Northern Ireland - Social Security and Child Support Commissioners' Decisions

 


PMcC-v-Department for Social Development (IS) [2012] NICom 325

Decision No: C7/12-13(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998 INCOME SUPPORT Application by the claimant for leave to appeal and appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 22 July 2011 DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. Having considered the circumstances of the case, I am satisfied that the application can properly be determined without a hearing. I grant leave to appeal and proceed to determine all questions arising thereon as though they arose on appeal.
2. The decision of the appeal tribunal dated 22 July 2011 is in error of law. The error of law identified will be explained in more detail below. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.
3. For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given. This is because there are further findings of fact which require to be made and I do not consider it expedient to make such findings, at this stage of the proceedings. Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination. In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the appeal tribunal takes into account the guidance set out below.
4. It is imperative that the appellant notes that while the decision of the appeal tribunal has been set aside, the issue of her entitlement to income support (IS) remains to be determined by another appeal tribunal. In accordance with the guidance set out below, the newly constituted appeal tribunal will be undertaking its own determination of the legal and factual issues which arise in the appeal.
5. Although the appellant has been successful in her appeal to the Social security Commissioner, the remittal of the appeal to another appeal tribunal for re-determination will come as a disappointment to her. This is because she has informed the Office of the Social Security Commissioners that her health is poor and that other decisions with respect to her circumstances are dependent on the outcome of this appeal. As will be noted in greater detail below, one of the reasons for allowing the appeal is that I have concluded that the appeal tribunal has failed to address a specific issue ie whether the 'notional capital' rules, set out in regulation 51 of the Income Support (General) Regulations (Northern Ireland) 1987 have any application to the questions arising in this appeal. Consideration of the application of regulation 51 requires taking evidence and making findings in respect of the core elements of that regulation. I am unable to adduce that evidence and make those findings in the proceedings which are before me. If there is an imperative in the early resolution of the appeal then representations might be made to The Appeals Service (TAS) seeking to have the re-hearing expedited.

Background

6. On 13 April 2011 a decision-maker of the Department decided that the appellant should not be entitled to IS from 9 March 2011. A copy of the decision dated 13 April 2011 is attached to the original appeal submission as Tab No 11. The stated basis for disallowing entitlement to IS was that the appellant had capital assets in excess of the prescribed capital limit applicable to entitlement to IS.
7. On 3 May 2011 an appeal against the decision dated 13 April 2011 was received in the Department. On 9 June 2011 another decision-maker reconsidered the decision dated 13 April 2011 and decided that it should be revised. As the decision of 13 April 2011 as revised on 9 June 2011 was not more advantageous to the appellant, the appeal continued against the decision as revised.
8. An oral hearing of the appeal took place on 22 July 2011. The appeal tribunal hearing took place on the same day as an oral hearing of an appeal brought by the appellant's husband. As will be noted below, the issues arising in both appeals were so similar that the legally qualified panel member (LQPM) of the appeal tribunal, in preparing the statement of reasons for its decisions in connection with both appeals, made a cross-reference to each individual appeal.
9. The appeal tribunal disallowed the appeal and issued a decision notice to the following effect:

'Appeal disallowed

Appellant is not entitled to Income Support from 9.3.11 as is treated as possessing capital in excess of the prescribed amount of £16,000'

10. On 26 January 2012 an application for leave to appeal to the Social Security Commissioner was received in TAS. On 7 February 2012 the application for leave to appeal was refused by the LQPM.

Proceedings before the Social Security Commissioner

11. On 20 February 2012 a further application for leave to appeal was received in the Office of the Social Security Commissioners. On 27 April 2012 written observations on the application for leave to appeal were sought from Decision Making Services (DMS) and such written observations were received on 24 May 2012. In these initial written observations, Mrs Rush, for DMS, opposed the application for leave to appeal on all of the grounds submitted by the appellant. Written observations were shared with the appellant and her representative on 25 May 2012 when the appellant was also requested to give her consent for the application for leave to appeal to be treated as an appeal under regulation 11(3) of the Social Security Commissioners (Procedure) Regulations (Northern Ireland) 1999, as amended. On 29 May 2012 the relevant consent was received from the appellant.
12. On 25 June 2012 Mrs Rush was asked to provide a further submission on a specific question relating to the potential application of the notional capital rules. A further submission was received from Mrs Rush on 29 June 2012 which was shared with the appellant and her representative on 2 July 2012.

