Compensation policy and procedure

Introduction

This policy explains mhs group’s approach to adopting a fair, transparent, and customer-focused approach to remedies and compensation.

 

This Policy applies to tenants and residents of mhs homes and Heart of Medway.  It also applies to other customers who make a complaint about services they receive from us.

This policy is relevant for all colleagues, but particularly those who take details on complaints as they come in, or colleagues who investigate complaints.

Policy statement

We want to deliver excellent services. But if something goes wrong, we believe in making it right as quickly and fairly as possible.

This policy explains how we decide what to do when we’ve made a mistake. It’s here to make sure everyone is treated fairly, decisions are clear, and we focus on rebuilding trust. The policy applies to all customers of mhs as well as other people affected by the services we provide who may make a complaint to us.

When investigating complaints we carry out a fair assessment to understand what happened. As part of the investigation, we will consider fair and proportionate remedies, which are appropriate to each individual case.

Some of the time a remedy could be financial, so this policy also sets out how we will pay financial remedies as well as other compensatory measures, such as compensation for where a customer has lost money as a result of our actions or omissions.

By adopting this policy, mhs will ensure that we:

• Comply with the Housing Ombudsman’s code of practice and guidance on remedies
• Remain consistent with best practice and the strategic aims of mhs

This policy applies to all mhs employees, and must be applied when considering complaints and any remedies associated with rectifying those complaints.

The Customer Experience Manager is responsible for this policy

All colleagues who respond to complaints are responsible for understanding and following this policy.

By adopting this policy, mhs will ensure that we:

• Comply with the Housing Ombudsman’s code of practice and guidance on remedies
• Remain consistent with best practice and the strategic aims of mhs

A remedy is how we put things right after a complaint has been upheld.

Compensation refers to a payment provided to an individual as reparation for harm or loss caused by mhs’ actions or mistakes.

This policy can be read in conjunction with or may have links to other policies including:

• Complaints policy
• Decants policy
• Appeals policy

Our approach is based on guidance provided by the Housing Ombudsman, using the following principles.

Be fair – seeking fair outcomes - we will treat each case individually and ensure that the remedy is fair when considering the specific circumstances of the case by:

• Providing a remedy which is appropriate and proportionate to the severity of the service failure.

• Considering the impact of the action or behaviour on the customer, recognising diverse needs and specific circumstances which may cause disproportionate impact.

Put things right - The remedy will set out the measure(s) that will correct the level of service failure and will consider a range of measures to put things right for the complainant, including financial compensation.

Learn from outcomes - Where possible we will seek to add value by looking beyond the circumstances of the individual complaint and consider whether anything can be improved in terms of process and systems. Part of a remedy may be to ensure that changes are made to policies, procedures, systems, staff training, or all of these, to ensure that the service failure is not repeated.

Our staff exercise their discretion when considering what the most appropriate remedies in a case should be, considering the individual circumstances of that particular case. This includes any relevant individual needs, disabilities or other factors. Training will be provided to staff to make sure they understand how to apply this discretion fairly and consistently. This policy cannot cover every individual scenario or circumstance that we will consider and therefore remedies could be different in every case.

We offer several types of remedy, these can include:

Apology - in some circumstances an apology is the most appropriate remedy. An apology will be made in writing or in person and will be a corporate responsibility, not that of an individual. An apology should acknowledge the service failure, accept responsibility for it, explain clearly why it happened and also express sincere regret.

Specific action – this might be an action to correct a service that was incorrectly delivered, or an additional service to make things better.

Policies and procedures – as a result of a complaint we might review, and if necessary, change a policy or procedure.

Financial compensation – this might be offered in cases where there is proven financial loss to the customer, or if our actions or inactions have caused avoidable inconvenience, distress, detriment or other unfair impact.

When considering financial compensation we may consider:

• the time taken to resolve the issue
• any individual needs that may have increased the impact
• the severity of the impact
• any other relevant factors that may have increased the impact

Goodwill gestures - this might include a small token like flowers or vouchers. This remedy should be used where the customer has requested something specific to resolve their complaint.

We’ll look at how serious the issue was and how it affected the customer before we decide what the remedy should be. For example a delay in repairs may have a more significant impact on a customer with mobility issues, requiring a more comprehensive remedy.

