Northern Ireland - Social Security and Child Support Commissioners' Decisions

BPMcN-v-Department for Social Development (IS) [2014] NICom 5

 

Decision No:  C7/13-14(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 23 October 2012

 

 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

 

 

1.     This is a claimant’s application for leave to appeal from the decision of an appeal tribunal sitting at Strabane on 23 October 2012.

 

2.     For the reasons given below, I grant leave to appeal.  I allow the appeal and set aside the decision of the appeal tribunal.  I exercise my power under Article 15(8)(a)(ii) to make further findings of fact and to give the decision I consider appropriate in the light of them.  I find that the applicant is entitled to housing costs at the rate of £5.01 per week from and including 2 July 2008.

 

REASONS

 

         Background

 

3.     The applicant claimed income support (IS) from the Department for Social Development (the Department).  This was awarded from 7 February 1997 in respect of himself, his wife and four children.  He completed an IS review form on 16 September 2003, stating that he owned his own home and did not have a mortgage on it.  On 2 July 2008 the applicant completed a further IS review form, stating that he owned his own home but that he had a mortgage on the address taken out five years previously.  On 5 October 2009 the Department obtained evidence from Leeds Building Society dated 1 October 2009 which stated that the applicant had taken out a mortgage loan of £110,000 on 4 September 2006 by way of a re-mortgage.  In response to enquiries the applicant stated that he had obtained a mortgage on his old house in order to build a new house beside it.

 

4.     On 30 March 2010 the Department decided that the applicant did not qualify for housing costs as part of his IS as he had taken out the mortgage in a “relevant period”.  The applicant appealed, and his appeal was heard by a tribunal.  It appears that a legally qualified member later set aside the tribunal’s decision on 6 April 2012.  Following a new hearing on 23 October 2012 the appeal was disallowed.  The applicant requested a statement of reasons for the tribunal’s decision.  This was issued on 22 January 2013.  He applied for leave to appeal to the Social Security Commissioner, but the application was refused by a determination issued on 20 March 2013.  On 18 April 2013 he made an application to a Social Security Commissioner for leave to appeal.

 

         Grounds

 

5.     The applicant submits that the tribunal has erred in law as:

 

         (i)      it made perverse or irrational findings of fact in terms of the timelines of the loans in the case and made a mistaken judgment as a result.

 

6.     The Department was invited to make observations on the applicant’s grounds.  Mrs Rush replied on behalf of the Department.  She indicated that the Department did not support the application for leave to appeal on the claimant’s grounds.  However, she submitted that it was arguable that the tribunal might have erred by failing to consider paragraph 4(8) of Schedule 3 to the Income Support (General) Regulations (NI) 1987.

 

         Legislation

 

7.     The rules governing entitlement to an element of IS for housing costs are set out at Schedule 3 to the Income Support (General) Regulations (NI) 1987.  A key principle is set out at paragraph 4(2) of the Schedule, which reads:

 

                   (2) Subject to sub-paragraphs (3) to (12), loans which, apart from this paragraph, qualify under paragraph 15 shall not so qualify where the loan was incurred during the relevant period and was incurred—

 

                              (a) after 1st October 1995;

                               …

 

         The “relevant period” is defined at paragraph 4(4) as follows:

 

                   (4) The “relevant period” for the purposes of this paragraph is any period during which the person to whom the loan was made—

 

                               (a) is entitled to income support or income-related employment and support allowance; or

 

                               (b) is living as a member of a family one of whom is entitled to income support or income-related employment and support allowance,

 

                   together with any linked period, that is to say a period falling between two such periods of entitlement to income support or income-related employment and support allowance separated by not more than 26 weeks.

 

         Exceptions to the general rule created by paragraph 4(2) are established by paragraph 7 which reads:

 

                  (7) Notwithstanding sub-paragraphs (1) to (6), housing costs shall be met in any case where a claimant satisfies any of the conditions specified in sub-paragraphs (8) to (11), but—

 

                              (a) those costs shall be subject to any additional limitations imposed by the sub-paragraph; and

 

                              (b) where the claimant satisfies the conditions in more than one of these sub-paragraphs, only one sub-paragraph shall apply in his case and the one that applies shall be the one most favourable to him.

 

         The particular rules governing exceptions appear at paragraphs 8 to 11.  These read:

 

                  (8) The conditions specified in this sub-paragraph are that—

 

                              (a) during the relevant period the claimant or a member of his family acquires an interest (“the relevant interest”) in a dwelling which he then occupies or continues to occupy, as his home; and

 

                              (b) in the week preceding the week in which the relevant interest was acquired, housing benefit was payable to the claimant or a member of his family;

 

                  so however that the amount to be met by way of housing costs shall initially not exceed the aggregate of—

 

                                    (i) the housing benefit payable in the week mentioned at sub-paragraph (8)(b), and

 

                                    (ii) any amount included in the applicable amount of the claimant or a member of his family in accordance with regulation 17(1) (e) or 18 (1) (f) in that week,

 

                  and shall be increased subsequently only to the extent that it is necessary to take account of any increase, arising after the date of the acquisition, in the standard rate or in any housing costs which qualify under paragraph 17 (other housing costs).

