to the matter. It advised it remained open to Miss A to make a formal request and provide evidence that the bank charges had arisen due to the DWP’s actions.
109. We have reviewed the evidence and see that Miss A referred to the costs of the bank charges in her email dated 28 June 2021 to the DWP. Her email explained why she did not think that the DWP’s proposed ex-gratia payment of £50 was enough. It does not appear that DWP responded to this email or asked her at this stage to provide further evidence of her costs, nor that it took any steps to review its initial offer of £50 in the light of the information she had provided.
110. Taking into account the above, and as the evidence available to us suggests Miss A would not have incurred those costs if DWP had not made an error in closing her UC claim, we therefore recommend that DWP makes a further financial payment of £70 to cover the costs of the unauthorised overdraft fees charged to Miss A.
111. We note Miss A also refers to the impact on her exam results and credit score. As explained above, we cannot reach a view on the balance of probabilities, based on the evidence available, that either were caused by DWP’s error. As such, we do not make a recommendation for financial remedy on those points.