An investigation into DWP’s handling of migration to Employment and Support Allowance

Relevant standards and guidance

29. We use related or relevant law, policy, guidance and standards to inform our thinking. This allows us to consider what should have happened. In this case we have referred to

Our standards

30. The Ombudsman’s Principles 2009: the Ombudsman’s Principles of Good Administration, of Good Complaint Handling and for Remedy are broad statements of what public organisations should do to deliver good administration, provide good customer service and respond properly when things go wrong.

31. The Principle of Good Administration relevant to this complaint is ‘Getting it right’, which includes that public bodies must comply with the law and have regard for the rights of those concerned; and provide effective services, and should plan carefully when introducing new procedures; and that decision making should take account of all relevant considerations, ignore irrelevant ones and balance the evidence appropriately.

32. The Principles for Remedy say that for public bodies, there is a balance between responding appropriately to people’s complaints and acting proportionately within available resources but that ‘finite resources should not be used as an excuse for failing to provide a fair remedy’. The Principles for Remedy accord with HM Treasury’s guidelines set out in Managing Public Money (set out below).

33. The Principles for Remedy particularly relevant to this complaint are:

• ‘Getting it right’, which includes that:
  • Where maladministration has led to injustice or hardship, the public body should consider all relevant factors when deciding the appropriate remedy and take steps to provide a remedy.
  • The public body should ideally, return complainants and, where appropriate, others who have suffered injustice or hardship as a result of the same maladministration or poor service, to the position they were in before the maladministration or poor service took place, and if that is not possible, compensate them appropriately.
  • In many cases, an apology and explanation may be sufficient, and in putting right any injustice or hardship, the public body should assess all the relevant circumstances in a balanced way.
  • In some cases, the remedy will be easy to work out; in others, it will be more difficult because of the number of factors to take into account.
• ‘Acting fairly and proportionately’, which requires:
  • Remedies to be fair, reasonable and proportionate to the injustice or hardship suffered.
  • The public body to consider how the circumstances of the case have affected the complainant in all ways.
  • The public body to consider whether it has acted fairly and how its decisions have affected not only the complainant but where appropriate, others who have suffered injustice or hardship as a result of the same maladministration or poor service, even if an offer of a remedy is not legally required.
  • Each case to be considered on its own merits. Any guidance or procedure that public bodies use to decide remedies should be flexible enough to enable the public body to consider fully the individual circumstances.
  • That people should be treated consistently. Decisions on remedies should take proper account of previous decisions made on similar facts.
  • Public bodies to bear in mind the proper protection of public funds.
• ‘Putting things right’, which includes:
  • Where maladministration or poor service has led to injustice or hardship, public bodies should try to offer a remedy that returns the complainant to the position they would have been in otherwise. If that is not possible, the remedy should compensate them appropriately. Remedies should also be offered, where appropriate, to others who have suffered injustice or hardship as a result of the same maladministration or poor service.
  • An appropriate range of remedies will include: an apology, explanation, and acknowledgement of responsibility; remedial action, including revising procedures; and financial compensation for direct or indirect financial loss, loss of opportunity, inconvenience, distress, or any combination of these.
  • In relation to financial compensation, public bodies should: calculate payments for financial loss by looking at how much the complainant has demonstrably lost or what extra costs they have incurred; apply an appropriate interest rate to payments for financial loss, aimed at restoring complainants to the position they would have been in if the maladministration or poor service had not occurred; and consider what interest rate to pay and explain the reasons for the chosen rate. Factors to consider when deciding the level of financial compensation for inconvenience or distress should include the impact on the individual – for example whether the events contributed to ill health, or led to prolonged or aggravated injustice or hardship; the length of time taken to resolve a dispute or complaint; and the trouble the individual was put to in pursuing the dispute or complaint.

DWP Guidance

34. DWP’s Special Payment Scheme: Policy and Guiding Principles April 20121 (the Guiding Principles) said:

• Remedy can include any combination of an apology, an explanation, putting things right and a special payment.
• Special payments are discretionary.
• If it is unclear whether an assertion is true special payment officers must decide whether it is ‘more likely than not’ to be true.
• Under ‘Guiding principles’, that ‘Individuals should not be disadvantaged as a result of maladministration’ and it is not necessary for an individual to request a special payment. DWP should consider it even without a request in cases of maladministration.
• The purpose of a special payment is ‘wherever possible, to return the individual to the position they would have been in but for the maladministration. In the event that this cannot be achieved the aim is to provide redress that is reasonable and proportionate in light of the individual circumstances of the case’.
• ‘Injustice and hardship… should be considered on a case by case basis. Each case should be considered on its own merits. Consideration should be given to the circumstances of the individual and the impact any maladministration has had on them (for example: the impact on an individual with a pre-existing health condition may be more severe than for someone with no health problems). The individual who experienced the maladministration should be given the opportunity to provide evidence (oral or written) to inform the special payment decision making process’.
• There are three special payment categories: payment for loss of entitlement to statutory benefit payments; payment for actual financial loss or costs which resulted directly from maladministration; and ‘consolatory payments’ where injustice or hardship has been suffered as a result of maladministration.

