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[1990] UKSSCSC CSB_631_1989 (17 May 1990)

R(SB) 3/91

Mr. V. G. H. Hallett CSB/631/1989

Recovery of overpayment - recovery of overpaid supplementary benefit from German invalidity benefit - whether it is necessary that the German benefit have been paid by virtue of Council Regulation (EEC) 1408/71

The claimant left Germany in 1935 at the age of 15. He has lived in the United Kingdom ever since. Under the German Reparation Law he was allowed to pay contributions to the German scheme to obtain German invalidity benefit. By the time this was awarded he had been in receipt of supplementary benefit for some years. Part of the arrears of invalidity benefit were paid by the German authorities to the Department of Social Security which recovered from them supplementary benefit paid to the claimant. The claimant's appeal against this recovery was allowed by the social security appeal tribunal on the ground that it was not permitted under the EEC Regulations and was therefore precluded under United Kingdom legislation also. The adjudication officer appealed.

Held that:

the tribunal's decision was erroneous in law, EEC legislation takes precedence over British domestic legislation where they are in conflict but there is no conflict in the present case; EEC Regulations 1408/71 and 574/72 do not contain any provision prohibiting recovery from one Member State's benefit by another Member State (para. 13);

for recovery to be made under British legislation (section 27(2) of the Social Security Act 1986 and regulation 9(1)(g) of the Payments on Account, Overpayment and Recovery Regulations) it is not necessary for the other State's benefit to have been awarded under EEC Regulation 1408/71; it is only necessary that the benefit be one mentioned in Article 4(1) of that Regulation (para. 19);

the benefit awarded to the claimant was German invalidity benefit within Article 4(1) and the German Reparation Law under which it was obtained did not exclude it under Article 4(4) (para. 20);

for recovery to be made under Article 111 of EEC Regulation 574/72 it is not necessary for the other State's benefit to have been awarded under Regulation 1408/71; it is only necessary for the claimant to be a person to whom that regulation applies (para. 24(1));

to be a person to whom Regulation 1408/71 applies it is not necessary to be a migrant worker who has been insured in two or more Member States; the claimant's insurance under the United Kingdom scheme alone brought him within Article 2(1) of EEC Regulation 1408/71 which prescribes persons covered (para. 24(5)).

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Decision

This adjudication officer's appeal succeeds. My decision is that the decision of the social security appeal tribunal dated 26 January 1989 is erroneous in law and I set it aside. It is expedient that I should make further findings of fact and give the decision that is appropriate in the light of those findings. My decision is that German invalidity pension arrears of £3,340.52 were properly withheld because supplementary allowance of the same amount would not have been paid had German invalidity pension been in payment from 24 November 1980 to 31 December 1981.

Representation

I held oral hearings of this appeal on 28 September 1989 and 19 February 1990. The adjudication officer was represented by Miss C. M. Warry of the Chief Adjudication Officer's Office. The claimant, who did not appear, was represented by Dr. F. Karsten, a distinguished consultant on Continental and International law.

Nature of this appeal

This appeal is concerned with the circumstances in which recovery of benefit paid under the law of Great Britain can be made out of arrears of benefit due from some other Member State of the European Community in respect of the same period as that for which the first mentioned benefit was paid.

The main questions arising for decision are:

(1) Is it necessary for the purposes of recovery of benefit paid under British domestic legislation that the arrears of benefit from which recovery is made should have been obtained by virtue of EEC Regulation 1408/71?

(2) Is it necessary for the purposes of recovery under Article 111 of EEC 574/72 that such arrears should have been obtained by virtue of EEC Regulation 1408/71?

The period in issue

The period in issue is 24 November 1980 to 31 December 1981.

The relevant law

The relevant law is set out in the appendix to this decision.

The adjudication officer's decision

(1) On a date not earlier than December 1987 and not later than 11 March 1988, an adjudication officer issued a decision of which the following particulars are set out in box l of page 1 of form AT2 (the appeal papers for the social security appeal tribunal):

"German invalidity pension arrears of £3,343.40 have been withheld because supplementary allowance of the same amount would not have been paid had German invalidity pension been in payment from 24 November 1980 to 31 December 1981."

(2) No copy of the actual decision has been produced and (as explained in Commissioner's decision CSB/799/1986) there is at present no obligation for an adjudication officer's decision to be in writing. But the date cannot be earlier than December 1987 for it is not in dispute that the first payment of German pension was not made until December 1987. The later date is fixed by form CF(N) 813 referred to in sub-paragraph (3) below.

