Northern Ireland - Social Security and Child Support Commissioners' Decisions

[1996] NISSCSC C7/96(IS) (23 May 1996)

 


Decision No: C7/96(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS

(NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (CONSEQUENTIAL PROVISIONS)

(NORTHERN IRELAND) ACT 1992

INCOME SUPPORT

Application by the claimant for leave to appeal

and appeal to the Social Security Commissioner

on a question of law from the decisions of

Belfast Social Security Appeal Tribunal

dated 20 March 1995

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. In this case the claimant seeks leave to appeal against two decisions of Belfast Social Security Appeal Tribunal, whereby it was held:-

(a) that he was to be treated as in receipt of income of £20 (net) from 30 December 1993 to 27 July 1994, and of income of £20 per week from 28 July 1994 to 12 March 1995 (both dates inclusive), and

(b) that the sum of £600 was overpaid by way of income support for the period 30 December 1993 to 27 July 1994 and that this was recoverable from him.

I grant leave to appeal and with the consent of the parties treat the application as an appeal.

2. It is unnecessary for me to refer in detail to the somewhat involved facts of the case. Briefly, the claimant was alleged to have been working when in receipt of income support. When questioned about the matter the claimant first denied having done any work, paid or unpaid, but subsequently did not dispute that both he and his wife had performed some work for a company (B…), of which the claimant was company secretary and his wife a director. The Adjudication Officer decided that the claimant's award of income support had been given in ignorance of the material fact that the claimant and his wife had started part-time work. He accordingly reviewed the existing award so as to reduce the amount of the claimant's income support entitlement and sought recovery of overpayment of £1,011.24. It was against this decision on review that the claimant appealed to the Tribunal.
3. In reaching their decisions as set out in paragraph 1 above, the Tribunal recorded the following common findings of fact:-

"We adopt the accounts as prepared by the accountants. These

indicate a trading profit of £1,942 for the 6 months to 30 June 1994.

We find that the trading profit for subsequent periods of 6 months

was at least this amount. The Company's payment rate to its

contractors for direct labour and to Mr M... as a direct labourer

on site was £5 per hour. He also did work as an estimator and

pricing and inspecting jobs.

Mr M... is a trained joiner, the Company sub-contracted with

another joiner to do both joinery work and handyman work. This was

because the sub-contracting joiner could do mixed handyman and

joinery work. Mr M... was not used on the joinery element of the

jobs because he was likely to lose Income Support and because of

the desire to have both jobs combined.

Mr M... actually took earnings of £240 for the 3 months January,

February, March 1994.

Mrs M... worked 8 hours per month for B… from

31 December 1993 to date."

Their reasons for the decision that the claimant was to be treated as in receipt of the specified income were:-

"We prefer to adopt the actual company accounts prepared as same

have been prepared by an accountant. Mr M... was working for 5

hours per week from 30 December 1993 - 12 March 1994 (inclusive)

for B… From the accounts of the company

it appears apparent to us that the company could well have afforded

to pay Mr M... the going rate for the work which he did. In light

of Mr M...'s evidence to us we have taken this rate to be £5 per

hour. Mrs M... also worked for the company and we are of the view

that the company could well have afforded to pay her Regulation

42(6) of the Income Support (General) Requirements obliges the

Adjudication Officer to treat the claimant as possessing earnings

where a claimant performs a service for another person. Mr M...

performed a service for B... The only way in

which he could escape notional earnings being applied to him was

if he could show that B…s could not afford to

pay him. We consider this has not been shown and that Mr M...

must therefore be treated as in receipt of earnings of £25 per

week from 5 December 1993 to 12 March 1995. Mrs M... cannot be

treated as a claimant as she does not fall within the definition of

claimant at Regulation 2 of the Income Support (General) Regulations."

