UK Social Security and Child Support Commissioners' Decisions

[1995] UKSSCSC CSSB_6_1995 (07 December 1995)

R(SB) 1/96


Mr. J. G. Mitchell QC CSSB/6/1995

7.12.95

Recovery of overpayment - misrepresentation of amount of capital - recovery from the estate of deceased claimant

The claimant was in receipt of supplementary benefit from 1986 to 1988 and income support from 1988 to 1993. Following her death in 1993, it emerged from the inventory of her estate that she had capital in her bank account in excess of £3000. The tribunal upheld the adjudication officer's decision that the claimant was not entitled to either supplementary benefit or income support on the basis that she had misrepresented the amount of capital held by her and that, as a result, an overpayment of each benefit had been made which was recoverable from her estate. The executor of the claimant's estate appealed to the Commissioner.

Held, allowing the appeal, that:

applying Plewa v. Chief Adjudication Officer [1995] AC 249 [R(P) 2/95], the statutory authority for the recovery of the overpayment of supplementary benefit from 27 May 1986 to 5 April 1987 was section 20 of the Supplementary Benefits Act 1976 and not section 53 of the Social Security Act 1986 (consolidated as section 71 of the Social Security Administration Act 1992). Subject to that alteration, the decisions of the adjudication officer were upheld;

as a matter of Scots Law, the executor is eadem persona cum defuncto (the same person as the deceased). Accordingly, the position in Scotland is the same as that in England (see Secretary of State for Social Services v. Solly [1974] 3 All ER 922, R(SB)21/82 and R(SB)28/83);

questions of the recovery from, and consequential liability of, the executor were strictly outwith the Commissioner's jurisdiction.

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. My decision is that the decision of the social security appeal tribunal dated 13 September 1994 is erroneous in law and is set aside. The decision which I give in its place as the decision which the tribunal should have made is as follows. The statutory authority for the recovery of the overpayment of supplementary benefit in the period from 27 May 1986 to 5 April 1987 was section 20 of the Supplementary Benefits Act 1976 and not section 53 of the Social Security Act 1986 (consolidated as section 71 of the Social Security Administration Act 1992). Subject to that alteration the decisions of the adjudication officer issued on 24 November 1993 in this case are upheld for the reasons given below.

1. This is an appeal by the executor of the late Mrs. Sarah Dooley with leave on a question of law against the above mentioned decision of a tribunal on 13 September 1994 refusing the appeal by the executor against the decision of an adjudication officer which was in the following terms:

"I have reviewed each of the decisions from 29 April 1986 to 22 November 1987 of the adjudication officer awarding supplementary benefit from 27 May 1986 to 11 April 1988. I am satisfied that the decisions were given in ignorance of a material fact. My revised decision for the period from and including 27 May 1986 is that the claimant was not entitled to supplementary benefit because of capital (non-entitlement because of the level of capital held). As a result an overpayment of supplementary benefit has been made, amounting to £940.85, as shown on the attached schedule, and is recoverable from the estate of the late Mrs. Sarah Dooley. On 26 May 1986 and 30 September 1987, Mrs. Sarah Dooley misrepresented the amount of her capital.

I have reviewed each of the decisions from 22 November 1987 to 12 January 1993 of the adjudication officer awarding income support from 12 April 1988 to 18 January 1993. I am satisfied that the decisions were given in ignorance of a material fact. My revised decision for the period from and including 12 April 1988 is that the claimant was not entitled to income support because of capital (non-entitlement because of the level of capital held). As a result, an overpayment of income support has been made, amounting to £631.40, as shown on the attached schedule, and it is recoverable from the estate of the late Mrs. Sarah Dooley. On 12 April 1988 and each week thereafter, Mrs. Sarah Dooley misrepresented the amount of her capital.

The law used to make this decision

Social Security Administration Act 1992, sec. 25(1)(a)

Social Security Administration Act 1992, sec. 17, 71(1), (3) and (5)

Social Security Administration Act 1992, sec. 186 and Schedule 10

Social Security (Claims and Payment) Regulations, 49(1)

Social Security (Payments on Account) Regulations, 14(1), (2) and (3)"

