Northern Ireland - Social Security and Child Support Commissioners' Decisions

 


[2007] NISSCSC C1_07_08(IS) (23 July 2007)

Decision No: C1/07-08(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 24 July 2006
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. The decision of an appeal tribunal sitting in Belfast on 24 July 2006 (the tribunal) is wrong in law. I therefore set the tribunal's decision aside. I substitute for the tribunal's decision the one which is appropriate on the basis of the evidence now before me, which is to the following effect:

The decision of the Department dated 9 March 2006, an overpayment decision in respect of Income Support (IS) amounting to £167.00 from 24 May 2002 to 06 November 2002 (the relevant decision), is flawed and of no force and effect. The appeal to the tribunal is therefore allowed. It is now for the Department to determine whether or not to start again with fresh decisions in relation to the matters arising.

2. Leave to appeal to the Commissioner was given by the Chief Commissioner, His Honour Judge Martin QC. The Department supports the appeal, though it suggests a remit to a fresh tribunal following corrective action by the Department. For the reasons set out below, which include the substantial delay which has occurred already with the present appeal, I do not consider that course to be appropriate.

BACKGROUND

3. I set out the relevant facts in so far as I understand them and as are necessary for the purposes of this decision. If the Department chooses to make fresh decisions then these will be governed by the evidence available at the contemporaneous date. Should appeal to a tribunal again be taken, any fresh tribunal would in no way be bound by the present summary of fact.
4. The appellant was in receipt of Income Support (IS) from 24 February 1995. Evidence then emerged that she had undisclosed capital from 24 March 1998. On 18 October 2005, a decision-maker (DM) on behalf of the Department firstly determined that the appellant was not entitled to IS from 24 March 1998 to 23 May 2002; however, whether revision or supersession was being carried out, what was the date of the decision being altered, (or of each decision under which benefit was paid during the overpayment period if applicable), what is the relevant legislation under which the alteration was carried out, whether the appellant was regarded as being in receipt of actual capital or notional capital during the relevant period and if so for what amount at any particular time, none of these matters were specified.
5. The second part of the decision of 18 October 2005 then narrated that between 24 May 2002 and 6 November 2002 a tariff income of £7.00 was applicable on the appellant's IS entitlement "… because she had an investment with a value of between £4,500.01 and £4,750.00". As with the first part of the decision, presumably a supersession based on a relevant change of circumstances, no other supporting detail was given; in particular, what was the changed amount of benefit to which she was now entitled was not set out. There is, furthermore, no record of the supersession decision of 18 October 2005 (the supersession) having been notified to the appellant. No copy of the supersession, nor allusion to it, was in the appeal papers before the tribunal.
6. On 15 March 2006, the appellant was, however, notified of two overpayment decisions, both made on 9 March 2006. But these decisions wrongly stated that they resulted from a decision dated 15 February 2006 (and not, as should have been the case, from the supersession of 18 October 2005); in fact, what had been done by a DM on 15 February 2006 was to draw up new assessments. The first overpayment decision was for a much larger sum: £15,554.74 in respect of the period 10 August 1999 to 23 May 2002 based on a nil entitlement and said to be recoverable from the appellant due to her failure to disclose that she had capital. The relevant decision also founded the recoverable overpayment on a failure to disclose; in this instance that the appellant had capital in excess of £3,000.00 which was therefore subject to a capital tariff income.
7. The appellant appealed against both overpayment decisions on 30 March 2006 on the ground that she had used her capital for home improvements and was able to provide receipts for this work (although, in the event, no such receipts were produced). The appeals proceeded individually before two separate tribunals. There was no mention in the appeal papers before the tribunal relating to the relevant decision, of the other longer overpayment arising from a common background and also subject to appeal.
8. The tribunal confirmed the relevant decision. The hearing had proceeded as a paper determination because the appellant clearly indicated on her hearing enquiry form that she was "…content for the appeal to proceed without an oral hearing". The tribunal decision on appeal from the relevant decision is the one now subject to further appeal to the Commissioner. The appeal hearing of a tribunal relating to the larger overpayment has apparently been adjourned pending the outcome of the present appeal.

