Northern Ireland - Social Security and Child Support Commissioners' Decisions

[2004] NISSCSC C11/03-04(IS) (10 June 2004)

 


Decision No: C11/03-04(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998 INCOME SUPPORT Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 16 December 2002 (after a hearing on 12 December 2002)
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal by the claimant, with the leave of a Commissioner, against the decision of the Appeal Tribunal in which the Tribunal, affirming the decision of a Decision Maker, disallowed the appeal and held that the claimant was not entitled to Income Support from 7 September 2000 as her capital (actual and notional) exceeded the limit of £8000.
2. The case has a long and convoluted history. However, it is not necessary to set out the complete history in detail. Suffice to say that the claimant made a claim for Income Support on 7 September 2000 but, after due consideration of all the relevant evidence, it was decided on 10 January 2001 that she was not entitled to Income Support as her capital exceeds the prescribed limit of £8000. The claimant then appealed. The appeal was heard by a Tribunal on 18 June 2001 but, as the principle parties to the case, namely the Department and the claimant, expressed the view that the decision was erroneous in point of law, the Legally Qualified Member of the Tribunal set the decision aside in accordance with the provisions of Article 14(3) of the Social Security (Northern Ireland) Order 1998 and referred the case for re-determination by a freshly constituted tribunal. The matter came before another Tribunal on 26 November 2001 but as the claimant did not appear, the Tribunal held "a paper" hearing. As the Tribunal did not have sufficient evidence before it to determine the appeal the case was adjourned on specific terms. The case came before the Tribunal again on 19 June 2002 but again the appellant did not appear and on this occasion also the Tribunal hearing was adjourned on specific terms. The case came before the Tribunal again on 12 December 2002. On this occasion the appellant was present as was a departmental presenting officer. The Tribunal, consisting of the Legally Qualified Member alone, reserved his decision. On 16 December 2002 the Tribunal's decision was promulgated to the effect as set out in paragraph 1 herein.
3. The reasons for the Tribunal's decision were given on 13 March 2003 and were as follows:

"[The claimant] (…) claimed Income Support on 7 September 2001. The issue for decision is whether her capital at that date exceeded the 8,000 limit.

[The claimant] was assaulted and in November 1999 was awarded compensation of approximately £22,500. She was granted an advance of £2,500 by the Bank of Ireland drawn on a current account. She gave members of her family presents of cash for Christmas 1999 amounting to £1,500 and spent nearly £1,500 on dresses etc for her planned wedding (which later was postponed to April 2001).

[The claimant] received £21,901 compensation monies on February 2000 and these were lodged to her current account. By then she was £5,176 overdrawn. The Bank then set-off her overdraft of £5,176, leaving a credit of approximately £16,725. The Bank requested security for future overdraft facilities and [the claimant] agreed in February to invest £10,000 in a Bond. On 9 February £15,000 was withdrawn from the current account £10,000 for the Bond and £5,000 which appears to have been transferred to Classic Saver (CS) Account. [The claimant] states that she did not have a book for the Classic Saver until June 2000 but first entry in that book states "balance forward" which suggests that the account was open before June 2000 and entries marked "a/c transfer" appear on current account from March when money was credited to it.)

At 9 February, therefore [the claimant] had approximately £6,725 in her Current/Classic Saver Accounts together and £10,000 tied up in a Bond. Her entitlement to Income Support ended on 2 March. [The claimant's] remaining income was Disability Living Allowance paid into her Current Account.

She also in March 2000 signed papers to act as guarantor for a loan of £2,000 to her partner, [Mr …].

Over the next few months she paid rent, rates, household bills, clothes etc. Receipts have been produced for some of these items. She also in June paid £889 for her partner's – later her husband – divorce.

By 19 June [the claimant] had £12 in her current account and by 21 June had £24 in her Classic Saver Account. On 21 June [the claimant] asked for an Income Support claim form. She has stated that she did not submit a claim at that time as she believed that her capital was excess of the limit."

4. The claimant sought leave from the Legally Qualified Member to appeal to a Commissioner but such leave was refused on 14 April 2003.
5. Application for leave was then sought from a Commissioner. I arranged a hearing of this application and it took place on 2 March 2004. Although the Department was represented by Mr Gough, neither the claimant nor her representative, her husband, appeared. At the end of that hearing I indicated that I intended granting leave to appeal and, in normal circumstances, I would have asked the parties for their agreement for the application for leave to be treated and determined as an appeal under the provisions of regulation 11(3) of the Social Security Commissioners (Procedure) Regulations (Northern Ireland) 1999. However, as the claimant was neither present nor represented, this expedited procedure was not possible and the normal appeal process continued.
6. Leave to appeal was granted by me on 18 March 2004 for the following reasons:

"It is arguable that the decision was wrong in law, because: -

(i) the Tribunal failed to apply the diminishing notional capital rule;

(ii) the Tribunal failed to identify properly the actual capital resource;

(iii) the Tribunal failed to consider the possibility that not all the capital had been spent;

(iv) the Tribunal failed to set out and investigate properly the amounts of deprivation,

(v) the Tribunal failed to give sufficient reasons as to why all expenditure prior to 21 June 2000 should be considered reasonable and therefore outside the terms of regulation 51(1) of the Income Support (General) Regulations (Northern Ireland) 1987."