Errors of law

13. A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.
14. In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals. As set out at paragraph 30 of R(I) 2/06 these are:

"(i) making perverse or irrational findings on a matter or matters that were material to the outcome ('material matters');

(ii) failing to give reasons or any adequate reasons for findings on material matters;

(iii) failing to take into account and/or resolve conflicts of fact or opinion on material matters;

(iv) giving weight to immaterial matters;

(v) making a material misdirection of law on any material matter;

(vi) committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

Each of these grounds for detecting any error of law contains the word 'material' (or 'immaterial'). Errors of law of which it can be said that they would have made no difference to the outcome do not matter."

Why was the decision of the appeal tribunal in the instant case in error of law?

What did the Department decide?

15. As was noted above, the decision under appeal to the appeal tribunal was a decision of the Department dated 13 April 2011 as revised on 9 June 2011. A copy of that decision was attached to the original appeal submission as Tab No 11. The 'decision' is set out in a template form which is utilised by Departmental decision-makers. The decision, after noting the appellant's name and national insurance number, begins with the following:

'On the balance of probabilities customer has a capital in excess of the prescribed amount for Income Support.

The Law Used To Make This *Decision/Determination

Income Support (General) Regulations (NI) 1987 Regulation 45

Reasons for *Decision/Determination

Customer received £385,000.00 on 8/11/05 from a compensation payment. Previous claims have been submitted by her husband dated 8/7/09 and 19/10/09.

The husband provided some receipts for expenditure which were accepted on previous decision dated 8/7/09. He provided a summary from the builder which was not accepted as no invoice has been provided to date. Customer and her husband have not provided any further receipts or explanations for expenditure from this capital since application for Income Support on 19/10/09. The unaccounted for capital figure reduced to £264,006.28 at 19/10/09. I have used this unaccounted for capital figure and reduced it by living expenses for the period 19/10/09 to 13/4/11 (…). As a result the unaccounted for capital figure at 13/4/11 has been reduced by £7073.96 to £256,932.32.'

16. The decision was then signed and dated. Attached to the decision were various sheets with hand-written calculations and figures.
17. As was noted above, the decision dated 13 April 2011 was revised on 9 June 2011. A copy of the decision dated 9 June 2011 is attached to the original appeal submission as Tab No 12. There is no requirement to set out the decision dated 9 June 2011 in full save to note that reference is made once again to regulation 45 of the Income Support (General) Regulations (Northern Ireland) 1987 in the section headed 'The Law Used to Make this Decision'.

What did the appeal tribunal decide?

18. I have set out above the detail of the appeal tribunal's decision notice. The LQPM prepared a statement of reasons for the appeal tribunal's decision. The final paragraph of that statement of reasons reads as follows:

'It is not disputed that the Appellant was in receipt of £385,000 by way of a compensation payment on 8.11.05. The Appellant either on her own behalf or by way of her husband has explained why this money has reduced to a figure below the sum of £16,000. The Tribunal does not accept those explanations as outlined in the related case of (the claimant's husband) (NW/5840/11/61/L). There is little or no evidence to corroborate those assertions by the Appellant and her husband. Accordingly the Tribunal is satisfied that the Appellant still possesses that capital subject to the deductions for living expenses outlined in her husband's related case. The unaccounted capital figure at the date of the decision is £275,488.44 less the sum of £21.00 identified as contained in the bank account on 21.3.11 leaving a sum of £275,467.43. The Appellant is treated as being in possession of that figure and is therefore not entitled to Income Support.'

19. As the paragraph above refers to the statement of reasons for the related case concerning the appellant's husband, it is necessary to set out the relevant paragraphs from that statement of reasons. They are as follows and reference to 'the appellant' in these paragraphs is to the appellant's husband.

