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You are here: BAILII >> Databases >> Northern Ireland - Social Security and Child Support Commissioners' Decisions >> GM -v- Department for Communities [2017] NICom 60 (12 October 2017)
URL: http://www.bailii.org/nie/cases/NISSCSC/2017/60.html
Cite as: [2017] NICom 60
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GM-v-Department for Communities (JSA) [2017] NICom 60
Decision No: C1/17-18 (JSA)
SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
JOBSEEKERS’ ALLOWANCE
Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 16 November 2016
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. As will be explained in greater detail below, both parties have expressed the view that the decision appealed against was erroneous in point of law.
2. Accordingly, pursuant to the powers conferred on me by Article 15(7) of the Social Security (Northern Ireland) Order 1998, I allow the appeal, I set aside the decision appealed against and I refer the case to a differently constituted tribunal for determination.
Analysis
3. In the application for leave to appeal, which was received in the Office of the Social Security Commissioners, Mr McGrath made the following submissions on behalf of the appellant:
‘I would submit that the claimant can illustrate that the decision reached is not supported by the evidence provided and the decision has not been reasonably reached.
On 30th June 2016 the claimant was allowed housing costs of £40,260.09. Following a reconsideration on 8th August 2016 the decision was revised and a further £843.50 was allowed. The claimant proceeded to appeal this matter and this was heard by the Tribunal on 16 November 2016. On this occasion the Tribunal upheld the decision of the Department.
It is noted that the claimant’s application deals with a number of individual loans between the years 1997 to 2008.
It is accepted that certain loans and elements of the claimant’s lending may not be eligible for the purpose of support with housing costs. However it is further submitted that there are loans and elements of the lending of the claimant that have been unreasonably rejected and inadequately considered, that should permit increased assistance in respect of permitted housing costs.
It is submitted that the claimant’s application includes allowable home improvement loans which include allowable repairs and improvements, which have not been adequately considered due to an unfair and overly onerous burden being placed on the claimant regarding the evidence sought.
It is advocated that the Department and the Tribunal have failed to give adequate consideration to the evidence provided by the claimant and unreasonably failed to accept certain evidence (receipts) provided by the claimant.
I make reference to the case CIS 515 2006 …
In respect of the claimant’s application I would submit that the burden placed on him has been too high. R(SB)33/85 held that a claimant’s evidence does not require independent corroboration. It is accepted that a Tribunal is entitled to weigh the evidence before it accordingly. However it would appear within the decision provided that the claimant’s oral evidence and explanations regarding the receipts provided in respect of the works carried out to the property and manner in which the home improvement loans are used are given no consideration at all.
I would further submit that inadequate reasons for the decision have been provided by the Tribunal. Within the statement of reasons the Tribunal makes reference to the ‘problems’ faced by the claimant within his application. It is acknowledged that the claimant, like many other applicants, may face problems in respect of an application for assistance with housing costs, given its very nature. Help with housing costs is in place to assist those applicants who have experienced unexpected and generally significant financial difficulties. An application for help with housing costs is not likely to be pre-planned and as such evidentially difficulties are not be unexpected. However I would submit that the Tribunal in its decision making has dealt with the claimant’s appeal in too broad a manner and has failed to address the individual lending and individual repair and improvement works carried out in the forensic manner which would be required.
I would submit that the tribunal, within its statement of reasons, does not illustrate that it has addressed fully the issues raised by the claimant and assessed the evidence linked to those issues. The tribunal decision provides a restatement of the department’s submissions followed by a short statement on the problems faced by the claimant. It is accepted that the matter is complex, heightened by the period of lending in question, which commenced in 1997, however the legislation does not preclude entitlement based solely on a long and difficult sequence of lending.
The claimant himself during the course of his appeal stated that the ‘framework is too rigid’ and his belief that ‘he was deal with unfairly’. In reference to this position it is subsequently stated in the statement of reasons that: ‘The Tribunal would accept that the system in covering housing costs for Jobseeker’s Allowance claimants is probably not appropriate as a means of financing a self-build project.’ I would submit that the failings of the system in adequately dealing with self-build projects should not ultimately prevent a claimant from obtaining his valid entitlement to housing costs, nor should it result in an unreasonable burden in respect of the evidence sought.’