Their reasons for the decision on overpayment and recovery were:-

"Mr M...'s non-disclosure both his actual earnings and the fact

that he had done other work for which he was not paid was not,

in our view, reasonable. The instructions given to him were that

he should have been aware of the need to have disclosed same. In

addition on 2 occasions he misrepresented that he had done no work

paid or unpaid. The overpayment was made as a result. The

original rate of £8.75 raised by the Adjudication Officer was too

high. The £5 paid to sub-contractors appears to us reasonable

and we have adopted same. We computed the overpayment on the basis

of 5 hours per week at £5 per hour applied the £5 disregard.

Mrs M...'s assumed earnings cannot be taken into account under

Regulation 42 as she is not the claimant."

4. The grounds of the claimant application for leave to appeal to the Commissioner are that the Tribunal erred in law:-

"(a) in making inadequate findings of fact and making findings of

fact unsupported by evidence.

The Tribunal held that a trading profit of £1,942 had been made for

six months to 30 June 1994 and that a similar profit was made in the

subsequent six months.

Evidence was given that company accounts presented after six months

were presented in a rosy light in order to get company added to

NIHE list of registered contractors. In particular account was

taken of payments due but not yet received by the company. No

findings of fact made as to why this submission was rejected by

tribunal in findings of fact.

Moreover, the finding that similar profit made in following six

months is not based on any evidence. In fact, net profit for

calendar year 1994 was £1,256 (less than one third of the amount

held as net profit by the Tribunal). A copy of the financial

accounts for the year are enclosed.

(b) the Tribunal misdirected itself in law.

Evidence was given that the company paid the appellant ?240 for

three month period January to March, but could not afford any

additional payments. The payments from January to March represent

actual earnings which are recoverable, the circumstances of this

case. The Tribunal, however, have ignored this payment and treated

the appellant as having notional earnings during this period.

The Tribunal could have decided that there was actual earnings

and notional earnings, but cannot ignore the actual earnings in

reaching its decision."

5. In response to an invitation to comment upon the application, the Adjudication Officer now concerned with the case, by letter dated 30 October 1995, rejected the allegation that the Tribunal had made inadequate findings of fact or made findings of fact unsupported by evidence. She agreed, however, that the Tribunal had erred in not taking account of the claimant's actual income when calculating the amount of the overpayment, despite making a finding of fact on the subject. She further submitted that the Tribunal had also erred in law in deciding that Mrs M... could not be treated as having notional earnings under regulation 42(6) of the Income Support (General) Regulations (Northern Ireland) 1987, (the General Regulations). It was pointed out that regulation 42 falls within Part V of the General Regulations, and that regulation 23 is in the following terms:-

"23-(1) Subject to paragraphs (2) and (4) and to regulation 44

(modifications in respect of children and young persons) the

income and capital of a claimant's partner and the income of a child

or young person which by virtue of article 23(5) of the Order is

to be treated as income and capital of the claimant, shall be

calculated in accordance with the following provisions of this

part in like manner as for the claimant; and any reference to the

"claimant" shall be construed, for the purposes of this part, as

if it were a reference to his partner or that child or young person."

6. I have considered this matter and I find myself in full agreement with the views expressed by the Adjudication Officer in her letter of 30 October 1995. In my opinion the Tribunal gave careful consideration to the issues in the case and recorded findings of fact which, on the evidence at their disposal, were fully justified. Specifically, I reject any suggestion that the Tribunal erred in law in relation to their acceptance of the accountant's six month figures. The Tribunal did, however, err in law in failing to record and distinguish between the claimant's actual and notional earnings over the period in question. For the reasons explained by the Adjudication Officer the Tribunal were also wrong to decide that Mrs M...'s notional earnings could not be taken into account.
7. As the Adjudication Officer has pointed out, the claimant will be most unlikely to benefit from the correction of the errors of law which have been identified. Nevertheless, I have reached the conclusion that he is entitled to have the Tribunal's decision set aside if he so wishes. Accordingly, for the reasons given in paragraph 6 above I allow this appeal and set aside the Tribunal's decision. I am not in the position to make appropriate findings in relation to Mrs M...'s notional earnings and the case must therefore be referred for determination by another Tribunal who should have regard to the views expressed in this decision.

(Signed): R R Chambers

CHIEF COMMISSIONER

23 May 1996