'Although the bank account is in name of his wife the Appellant is treated as possessing that capital by virtue of Section 130, and 132 of the Social Security Contributions and Benefits (NI) Act 1992. Reg 45 of the Income Support (General) Regulations (NI) 1987 provides that the capital limit to receiving Income Support is £16,000. In other words if it is proved that an individual has capital of £16,000 or more than there can be no entitlement to Income Support.

(The claimant), in his letter of appeal, indicates that he no longer has capital in excess of £16,000 having spent all of his money in the interim. He has provided various documents, including bank statements and receipts as evidence of this contention. More recently he has produced documentation which would indicate that various direct debits, in his wife's name have been refused due to lack of funds. He has also supplied a supportive letter from his solicitors Messrs Rafferty and Co. At the hearing of the appeal the Appellant referred to extensive renovations at his property and to gifts and loans to friends and family. He confirmed that he had no record of these latter transactions.

It is clear from the papers in this case that (the claimant's wife) received High Court compensation in the sum of £385,000 and this sum was lodged to her First Trust Bank Account on 8.11.05. At this point her husband was, by virtue of the above legislation, no longer entitled to Income Support because of the capital rule. He had, in fact, been receiving this benefit until the compensation sum came to the notice of the Department who on 8.7.09 disallowed his entitlement from 8.11.05 to 24.11.08. This decision was not appealed. His most recent claim made on 19.10.09 was considered in the light of this information and subsequent documentation contained at Tabs 6 and 8 of the case papers. This claim was disallowed on 7.1.10 although this decision was amended, as it contained an official error, and a revised decision was made on 5.6.11 against which the Appellant has now appealed.

Having considered all of the evidence in this case the Tribunal is satisfied that the Department's decision is correct and it is therefore upheld. The starting point is the previous decision of the Department dated 8.7.09. The capital of the Appellant was assessed as £273,267.71 as at 24.11.08. This decision was not appealed. Indeed there is nothing in the evidence before the Tribunal to indicate that this decision was incorrect or in error of law. By the time his most recent claim was made the Department took the view that the Appellant should be treated as possessing this capital. The Tribunal has considered all of the evidence in this case both verbal and written and is satisfied that the Appellant remains in possession of capital sufficient to exceed the sum of £16,000. The Appellant has, in the view of the Tribunal, not provided a satisfactory explanation as to why large withdrawals were made on the bank accounts. The Tribunal does not accept that numerous gifts or loans were made to family and friends. The Department has correctly assessed the capital retained by the Appellant as at 7.1.10 the date of the decision to disallow the claim. The reconsideration dated 5.6.11 and contained at Tab 13 of the casepapers indicates that, at the date of the decision, the appellant is treated as possessing capital amounting to £280,479.77 less the amount of £1119.76 contained in his wife's bank account number *****-***. The Tribunal is satisfied that the Department's decision is correct and it is therefore upheld.'

The relevant legislative provisions

20. Section 130(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as amended, provides that:

'No person shall be entitled to an income-related benefit if his capital or a prescribed part of it exceeds the prescribed amount".

Section 132(4) of the 1992 Act provides that:

'(4) Circumstances may be prescribed in which –

(a) a person is treated as possessing capital or income which he does not possess;

(b) capital or income which a person does possess is to be disregarded;

(c) income is to be treated as capital;

(d) capital is to be treated as income.'

Regulation 45 of the Income Support (General) Regulations (Northern Ireland) 1987, as amended, provides that:

'For the purposes of section 130(1) of the Contributions and Benefits Act as it applies to income support (no entitlement to benefit if capital exceeds prescribed amount), the prescribed amount is £16,000'

Regulation 51(1) of the Income Support (General) Regulations (Northern Ireland) 1987, as amended, provides that:

'(1) A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to income support or increasing the amount of that benefit except—

(a) where that capital is derived from a payment made in consequence of any personal injury and is placed on trust for the benefit of the claimant; or

(b) to the extent that the capital which he is treated as possessing is reduced in accordance with regulation 51A (diminishing notional capital rule); or

(c) any sum to which paragraph 43(2)(a) of Schedule 10 (capital to be disregarded) applies which is administered in a way referred to in paragraph 43(1)(a).'