4. In his detailed and constructive written observations on the application for leave to appeal, Mr Crilly has made the following submissions:
‘Loans acquired by (the appellant)
As noted in paragraph 4 of these observations, the claimant has taken out numerous loans with the … over the years which I will now detail.
The first loan … was taken out on 01.12.97 for the amount of £44,867. This was used by the claimant to purchase his current home at … The amount outstanding on this mortgage at 11.05.16 was £40,260.09.
The claimant then made arrangements to carry out a long-term programme to refurbish the property. However, as he lacked sufficient capital resources at that time he planned to undertake the relevant repairs and improvements under self-build arrangements. This meant that capital in the form of loans would only be paid out by his lender in stages after the necessary work for each stage had been actually carried out.
The claimant’s second loan … was acquired on 21.12.98. This was a home improvement loan for £15,000. The amount outstanding on this borrowing at 11.05.16 stood at £11,440.59 with arrears of £194.76.
The third loan … was obtained on 09.02.00 for a further £15,000. This was also for home improvements and, by 11.05.16, the amount outstanding on it was £11,596.96 with arrears of £196.72.
The next home improvement loan … was acquired on 05.08.02 when another £15,000 was lent. A figure of £12,901.94 remained outstanding on this borrowing on 11.05.16 with the claimant having fallen into arrears of £219 at that time.
The fifth loan … was for the amount of £20,000 and was taken out on 28.07.04 for home improvements. The balance outstanding on this loan was £18,943.48 on 11.05.16 with arrears of £244.62.
The claimant acquired his sixth loan … on 29.06.05. This was for the amount of £60,000 and was described by his lender as borrowing for the purpose of raising capital. A figure of £58,002.82 remained outstanding on this loan on 11.05.16 with arrears of £1,110.21.
The seventh loan … was also described by the lender as a capital raising loan and amounted to £20,000. This was obtained on 22.11.05. A balance of £11,566.82 remained owing on this on 11.05.16.
Loan … was acquired on 08.06.06 for the amount of £26,000. The lender confirmed that the reason behind this borrowing was to re-finance other loans. A figure of £18,480.41 remained to be paid on 11.05.16 with the claimant having fallen into arrears of £5,696.12 at this time.
The claimant’s ninth and final loan … amounted to a figure of £120,000 and was obtained on 25.07.08. Again, the lender confirmed that the purpose of this borrowing was to re-finance other loans. The claimant has confirmed that this loan was used to purchase an apartment in London which he later had to sell at a loss in 2010 during the financial crisis that was running its course at that time. An amount of £108,485.66 was outstanding on this loan on 11.05.16 with arrears of £8,877.48.
Decision dated 06.07.16
In his determination dated 30.06.16, the decision maker made reference to the various loans outlined above. He also considered the large number of receipts that had been provided by the claimant to support the latter’s statements with regard to expenditure that had been made to carry out repairs and improvements to his home over the period from 1998 to 2009.
The decision maker determined that the outstanding amount of £40,260.09 of the loan that had been used by the claimant to purchase his home in December 1997 fell to be regarded as an eligible housing cost.
At the same time, however, the decision maker concluded that none of the subsequent loans acquired by the claimant from 1998 to 2008 represented eligible housing costs for jobseeker’s allowance purposes. In doing so, he stated the following:
“(The appellant) was asked to complete MI10 forms in order to establish if he was eligible for help with home improvement loans. He states that the MI10 forms are unsuitable for his circumstances and states that he is unable to complete these forms with any degree of accuracy. In order to qualify for help with a loan for home improvements, the loan has to be taken out to carry out repairs or improvements to the dwelling occupied as the home with a view to maintain the fitness of the dwelling for human habitation. (The appellant) states that he bought the bungalow on (sic) 1997 in order to turn it into a chalet bungalow. This would suggest the bungalow would have been fit for human habitation and (the appellant) chose to re-build it using the self-build method. For this reason, and the fact that (the appellant) is unable to supply specific details of what the home improvement loans were used for, I have determined that (the appellant) is not entitled to assistance with the four home improvement loans totalling £65,000.00.
(The appellant) stated that the capital raising loans of £60,000.00 and £20,000.00 were used to complete construction of the property. The refinance loan of £26,000.00 was for debt consolidation. The refinance loan of £120,000 was used to buy a buy to let flat which (the appellant) stated that he has since sold. (The appellant) is not entitled to assistance with the capital raising or refinance loans.
