A FAMILY, forced into a lower grade house when the council didn't pay them enough housing benefit, has been awarded £3,000 in compensation.

The couple, now separated, and their four children, complained after they were underpaid housing benefit as a result of Crewe and Nantwich Borough Council's failure to arrange a referral of a housing benefit review.

A report by local government ombudsman, Patricia Thomas, found a computer error had led to the failure to arrange a referral, which "caused significant unnecessary hardship, stress and upheaval for the family."

The man, who cannot be named because of legal reasons but was referred to as 'Mr Ash' in the report, said the family was finding it increasingly difficult to afford the rent with £84.81 housing benefit, and decided to move to another house with lower rent.

After handing in their notice to the landlord, the family's old house was then let to one of their friends - a single mother, with a nine-year-old child - who told Mr Ash she would be receiving £109.62 in housing benefit - the equivalent of a full weeks rent.

When Mr Ash pointed out to the council that his family received approximately £25 less, a council officer apologised and said there had been a mistake and that an annual rent review should have been arranged.

Had the review been organised, the council said it would have awarded £109.62 - to cover a full weeks rent - instead of the £84.81 it had given.

The council paid the lost benefit of over £700, as well as a discretionary hardship payment of £300 and personal compensation of £1000 each.

The report also told the council to advertise its exceptional hardship scheme more prominently - it currently only appears in one paragraph on the back of housing benefit notification letters.