Benefits underpaid for nine years

What happened

From spring 2004, or possibly earlier, Jobcentre Plus incorrectly deducted between £30 and £35 from Mr B's weekly benefits, which comprised disability living allowance, child benefit, income support and a non-standard rate of carer's allowance. (The rate reflected the fact that Mr B and his wife each care for one of their sons, who are severely disabled.) At the time, the deduction represented 20% of Mr and Mrs B's overall weekly income.

Every year, Jobcentre Plus manually calculated Mr B's benefit entitlement. This meant that it had seven opportunities in the years that followed to correctly calculate the benefit entitlement. However, it was not until early 2012 that Jobcentre Plus spotted its error and increased Mr B's benefits to his full entitlement of £56.85 per week (an extra £35.24 per week).

In spring 2012, Jobcentre Plus paid Mr B around £14,000 in benefit arrears for about eight years and nine months.

After a complaint from Mr B, Jobcentre Plus paid Mr B around £1,850. This was made up of a consolatory payment of £750 for gross inconvenience, interest calculated on the underpayment of around £1,100, and £6 for postage costs.

Mr B complained to the Independent Case Examiner (ICE). ICE upheld his complaint and asked Jobcentre Plus to increase the consolatory payment to £1,500 and the interest payment to around £7,500.

In reaching these recommendations, ICE noted Mr B's family's particular situation, including the needs of his disabled children and the extra difficulty the underpayment had caused in his family's circumstances. It also noted that Mr B and his wife had been diagnosed with stress and depression; there was professional medical opinion that the underpayment had contributed to the physical and mental ill-health of Mr B and his wife; and that Jobcentre Plus had put Mr B in the position of having to live on an amount under the minimum that the law said he needed.

ICE accepted that this meant that Mr B had to use credit cards to get by. Accordingly, Jobcentre Plus should have calculated interest based on average credit card rates rather than the official interest rate of 0.5% that it had used.

What we found

Mr B told us that carers like him do not have access to average rates of credit and have to borrow at higher interest rates. He also told us that he had to pay late payment and transfer charges. He believed ICE should have taken this into account and recommended a higher interest payment.

However, Mr B did not provide enough evidence to support his claim. His evidence showed that he had paid interest at 18% in one period and 0% at another time. Consequently, ICE's recommendation that Jobcentre Plus pay the average credit card rate of interest (13.4%) was fair, based on the information available.

Normally, Jobcentre Plus requires more evidence than Mr B was able to give before it can pay interest at the rate that ICE recommended. This includes evidence of the amount of debt in the years before and after its error; evidence of the rate of interest paid on that debt; and evidence of what was purchased with the debt. In this particular case, ICE was right not to insist on further evidence, which Mr B simply could not provide, and right to take into account the circumstances of the case, in addition to the available evidence.

However, in the course of our investigation, Mr B gave us further medical evidence that we felt showed a strong link between the despair and stress he felt in resorting to credit card debt to meet the shortfall in his benefit payments and a sudden decline in his mental health. This persuaded us that Jobcentre Plus should further increase the consolatory payment in recognition of the impact of its error on the health and mental well-being of Mr B and his family.

We did not uphold Mr B's complaint about ICE. We partly upheld his complaint about Jobcentre Plus. Our basis was that, through ICE's recommendations, Jobcentre Plus had done a lot to try to address Mr B's complaint, but there was still more it could do to recognise the impact of its error on Mr B and his family.

Putting it right

At the time of the complaint to us, Jobcentre Plus had apologised to Mr B and paid him around £14,000 in benefit arrears; around £7,500 interest on the arrears; and £1,500 as a consolatory payment.

We recommended that Jobcentre Plus give Mr B a further £1,000 consolatory payment in recognition of the impact of its error on him and his family.

Jobcentre Plus agreed to our recommendation.