The outstanding balance of the original amount borrowed to acquire interest in the property concerned can only be considered as being an allowable housing cost in this instance, i.e. £40,260.09 as no extra borrowing had been for the purpose of maintaining the home as being fit for human habitation”.
Reconsideration decision dated 08.08.16
As outlined in paragraph 7 above, the decision dated 06.07.16 was reconsidered on 08.08.16. The decision maker began by detailing the repairs and improvements to the property at … that had been carried out by the claimant before outlining the loans that had been taken out by him. The receipts provided by the claimant were then considered in the following terms:
“In the absence of completing form MI10s, (the appellant) provided receipts dating back to 1998 to support his claim for help with his housing costs. He states these receipts were from the work he carried out at the property at … He stated that he did not move into the property at … until 2007 10 years after purchase as it took this period of time to complete.
I have considered all receipts provided and categorized them as follows:
The first home improvement loan was taken out on 21-Dec-1998. Receipts were not accepted prior to 21-Dec-1998 as these items were not bought using this home improvement loan.
Receipts that were addressed to … There is no evidence to show that these purchases where (sic) in fact for (the appellant’s) property at …
Receipts from 20-Aug-2007. These receipts have not been accepted as the loan on the 8-Jun-2006 was not a home improvement loan. This was in fact a loan to refinance other loans and therefore cannot be considered.
The following items cannot be accepted as some are undated receipts, incomplete dates, incomplete receipt (sic), receipts not showing a price or itemized value on them, returns, delivered to … or … quotations, sketches or drawings.
Receipts from October 1999 to December 1999. These receipts have not been accepted as the loan for the home improvement was taken out and not used within six months of its receipt or any such further period as is reasonable”.
The decision maker undertaking the reconsideration then proceeded to determine the eligibility of each of the claimant’s loans in turn.
The decision maker agreed that the first loan obtained by the claimant and used to purchase his home represented an allowable housing cost of £40,260.09. A further amount of £843.50 in respect of the second loan of £15,000 taken out on 21.12.98 was also deemed to be eligible as receipts provided by the claimant confirmed that this had been spent on kitchen worktops. The remainder of the second loan, £14,156.50, was disregarded as the claimant was unable to supply specific details of what it was used for and the receipts provided did not “. . . specify what they were for . . . or what they were used for”.
The third loan of £15,000 acquired on 09.02.00 was disregarded in full as an eligible housing cost. The decision maker accepted that £4,000 of this loan appeared to have been used to install a new central heating system. However, this could not qualify as an eligible housing cost as it was not a repair of an existing system. The remaining £11,000 of the loan was discounted for the same reasons as outlined in paragraph 30 above.
It was also determined that the full amount of £15,000 in respect of the fourth loan could not qualify as an eligible housing cost because the claimant had been unable to specify how it had been used to carry out repairs and improvements in his home. In addition, there was no evidence of any repairs and improvements being carried out within 6 months of this loan being acquired by the claimant.
The fifth loan of £20,000 acquired on 28.07.04 was disregarded in full as an eligible housing cost for identical reasons as those outlined in paragraph 31.
The sixth and seventh loans of £60,000 and £20,000 respectively were disregarded in full as they were not home improvement loans. The decision maker determined that the eighth loan of £26,000 taken out on 08.06.06 had been used to consolidate existing debt and so could not be taken into account as an eligible housing cost. The final loan of £120,000 had been used to purchase a flat and so could not qualify as an eligible housing cost under Schedule 2.
The decision maker concluded:
“(The appellant) is not entitled to any help with additional borrowing for home improvements because he has not provided details of precisely what home improvements were made and how much each home improvement cost and has not shown that the repairs and improvements were carried out within 6 months of taking the home improvement loan. He has not shown that all the receipts were for his property at …
I am revising the decision dated 06 July 2016 on the grounds I am satisfied that (the appellant) used part of his first loan to purchase a kitchen work top to prepare food.
My decision takes effect from 10 May 2016 and from the effective date of any other decisions that have been made since that date.
As a result I have decided that (the appellant) is entitled to JSA to include help with his original mortgage which is £40,260.09 and £843.50 towards his first home improvement loan (rate to be determined)”.
Tribunal’s decision dated 16.11.16
The hearing of the claimant’s appeal took place on 16.11.16. In the statement of reasons, the LQM outlined the Department’s position:
“Appellant’s problem is that some of the loans do not qualify under paragraph 15 as home improvement loans for example installing a new central heating system as opposed to repairing the existing heating system.
