R(IB) 4/05
Mr P L Howell QC Commissioner 21.2.05 |
CIB/1985/2004 |
Recovery of overpayment - failure to disclose and cause of overpayment - failure to comply with notification requirement for exempt work
The claimant was receiving incapacity benefit on the ground of incapacity for work. In January 2003 he started doing a small amount of part-time work. Regulation 16 of the Incapacity for Work (General) Regulations 1995 provides that a person shall be treated as capable of work for any week during which he does work unless that work meets the conditions of regulation 17. It was not disputed that the work done by the claimant met the conditions of regulation 17, at least for the first 26 weeks, apart from the requirement to notify the Secretary of State within 42 days of starting work. The claimant had not done this because he had not understood from the information provided by the Department that he had to. He eventually notified the Department on 27 August. His benefit entitlement was taken away by a departmental decision of 28 August 2003, effective retrospectively from 9 January 2003 and the resulting overpayment was determined to be recoverable. He appealed against the overpayment decision to a tribunal, which dismissed his appeal, holding that he had not made the disclosure reasonably to be expected of him in all the circumstances, applying the test consistently applied and understood by Commissioners and tribunals for many years following R(SB) 21/82. The claimant appealed to the Commissioner. The two issues before the Commissioner were (1) whether the Secretary of State had shown a relevant "failure" by the claimant to disclose a material fact and (2) if so whether the payments had been made "in consequence of" that failure and "would not have been made" but for that failure.
Held, allowing the appeal, that:
DECISION OF THE SOCIAL SECURITY COMMISSIONER
Social Security Administration Act 1992:
"Overpayments – general
71.—(1) Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure –
(a) a payment has been made in respect of a benefit to which this section applies; or
(b) ...
the Secretary of State shall be entitled to recover the amount of any payment which he would not have made … but for the misrepresentation or failure to disclose."
Social Security (Incapacity for Work) (General) Regulations 1995 (SI 1995/311) as amended and in force from 8 April 2002:
"Person who works to be treated as capable of work
16.—(1) … a person shall be treated as capable of work on each day of any week … during which he does work … unless that work –
(a) falls into any of the categories of exempt work set out in regulation 17(1); and
(b) is done within the limits set out in regulation 17(2). …
Exempt work
17.—(1) The categories of exempt work referred to in regulation 16(1)(a) are –
(a) work in respect of which the required notice is given, and – ...
(iv) to which paragraph (1A) below applies; …
(1A) This paragraph applies in the case of a person whose circumstances are specified –
(a) in sub-paragraph (a) of paragraph (1B) below, to work which is undertaken by that person during the period specified in sub-paragraph (b) of that paragraph;
(b) in sub-paragraph (a) of paragraph (1C) below, to work which is undertaken by that person during the period specified in sub-paragraph (b) of that paragraph;
…
(1B) For the purposes of paragraph (1A)(a) above –
(a) the specified circumstances are where –
(i) no work to which paragraph (1A) applies has previously been undertaken by that person …
(b) the specified period is the period of 26 weeks beginning with the first day on which the work is undertaken.
…
(1C) For the purposes of paragraph (1A)(b) above –
(a) the specified circumstances are where –
(i) work to which paragraph (1A) applies has previously been undertaken by that person during a period specified in paragraph (1B)(b) above, and
(ii) there is appropriate evidence that, by undertaking further work, during the period specified in sub paragraph (b) below, he is likely to improve his capacity to engage in full time work;
(b) the specified period is the period of 26 weeks beginning immediately after the end of the period specified in paragraph (1B)(b) above.