 

                  (9) The condition specified in this sub-paragraph is that the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant.

 

                  (10) The conditions specified in this sub-paragraph are that—

 

                              (a) the loan commitment increased in consequence of the disposal of the dwelling occupied as the home and the acquisition of an alternative such dwelling; and

 

                              (b) the change of dwelling was made solely by reason of the need to provide separate sleeping accommodation for persons of different sexes aged 10 or over but under the age of 20 who live with the claimant and for whom the claimant or the claimant’s partner is responsible.

 

                  (11) The conditions specified in this sub-paragraph are that—

 

                              (a) during the relevant period the claimant or a member of his family acquires an interest (“the relevant interest”) in a dwelling which he then occupies as his home; and

 

                              (b) in the week preceding the week in which the relevant interest was acquired, the applicable amount of the claimant or a member of his family included an amount determined by reference to paragraph 17 and did not include any amount specified in paragraph 15 or 16, so however that the amount to be met by way of housing costs shall initially not exceed the amount so determined, and shall be increased subsequently only to the extent that it is necessary to take account of any increase, arising after the date of acquisition, in the standard rate or in any housing costs which qualify under paragraph 17.

 

         The tribunal decision

 

8.     The tribunal in the case found that the applicant took out a mortgage during the time when he was claiming and receiving IS – a “relevant period”.  It correctly identified that, as the loan was taken out during a “relevant period”, the applicant was not entitled to housing costs unless falling within a prescribed exception.  It considered the main exceptions within Schedule 3 and found that none assisted the applicant.  Accordingly, the appeal was disallowed.

 

         Hearing

 

9.     I held an oral hearing of the appeal.  The applicant attended but was unrepresented.  The Department was represented by Mr Gough of Decision Making Services.

 

10.   The applicant explained that he had claimed IS from 1997, He was the father of four children who were aged 19, 18, 13 and 11 respectively in September 2006.  The oldest child was a girl, while the others were boys.  He had inherited the house and surrounding land from an uncle.  The house was 200 years old and in poor repair.  He had taken out a previous home improvement load and then obtained a mortgage on the property to finance the construction of a new home on the same site as his existing dwelling.  This loan was paid in two tranches of £40,000 and £70,000, totalling £110,000.

 

11.   The applicant submitted that the tribunal had erred in law in its understanding of the timelines involved in his borrowing.  He made submissions to me which were less than precise in terms of ascribing dates to events.  No documentary evidence was produced to clarify the applicant’s recollection of events.

 

         Assessment

 

12.   The key issue for the tribunal was whether the loan was taken out during the “relevant period” – in other words at a time when the applicant was claiming IS.  As the applicant accepts that he continuously claimed and received IS from 1997 to the present, there is no possibility that the tribunal had made an error of fact in relation to this basic finding.  I therefore reject the applicant’s submissions to this effect.

 

13.   That would be the end of the matter, except for further submissions by the Department.  The Department considered a number of the exceptions to the general rule on IS housing costs.  These are set out above at paragraphs 4(8) to (11) of Schedule 3 to the IS Regulations.  The Department submitted that exceptions relating to the needs of a disabled person, to children between the ages of ten and 20, and to taking out a new loan in certain circumstances, do not apply in the case of the applicant.

 

14.   However, it was pointed out by the Department that an anomaly exists in paragraph 4(8) of Schedule 3, which is set out above.  Paragraph 4(8) applies in relation to housing costs payable in respect of acquiring an interest in a dwelling which the claimant occupies or continues to occupy as his home, where housing benefit (HB) was payable to the claimant in the week prior to acquiring the interest.  The provision permits housing costs to be paid up to the level of any HB paid in that week.

 

15.   In Great Britain, council tax has been in place instead of domestic rates since 1993.  A means tested benefit, council tax benefit (CTB) was established to assist those liable to pay council tax if they were in receipt of IS or otherwise satisfied the conditions of financial eligibility.  However, in Northern Ireland, domestic rates continued past the introduction of council tax in Great Britain.  Further, in Northern Ireland the HB scheme continued to assist those liable to pay domestic rates who were in receipt of IS or otherwise met the financial eligibility criteria.

 

16.   A consequence, probably unintended, is that HB for the purposes of paragraph 4(8) of Schedule 3 is payable in Northern Ireland in broader circumstances than it would be in Great Britain.  The implication, as submitted by the Department, is that a claimant who acquires an interest in a dwelling during the relevant period can have housing costs paid up to the level of HB (if any) previously paid to that individual for domestic rates.  No equivalent provision would have assisted those in receipt of CTB in Great Britain.  CTB has in turn been abolished in Great Britain, as I understand it, from April 2013.  However, nothing turns on that.