His other problem is that he is unable to show that any qualifying home improvement loans were used within 6 months or a reasonable period of 6 months. His work has been ongoing since 1998.
And finally some of the loans are not home improvement loans but refinancing or consolidating loans.
At the oral hearing, Appellant reiterated some of the grounds set out in his letter of appeal received 25.8.16 but also made the point that “the system just can’t cope with self builders, the framework is too rigid and he was dealt with unfairly”.
The Tribunal would accept that the system in place to cover housing costs for Jobseekers Allowance claimants is probably not appropriate as a means of financing a self bill (sic) project on the scale undertaken by the Appellant (he now owes £300,000), especially where the self builder does not, at least initially, occupy the dwelling as his house”.
The tribunal’s decision was given in the following terms:
“Appeal disallowed.
The decision of 6.7.16 as revised on 12.8.16 is confirmed”.
Grounds of appeal to the Commissioner
In his appeal to the Commissioner, the claimant has raised 2 main issues.
…
The Department’s response
For the reasons outlined below, I respectfully submit that the tribunal erred in law when it decided to disallow the claimant’s appeal against the decision dated 06.07.16 as revised on 08.08.16.
I agree with the submission of the claimant’s representative that the burden of proof placed on the claimant in this instance was too high and, as a consequence, was unreasonable. As noted previously, the programme of repairs and improvements began in 1998, some 18 years before the claimant applied for assistance with his housing costs. I submit that, given this, it would be unreasonable to expect him to have documented evidence in the form of receipts for all expenditure. In addition, it would not be reasonable to expect the claimant to provide specific or minute details as to the cost of each home improvement over the period of the repairs and improvements as well as specifically outlining exactly when each was carried out.
The consideration of evidence was addressed in C5/13-14(JSA) in which the Northern Ireland Chief Commissioner held:
17. There is a second aspect of the appeal tribunal’s reasoning which I find to be problematic. As was noted above the appeal tribunal concluded that the appellant had ‘… not produced any verified evidence as to how the money was spent in the period subsequent to December 2011.’ It is clear that the appellant had provided evidence as to how the funds in his current account had been dissipated. That evidence was given to the Department during the initial decision-making process. The evidence is contained within the record of a telephone call with an officer of the Department on 6 June 2012, attached to the original appeal submission as Tab No 6, in further correspondence with the Department attached to the appeal submission as Tab No 8 and in his letter of appeal, attached to the appeal submission as Tab No 1. In summary his evidence was that the money had been spent on repaying loan sharks, gambling and purchases for his children. That evidence may or may not have been the most compelling or persuasive but it was evidence nonetheless.
18. More significantly, it is unclear to me what the appeal tribunal means by ‘verified’ evidence. Although I cannot be certain, I suspect that the appeal tribunal reasoned that the appellant had not provided any further evidence – perhaps by way of written receipt - to corroborate his claimed expenditure. If that was the thinking of the appeal tribunal then it is clearly in error of law. In CIS/4022/2007, after analysing a series of authorities on the issue of the assessment of credibility, including R3/01(IB)(T), the Deputy Commissioner (as he then was) stated, at paragraph 52, as follows:
C5/13-14(JSA) was concerned with the issue of evidence in the context of the disposal of capital. However, I submit that the comments of the Chief Commissioner as referred to above are also pertinent to this case.
At the same time, however, as well as the claimant’s oral and written submissions in relation to the work carried out by him on his home, I submit that the tribunal in this instance also had before it evidence in the form of voluminous receipts ranging from 1998 up to 2009. I further submit that it is clear from evidence in the papers derived from these receipts as well as completed Departmental MI10 forms dated 29.04.16 that the claimant undertook what appears to be substantial repairs and improvements to his home from 1998 onwards. In doing so, he acquired numerous loans as detailed in paragraphs 14 to 24 of these observations totalling £291,000 approximately, excluding the initial mortgage of £44,867. It is also clear that some of these loans were taken out for the express purpose of carrying out repairs and improvements to the claimant’s home. Whilst it may be the case that not all of these works may fall within those outlined in paragraph 15(2) of Schedule 2 to the JSA Regulations, I submit that the decision to allow only £843.50 as eligible housing costs from all of the claimant’s combined borrowing and from all of the work carried out in his home is unreasonable and perverse.