Regulation 51A provides for the reduction of any notional capital determined under regulation 51.

The proper approach to the issues of capital relevant to benefit entitlement

21. In R2/09(IS), the Chief Commissioner set out, at paragraph 17, the proper approach to be taken by decision-makers and appeal tribunals, with issues of capital relevant to benefit entitlement. He stated:

'17. How ought a decision-maker or a tribunal on appeal deal with issues of capital relevant to benefit entitlement? While I do not wish to be too prescriptive, I suggest that a decision-maker or a tribunal on appeal in such circumstances should endeavour to seek the answers to certain questions, in a relevant and coherent order, and, if this is done, it is more likely that the correct decision will emerge. These are, in my view, the relevant questions:

(Questions (i) to (viii) relate to actual capital.)

(i) Is capital relevant to the rules of entitlement to the benefit at issue?

(ii) If so, what is the relevance of capital to the issues in the case eg if the capital is above a certain amount will the claimant's potential benefit be affected?

(iii) Is the capital at issue in the case actual capital? and, if so, identify the actual capital.

(iv) What is the connection between the capital and the claimant eg sole owner or co-owner?

(v) If there is such a connection, does anyone else have a legal or other interest in the capital?

(vi) Can any or all of the capital be disregarded, under the disregard rules?

(vii) If not, what is the value of the actual capital?

(viii) Having established the value of the actual capital, taking into account the disregard rules, is entitlement to the benefit at issue affected?

(Questions (ix) to (xiv) will help clarify whether one is dealing with actual or notional capital and care should be taken not to ignore these questions on an assumption, often a wrong assumption, that the relevant capital is notional.)

(ix) Did the claimant ever have capital which might have affected entitlement to the benefit in question?

(x) Has it been established that the claimant still has that capital? ie is it still actual capital?

(xi) What is the connection between that capital and the claimant eg sole owner or co-owner?

(xii) If there is such a connection, does anyone else have a legal or other interest in that capital?

(xiii) Can any or all of that capital be disregarded, under the disregard rules?

(xiv) If not, what is that capital's value?

(Questions (xv) to (xvi) relate to notional capital.

(xv) If no-one else has a legal or other interest in it, has the claimant deprived himself of the capital for the purpose of securing entitlement to benefit in line with the rules on deprivation? ie has it become notional capital?

(xvi) What is the value of the notional capital, taking into account the diminishing notional capital rule? ie has the value diminished over the passage of time?

The answers to these questions are not necessarily straightforward and, almost inevitably, rigorous and careful fact-finding will be required by decision-makers and tribunals.'

Analysis

22. In my view, the approach taken by the appeal tribunal to the 'capital' issue is problematic in two ways. Firstly, it is arguable that the appeal tribunal has confined itself to addressing questions (i) to (iv) in R2/09(IS) and has concluded that the appellant, at the date of claim to IS, that is 9 March 2011, had actual capital of £275,467.43. It is clear that an adjudicating authority is entitled to conclude, after a rigorous examination of the relevant evidence, that a claimant retains a capital asset despite a submission by that claimant that the capital asset had gone. In such a case the capital asset remains actual capital. In the instant case, it is important to recall that the decision by the decision-maker dated 13 April 2011 makes reference to the applicability of regulation 45 of the Income Support (General) Regulations (Northern Ireland) 1987, as amended. What is required, however, for such a conclusion to be rational is that it is based on a thorough examination of the relevant evidence and is supported by that evidence and that primary facts found from the evidence justify the conclusion.
23. In this regard I am reminded of the judgment of Carswell LCJ in Chief Constable of the RUC v Sergeant A [2000] NI 261 at 273f as follows: -

'A tribunal is entitled to draw its own inferences and reach its own conclusions, and however profoundly the appellate court may disagree with its view of the facts it will not upset its conclusions unless—

(a) there is no or no sufficient evidence to found them, which may occur when the inference or conclusion is based not on any facts but on speculation by the tribunal (Fire Brigades Union v Fraser [1998] IRLR 697 at 699, per Lord Sutherland); or

(b) the primary facts do not justify the inference or conclusion drawn but lead irresistibly to the opposite conclusion, so that the conclusion reached may be regarded as perverse: Edwards (Inspector of Taxes) v Bairstow [1956] AC 14, per Viscount Simonds at 29 and Lord Radcliffe at 36.'