An example of these and how we might grade them are below:

Minor

What this might look like: A short delay or small inconvenience.

What a remedy could be: An apology, explanation, or a small gesture

Moderate

What this might look like: Significant inconvenience or distress.

What a remedy could be: Compensation, fast-tracking a repair, or a combination of actions.

Severe

What this might look like: A big impact on the customers life, over a long period.

What a remedy could be: Higher compensation, reimbursement of any costs, and steps to prevent it happening again.

Mitigating and aggravating factors

We will also consider mitigating or aggravating factors. These might be as the result of action or inaction by the customer that have made a situation worse, for example by not reporting an issue in a timely way or refusing access to put something right.

How long will it take?

We’ll agree a remedy with the customer within 10 working days of resolving their complaint.

We’ll ask the customer to respond within 30 working days to either decline or accept the remedy.

We’ll pay any money within 28 days of their response.

We’ll agree the timeline for other remedies with customers depending on the actions being taken. So for example if an appointment needs to be rebooked we’ll discuss this with the customer and arrange it as part of the remedy to the complaint. All remedies and timelines should be discussed with the customer.

Circumstances in which compensation will be offered

There are three types of compensation payment that will be considered under this policy: 

• Financial Remedy - payments may be made when there has been a failure of service which has caused delay, distress or inconvenience. 

• Mandatory payments – this applies to disturbance or home loss, where payments will be made to compensate where the customer loses the right to rent their home, or to compensate reasonable expenses incurred in being re-housed, either on a temporary or permanent basis as a result of works.

• Quantifiable loss payments – where the customer can demonstrate actual loss as a result of our actions or omissions, or those of a third party working on our behalf. 

Compensation will normally only be awarded once a complaint investigation has been completed. In general, we will deduct any arrears or money owed to mhs homes from the compensation prior to it being paid to the customer. 

Circumstances in which compensation will not be considered 

We will not consider a claim or compensation where: 

• The loss or damage was caused by the customer, another household member or visitor to their property. This includes failure to report a repair promptly or to keep an appointment
• The fault was unforeseeable and/or caused by a 3rd party or mhs homes had no control over it, such as water leaking from a neighbouring property (unless we had already been alerted to this and had not resolved it promptly)
• Personal possessions are lost, stolen or damaged through no fault of mhs homes or its contractors
• Service failure or damage that is the result of extreme or unforeseen conditions, such as the weather
• Loss of supply of gas, electricity or water that is outside of mhs homes’ control, such as a failure by the utility provider.

The customer should make sure they have sufficient home contents insurance to cover damage to their belongings through no fault of mhs homes.

Compensation is not intended as a substitute for home contents insurance however where damage has been caused directly as a result of our actions or oversights, or those of contractors working on our behalf, consideration will be given to reimbursement without the need for a customer to make a claim on their insurance at further inconvenience and cost to them. 

Home loss payments 

We will make home loss payments to the customer if we need them to move from their home permanently due to demolition, redevelopment, sale of land, or major works. The home loss payment regulations 2015 sets out the amount of compensation payable when they lose the right to reside in their home. The amount is currently set for tenants at £7,100 from 1st October 2021. For shared owners and leaseholders the payment will be 10% of the market value of their interest held in the property, up to a maximum of £71,000. 

To qualify for a mandatory home loss payment, they’ll need:  

• To have been living at the property for at least 12 months before the date we move the customer (however anything under 12 months may be entitled to a pro-rata disturbance payment)
• To be permanently moving away from their existing home  

Only one home loss payment will be made per property, irrespective of whether it is an individual or joint tenancy. We will usually only make home loss payment by direct bank transfer and only to the person(s) named on the tenancy agreement. We will only pay this after the move has taken place, and within 3 months of receipt of claims, whichever is latest. 

If they are in arrears, we will use the home loss payment to clear these arrears, with anything remaining being paid to them. 

Disturbance payments 

These are made to compensate for any reasonable out of pocket expenses incurred where a customer has been asked to move out of their property through no fault of their own. These payments are variable but will not exceed £2,500. These payments may be in addition to the home loss payment. 