I respectfully submit that the tribunal’s apparent acceptance and endorsement of the Department’s decision represents an error in law. The LQM failed to properly consider and determine whether or not any of the works carried out in the claimant’s home between 1998 and 2008-09 fell within the list contained within paragraph 15(2) of Schedule 2 to the JSA Regulations so as to be included as eligible housing costs for jobseeker’s allowance purposes. I also submit that the tribunal erred in allowing an amount of £843.50 for the installation of a kitchen worktop only to be taken into account as an eligible repair or improvement out of the 4 loans that had been expressly taken out for the purpose of carrying out such repairs and improvements.
I further respectfully submit that the tribunal was wrong to accept the Department’s determination that the sixth, seventh and eighth loans fell to be discounted automatically on the basis that the reasons given by the lender for this borrowing was to raise capital and to refinance previous borrowing.
This issue was addressed in detail in R(IS) 5/06 which considered the application of paragraph 16 of Schedule 3 to the Income Support (General) Regulations 1987, the income support equivalent to paragraph 15 of Schedule 2 to the JSA Regulations. In R(IS) 5/06, the claimant was the carer and appointee of her husband who was seriously ill and disabled. She was awarded income support from and including 1 April 2004. She applied on 16 July 2004 for help with housing costs in respect of a loan of £18,420 that she had taken out in August 2002. The loan was originally taken out to make other improvements and consolidate loans, but it was then discovered that her husband had an inoperable brain tumour. The loan was then used as to £2,200 to provide a stairlift, as to £9,000 to provide a bathroom with disabled access and as to £3,000 to provide a driveway and ramping to the front door for a wheelchair. Further enquiries revealed that this work was carried out in September and October 2002. It also transpired that the claimant had bought her home with a mortgage of £70,000. In response to a further enquiry as to the balance of £4,280 not covered by the three items referred to above, the claimant advised that £367.85 was paid for mortgage arrears, £3,480 was paid as the balance owing for window and door replacements and £432.15 was paid as a fee for loan administration. The lender confirmed that the only reason given to it for this loan was consolidation.
The Commissioner held:
“17. Provided that all the purposes for which the loan was originally taken out fell within paragraph 16(1), it is unnecessary to decide whether the loan was originally taken out solely for loan consolidation purposes or whether it was partly taken out, as the claimant contends, for other improvements. The decision-maker, unlike the representatives of the Secretary of State on the appeal, appears to have proceeded on the basis that part of the loan was taken out for other improvements, and went on to consider whether part of the loan was used for permitted improvements falling within paragraph 16. The decision-maker, however, only applied this test to the remaining £4,280 after most of the loan had been used to pay for the improvements effected for the benefit of the claimant’s husband.
18. The purposes for which the loan was taken out must be decided on all the evidence, and not just on the understanding of the lender. Although information given by the claimant to the lender must be strong evidence of the original purpose of the loan, it is not necessarily determinative of the issue. If, for example, the claimant can show that the amount she required to pay off the earlier loans was, say, £14,000 and she borrowed £18,480, then it must be clear that the balance was borrowed for another purpose, whatever the understanding of the lender.
19. Assuming that the loan of £18,480 was all for a purpose within paragraph 16(1), then the question arises as to the extent to which the loan was used for such a purpose. The £14,200 used for the stairlift, external ramp and bathroom adaptations was clearly used to adapt the dwelling for the special needs of a disabled person, her husband, and is therefore within paragraph 16 – see paragraph 16(2)(k).
20. Of the balance, £367.85 is stated to have been used to pay mortgage arrears. That does not fall within paragraph 16 unless the mortgage where the arrears existed was itself in respect of a loan which qualified under paragraph 16(1)(a) or (b). It might also fall within paragraph 15 if the mortgage arrears would have qualified under paragraph 15(1)(a) as a loan to defray monies applied to acquire an interest in the dwelling occupied as the claimant’s home.
21. Secondly, £3,480 is stated to have been used to pay the balance for window and door replacements. The decision-maker found that this could not be allowed because the DWP was already allowing £6,000 for window replacements on a loan for £15,000 taken out in July 1998. I am not clear on what basis that £6,000 was allowed, but if it was under paragraph 16, then to the extent that the £3,480 was used to repay all or part of the qualifying part of the 1998 loan, the new loan qualifies under paragraph 16.