(3) A letter (form CF(N) 813) informing him of the decision was sent to the claimant on 11 March 1988. This stated that arrears of £17,656.67 had been transferred to the DHSS from the social security authority of Germany and represented arrears of benefit from 24 November 1980 to 31 December 1981. Payment of £3,440.52 had already been made to the claimant by way of supplementary benefit which the supplementary benefit officer [sic] had decided would not have been paid if the claimant had received the foreign benefit. The Department had therefore decided under powers contained in the Supplementary Benefit Act Section 12 [sic] to withhold that amount of foreign benefit. Reference was also made to Article 111 of Reg. EEC 574/72. The letter stated that a remittance of £14,215 (less £11,291.06 which had been issued to the claimant on 23 February 1988) was enclosed. It also informed the claimant of his right to appeal against the adjudication officer's decision.

The claimant appealed against that decision. Dr. Karsten submitted, on his behalf, that it was not the idea of Reg. EEC 574/72 to enable any of the Member States to claim back social security payments from pensions which were established seven years earlier.

In his written submission on the appeal, the adjudication officer stated that the facts before him were:

"1. Mr. Jaffe is aged 68 and married. He has been in receipt of supplementary benefit for a number of years.

He made a claim for German invalidity pension but no payment was made until December 1987. German invalidity pension was awarded from 1 December 1975. The German Authorities paid the arrears of invalidity pension for the period 1 January 1982 to 30 March 1987 directly to Mr. Jaffe's solicitors. On 3 February 1988 they paid arrears for the period 1 December 1975 to 31 December 1981 amounting to £17,656.57 to the Overseas Branch of the DHSS. In accordance with Article 111 of EEC Regulation No. 514/72, the Overseas Branch withheld arrears which were due from 24 November 1980 to 31 December 1981.

The adjudication officer decided that supplementary benefit amounting to £3,440.52 would not have been paid had the German invalidity pension in payment for the period 24 November 1980 to 31 December 1981. He, however, revised the amount to be withheld and decided that the amount to be withheld should be £3,343.65."

He stated that his reasons for the decision to make the deduction were:

"(i) German invalidity pension is a prescribed benefit under paragraph (h) of regulation 3 of the Duplication and Overpayment Regulations.

(ii) the arrears of German invalidity pension were paid after the prescribed dates as defined in regulation 3(2) of the Duplication and Overpayments Regulations; the prescribed dates being 24 November 1980 to 31 December 1981.

(iii) the relevant amount the Secretary of State is entitled to receive out of the payment due to be paid to the claimant is £3,343.65 (for details of how this was calculated see sheet 2)

(iv) the relevant amount in (iii) above is the sum that has been paid by way of supplementary benefit which would not have been paid if the prescribed payment had been made on the dates in (ii) above."

The social security appeal tribunal's decision

The appeal tribunal heard the appeal on 3 November 1988 and 26 January 1989. The chairman's note states:

"DR. KARSTEN:

Brief resume of Mr. Jaffe's background and history of claim for German invalidity pension:

(a) Mr. Jaffe left Germany in 1935 when he was 15. He had to interrupt his education. Has lived in the UK ever since. Served in the British army for six years.

(b) End of 1956 the German Government published restitution law could claim damages if could not complete education. Mr. Jaffe received damages.

(c) In early 1970 German Government proclaimed further law to help people who lost any claims against the German Social Security system for pensions etc. with regard to payments made into the social security system prior to leaving Germany, paragraph 10a of the law indicates that persons whose education was interrupted entitled to make payments for contributions and to receive benefits as if they had worked in Germany. However required at least one contribution prior to leaving Germany. Mr. Jaffe had made no contributions as he was only 15 when he left.

(d) United Restitution Office on behalf of Mr. Jaffe attempted to make claims for German invalidity pension but no payment was made by 1986 despite numerous claims together with court proceedings to allow permission to make voluntary payments.

(e) Dr. Karsten took over the case in 1986.

(f) During the period of claim the UK had joined the EEC. However between the 1 January 1973 and the 31 March 1973 there was a period when the old reciprocal agreement was still valid and by chance Mr. Jaffe had made payments under the English Social Security system, eventually these were agreed as counted as payments made in Germany and gave a basis for the settlement of his claim for invalidity pension which was eventually paid out in 1986.