…
(1E) In this regulation –
'appropriate evidence' means, in relation to any work –
(a) evidence from an officer of, or person providing services to, the Secretary of State who is authorised by the Secretary of State for the purpose; and
(b) evidence (if any) from any other person (including the person undertaking the work),
or such part of such evidence as constitutes the most reliable evidence available in the circumstances;
…
'the required notice' means, in relation to work referred to in any of heads (i) to (iv) of paragraph (1)(a), notice to the effect that the person is undertaking, or is about to undertake the work, given in writing to the Secretary of State by that person or another person acting on his behalf - …
(b) in the case of work referred to in paragraph (1)(a)(iv), no later than the end of the period of 42 days which begins with the day on which the work begins;
…
(2) The weekly limits in relation to exempt work are –
(a) that earnings from work referred to in paragraph (1)(a)(ii) to (iv) do not exceed £67.50;
(b) that … the combined total of the number of hours spent doing work referred to in paragraph (1)(a)(iv) is less than 16; …"
Failure to disclose issue
"9. [The claimant] is clearly a person of high intelligence, being an Oxford graduate. The DWP's letter about permitted work (document 20) is in straightforward terms. The second paragraph indicates the need to contact the DWP if work is contemplated. Even though [the claimant] had forgotten, by January 2003, what was in the letter, the Tribunal find that he was not so incapacitated by his illness that he could not be expected to realise that as a recipient of benefit he should inform the DWP of significant changes in his circumstances and should make enquiries as to possible conditions attached to his continued entitlement to incapacity benefit if he started work. If necessary, his parents could have made enquiries on his behalf."
"In those circumstances, I conclude that a person reading the factsheet with a degree of care to be expected of ordinary people, rather than lawyers or benefit experts, could think, without going outside the boundaries of reasonableness, that it was not necessary to inform the incapacity benefit authorities of work within the hours and earnings limits for permitted work. It could reasonably have been thought that giving such information was desirable, but no more, as it could have been thought that the giving of the information was irrelevant to the question of whether or not the work would affect entitlement to benefit. It could also reasonably have been thought that the new information superseded whatever was printed in the order book."
I respectfully agree with that, and it follows that I disagree with the tribunal chairman that what the leaflet told the claimant was "in straightforward terms", at least so far as concerns the crucial point whether it was essential to report to the Department before work otherwise within the limits notified to him could count as "permitted work" at all.
"You will no longer need to get a doctor to agree that the work will help your medical condition, but you should tell the office that deals with your benefit before you start work. You should fill in an application form before you do any permitted work."
Causation issue
"4. Mr Newton … argued firstly that [the claimant's] employment was not a material fact, non disclosure of which caused the overpayment, since timely disclosure would not have brought about the cancellation of [his] incapacity benefit but would have brought him within the exempt work provisions of regulation 17(1)(a) of the Incapacity for Work (General) Regulations, so that his entitlement to incapacity benefit would have continued. ….
5. It is of course the case that entitlement to incapacity benefit would have continued if the required notice had been given, thus giving force to the apparent logic of Mr Newton's argument. The difficulty, however, is that, if Mr Newton is right, the requirement that a person in receipt of incapacity benefit who undertakes exempt work – and is therefore ex hypothesi not incapable of all work – should notify the DWP of this fact as a condition of continuing to receive incapacity benefit would be rendered otiose in most, if not all, cases.
6. Parliament can scarcely be taken to have intended such a result and the proper interpretation, in the Tribunal's view, is that failure to give the required notice prevents reliance on the exempt work provisions in all cases. In the absence of notice entitlement to incapacity benefit ceases, an overpayment results and the commencement of work is a material fact which is causative of that overpayment."
(1) It must have been determined that he or she has failed to disclose a material fact. Here as noted in paragraph 16 above the determination as formulated and relied on by the Secretary of State as the basis for the claim to recovery pursued before the tribunal was that "[The claimant] failed to disclose on 09/01/03, or as soon as possible afterwards, the material fact that he had started work."
(2) In consequence of that failure, a payment has been made in respect of a benefit to which section 71 applies; incapacity benefit being such a benefit.
(3) The amount sought to be recovered is that of a payment which the Secretary of State would not have made but for that failure to disclose.