22. Finally, £432.15 is said to have been used for a loan administration fee. I am unclear as to the loan in respect of which the fee is said to have been paid, and as to the reason for the fee. If the fee was part of the cost of paying off all or part of the 1998 loan, then it would seem to qualify to the same extent as the payment off of £3,480. If it was a fee deducted from the advance by igroup, however, then to that extent the loan does not appear to me to have been used for any of the purposes in paragraph 16. So too, if it was a charge because of the arrears, it would not have been a housing cost under the earlier loan (CIS/392/1994), so that paying it off would not fall within paragraph 16(1)(c).
23. For the reasons given, the tribunal and the decision-maker were in error of law in their construction of paragraph 16 . . . . ”
Taking this into account, I submit that the tribunal should have investigated whether or not some or all of sixth and seventh loans had been acquired and used by the claimant to carry out repairs and improvements to his home and, if so, to clarify what repairs and improvements were actually made to the home to establish if these could have been caught by paragraph 15(2). In addition, the tribunal should have made enquiries as to whether or not the previous borrowing that was consolidated by the eighth loan had originally been used for the purpose of carrying out repairs and improvements. I submit that the tribunal’s failure to fully investigate these matters represents an error in law.
I also do not agree with the LQM’s comments that the framework for housing costs within Schedule 2 to the JSA Regulations is not appropriate for self-build arrangements. As noted previously, the claimant appears to have borrowed money from other sources to finance each stage of the refurbishment of his home. He then appears to have replaced this borrowing with at least some of the loans acquired from his lender. I submit that this means the relevant loans fell within paragraph 15(1) of Schedule 2 and the question which then remained to be addressed was whether or not the particular home improvements and/or repairs fell within the parameters of paragraph 15(2). Consequently, it is my submission that the provisions in Schedule 2 were appropriate for dealing with the claimant’s self-build arrangements in this instance.
With all of the above in mind, I respectfully request that the Commissioner set the decision of the tribunal aside and remit this case to a new tribunal for determination. This is because further evidence and fact finding will be required concerning the eligibility of the loans acquired by the claimant as well as whether or not the relevant repairs and improvements carried out by the claimant fall within paragraph 15(2) of Schedule 2.
Further comments
If the Commissioner agrees with my submission that the decision of the tribunal be set aside, I submit that the new tribunal should consider the following issues.
Receipts addressed to …
The first of these issues relates to receipts for work carried out in 1999 to 2000 which had been addressed to the home of the claimant’s parents and discounted by the decision maker. The basis for this was there was no evidence that these were derived from work carried out at the claimant’s property at …
I submit that this was the wrong approach to adopt. The claimant has clearly stated that, whilst he bought the house in … in December 1997, he continued to live with his parents for a further 10 years up to 2007. It was only at this point that he was able to take up residence in his current home. I submit that there is no doubts that the claimant was refurbishing … during this time. I further submit that it would have been reasonable for the claimant’s receipts relating to work carried out in 1999 to 2000 to have been sent to him at his parent’s address if this was his home at that time. I submit that the new tribunal should take these receipts and invoices into account and clarify if they are associated with repairs and improvements that may fall within paragraph 15 of Schedule 2.
Receipts for work carried out prior to 21.12.98
A further issue relates to the treatment of receipts provided by the claimant that related to work carried out prior to 21.12.98 when the claimant acquired his second loan for £15,000. These receipts were disregarded in full by the Department and the tribunal and any repairs and improvements carried out prior to 21.12.98 were determined not to be eligible housing costs in accordance with paragraph 15 of Schedule 2. The basis for this was that these works were carried out prior to the second loan being obtained and thus were not financed by that borrowing.
I submit that this reasoning is flawed. The claimant’s programme for repairs and improvements were carried out under self-build arrangements. As already noted in paragraph 16 of these observations, this meant that capital in the form of loans would only be paid out by his lender in stages after the necessary work for each stage had been actually carried out. In these circumstances, it appears that the claimant first borrowed money from other sources such as his parents or through the use of his credit cards to pay for the work concerned. He then used the capital obtained from his lender to repay that money. In effect, it would appear that, with each subsequent loan, he used the money from his lender to pay off earlier loans which he had obtained from his parents or on credit for the purpose carrying out repairs and improvements. If this is accepted then the loan acquired in December 1998 was used to replace loans for repairs and improvements that had been carried out previously in that year. Consequently, I submit that the receipts derived from these repairs and improvements should not be discounted and the repairs and improvements should be investigated to establish if they fall within paragraph 15 of Schedule 2 so as to be possibly taken into account as eligible housing costs.