Argument is as follows:

Regulation 1408/71 does not apply to Mr. Jaffe and hence Regulation 12(1)(8) is not applicable because this EEC Regulation specifically deals with persons who are employed in EEC countries and migrate between the countries; Mr. Jaffe was never employed in Germany. Furthermore, paragraph 3 of Article 111 of Regulation 574/72 specifically states the circumstances in which one member country can re-claim benefit paid to a person who it has assisted - this is where payments are made under Regulation 1408/71 - the payments of invalidity pension were not made under 1048/71 [sic] for the reason that Mr. Jaffe was not an employed person at any time in Germany but were made outside the Regulations in view of the restitution laws passed by the German Government and hence no abatement can be made under EEC law which must supersede the UK law and in particular the last phrase of Regulation 3(1)(h) of the Duplication and Overpayment Regulations which states that an overpayment can be abated whether or not a benefit has been acquired under Regulation 1408/71 or not.

Accepts that invalidity benefit is one of the benefits set out under Regulation EEC No. 1408/71."

At the second hearing, his submissions were:

"Dr. Karsten

Conflict of law between EEC and UK law:

EEC law states only way under EEC Regulations one Member State can reclaim a benefit paid by another Member State is if these are paid under 1048/71 [sic].

UK law states in 31H that a Member State can reclaim benefit paid by another Member State whether or not paid under 1048/71 [sic] clear conflict not resolved by the Department saying 574/72 does not apply in this case."

The appeal tribunal's decision was:

"Appeal upheld. German invalidity pension arrears of £3,343.40 should not be withheld from Mr. Jaffe."

Their recorded findings of fact were:

"1. Mr. Jaffe is a 68 year old married man who has been in receipt of supplementary benefit for several years.

He has been awarded German invalidity pension from 1 December 1975 under the restitution laws passed by the German government and not as a result of a payment by him of any contributions under the German National Insurance Scheme.

Initially arrears of invalidity pension for the period 1 January 1982 to 30 April 1983 were paid to Mr. Jaffe's solicitors but thereafter arrears for the period 1 December 1975 to 31 December 1981 were paid to the Overseas Branch of the Department of Health and Social Security and an ajudication officer there decided that supplementary benefit amounting to £3,440.52 would not have been paid during the equivalent period had the invalidity pension been in payment at that time.

In view of the above the Department of Health and Social Security have withheld £3,343.40.

Under EEC law the only way in which a member state can reclaim a benefit paid by another member state to a person it has assisted is where payments are made under Regulation 1408/71 in conjunction with Regulation 574/72.

Mr. Jaffe's German invalidity pension is not paid under Regulation 1408/71.

Section 12(1) of the Social Security Act 1976 and Regulation 3(1)(h) of the Duplication and Overpayments Regulations make provision for abatement of benefits whether or not the benefit has been acquired by virtue of the provisions of Regulation 1408/71."

Their reasons for their decision were:

"The tribunal were satisfied that there was a conflict between the EEC regulations which clearly state that the only way a benefit can be reclaimed from an assisted person is based on the provisions of Regulations 1047/71 and 574/72 and the wording of Section 12(1) of the Social Security Act and regulation 3 of Supplementary Benefit Duplication and Overpayments Regulations wherein it is specified that it matters not whether a payment is made under the relevant EEC Regulation 1408/71. As the Department of Health and Social Security accept that Mr. Jaffe's German invalidity pension is not payable under Regulation 1408/71, the tribunal felt that they had to make a judgment as to whether or not EEC Regulations were paramount to the UK law and as in their opinion that was the case, they felt that 574/72 and 1048/71 overrode the provision in regulation 3(1)(h) of the Duplication of Overpayments Regulations and the words "whether or not the benefit has been acquired by virtue of the provisions of that Regulation" were unenforceable."

The adjudication officer applied for leave to appeal against this decision on the ground that the appeal tribunal erred in law in concluding that, where a person was not subject to the provisions of EEC Regulations 1408/71 and 574/72 regarding recovery of benefit, domestic legislation providing for recovery of supplementary benefit from foreign invalidity benefit was not enforceable.

Was the appeal tribunal's decision erroneous in law?