The following expenses will generally be covered and where possible we will arrange and carry out works directly or through our approved contractors. If a customer wishes to arrange their own works, we will only reimburse on production of valid receipts or paid invoices. 

• Removal expenses (we will arrange removals for the customer). We can also arrange to provide a packing service, if there are reasons a customer would not be able to pack themselves we will speak to them to understand what they need and why
• Disconnection and reconnection of domestic appliances such as cooker, washing machine, telephone, broadband, television aerial/satellite dish.
• Redirection of post for up to 3 months
• Cost of altering existing or purchasing new carpets and curtains (and refitting of rails/blinds). We will not pay disturbance for carpets or curtains if there are new or good condition floor coverings and curtains in the new property or if the carpets and curtains in the old property can be adapted to fit the new property.
• Refitting security alarms or other security equipment
• Adaptions required for a disabled customer, such as handrails 

The Disturbance payment will be paid directly to the service providers (e.g., removals, carpet fitters) up to the value of £2,500. A customer would not be entitled to any funds remaining from the £2,500.

Quantifiable loss payments  

If a complaint investigation finds that a customer is out of pocket as a direct result of mhs homes’ actions or omissions, then we will consider compensation to offset the losses. This could include (but is not limited to); 

• Increased heating bills due to disrepair
• Having to pay for alternative accommodation or takeaway food
• Paying for one off cleaning
• Carrying out their own repairs where it is proven that we have failed to carry out our obligations 
• Replacement of or costs towards replacing lost or damaged possessions 

We will not cover costs if the customer has: 

• Not notified us of the issue
• Not given us reasonable time to rectify the issue
• Refused us access to the property
• Refused our offer to rectify the issue 

The customer will need to provide evidence of the costs they have incurred, such as a receipt, paid invoice, or bill, within 8 weeks of the request. 
 

Missed appointments  

If an mhs homes employee, or a contractor working on our behalf, fails to attend an appointment a payment of £15 will be payable. This cannot be claimed if the customer is given reasonable notice (not less that 24 hours) in advance that the appointment is cancelled. 

If a new appointment is made and missed, a further payment of £20 will be made. Any further missed appointments for the same job will be payable at £25 per missed appointment, up to a total value of £100. 

To qualify for a missed appointment payment, the customer must have been available to allow access during the appointment time and have agreed the appointment in advance. 

Loss of heating and hot water 

Between 31st October and 30th April, if a customer is without heating for a period of longer than 3 working days, we will provide compensation of £15 per day, up to a total value of £150. This includes the cost of using any temporary heating that we provide.  

Between 31st October and 30th April, if a customer is without hot water for a period of longer than 5 working days, we will provide compensation of £5 per day, up to a total value of £50.  

The provision of temporary heating will be reviewed on a case by case basis and will be influenced by the needs of the household (for example, households with elderly, disabled, or children under the age of 12).

Payment for services 

Most tenants have fixed service charges, which means the charge is set each year and does not change during the year. If we have failed to deliver a significant service paid for through fixed service charges, we will consider the charge for the service, the disruption caused and how long the service was unavailable. The charge will be adjusted the following year if required. In exceptional circumstances material errors in fixed charges may be addressed during the year. 

Most homeowners have variable service charges. These are itemised bills with an annual estimate and then an ‘actual’ bill provided each year once costs are known.  For variable service charges, service failures will be credited and carried forward in the accounts or reimbursed to the customer after reconciliation of the accounts. 

Each case will be considered for compensation on an individual basis and consider all known circumstances and supporting evidence. We will work on evidence and facts and will generally not make any compensation awards based on the belief of what might have happened. All reports of loss or inconvenience will be investigated. Factors that will be considered when the level of compensation is considered include: 

• Whether the customer has contributed to the failure in service. This could be when there have been problems gaining access due to their availability, or delays in reporting the problem.
• The level of stress or distress caused as a result of action or inaction by mhs homes or its contractors. This will include the severity of the distress, the length of time involved, and the number of people affected
• The amount of inconvenience (time and trouble) the customer has experienced and how much effort was required by them to resolve the problem
• The additional impact that the customer has experienced based on their individual needs, for example a situation being made more difficult because of their ill-health or disability.  