2. The late Mrs. Dooley (whom for convenience I shall refer to as "the claimant") was in receipt of supplementary benefit from 27 May 1986 to 11 April 1988 and income support from 12 April 1988 to 18 January 1993. She represented throughout that time that she had no savings i.e. capital. Following her death on 13 January 1993 an inventory of her estate was lodged for Confirmation in March 1993 disclosing moveable estate by way of reckonable capital in a bank account in excess of £3,000. When the Benefits Agency became aware of this they wrote to the claimant's executor on 12 May 1993 notifying him that there could be a claim against the claimant's estate in respect of an overpayment of benefit. That letter was followed on 28 May 1993, after further investigation, by a definite intimation of claim with a request for details of the claimant's capital over the relevant period when she had been in receipt of means tested benefit. Information regarding the claimant's bank account was duly supplied in August 1993 and full details of the transactions in that account were supplied in October 1993. Thereafter an overpayment of benefit calculation was made and the decisions of the adjudication officer were issued on 24 November 1993 in the terms quoted in paragraph 2 above. The claimant's executor appealed to a social security appeal tribunal. Repayment of a social fund loan requested at the same time was not resisted.
3. At the tribunal hearing it was argued on behalf of the executor that as the decisions on review which were under appeal had not been made until November 1993 the executor was entitled to disburse the free estate and had done so and that accordingly no liability rested on the executry estate or the executor personally. The tribunal unanimously refused the appeal and held that the sum overpaid was recoverable from the estate of the claimant. The tribunal's reasons for their decision were stated as follows:

"The sums recoverable are so recoverable in terms of section 71 of the Social Security Administration Act 1992.

The person against who these sums are recoverable is the executive dative ... who prematurely disbursed the free proceeds of the estate.

The date of review was 24 November 1993 in excess of six months after intimation had been given to him that a claim against the estate was likely.

The executor dative had been advised that there was likely to be a claim against the estate and should have been put on warning not to disburse the free proceeds of the estate."

4. It has again been argued in this appeal that no liability rested upon the executry estate or the executor in the circumstances of this case. In my judgment the tribunal were correct to refuse to give effect to the contention on behalf of the executor that the decision on recovery of the overpayment came too late for liability to be established. The decision of the tribunal is however erroneous in law in my judgment for other reasons. The statutory authority for the decision on the recoverability of the overpayment was stated to be section 71 of the Social Security Administration Act 1992 (which consolidated section 53 of the Social Security Act 1986). However on 7 July 1994 it was held in the House of Lords case of Plewa v. the Chief Adjudication Officer [1995] AC 249 [now reported as R(P) 2/95] that the recoverability of any overpayments made before 6 April 1987 (when section 53 of the 1986 Act came into force) had to be determined according to the legislation in force at the time the overpayment occurred. The relevant provision of the legislation was section 20 of the Supplementary Benefits Act 1976. Neither the decision in Plewa nor the existence and effect of that decision were drawn to the tribunal's attention in the present case, with the result that they endorsed the wrong statutory authority for the recovery of the overpayment of supplementary benefit for the period up to 5 April 1987. Furthermore, the tribunal have not explained the basis of the transmission from the claimant to her estate of liability for such an overpayment and the tribunal also erred in my judgment in purporting to decide on the personal liability of the executor which was a possible consequential liability which it was not for the tribunal to enter upon. Finally, the tribunal did not set out or adopt the calculation of the overpayment relied upon by the adjudication officer and they went outwith their jurisdiction in purporting to decided that the social fund payment was recoverable, a matter which had in any event been conceded.
5. For the foregoing reasons I set aside the decision of the tribunal as erroneous in law. It is appropriate for me to exercise the power to substitute the decision which the tribunal should have given. Several points arise:

(1) The statutory authority for overpayment recovery. As mentioned above the statutory authority in relation to the period of overpayment which occurred up to and including 5 April 1987 was section 20 of the Supplementary Benefits Act 1976. Section 20 so far as material, provided as follows:

"20.-(1) If, whether fraudulently or otherwise, any person misrepresents, or fails to disclose, any material fact, and in consequence of the misrepresentation or failure-

(a) the Secretary of State incurs any expenditure under this Act ...

the Secretary of State shall be entitled to recover the amount thereof from that person".

Section 71 of the Social Security Administration Act 1992 provides, materially, as follows:

"71.-(1) Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure-

(a) a payment has been made in respect of a benefit to which this section applies; or ...

the Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose.

(2) Where any such determination as is referred to in subsection (1) above is made on an appeal or review, there shall also be determined in the course of the appeal or review the question whether any, and if so what, amount is recoverable under that subsection by the Secretary of State.

(3) An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it."