Yes, it was. It is not necessary for the purposes of recovery under British legislation that the arrears of benefit obtained elsewhere in the EEC should have been obtained by virtue of EEC Regulation 1408/71. EEC legislation takes precedence over British domestic legislation where they are in conflict. But there is no conflict in the present case. EEC Regulation 574/72 lays down the procedures for implementing EEC Regulation 1408/71 on the application of social security schemes within the Community. Now EEC Regulation 574/72 makes provision, in Article 111, for the recovery of assistance paid in one Member State where there is entitlement in another. These recovery provisions do not extend to persons to whom EEC Regulation 1408/71 does not apply. But neither regulation contains any provision in respect of such persons prohibiting recovery from one Member State's benefit by another Member State. It is not in dispute that if EEC Regulation 1408/71 does not apply no recovery can be made under the powers of EEC Regulation 574/72 but this does not have the effect of invalidating domestic legislation providing for such recovery. The appeal tribunal were wrong in law in concluding that the only way benefit could be recovered from an assisted person was through the provisions of the EEC Regulations and that if a person is not subject to those regulations no recovery can be made.

There was a further error of law. The appeal tribunal were considering the wrong act and regulations. As already pointed out, the adjudication officer's decision cannot have been made earlier than December 1987 nor later than 11 March 1988: see paragraph 7 above. Section 12(1) of the Social Security Act 1975 (the appeal tribunal's reference to 1976 is a clerical error) and regulation 3(1)(h) of the Supplementary Benefit (Duplication and Overpayment) Regulations 1980 (SI 1980 No. 1580) were not in force between those dates. They were replaced by section 27(2) (and para. 2 of Schedule 7) of the Social Security Act 1986 and paragraph 9(1) of the Social Security (Payments on Account and Recovery) Regulations 1987 (SI 1987 No. 491) both of which came into force on 6 April 1987. (The 1987 Regulations have since been replaced by SI 1988 No. 664 which came into operation on 11 April 1988 when income support replaced supplementary benefit).

For the above reasons, I set aside the tribunal's decision as erroneous in law.

It is expedient that I should give the decision that the tribunal should have given. All the necessary evidence is before me and I have had detailed submissions on all aspects of the appeal.

Dr. Karsten's argument before the tribunal was that EEC Regulation 1408/71 overrode British domestic legislation. This argument was accepted by the tribunal. They concluded that the only way benefit could be recovered from an assisted person was under Regulation 1048/71 (clearly a mistake for 1408/71) and 574/72. As explained in paragraph 13 above, this is wrong. It is not necessary for the purpose of recovery under British domestic legislation at the benefit to be recovered should have been obtained by virtue of EEC Regulation 1408/71.

Recovery of supplementary benefit under s. 27(1) Social Security Act 1986

German invalidity benefit paid in arrears could clearly be recovered directly from the claimant in a case where, for the period covered by the arrears, supplementary benefit had been paid to the claimant which would not have been paid if the German invalidity benefit had been paid on time, and not in arrears. German invalidity benefit is a "resource" in terms of regulation 11(2)(m) of the Supplementary Benefit (Resources) Regulations 1981: see Commissioner's decision R(SB) 28/85. It is accordingly "prescribed income" within the meaning of section 27(1) of the Social Security Act 1976: see regulation 8 of the Social Security (Payments on Account and Recovery) Regulations 1987. (These provisions are set out in the appendix to this decision). That section (read with para. 2 of Schedule 7 to the Act) enables recovery of supplementary benefit to be made from the claimant. There is nothing in the EEC Regulations to inhibit such recovery.

Recovery of supplementary benefit under s. 27(2)

(1) The Department of Social Security (formerly the Department of Health and Social Security) is entitled to receive, out of German invalidity benefit arrears due to the claimant, and in its hands, the amount of supplementary benefit which would not have been paid to the claimant if those arrears had been paid on time for the following reasons.

(2) Section 27(2) of the Social Security Act 1976 prevents duplication of "prescribed payments" by income support.

(3) Paragraph 2 of Schedule 7 provides that section 27 shall have effect in relation to supplementary benefit as it has effect in relation to income support.

(4) Regulation 9(1)(g) of the Social Security (Payments on Account and Recovery) Regulations 1987 defines prescribed payments. German invalidity benefit is such a payment. This is because German invalidity benefit is a "payment of benefit under the legislation of a Member State other than the United Kingdom" [i.e. West Germany] "concerning a branch of social security mentioned in Article 4(1) of Regulation (EEC) No. 1408/71" [i.e. invalidity benefit].

(5) It makes no difference whether or not that invalidity benefit was paid by virtue of the provisions of that Regulation 1408/71, because regulation 9(1)(g) expressly provides that it is to apply "whether or not the benefit had been acquired by virtue of the provisions of that Regulation".