35. DWP’s 2013 Financial Redress for Maladministration: A Guide for Special Payment Officers (the Guide) includes that ‘The scheme is discretionary, so this guide should not be read as a rigid set of rules or a blueprint for every situation. Each case must be considered on its own merits, having regard to the guiding principles…In making decisions, special payment officers must consider all relevant/available evidence, and apply the Department’s policy and guiding principles’.

36. Under delay, the Guide says that ‘Where payments are accepted as having been delayed as a result of maladministration, a special payment can be considered for any impact’. It continues, ‘award of certain benefits (linked benefits) is dependent on the customer being in receipt of an associated benefit…When maladministration results in delay determining entitlement to a qualifying benefit or in the payment of a qualifying benefit, this can have a knock-on effect on the award of any linked benefit. A special payment should be considered for the impact of the delay in respect of both’. It says, under interest, ‘where DWP maladministration has caused a significant delay [the guidance says a significant delay is more than a year] in paying benefit…it may be appropriate for the special payment to include an additional element in recognition that the value of the money has been eroded because of the passage of time’.

37. The Guide says it may be necessary to consider ‘the customer's age and/or health; and ‘Poor service will impact upon the health of different people to different extents. For special payment purposes, it is the degree and duration of the impact that is normally more important than the scale of the error. The more serious the impact, the greater the payment is likely to be…The customer should normally be asked to provide objective evidence of the impact on their physical and/or mental health.’ The Guide says ‘Special exercises are set up to identify customers affected by a particular error and provide a remedy. The following might result in a special exercise: A systemic failure which affects a number of similar cases’. The Guide and Guiding Principles include the Principles for Remedy guidance that the public body should ideally return complainants and, where appropriate, others who have suffered injustice or hardship as a result of the same maladministration or poor service, to the position they were in before the maladministration or poor service took place, and if that is not possible, compensate them appropriately.

HM Treasury guidance

38. HM Treasury’s 2019 guidance Managing Public Money sets out the main principles for dealing with resources in UK public sector organisations. Its Annex 4.14 on Remedy says ‘If their services have been found deficient, public sector organisations should consider whether to provide remedies to people or firms who complain…so that, as far as reasonably possible, they restore the wronged party to the position that they would be in had things been done correctly’. It goes on to say that when a public sector organisation recognises ‘it needs a scheme for a set of similar or connected claims after maladministration or service failure, it should ensure that the arrangements chosen deal with  all potential claimants equitably. It is important that such schemes take into account the PHSO’s Principles of good administration…designing a compensation scheme is no different from designing other services. Good management, efficiency, effectiveness and value for money are key’, and then lists issues to consider. It says Departments need to consult the Treasury ‘about cases which…could set a potentially expensive precedent’.

Passported and other benefits

39. GOV.UK guidance on DWP budgeting loans includes ‘To get a Budgeting Loan you must have been getting one or more of these benefits for the past 6 months: Income Support; incomerelated Jobseeker’s Allowance; income-related Employment and Support Allowance’. Guidance on cold weather payments says much the same.

40. According to NHS guidance, a person is entitled to free prescriptions if s/he is receiving income-related ESA. Guidance on the NHS low income scheme includes that ‘If you have a low income, you may be able to get help with’ prescription and dental costs: ‘you can get help with health costs even if your income is too high for a means-tested benefit’. Guidance on the warm home discount scheme says ‘you may be able to apply directly to your electricity supplier for help if…you’re on a low income’ or ‘get certain means tested benefits’.

41. Housing benefit is help paying rent for people who are unemployed, on a low income or claiming benefit. Gov.uk guidance includes that ‘You may get help with all or part of your rent’. Council Tax Reduction (sometimes called Council Tax Support) replaced council tax benefit in 2013 and is help for people on a low income or claiming certain benefits to pay their council tax. Guidance on it includes that ‘Your bill could be reduced by up to 100%’.

42. Disability living allowance is paid to help disabled people cover the cost of care and mobility. It is made up of the ‘care component’ and the ‘mobility component’. Gov.uk guidance says ‘You might get the care component of DLA if you: need help with things like washing, dressing, eating, using the toilet or communicating your needs; need supervision to avoid putting yourself or others in danger; need someone with you when you’re on dialysis; cannot prepare a cooked main meal…You might get the mobility component of DLA if, when using your normal aid, you: cannot walk; can only walk a short distance without severe discomfort; could become very ill if you try to walk’.

 1The April 2012 guide was replaced in November 2020, after the events in the complaint and DWP’s special payment decision in relation to Ms U. The 2020 guide includes very similar guidance to that set out here.