MY CONCLUSION AND REASONS

9. As it is common cause between the parties that the tribunal erred in law, with which I agree, I address their respective arguments only in so far as is necessary to explain my decision. It is effectively a year since the tribunal's hearing and I am anxious not to cause any more delay than is necessary but rather to get the decision making process, which has been subject to various unfortunate twists and turns, back on the right track.
10. Section 69(5A) of the Social Security Administration (NI) Act 1992 provides:

"Except where regulations otherwise provide, an amount shall not be recoverable … unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under Article 10 or superseded under Article 11 of the Social Security (Northern Ireland) Order 1998".

11. The parties are agreed that the tribunal erred in law because it failed in its inquisitorial role to satisfy itself that the overpayment raised in this case was based on a valid supersession decision in accordance with the above statutory provision. The parties are likewise agreed that the tribunal's decision should be set aside as in error of law for that reason. The divergence between the parties lies in what is to be done next.
12. On behalf of the Department, it is acknowledged that its decision to raise two separate overpayments, which has led to the two decisions being appealed individually, has been unsatisfactory because neither tribunal is bound by the decision of the other. It is therefore submitted that the Commissioner should remit the present appeal to a new tribunal and that this would allow the two overpayment appeals to be heard at tribunal level together. However, there can be no guarantee that the two overpayment appeals would be heard by the same tribunal.
13. It is further said on behalf of the Department that had the tribunal identified the errors in the relevant decision before it at the time, then it could have taken steps to correct those defects in accordance with R(IB)2/04. But an important difference between the circumstances of the present case and those considered in R(IB)2/04 is that in the current appeal the supersession was not itself directly before the tribunal.
14. In CIS/3228/2003, it was held that, even though there was no issue before a tribunal relating to whether there had been a valid supersession decision, because such supersession had not been appealed, this did not however prevent an overpayment tribunal from ignoring errors in it which were merely "defects of form" when deciding whether such supersession was sufficient to underpin the overpayment; but the Commissioner held that in those circumstances a tribunal could not substitute its own correct supersession or revision, so that, for example, the omission in such supersession of a table setting out the revised amounts of benefit, invalidated the recoverable overpayment decision. In CSG/741/2006, the Commissioner disagreed; he held that a tribunal was not entitled to find in an appeal related to a subsequent overpayment decision that a supersession contained in an unappealed decision was invalid with the result that the overpayment was irrecoverable. This was because to find otherwise would run contrary to the statutory provisions in respect of the finality of decisions, subject to appeal or review.
15. Nevertheless, whichever of the above approaches is preferable, the supersession of 18 October 2005 was not notified as required by Regulation 28 of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999 (the decisions and appeals regulations). This is a significant factor. Although a failure to comply with the duties imposed under that Regulation does not invalidate the decision altogether, nevertheless the time for appealing (and associated rights) only runs from when a claimant is informed of the decision. Therefore, in these unusual circumstances, it would be unduly prejudicial to a claimant were a tribunal to follow the approach of CSG/741/2006 because the appellant had no opportunity to contest the supersession.
16. Another possible approach, where the queried supersession decision is not directly before a tribunal on appeal, is to extend the reasoning in R(IB)2/04 (cited by the Department), a decision of a Tribunal of Commissioners in Great Britain, to the effect (see paragraph 59) that:

"…the scope of an appeal tribunal's powers depend on the scope of the powers available to the Secretary of State when considering the decision under appeal…"

17. When a DM is considering an overpayment, he or she ought to check the sufficiency of the revision or supersession of entitlement on which the validity of the overpayment depends. If the defects in the current supersession had then been noted by a DM, while carrying out the overpayment decision, it could have been contemporaneously revised for 'official error' under Regulation 3(5)(a) of the decisions and appeals regulations; (a correction of an accidental error under Regulation 9A of the decisions and appeals regulations would have been insufficient as this regulation relates to clerical errors only). It may be, therefore, that the tribunal, standing in the shoes of the overpayment DM, could likewise correct a supersession decision in the course of the overpayment appeal, even where the former has not been appealed to it (subject to natural justice points). However, again, this would have been unduly prejudicial as a course of action in the present case, because the decision altering entitlement had never even been notified as it should have been.
18. On behalf of the Department, the following is now suggested as the best way forward:

"…the Department should correct the defects within the decision dated 18/10/05 and issue [the appellant] with proper notification of the outcome of this decision together with her appeal rights. Then the subsequent overpayment decisions should also be corrected to the effect that they are based on the decision dated 18/10/05….If this action is taken, then I submit that [the appellant] should be allowed the appropriate time in which to consider submitting an appeal against the supersession decision. If she does submit an appeal then, ideally, this matter could be heard in conjunction with the overpayment appeals, but a newly convened appeal tribunal".