 

17.   In consequence of the continuation of the system of HB support in Northern Ireland to owner occupiers with a liability to pay domestic rates, the applicant is potentially entitled to housing costs under paragraph 4(8) of Schedule 3.  However, any amount would be restricted to the amount of any HB payable to him in the week prior to acquiring an interest in the dwelling he occupies or continues to occupy as his home.

 

18.   The tribunal was not directed to the particular exception by the submission of the Department.  Therefore, perhaps understandably, it did not address it in its decision.  The Department submits to me that the exception potentially applies and I accept that submission.  The tribunal has therefore erred in law by not addressing it.  I set aside the decision of the tribunal.

 

19.   In the circumstances, as this is a case where a legally qualified member sitting alone has responsibility for the decision, I am in as good a position as the original tribunal to decide the appeal, and I consider that it is appropriate to make findings of fact and to determine the appeal myself.

 

         Findings

 

20.   I find that the applicant took out his mortgage loan on 6 September 2006 while in a “relevant period”, as he was then, and continues to be, claiming and receiving IS.  Having considered the applicant’s family circumstances I am satisfied that none of the exceptions in paragraphs (9) to (11) assist him.

 

21.   In order to assess whether paragraph 4(8) might assist the applicant, I asked for evidence of HB paid to him in respect of domestic rates.  He provided this for the period from April 2006 to the present.  This evidence established that in the year 2006-2007 he was in receipt of a total of £260.41 HB towards his domestic rates.  Regulations 17(1)(e) and 18(1)(f) have no application in the circumstances of the case.  On the evidence before me, I calculate that the applicant’s weekly HB entitlement for 2006-2007 would have been £5.01.

 

22.   There are further conditions in paragraph 4(8).  The first of these is that during the relevant period the applicant must have acquired an interest in a dwelling which he then occupies or continues to occupy as his home.

 

23.   In the particular case, the applicant has built his own home.  The full circumstances and financial aspects have not been fully explained in evidence.  From what I understand, it would seem that the applicant obtained a mortgage secured on the original 200 year old property in early 2005 in order to finance the start of building his new home.  The project reached a stage of completion of roof structure and finish by June 2005.  At this stage there was no water or electricity connection.  There was a further loan in the interim, but I have no evidence as to how that was secured.  Of most relevance to me is that the applicant took out a mortgage of £110,000, secured on the new property, on 4 September 2006, and moved to the new house, by his evidence, on 16 December 2006.

 

24.   This is not a case where the applicant has purchased a house from a third party, where a contract of sale completion date can be identified.  He has acquired an interest in his home by building it from scratch on land which he already owned.  In these circumstances, I find it difficult to say exactly when he acquired “an interest in a dwelling”.  I accept that the end result was that he had acquired an interest in a dwelling.  However, when did the structure which the applicant built become a dwelling?  Was it when the roof was put on?  Was it when water and electricity were connected?  For my part, I would hold that the structure became a “dwelling” when the applicant took up his occupation of it as his home.  I accept the applicant’s evidence that this was on 16 December 2006.  In any event, I am satisfied that the applicant acquired an interest in a dwelling which he then occupied as his home and that this was during the “relevant period”.

 

25.   The precise date on which the applicant acquired an interest in the dwelling is significant for the calculation of housing costs.  He is entitled to housing costs, but only up to the level of HB paid to him in the week preceding the week in which the relevant interest was acquired.  Taking 16 December 2006 as the date on which the applicant acquired an interest in the dwelling, I find that the applicant was in receipt of HB in the week preceding that week at the rate of £5.01.

 

26.   I asked the Department to identify the date on which the applicant first applied for supersession of his IS entitlement to include an element of housing costs.  This could not be identified with certainty as no recorded evidence was available prior to 15 October 2009.  It was accepted that in an A2 review form of 2 July 2008 the applicant had declared a mortgage.  It was further accepted that an MI12 form, giving information about the mortgage and attaching information from Leeds Building Society, was received by the Department on 5 October 2009.  There was evidence also that a Departmental officer had recalled a domestic visit to the applicant in which housing costs were requested, but no date for this visit was recorded.

 

27.   It appears to me that, in all the circumstances, the completion and return of form A2, in which the applicant informed the Department of his mortgage, should be treated as an application for assistance with housing costs.  I understand that the Department does not demur from this view.  On the basis of regulations 6(2)(a)(i) and 7(2)(a) of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999, I find that the effective date for supersession would be the first day of the benefit week in which form A2 was returned – namely 2 July 2008.

 

28.   I hold that the applicant is entitled to housing costs under Schedule 3 to the IS Regulations at a weekly rate of £5.01 from and including 2 July 2008.

 

 

(signed):  O Stockman

 

Commissioner

 

 

 

13 February 2014