24. In the instant case, the appeal tribunal had before it copies of statements relating to the appellant's current account with the First Trust Bank. Those statements are in the file of papers which is before me. From those statements it is clear, as the appeal tribunal concluded, that the sum of £385,000 was deposited in the appellant's current account on 8 November 2005. On 14 November 2005 the sum of £270,000 was transferred to a fixed term account. Statements relating to the fixed term account from 14 November 2005 are also in the file of papers which are before me. Returning to the current account, the transfer on 14 November 2005 of the sum of £270,000 to the fixed term account left a balance in the current account on 14 November 2005 of close to £40,000. There then followed a systematic dissipation in the funds within the current account, by various methods – cheques, withdrawals, direct debits – such that by 24 November 2005 the level of funds was reduced to just under £4000. On 24 November 2005 the sum of £10,000 was transferred into the current account and there is a parallel entry from the statement of the fixed term account to confirm that this was the source for the transferred-in funds. Thereafter a pattern emerged of regular dissipation of the funds in the current account followed by what I might term 'top-ups' from the fixed term account. The funds in the fixed term account were also dissipated by separate direct withdrawals. This pattern continued until by 25 March 2009 there were no remaining funds in the fixed term account. The last entry which I have for the current account is for 1 October 2008 when the available funds were just short of £5,000.
25. The only possible conclusion which can be drawn from the evidence set out in the preceding paragraph is that by March 2011 the bulk of the £385,000 was no longer in the appellant's bank accounts. For the appeal tribunal to conclude, if that was its conclusion, that the appellant, as of the date of claim to IS, that is 9 March 2011, had actual capital of £275,467.43 would mean a finding, as a primary fact, that the basis of the actual capital, monies in the amount of £275,467.43, and which were no longer in the appellant's bank accounts, were being retained or held elsewhere. I regard that to be highly improbable. It seems to me that by 9 March 2011 the bulk of the £385,000 was gone. Accordingly and to utilise the language of Carswell LCJ cited above, in the instant case '…the primary facts do not justify the inference or conclusion drawn but lead irresistibly to the opposite conclusion, so that the conclusion reached may be regarded as perverse …'. To that extent, the decision of the appeal tribunal is in error of law.
26. To be fair to the appeal tribunal, however, I do not believe that it intended to conclude that by 9 March 2011 the appellant retained actual capital in the form of monies amounting to £275,467.43. A clue to that lies in certain of the wording of both the decision notice and statement of reasons for the appeal tribunal's decision. The decision notice makes reference to the appellant being '… treated as possessing capital in excess of the prescribed amount of £16,000'. The statement of reasons for the appeal tribunal's decision also makes reference to the appellant being '… treated as being in possession of that figure and is therefore not entitled to Income Support.' I am of the view that what the appeal tribunal had really concluded was that the appellant, while no longer in actual possession of a capital asset in excess of the prescribed capital limits should nonetheless be treated as so being in possession. Even if this is what the appeal tribunal intended to conclude, it is the second basis upon which its treatment of the capital issue is problematic.
27. The law permits an adjudicating authority to 'treat' a claimant as being in possession of a capital asset even though the claimant might no longer be in 'actual' possession of that capital asset. Regulation 51 of the Income Support (General) Regulations (Northern Ireland) 1987 sets out the circumstances in which a claimant to IS might be treated as still being in possession of a capital asset. Regulation 51 is headed 'Notional capital' and this is how such capital is termed for the purposes of benefit entitlement. The 'notional capital' tests are very specific, however, and centre on a test of deprivation of capital for the purpose of securing entitlement to benefit. The Chief Commissioner set out the inter-relationship between 'actual' and 'notional' capital in his series of questions in R2/09(IS) above. More particularly, the proper approach to the application of the 'notional capital' rules for IS has been set out in some detail by Commissioner Bano in CIS/218/2005 and for housing benefit (where the rule is identical) by Commissioner Howell in R(H) 1/06. Looking at the statement of reasons for the appeal tribunal's decision, it is my view that if the appeal tribunal had concluded that the appellant should not have an entitlement to IS on the basis of the application of regulation 51 of the Income Support (General) Regulations (Northern Ireland) 1987, then it has not adopted the proper approach to the application of regulation 51. There is no analysis of either of the core elements of deprivation and purpose. To that extent, its decision is in error of law.
28. In LG v Department for Social Development ([2011] NICom140 C7/10-11(IS), I said the following, at paragraphs 34 to 45 about the burden of proof in certain 'capital' cases:

