Council pays £200 to Hackney woman after two-year delay wiping benefit debt

A watchdog has rebuked Hackney Council for taking two years to write off a resident’s benefit debt and recovering over £1,000 from her while her appeal was ongoing.

In December 2025, the council agreed to make a symbolic payment of £200 for causing “distress and financial hardship” to the woman, known as Ms B, to whom it claimed to have overpaid £3,300 in housing benefit.

The council told the resident she was in arrears in January 2023 and continued to collect money from her even after she appealed against the decision, recovering over £1,600 in total. She continued to lobby the council for an explanation, but officers ended up nearly doubling the outstanding figure – only to eventually drop the debt altogether.

The Local Government and Social Care Ombudsman (LGSCO) found the council at fault for forcing Ms B to chase it for information and for taking far too long to review her case.

The watchdog added that the council should have suspended any debt collection as soon as she appealed against the decision. Ms B had disputed the arrears, arguing that the council made a mistake when calculating her income and that the money was irrecoverable.

She sent several follow-ups to the council asking for it to show its workings, but officers simply repeated previous debt calculations, and later increased the total arrears figure to £6,000.

After Ms B had complained to her local councillor, in November 2024 the council ruled in her favour. In January 2025 the council wrote off the debt and refunded her the £1,600 it had recovered.

But the Hackney resident complained to the Ombudsman months later that the council never apologised directly to her or explained why the decision had taken nearly two years.

The watchdog found the council “delayed excessively” and this had “exacerbated the injustice” it inflicted on her. The LGSCO ordered the council to shell out £200 as a symbolic payment to Ms B.

A spokesperson for Hackney Council said: “We are sorry for the distress this has caused the resident and acknowledge that we have not dealt with this case properly, and fell short of the standards we and our residents expect.

“We have refunded the money that was recovered from the resident and have compensated £200 to recognise the distress caused by the delay. We will make sure that we learn from this case and ensure that it is used to help improve the service we provide to residents.”