Compensation payments for delay and distress will be made based on the level of mhs homes’ responsibility for the loss or inconvenience and the impact on the customer. These payments may be in addition to another loss payment. In line with Housing Ombudsman guidance we will consider payments in the regions detailed below.

Offers of £50 to £250 - Considered in instances of service failure resulting in some impact on the customer or members of the household. The impact may be of short duration and may not have significantly affected the overall outcome.

Offers of £250 to £700 - Considered if we have found a considerable service failure, but there may be no permanent impact on the customer or members of their household.

Offers of £700 and above – Offers of this amount will be used in recognition when there has been a severe long-term impact on a customer or members of their household, this includes physical or emotional impacts, or both.

We will consider the following aspects before making a decision on the amount we can offer a customer. This list is not exclusive and there may be other factors we consider when making the decision.

• The duration of any avoidable distress or inconvenience
• The seriousness of any other unfair impact
• Actions taken by the customer or us, which either mitigated or contributed to actual financial loss, distress, inconvenience or unfair impact
• The level of rent or service charges they pay
• Our compensation policy  
• The volume of service failures we identify
• The remedies guidance from the Housing Ombudsman
• The levels of compensation for similar cases paid by the Housing Ombudsman or relevant UK Ombudsman.
• The specific impact on the customer in their situation, based on their needs or those of their household 

Paying compensation 

Compensation will first be applied to a customer’s account if they owe us rent, service charges or other debts. If their account is up to date, we will pay this directly to them. If we are reimbursing them for loss or damage to goods or other costs incurred unnecessarily, we will pay this directly to them regardless of whether their account is up to date. In order for these payments to be made, proof of purchase must be provided in the form of receipts or paid invoices.  

Forms of compensation may include: 

• Adjustment to their rent account or service charges, if they’re in arrears
• A rent-free or rent reduction period
• Flowers or gifts or an alternative that may resolve their complaint
• Vouchers
• Monetary compensation in the form of direct bank transfer or cheque 

All payments made are subject to our financial processes and approvals.

There is clear guidance from the Housing Ombudsman on the levels of compensation and types of remedies they expect landlords to deliver as part of their complaints process. This policy follows that guidance and will be updated as the guidance is reviewed and updated. 

Customers want to know that we're consistent in how we offer remedies and compensation.

The policy will be communicated to all colleagues involved in complaint resolution during their regular meetings. Additionally, a detailed matrix outlining compensation payments will be provided as part of the supporting procedure for this policy.

To ensure that this policy is accurate and reliable, the following measures have been taken:

• Expert Review: The policy has been reviewed and drafted by experienced staff members with relevant qualifications in housing management and legal compliance.

• Housing Ombudsman Guidance: The policy has been cross-checked against relevant Housing Ombudsman guidance to ensure alignment with best practices and statutory requirements.

Monitoring and Implementation

To ensure effective implementation and ongoing compliance with this policy, the following monitoring mechanisms will be in place:

• Internal Audits: Regular internal audits will be conducted to assess adherence to the policy and identify areas for improvement.

• Management Checks: Routine management checks will be performed and documented to ensure that the policy is being followed correctly.

• External Reviews: Periodic reviews by external third parties will be conducted to provide an independent assessment of our compliance and effectiveness.

• Feedback Mechanisms: We will establish channels for receiving feedback from staff and customers to continuously improve the policy and its implementation.

This policy is governed by and complies with the following legislation and regulations:

• Regulator of Social Housing: Ensures that social housing providers meet the required standards of governance, financial viability, and service delivery.

• Charity Commission: Oversees the compliance of charitable organisations with legal requirements and promotes best practices in governance and accountability.

Regulatory Compliance

The policy has been developed in accordance with the following key regulations:

• Housing Ombudsman’s Code of Practice: Provides guidelines for handling complaints and delivering fair and effective remedies.

• Data Protection Act 2018 and UK GDPR: Ensures that personal data is handled in compliance with data protection laws, maintaining confidentiality and security.

By adhering to these legal and regulatory frameworks, we ensure that our policy is robust, legally sound, and capable of withstanding scrutiny from regulatory bodies.