(6) It is under section 27(2) that the Department of Social Security is retaining, out of German invalidity benefit arrears in its hands, the sum of £3,340.52. [I accept this figure, which was in the letter sent to the claimant on 11 March 1988 (para 7(3) above), in preference to that mentioned in para. 7(1) of £3,343.40 in para. (1) or £3,343.65 the amended repayment calculation. The sum in question is that actually retained by the Department, and it is the letter which specifies this sum].

Were the arrears awarded to the claimant a "prescribed payment"?

(1) Dr. Karsten now argues that the invalidity benefit arrears are not a "prescribed payment" because Article 4(1) of 1408/71 does not apply as the claimant is not and was not an employee in Germany who was migrant within the EEC. But regulation 9(1)(g) expressly provides that it applies to a benefit mentioned in Article 4(l) whether or not that invalidity benefit was paid by virtue of the provisions of that regulation. The sole question, therefore, is whether the arrears of German benefit are in invalidity benefit. In my judgment, there is no doubt that it is. The actual letter of 13 November 1987 from the German social security authorities (the Bundesversicherungsanstalt fur Angestellte) says (I quote from the official translation):

"DECISION

Entitlement is awarded to earnings incapacity pension for [the claimant], date of birth 9 July 1920.

The insurance risk materialised on 5 November 1975

Pension commences on 1 December 1975 . . ."

The letter states, later:

"You (a typing error for "Your") pension is paid under the provisions of Reg. 1408/71 in connection with 97 ff AVG"

A further letter from the German authority to the DHSS dated 6 November 1989 states:

"The award made by us is, indeed, a standard German invalidity pension and therefore a payment concerning the branches of social security referred to in Article 4(1) of Regulation (EC) 1408/71. It is based upon 294 voluntary contributions exclusively. Of these, a number were paid by [the claimant] under a regulation which allows persecuted people to contribute voluntarily in order to compensate damages in social security caused by nazi persecution. I must point out that this is a regulation of social security and not a restitutional one although a certain restitutional character cannot be denied."

In a further letter, the same authority writes (in answer to a Fax query of 19 January 1990) that, in general, FRG invalidity benefit schemes permit payment of invalidity benefit to persons who are outside of the country (other than temporarily). There were exceptions to the rule but they did not apply in the claimant's case. The exceptions could not be overridden by "restitution provisions". In the case of the claimant the payment was made by virtue of Article 10 of Reg. EEC No. 1408/71 exclusively.

Does Article 4(4) of EEC Reg. 1408/71 apply?

(2) Dr. Karsten also submits that the benefit which the claimant was awarded was obtained under a scheme excluded by Article 4(4) of Reg. EEC 1408/71, as a victim of nazi persecution. But in case 70/80 Tamara Vigier v. Bundesversicherungsanstalt fur Angestellte the European Court of Justice dealt with the case of a plaintiff who left Germany in 1933 at the age of ten and was allowed to make retrospective payment of contributions for invalidity benefit under the Reparation law. The court ruled that this law came within the scope of Reg. EEC 1408/71 and was not excluded by virtue of Article 4(4) of that regulation. I agree with the adjudication officer who in her written submission of 27 March 1990 points out that, for the reasons she gives, this was the law under which the claimant was permitted to pay contributions to the German scheme to security benefit. Article 4(4) does not apply.

Does Article 111 of EEC Reg. 574/72 apply?

Finally, Dr. Karsten questions the right of the German authorities to pay the claimant's benefit to the DHSS under paragraph 111 of EEC Regulation 574/72. He puts it this way (letter of 28 February 1990):

"Great Britain entered the EEC on the 1 January 1973. The British/German Insurance Agreement of 1960 was in force until the 31 March 1973. [The claimant] made voluntary contributions in England for these three months. According to the German/English Convention of 1960 and these voluntary contributions, he was afterwards in a position to make voluntary contributions to the German insurance for a number of years. An invalidity pension was then granted on the basis of the above mentioned British/German agreement. It is absolutely clear, that as he never paid insurance in Germany before his emigration this pension has nothing to do with order EEC 1408/71. Therefore, paragraph 111 of 574/72 cannot be used to ask for repayment of income support. It is not possible to levy execution in Germany except in special cases, which can be found in paragraph 51 to 54 of the Sozialgesetzbuch. A request to repay income support [no doubt this is a slip of the pen for supplementary benefit, which is in issue in the present case] to the British authorities does not belong to these special cases."