'34. Firstly, the Tribunal of Commissioners in R(IS) 26/95 were considering three separate cases of which CIS/417/1992 was one. At paragraph 2.328 of Volume 2 of Social Security Legislation 2007 (which may have been the volume which was considered by the appeal tribunal in this case) the authors state:

'… In CIS 127/1993 the Commissioner raises the question of where the burden of proof lies when considering whether the capital rule is satisfied. The Tribunal of Commissioners in CIS 417/1992 (reported as part of R(IS) 26/95) treat this as part of what the claimant has to prove in showing entitlement to income support.'

35. At paragraph 25 of their decision, the Tribunal of Commissioners in CIS/417/1992, in remitting the case back to a differently constituted appeal tribunal, directed that the issues before the appeal tribunal was whether the claimant satisfied the conditions of entitlement to IS. In that case, that would turn on whether the market value of his actual (or deemed) share of a freehold exceeded the capital limits for entitlement to IS, and the claimant had discharged the burden of proof with respect to that entitlement condition. It seems to me that the authors of social security legislation are correct in concluding that the Tribunal of Commissioners treated the issue of proving the valuation of an actual capital asset as part of proving the conditions of entitlement to a social security benefit – which burden lay on the claimant. That seems to fall short of a conclusion that the decision is authority for the proposition that '… the question of capital is something the claimant has to prove to show entitlement to income support.' And that '… once it has been shown the claimant possesses capital it is for them [sic] to prove expenditure or the disregards apply.'

36. Secondly, the authors of social security legislation went on to qualify the statement which they had made in respect of CIS/417/1992. They stated that:

'However, the argument that the capital rule operates as an exception to the conditions of basic entitlement does not appear to have been put. See sidenote to s.134 which is entitled 'Exclusions from benefit.''

37. The latter reference is to section 134 of the Social Security Contributions and Benefits Act 1992, in Great Britain. In 2007, section 134(1) of the Social Security Contributions and Benefits Act 1992, read as follows:

'Exclusions from benefit

134 (1) No person shall be entitled to an income-related benefit if his capital or a prescribed part of it exceeds the prescribed amount.'

38. At paragraph 1.41 of Volume 2 of Social Security Legislation 2007 the authors state:

'… Since the capital rule operates as an exclusion to benefit it is arguable that burden of proof that a claimant's capital exceeds the limit is on the Secretary of State.'

39. Accordingly, it is arguable that there is an alternative to the reasoning ascribed to CIS/417/1992.

40. In paragraph 2.328 of Volume 2 of Social Security Legislation 2007, and in relation to the question of the burden of proof, the authors cite two further cases of the Social Security Commissioners in Great Britain – CIS/240/1992 and CIS/30/1993, which, they submit are authority for the propositions that:

(i) once it has been shown that the claimant possesses an item of capital, it is for him to prove that one of the disregards apply; and

(ii) once it has been established that the claimant is the legal owner of property, the burden is on her to show that she does not have all of the beneficial interest.

41. At paragraph 13 of CIS/240/1992, Commissioner Mesher states that:

'… Although I have not found it necessary in this decision to deal with the general question of the burden of proof in relation to the capital rule, it must be the case that once it is shown that a claimant possesses an item of capital it is for the claimant to prove that one of the provisions of Schedule 10 applies so that the item is disregarded.'

