e-mail Paul Lewis on paul@deadline.demon.co.uk
The Department of Social Security has finally published the secret rules which it has used since 1977 to compensate people when its staff make a mistake. Or at least, it nearly has. If you want to see them you will have to travel to your local Benefits Agency office as it refuses to let anyone buy or copy the whole document. But it could be a worthwhile trip. In 1995/96, when the rules were still secret, around 3300 people were given compensation worth £1.7 million for errors by the Department. Now that the rules are open, many more may benefit from them.
The rules were introduced following a recommendation from a House of Commons select committee in 1975 that the Department of Health and Social Security, as it then was, should introduce a scheme to compensate people who suffered what it called "undue delay which is clearly due to their error". The recommendation was strongly resisted but a couple of years later the Department drew up some internal rules and quietly began to pay compensation when it had to. But it also decided that the rules should be kept secret from the public.
In 1991 Saga Magazine, obtained a copy of part of the secret rules and published a guide to what they said ('Not a Lot of People Know That' Saga Magazine July/August 1991 p44). Shortly after the Benefits Agency mentioned the existence of the rules for the first time in one of its leaflets. But the rules themselves remained a closely guarded secret. Then in July 1993 the Prime Minister launched his Open Government initiative. In future, access to information would only be restricted "where there are good reasons for doing so" and Open Government officially began on 1 April 1994. Called Code of Practice on Access to Government Information the new rules allowed members of the public to ask government departments for information. In particular it said that Departments should publish "explanatory material on departments' dealings with the public (including such rules, procedures, internal guidance to officials...as will assist better understanding of departmental action in dealing with the public...)"
If anything described the secret rules on compensation that did, and so on 4 April 1994 I wrote to the Department of Social Security and asked for a copy of them. Two months later my request was refused. I asked for a review of the decision. In October 1995 the Department refused again. Under the Open Government rules the next step is to complain to the Parliamentary Commissioner for Administration, usually known as the Ombudsman. My case went to him 31 October 1995. A year and a half later the Ombudsman has still not made his ruling. But in February this year, out of the blue, the Department sent me a glossy printed document called Financial Redress for Maladministration. In its 63 pages the rules about when the Department will pay compensation and when it will not are fully explained. And the document is available to anyone who wants to look at it.
Money for mistakes
Compensation can only be paid when an official of the Department has made a mistake and the customer has lost money as a result. One of the commonest problems is caused by Benefits Agency staff who tell someone they have no claim for a pension and then, some years later, the customer finds they could have claimed all the time. But by then it may be too late. Retirement pension can only be backdated for twelve months (that is being reduced to three months from August). So if a claim is delayed longer than that because of bad advice you could lose a lot of money. At this point the compensation scheme will step in and pay the money which has been missed.
Another common problem is a long delay in paying a pension or other social security benefit. Under the Customer Charter benefits should be paid within a certain amount of time. This period is longer for some benefits than for others and compensation will only be paid if the delay is three times longer than the time it should have taken. For example, retirement pension should be paid within 60 working days (twelve weeks) of a claim being made. If it still has not been paid after eight months then compensation for the delay can be paid. The periods when compensation starts range from one month for a benefit called disability working allowance to 20 months for war disablement pension. The new document gives a list of all benefits and the time when compensation begins.
The compensation for delay is related to the interest the money could have earned if it had been in a savings account. The interest rates used are the average amounts paid by building societies in the year of the delay.
The scheme will also reimburse any money you have lost in pursuing a claim for compensation. That can range from small amounts for postage and telephone to legal fees where it was necessary to seek help from a lawyer. It can also cover interest charges if the delay in payment led to bank overdraft or credit card charges.
Finally, the scheme can make what it calls 'consolatory payments'. These are only paid in exceptional circumstances where a mistake has had what it calls "an adverse effect on the customer's life". The guidance warns that it does not cover the normal delays that customers may encounter and that "complying with the law can be frustrating or inconvenient and sometimes stressful...This background inconvenience and frustration is not the context in which we would normally consider a consolatory payment." The payments range from £50 to £500 though the highest payments are reserved for causing 'gross embarrassment, humiliation or unnecessary personal intrusion".
Getting out of it
In some cases you will not get a payment even if your case seems to come within the rules. Even where an official makes a mistake it might not be what is accepted as 'official error'. For example, if your benefit is not paid while the Government waits for a test case in the courts you will not get any compensation for the delay. The Government says that officials did not make a mistake if they followed their own faulty guidance about what the law meant.
And you will not get compensation for part truths. Although officials are obliged to tell you the truth and nothing but the truth, they do not have to tell you the whole truth. So if you ask whether you are entitled to a pension and an official says 'no' but does not go on to say 'but if you paid a small amount of national insurance contributions you would have an entitlement' that is not a mistake. And if you later find that you have an entitlement you cannot get any compensation for the missed years.
The Department will also consider if you have contributed to the problem. For example if there has been a long delay in paying you money, did you act promptly at all times? Or was some of the delay your fault? If at least three months of the delay was down to you, then the compensation will normally be reduced, though your age and health will be taken into account.
Finally, the Department will not compensate you for disappointment. For example, an official wrongly tells you that your claim to benefit will be successful and you should get a certain amount each week. But when you claim you are refused benefit altogether. You will not get any compensation for the disappointment if the decision to refuse you as correct.
Proving it
One of the hardest things about getting redress from the Department of Social Security can be proving what happened. You may have been given wrong information verbally years ago and the official you spoke to may have moved on. The guidance says that these things should not rule out compensation. But if you have no written evidence of what happened you will have to make a very strong case. Witnesses are helpful. Even if no-one was with you at the time you could get support from someone you told about the advice immediately after.
If you think that you may have a claim for compensation for delay or a mistake by the Benefits Agency - and remember that the rules apply to the Contributions Agency and Child Support Agency as well - you should write to your local office and explain why. If you want to see the rules before writing your letter then you should go to the office and ask to see a copy of Financial Redress for Maladministration. If that request is refused or you are kept waiting unreasonably ask to see the customer service manager.
The Department of Social Security has told Saga Magazine that it will not publish the rules because they change a lot. That excuse is almost certainly nonsense. And it is possible that the Ombudsman may force the Department to allow people to have a full copy of the rules. But until then you are obliged to look at them at your local Benefits Agency office and ask for a photocopy of the relevant pages. No charge should be made but if you ask for too many pages you may be refused. A spokesman for the Department told me that this procedure was 'fully consistent with the commitment to Open Government'. We'll see.
May 1997
e-mail Paul Lewis on paul@deadline.demon.co.uk