The basis of this argument is that the claimant was not a migrant worker and that Article 1408/71 and Article 574/72 only apply to migrant workers and since the claimant had worked only in England and not in Germany he was not a migrant worker.

So far as the British authorities are concerned, it does not seem to matter whether or not Article 574/72 applies. The DHSS has received the benefit in question and under section 27(2) of the Social Security Act 1986 (and the associated provisions mentioned above) they were entitled to do so. There would be no point in their paying over the relevant sum to the claimant. For they were entitled to recover the sum, in the event of it being paid to him, under section 27(1) of the Social Security Act 1986, as already explained.

Nevertheless, it is desirable to consider whether the procedure adopted, which expressly refers to Article 111 of Reg. EEC 574/72 was correct. In my view, it was, both as to the actual sum retained to satisfy the overpaid supplementary benefit and as to the far larger balance which was paid over by the British Authorities to the claimant. My reasons are as follows.

(1) As regards the sum retained. It is not necessary for the purposes of recovery under Article 111 of EEC Regulation 574/72 that arrears of benefit obtained elsewhere in the EEC should have been obtained by virtue of EEC Regulation 1408/71. It is sufficient that the claimant is a person to whom EEC Regulation 1408/71 applies.

(2) Article 111(3) provides for the recovery of assistance paid:

"when a person to whom the Regulation applies has received assistance in the territory of a Member State during a period in which he was entitled to benefits under the legislation of another Member State."

(3) The claimant did receive assistance by way of supplementary benefit during the period 24 November 1980 to 31 December 1981: see paragraph 7 above.

(4) During that period the claimant was entitled to invalidity benefit under the legislation of West Germany: see page 1 of the letter dated 13 November 1987 from the Bundesversicherungsanstalt fur Angestellte, where the award of pension for this period is specified.

(5) Dr. Karsten argued that Article 111 of Regulation 574/72 does not apply. I do not agree. "Regulation" for the purposes of Regulation 574/82 means Regulation EEC 1408/71: see the definition in Article 1(l) of Regulation EEC 574/82. Article 2(l) of EEC Regulation 1408/71 under the heading "Persons covered" provides that:

"This Regulation shall apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States . . ."

Form E205 GB completed by the Overseas Branch of the Department of Health and Social Security on 13 August 1986 shows that the total length of period of insurance by the claimant under the United Kingdom social security scheme for employed and self-employed persons was from 6 April 1940 to 3 March 1974, that the date of entry was 13 March 1941 and that he completed several insurance periods as an employed person and others as a self-employed person. The claimant was subject to the legislation, therefore, both as an employed and a self-employed person. He moved from one Member State (West Germany) to another (the United Kingdom). It was not necessary for him to have been subject to the legislation of or employed in West Germany for Regulation 1408/71 to apply. As the adjudication officer now concerned points out, Article 10 in relation to invalidity, old-age and certain other benefits, and Article 69, in relation to unemployed benefit, provide examples of provision of Regulation 1408/71 which can apply to persons who have only been subject to the legislation of one State. ["legislation" generally covers in respect of each Member State, statutes, regulations and other implementing measures, present and future, relating to the branches and schemes of social security covered by Articles 4(1) and (2): see the definition in Article 2(1)(j)]. So EEC Regulation 1408/71 does apply to the claimant. It follows that Article 111 of EEC Regulation 547/72 also applies to him.

(6) That Article, in its third paragraph goes on to provide that the body which gave the assistance (in this case it is the United Kingdom) may, if it is legally entitled to reclaim the benefits due to the claimant, (as it is, under British domestic legislation, as explained in paras. 19 and 20 above) request the institution of any other Member State responsible for the payment of benefits in favour of that person (i.e. West Germany) to deduct the amount of the assistance paid from the amount which the latter (West Germany) pays to the claimant.

(7) The procedure adopted in the present case, and no doubt in other cases, since form CF(N) 813 is a printed form, envisages payment of arrears of benefit by a Member State (other than the UK) to the UK and deduction by the UK of the amount corresponding to supplementary benefit already paid for that period. The balance if any is paid by the UK to the claimant. I can see no objection to this procedure, under which the UK acts as agent for the other Member State. The practice was considered in paragraphs 8 and 9 of decision CSB/801/1989 given by Mr. Commissioner Rice and (dated 23 April 1989 and promulgated while the present decision was in draft) as quite unobjectionable.