42. The emphasis in the quotation is mine and the reference to Schedule 10 is to Schedule 10 of the Income Support (General) Regulations 1987, which deals with capital which is to be disregarded. In my view, accordingly, CIS/240/1992 is authority for the more limited principle that if a claimant, in possession of a capital asset, wishes to have that disregarded for the purposes of entitlement to IS, the burden of proof that one of the Schedule 10 disregards applies lies on the claimant. Once again that seems to fall short of a conclusion that the decision is authority for the proposition that '… the question of capital is something the claimant has to prove to show entitlement to income support.'

43. I accept that at paragraph 36 of CIS/30/93, Commissioner Mesher set out the principle that '… once it is shown that the claimant was the legal owner of a capital asset, the burden then falls on her to prove (on the balance of probabilities) that she did not have any or all of the beneficial interest in that asset.' That statement was, however, in the context of the facts of that particular case, where the claimant had transferred a capital asset. Once again, that principle falls short of a conclusion that the decision is authority for the proposition that '… the question of capital is something the claimant has to prove to show entitlement to income support.'

44. Finally, in paragraph 2.328 of Volume 2 of Social Security Legislation 2007, the authors note that all of the decisions cited in connection with the burden of proof in capital cases had to be read in light of the decision of the House of Lords in Kerr v Department of Social Development for Northern Ireland [2004] UKHL 23; [2004] 4 All ER 385. At paragraphs 62 and 63, Baroness Hale stated that:

'62. What emerges from all this is a co-operative process of investigation in which both the claimant and the department play their part. The department is the one which knows what questions it needs to ask and what information it needs to have in order to determine whether the conditions of entitlement have been met. The claimant is the one who generally speaking can and must supply that information. But where the information is available to the department rather than the claimant, then the department must take the necessary steps to enable it to be traced.

63. If that sensible approach is taken, it will rarely be necessary to resort to concepts taken from adversarial litigation such as the burden of proof. The first question will be whether each partner in the process has played their part. If there is still ignorance about a relevant matter then generally speaking it should be determined against the one who has not done all they reasonably could to discover it …'

45. It seems to me that there is sufficient doubt and qualification concerning the cited quotation from Volume 2 of Social Security Legislation 2007 to conclude that it is representative of the correct legal position that the burden of proof that a claimant's capital exceed the limits for entitlement to a relevant benefit lies on the claimant, as part of proving entitlement to benefit.'

29. I quote these paragraphs because it seems to me that the appeal tribunal has appeared to have adopted an approach which has placed the burden of proof on the appellant to demonstrate that she satisfied the capital rules.
30. Finally, I would note that I have also considered the appellant's cited grounds for seeking leave to appeal to the Social Security Commissioner. Having found that the decision of the appeal tribunal is in error of law on the basis of the analysis set out above, I do not have to consider those grounds in any detail.

Disposal

31. The decision of the appeal tribunal dated 22 July 2011 is in error of law. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.
32. I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given. This is because I have concluded that there is a requirement to consider, in addition to the question of whether the appellant has actual capital in excess of the prescribed capital limits for entitlement to IS, whether the notional capital rules set out in regulation 51 of the Income Support (General) regulations (Northern Ireland) 1987, as amended apply. Consideration of the application of regulation 51 requires taking evidence and making findings in respect of the core elements of that regulation. I am unable to adduce that evidence and make those findings in the proceedings which are before me.
33. The decision under appeal to the appeal tribunal is a decision of the Department dated 13 April 2011 as revised on 9 June 2011 in which it was decided that the appellant should not be entitled to IS from 9 March 2011.
34. The Department is to prepare a further submission which addresses the applicability of all of the capital rules as set out above and which addresses how they apply to entitlement to IS in the context of the appellant's circumstances.
35. The appeal tribunal is to address the capital issues in the context of the guidance given by the Chief Commissioner in R2/09(IS). In considering whether regulation 51 of the Income Support (General) Regulations (Northern Ireland) 1987, as amended, applies to the issues arising in the appeal the appeal tribunal is to look to the guidance provided in CIS/218/2005 and R(H) 1/06. Further guidance is to be found at pages 470 to 482 of Volume II of Social Security Legislation 2011/2012.

(Signed): K Mullan

Chief Commissioner

12 September 2012