Application of the 6 month rule in paragraph 15(1) of Schedule 2
Linked to this is the application by the decision maker of the 6 month rule in paragraph 15(1) of Schedule 2. Some loans acquired by the claimant were determined not to represent eligible housing costs and were disregarded on a permanent basis as the evidence in the papers suggested that they had not been used to carry out repairs and improvements within 6 months of their acquisition. However, as noted above, if each of the loans under the self-build arrangement was used to defray earlier borrowing that had been obtained to facilitate the payment of repairs and improvements already carried out then the 6 month would not come into play.
If the Commissioner disagrees with this analysis and is of the opinion that the 6 month rule is relevant, I submit that the interpretation afforded to it by the decision maker and the tribunal in this case was incorrect. Under this interpretation, entitlement to assistance with housing costs for repairs and improvements can never be realised in relation to a loan if that loan is not used for such a purpose within 6 months or such longer period as is reasonable.
This approach was rejected by Commissioner Stockman in his decision, FMcC-v-Department for Communities (PC) [2016] NICom 70 or C2/15-16(PC). The Commissioner concluded:
“38. I conclude that the words qualifying entitlement in terms of the time in which the loan must be used for the statutory purpose apply to periods when the work of repairs and improvement has remained in prospect, but not to the period when the work of repairs and improvement has been done. Accordingly, there should be no restriction on entitlement to the appellant in the present case during any period when she had completed work of repairs and improvements, solely on the basis that she did not complete such work within six months of receiving a loan or such further period as might be reasonable in the circumstances.
39. The Department and the tribunal each interpreted the time qualification as precluding an award of an element of housing costs where repairs and improvements were carried out beyond a period of six months or further reasonable period from the receipt of the loan. I am satisfied that this interpretation involved the making of an error of law”.
Whilst this conclusion was arrived at in the context of an award of state pension credit, I submit that it is equally applicable to the present case. Therefore, the 6 month rule cannot apply so as to preclude loans from consideration as eligible housing costs in instances where the relevant repairs and improvements have been carried out. This is the case even if the carrying out of the repairs and improvements occurs beyond the 6 month period referred to in paragraph 15(1) of Schedule 2.
Conclusion
I submit that the tribunal erred in law in this instance for the reasons outlined in paragraphs 41 to 49 of these observations.
If the Commissioner agrees that the tribunal’s decision should be set aside, I submit that the new tribunal should have regard to the claimant’s circumstances up to and including 06.07.16 when the decision under appeal was made in relation to his application for assistance with housing costs. The tribunal should determine which loans fall to be taken into consideration with regards to repairs and improvements in order to establish those that fall within paragraph 15(1) of Schedule 2. The tribunal should then clarify what repairs and improvements were undertaken for each qualifying loan, determine which fall within the list of measures as contained in paragraph 15(2) of Schedule 2 and establish how much each of the repairs and improvements cost. This will allow the tribunal to work out how much of each loan should be taken into account as eligible housing costs. I further submit that this should be applied to all work that had been carried out by July 2016. Such an approach may also entail the making of inferences based upon the balance of probability where there is a lack of verified evidence.’
5. It is clear, therefore, that both parties have expressed the view that the decision appealed against was erroneous in point of law.
6. Accordingly, pursuant to the powers conferred on me by Article 15(7) of the Social Security (Northern Ireland) Order 1998, I allow the appeal, I set aside the decision appealed against and I refer the case to a differently constituted tribunal for determination.
7. I make the following directions:
(i) The Department is directed to prepare a further submission for the appeal before the differently constituted tribunal. The further submission should draw on the detailed analysis of the issues arising in the appeal undertaken by Mr Crilly and as set out above.
(ii) The further submission is to be shared with the appellant and his representative in advance of the appeal in order to allow them to prepare their own submissions in connection with the issues arising in the appeal.
(iii) The appeal is to be listed as an oral hearing.
(iv) A Presenting Officer from the Department is to attend the oral hearing.
(signed): K Mullan
Chief Commissioner
12 October 2017