My decision is set out in paragraph 1.

Date: 17 May 1990 (signed) Mr. V. G. H. Hallett

Commissioner

APPENDIX

SOCIAL SECURITYACT 1986

(1) Section 27 of the Social Security Act 1986 came into force on 6 April 1987. It provides, in sub-sections (1) and (2):

"27.-(1) Where –

(a) a payment by way of prescribed income is made after the date which is the prescribed date in relation to the payment; and

(b) it is determined that an amount which has been paid by way of income support would not have been paid if the payment had been made on the prescribed date,

the Secretary of State shall be entitled to recover that amount from the person to whom it was paid.

(2) Where –

(a) a prescribed payment which apart from this subsection falls to be made from public funds in the United Kingdom or under the law of any other member State is not made on or before the date which is the prescribed date in relation to the payment; and

(b) it is determined that an amount ("the relevant amount") has been paid by way of income support that would not have been paid if the payment mentioned in paragraph (a) above had been made on the prescribed date,

then –

(i) in the case of a payment from public funds in the United Kingdom, the authority responsible for making it may abate it by the relevant amount; and

(ii) in the case of any other payment, the Secretary of State shall be entitled to receive the relevant amount out of the payment."

(2) Section 73 of the Act provides:

"73. Schedule 7 to this Act shall have effect for the purpose of making provision in relation to the benefits there mentioned."

(3) Schedule 7 provides in paragraph 2:

"2. Section 27 above shall have effect in relation to supplementary benefit as it has effect in relation to income support."

THE SUPPLEMENTARY BENEFIT (RESOURCES) REGULATIONS 1981

Paragraph 11 of the Supplementary Benefit (Resources) Regulations 1981 [SI 1981 No. 1527] provided:

"11 (1) . . . . . . . . . . .

(2) There shall be treated as income and taken into account in full –

. . . . . . . . . . . . . . . . . . . . . . . . . .

(m) any payment made under the legislation of, or under any scheme operating in, any country outside Great Britain which is analogous to any income to which the preceding sub-paragraphs relate:

. . . . . . . . . . ."

THE SOCIAL SECURITY (PAYMENTS ON ACCOUNT AND RECOVERY) REGULATIONS 1987 [1987 No. 491]

These regulations came into force on 6 April 1987 and remained in force until replaced by SI 1988 on 11 April 1988. Paragraphs 7, 8 and 9 provide:

"Duplication of payments and supplementary benefit

References in this Part to section 27 of the Act (prevention of duplication of payments) are to the provisions of that section as applied to supplementary benefit by section 73 of, and paragraph 2 of Schedule 7 to, that Act.

Duplication and prescribed income

-(1) For the purposes of section 27(1) of the Act (recovery of amount of benefit awarded because prescribed income not paid on prescribed date), a person's prescribed income consists of resources which are required by Part III of the Supplementary Benefit (Resources) Regulations 1981(a) to be taken into account in the calculation of his income resources.

(2) The prescribed date in relation to any payment of income prescribed by paragraph (1) is –

(a) where it is made in respect of a specific day or period, that day or the first day of the period;

(b) where it is not so made, the day or the first day of the period to which it is fairly attributable.

Duplication and prescribed payments

-(1) For the purposes of section 27(2) of the Act (recovery of amount of benefit awarded because prescribed payment not made on prescribed date), the payment of any of the following is a prescribed payment: -

(a) any benefit under the Social Security Act 1975(b) other than any grant or gratuity;

(b) any child benefit;

(c) any family income supplement;

(d) any war disablement pension or war widow's pension (c) which is not in the form of a gratuity and any payment which the Secretary of State accepts as analogous to any such pension;

(e) any allowance paid under the Job Release Act 1977(d);

(f) any allowance payable by or on behalf of the Manpower Services Commission to or in respect of a person for his maintenance for any period during which he is following a course of training or instruction provided or approved by that Commission;

(g) any payment of benefit under the legislation of any member State other than the United Kingdom concerning the branches of social security mentioned in Article 4(1) of Regulation (EEC) No. 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community(a), whether or not the benefit has been acquired by virtue of the provisions of that Regulation.

(2) The prescribed date, in relation to any payment prescribed by paragraph (1) is the date by which receipt of or entitlement to that benefit would have to be notified to the Secretary of State if it were to be taken into account in determining, whether on review or otherwise, the amount of or entitlement to supplementary pension or allowance."