It is apparent that the terms of section 20 of the 1976 Act were essentially similar to those founded on by the adjudication officer in rendering recoverable from the person concerned overpayments of benefit resulting from his or her misrepresentation or failure to disclose material fact. Unlike section 71 of the 1992 Act however section 20 of the Supplementary Benefits Act 1976 did not in terms require that the awarding decisions under which the overpayment had been made should be reviewed and revised. Nevertheless a decision reviewing and revising those decisions on a relevant statutory ground, as was done in the present case, was entirely competent and appropriate in order to clarify the extent of the correction required to those awards and to support and explain the calculation of the resulting overpayment. Accordingly in relation to the initial period of the overpayment of supplementary benefit from 29 April 1986 up to and including 5 April 1987 the decision of the adjudication officer in this case which proceeded on the basis of review and revisal of the relevant decisions can be upheld, with the substitution of the appropriate statutory authority under section 20 of the Supplementary Benefits Act 1976 as the authority for the recoverability of the benefit in that period.

(2) Amount of overpayment. Detailed calculations have been produced at pages 33 and 34 of the appeal papers showing the computation of the weekly overpayment of supplementary benefit and income support together with details of single payments of supplementary benefit which the claimant was not entitled to receive. The resulting calculation of the overpayment is not now challenged and I adopt it.

(3) It was of course the claimant who during her lifetime made the misrepresentations founded upon by the adjudication officer. The making of those misrepresentations has not been challenged. But for the claimant's death the overpayment of benefit would of course have been recoverable from her. It was held in England in the case of Secretary of State for Social Services v. Solly [1974] 3 All ER 922, and subsequently in reported decisions R(SB) 21/82 and R(SB) 28/83, that the Department of Social Security was entitled to recover overpayments of benefit from the estate of a deceased claimant in such circumstances. The position is the same in Scotland. Under the law of Scotland the executor of a deceased person is eadem persona cum defuncto (the same person as the deceased). The executor stands in the shoes of the deceased person, see Globe Insurance Company v. Scotts Trustees [1849] 7 Bell's App 296. In relation to creditors the executor is therefore a debtor although his liability is limited to the estate committed to his charge. See Stewarts Trustees v. Stewarts Executor [1896] 23 R 739. In these circumstances the decision of the adjudication officer finding that the overpayment of benefit was recoverable from the deceased's estate was therefore correct and was correctly directed towards the executor having charge of that estate.

(4) Executor's objections to liability. The objections raised by the executor to liability for the overpayment are in my judgment not matters appropriate for decision in this appeal. The executor has claimed that the demand for payment came too late and after he had in any event distributed the estate among the beneficiaries, including himself. I note that he states that he had in fact distributed the estate in April 1993 less than six months after the date of death of the claimant when arguably he was not in safety so to do. However that may be, these issues appear to me to go beyond the scope of the adjudication on overpayments by the adjudicating authorities envisaged by either section 20 of the 1976 Act or section 71 of the 1992 Act. They relate to the enforceability or otherwise in particular circumstances of the transferred liability of the claimant's executor and are best left to be dealt with, in Court if necessary, should the Secretary of State decide to pursue recovery of the overpayment in this case. I note that a somewhat similar consequential question was touched upon by the Commissioner in R(SB) 28/83 where an overpayment of benefit had occurred through a failure to disclose capital, initially by a mentally ill claimant and thereafter by his brother who had been appointed as his receiver. The Commissioner observed in paragraph 12 of his decision:

"The deceased who received the benefit has died since the decision of the appeal tribunal and the Secretary of State will be entitled to recover the amount overpaid from his estate. The personal representative, in failing to disclose the deceased's assets, was acting as receiver (or agent) on the deceased's behalf. The personal representative is acting in a representative capacity only in this appeal and, if there is any question as to his liability to the estate or to the Court of Protection in connection with the repayment, those are not matters within my jurisdiction."

Whether or not the questions of consequential liability raised in the present case are strictly outwith my jurisdiction in the way in which those referred to by the Commissioner in R(SB) 28/83 clearly were, I am in no doubt that this appeal is not a convenient forum for settling these questions. The material facts need to be clearly established and the Secretary of State, who would have an obvious interest in the outcome, is not a party. For these reasons I decline to entertain these objections to the executor's liability in this appeal.

6. For the foregoing reasons my substituted decision is as set forth in paragraph 1 above. It follows that although the tribunal's decision has been set aside, for practical purposes the appeal of the claimant's executor is refused.

Date: 7 December 1995 (signed) Mr. J. G. Mitchell QC

Commissioner