7. The appellant was then informed by letter dated 26 March 2004 that, leave having been granted after a hearing of the application for leave, it was considered by the Commissioner that the appeal could properly be decided without a hearing. In the circumstances the claimant was given an opportunity to make any additional points before the matter was decided. The claimant did not avail herself of this opportunity. In addition Mr Gough did not make any further submissions.
8. The original grounds of appeal of the claimant were as follows: -

"The tribunal was wrong because they said I had money left a sum of around £8000 pounds. I declare that I have no saving or investment what so ever. Me and my husband are living on £53 per week. We also have a 2 year old which (sic) and another child due in 5 weeks. My husband cannot claim a Maternity Sure Grant for me because of this appeal."

9. The facts of the case relevant to the legal issues can be set out fairly shortly. The claimant received a compensation award for criminal injuries of £22,500 in and around November 1999. A net sum of £21,901.50 pence was lodged initially to her bank current account in and about February 2000. By that time she was overdrawn in that account to the tune of £5,176. She then took advice from the Bank and put £10,000 into a savings bond, leaving her with £6,725 accessible capital. She continued spending at what appears to have been an extravagant rate. Then on 21 June 2000 she asked for an Income Support form to claim Income Support. Her accessible capital was then practically nil. In August 2000 she cashed in her bond at a considerable loss because she received only £7,961. She then claimed Income Support on 7 September 2000. At that time she had £6,604 and another sum of £166 in accessible capital.
10. The Tribunal clearly found that she had difficulty in managing her money. Moreover, it found specifically that from 21 June 2000 she had deprived herself of capital to reduce her savings below the relevant limit of £8,000.
11. I do not consider that there is any substance in law in the points raised by the claimant in her grounds of appeal and no attempt has been made at anytime to develop these grounds.
12. In relation to the substantive points raised by the Department, these have been set out in the reasons given by me for granting leave to appeal. Although in my view all these issues were arguable and were in fact put forward by Mr Gough at the hearing of the application for leave, there is no doubt that the points raised on behalf of the Department are not of equal legal weight.
13. The Department clearly takes the view that the circumstances of the original payment of compensation into the claimant's account and the reasons for the original overdraft need closer inspection. However, in my view, the Tribunal was entitled, on the evidence before it, not to decide that she was intending to deprive herself of capital at that time in order to secure benefit. Accordingly, in my view, difficult questions of capital/income distinctions were not relevant in light of the Tribunal's findings. Also it seems to me that the status of the overdraft was not relevant to the Tribunal in its decision making process in relation to findings.
14. In addition the date of the receipt of the capital resource (the criminal injury compensation money) and its true amount were not relevant as the Tribunal found that there was no intent to deprive at that particular time.
15. However the Department has made a point of substance which I consider to be correct. Mr Gough has submitted that the diminishing capital rule was not considered and has correctly stated that the Tribunal was given totally inadequate help in the written submission from the Department.
16. Regulation 51A of the Income Support General Regulations provides that the diminishing notional capital rule applies from the week subsequent to the "relevant week" where a person has been disallowed benefit because he or she was determined to have notional capital. The "relevant week" is defined in regulation 51A(7)(b) of the General Regulations as:

"(b) "relevant week" means the benefit week or part-week in which the capital in question of which the claimant has deprived himself within the meaning of regulation 51(1) –

(i) was first taken into account for the purpose of determining his entitlement to income support, or

(ii) as taken into account on a subsequent occasion for the purpose of determining or re-determining his entitlement to income support on that subsequent occasion and that determination or re-determination resulted in his beginning to receive, or ceasing to receive, income support,

and where more than one benefit week or part-week is identified by reference to heads (i) and (ii) the later or latest such benefit week, or the case may be, the later or latest such part-week."

17. In this case the Department, in written submissions from Mr Conlon dated 24 July 2003 and in oral submissions from Mr Gough made on 2 March 2004, has made the following point: -

The first week in which the notional capital was taken into account in determining Income Support was that which included 7 September 2000. Accordingly the diminishing notional capital rule should apply from the week following this. The amount to be allowed each week is the amount in Income Support that would have been payable if notional capital had not been taken into account, plus the difference between the amount of the maximum Housing Benefit the claimant could have been awarded and the amount actually awarded.

18. In my view Mr Conlon is correct to draw this point to my attention. The Tribunal has clearly erred by not considering this rule which provides for the reduction of the claimant's notional capital over time by reference to the amount of benefits which would otherwise have been payable.
19. In the circumstances I hold that the Tribunal has erred in law. I therefore allow the appeal, set aside the Tribunal's decision and remit the case to be reheard by a differently constituted tribunal. This Tribunal may or may not come to the same conclusion as the previous Tribunal on many of the important actual points of this case as a lot will depend on the evidence available to the Tribunal and the view that the Tribunal takes of that evidence. Therefore success in these appeal proceedings by the claimant (in spite of her total lack of input into the appeal process before me) should not be taken as an indicator as to ultimate success in the appeal before the Tribunal.

(Signed): J A H Martin QC

Chief Commissioner

10 June 2004