EEC REGULATION 1408/71

Articles 1(1)(j) (1st para.) 2, 4, 10 (1st para.) and 69 (1st para.) provide:

"(i) 'stay' means temporary residence;

(ii) 'legislation' means in respect of each Member State statutes regulations and other provisions and all other implementing measures, present or future, relating to the branches and schemes of social security covered by Article 4(1) and (2).

. . . . . . . . . .

Article 2

Persons covered

This regulation shall apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, as well as to the members of their families and their survivors.

In addition, this regulation shall apply to the survivors of employed or self-employed persons who have been subject to the legislation of one or more Member States, irrespective of the nationality of such employed or self-employed persons, where their survivors are nationals of one of the Member States, or stateless persons or refugees residing within the territory of one of the Member States.

This regulation shall apply to civil servants and to persons who, in accordance with the legislation applicable, are treated as such, where they are or have been subject to the legislation of a Member State to which this regulation applies.

......

Article 4

Matters covered

This regulation shall apply to all legislation concerning the following branches of social security:

(a) sickness and maternity benefits;

(b) invalidity benefits, including those intended for the maintenance or improvement of earning capacity;

(c) old-age benefits;

(d) survivor's benefits;

(e) benefits in respect of accidents at work and occupational diseases;

(f) death grants;

(g) unemployment benefits;

(h) family benefits.

This regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to schemes concerning the liability of an employer or ship owner in respect of the benefits referred to in paragraph 1.

The provisions of Title III of this regulation shall not, however, affect the legislative provisions of any Member State concerning a ship owner's liability.

This regulation shall not apply to social and medical assistance, to benefit schemes for victims of war or its consequences, or to special schemes for civil servants and persons treated as such.

. . . . . . . . . .

Unemployed persons going to a Member State other than
the competent State

Article 69

Conditions and limits for the retention of the right to benefits

An employed or self-employed person who is wholly unemployed and who satisfies the conditions of the legislation of a Member State for entitlement to benefits and who goes to one or more other Member States in order to seek employment there shall retain his entitlement to such benefits under the following conditions and within the following limits:

(a) before his departure, he must have been registered as a person seeking work and have remained available to the employment services of the competent State for at least four weeks after becoming unemployed. However, the competent services or institutions may authorize his departure before such time has expired;

(b) he must register as a person seeking work with the employment services of each of the Member States to which he goes and be subject to the control procedure organized therein. This condition shall be considered satisfied for the period before registration if the person concerned registered within seven days of the date when he ceased to be available to the employment services of the State he left. In exceptional cases, this period may be extended by the competent services or institutions;

(c) entitlement to benefits shall continue for a maximum period of three months from the date when the person concerned ceased to be available to the employment services of the State which he left, provided that the total duration of the benefits does not exceed the duration of the period of benefits he was entitled to under the legislation of that State. In the case of a seasonal worker such duration shall, moreover, be limited to the period remaining until the end of the season for which he was engaged. "

EEC REGULATION 574/72

Article 1 and Article 111 (para. 3) provide:

"Article 1

Definitions

For the purposes of this Regulation:

(a) 'Regulation' means Regulation (EEC) No. 1408/71;

(b) 'implementing Regulation' means this Regulation;

(c) the definitions in Article 1 of the Regulation have the meaning assigned to them in the said Article.

Article 111

When a person to whom the regulation applies has received assistance in the territory of a Member State during a period in which he was entitled to benefits under the legislation of another Member State, the body which gave the assistance may, if it is legally entitled to reclaim the benefits due to the said person, request the institution of any other Member State responsible for the payment of benefits in favour of that person to deduct the amount of the assistance paid from the amounts which the latter pays to the said person.

When a member of the family of a person to whom the regulation applies has received assistance in the territory of a Member State during a period in which the said person was entitled to benefits under the legislation of another Member State in respect of the member of the family concerned, the body which gave the assistance may, if it is legally entitled to reclaim the benefits due to the said person in respect of the member of the family concerned, request the institution of any other Member State responsible for the payment of such benefits in favour of that person to deduct the amount of the assistance paid from the amounts which the latter pays to the said person in respect of the member of the family concerned.

The institution responsible for payment shall make the deduction under the conditions and within the limits provided for such setting - off by the legislation which it administers, and shall transfer the amount deducted to the creditor body."