Birmingham City Council has been instructed to pay a private landlord £1,269.20 after mistakingly paying housing benefit directly to his tenant.
The landlord was left out of pocket following the error, as the tenant, who had significant rent arrears, disappeared without passing the money on to her landlord.
The woman, who has not been named, was in receipt of housing benefit to pay her rent up until July 2018 when the claim ended.
She then made a fresh claim in October last year and asked for the council to pay her benefit directly to her, which it agreed to do so, despite the fact that the tenant was in severe rent arrears.
The law states that rent should be paid directly to a landlord if a tenant is in more than eight weeks' worth of rent arrears.
The council apologised for the mistake but refused to pay the landlord the £1,269.20 owed, claiming that it 'cannot pay housing benefit twice'.
However, the Local Government Ombudsman ruled that the authority caused an 'injustice' and ordered it to compensate the landlord.
The watchdog's report said: "The council has accepted it is at fault. It should have paid the housing benefit to Mr X’s (letting agent) company.
"The council is right; it cannot pay housing benefit twice and Ms T (tenant) should have paid her rent. However, this does not mean it has not caused injustice. It should remedy that injustice. If the council had acted correctly it would have paid Mr X £1,269.20 towards Ms T’s rent. Mr X has no ability to reclaim this from Ms T."