19. The response to the above, from the representative on behalf of the appellant, is that the statutory prohibition in the Social Security (NI) Order 1998, (Article 13(8)(b)) against an appeal tribunal taking into account any circumstances not obtaining at the time when the decision appealed against was made, would prevent such later corrective action by the Department. I am not convinced this is so. The prohibition would bite had there been no previous section 69(5A) decision at all; but where an existing decision is revised, then under Article 10(3) of the Social Security (NI) Order 1998 that revision takes effect as from the date on which the original decision took effect, (except, under paragraph (5), for the purpose of time limits in bringing an appeal). Therefore, with respect to whether or not the circumstance of a sufficient prior supersession obtained at the time of the recoverable overpayment decision under appeal, the supersession remains dated 18 October 2005, albeit in a form as subsequently revised.
20. However, for the purposes of appealing it, the supersession is dated from when it is revised. In the present case, this coincides with the same time limits for appeal required in any event following its first notification. Accordingly, as already accepted by the Department, appropriate time would have to be given to the appellant in any event, in order to consider whether an appeal against the supersession decision, as revised, is advisable.
21. But the situation with respect to the overpayment decisions is different. The proposed corrective action to them, because not producing decisions more favourable than those they would replace, would mean that the appeals did not lapse under Article 10(6) of the Social Security (NI) Order 1998. Such a circumstance falls instead within Regulation 30(1) of the decisions and appeals regulations and the appeal continues, but treated as though it had been brought against the decision as revised (under paragraph (3)). Therefore, technically, it would be possible for the overpayment appeals to proceed before any appeal was lodged with respect to a revised and notified supersession.
22. A Commissioner ought to reach a decision which guarantees a fair hearing for a claimant on all issues and, in so far as it can be done, to ensure that, if appropriate, all relevant issues are determined at the same time by the same tribunal.
23. In view of the highly unsatisfactory process so far, and of the above considerations, and in light of the complexity of the interacting legal provisions, I judge that the best way forward, to cut the Gordian knot, is for the Commissioner, in place of the tribunal, to set aside the relevant overpayment decision as of no effect; this is on the basis that it is underpinned by a defective decision, which has not been notified, so that the appellant could previously have had no chance of effective remedial action with respect to it. Furthermore, the same supersession underpins another overpayment decision over which the tribunal has no control (I too have no jurisdiction with respect to an appeal from the other overpayment decision arising from the same supersession but recommend that the same course of action is taken in such appeal).
24. It is then open to the Department, if it considers it appropriate having regard to the evidence then available to it, to correct the supersession of 18 October 2005, on the basis of official error. It is right that the Department should take any such revision action with respect to that supersession, because neither overpayment tribunal may bind the other. In view of what may be required for a valid supersession decision in present circumstances, great care should be taken if any such revision is carried out and in the notifications and explanations given to the appellant and her representative. In particular, the Department requires to be specific about whether it is relying on possession of actual or of notional capital, because this affects the application of a diminishing capital rule and, accordingly, whether or not a calculation of tariff income becomes appropriate; that neither I nor the tribunal have the essential information to enable us to do this is another reason why it is inappropriate to carry out any interference with the supersession of our own hand.
25. If the Department carries out such a revision of the supersession of 18 October 2005 then the appellant will have appeal rights relating to it, so that all entitlement issues, and those about the validity of the supersession as revised, may be explored by a new tribunal. A fresh, single recoverable overpayment decision could then follow, if considered appropriate by the Department. This has the advantage, particularly if firstly, the revision of the supersession of entitlement and secondly, the new resultant overpayment determination are combined as two parts of one decision, that the claimant then has the advantage of a uniform appeal period to a tribunal and that all relevant issues are necessarily decided at an appellate level by the same fact-finding body.

SUMMARY

26. My decision is, therefore, as set out at paragraph 1 above.

(signed): L T PARKER

NI Deputy Commissioner

(GB Commissioner)

23 July 2007