UK Social Security and Child Support Commissioners' Decisions

CIS 11861/96 (*3/97) [1997] UKSSCSC 1 (10th January, 1997)

Commissioner's File: CIS 11861/96 (*3/97)
Mr Commissioner Howell QC
10 January 1997

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
LOCAL GOVERNMENT FINANCE ACT 1988
Community Charges (Deductions from Income Support) (No 2) Regulations 1990

APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Claim for: Income Support
Appeal Tribunal: Manchester SSAT

[ORAL HEARING]

1. My decision is that the decision of the social security appeal tribunal given on 24 April 1995 was erroneous in point of law. I set it aside and, as I was invited to do by both parties to the appeal, I give instead the decision I consider appropriate on the evidence before the tribunal and the later evidence included among the papers before me. This is that (1) it has not been shown that the claimant is or was at any material time a debtor for the purposes of the Community Charges (Deductions from Income Support) (No 2) Regulations 1990 SI No 545; and consequently (2) it has not been shown that the most basic condition to authorise operating the machinery in those regulations leading to a deduction from her income support for community charge liabilities was met; so that (3) the adjudication officer's decision of 26 January 1995 purporting to direct that an amount of £2.30 per week shall be paid directly to Oldham Metropolitan Council in order to recover a community charge debt of £456.10 is invalid, and is set aside.

2. I held an oral hearing of this appeal at which the claimant appeared and conducted her case in person and the adjudication officer was represented by Miss Rachel Perez of the Solicitor's Office, Department of Social Security. I am sorry the production of this written decision has been delayed for so long after the hearing.

3. The claimant is a lady now aged about 50 whose husband has left her and who has a grown up son who suffers from a mental disability. Having no other means of support she has been receiving income support since October 1994, and this appeal arises out of an attempt on the part of the department to recover an alleged debt for poll tax claimed by the Oldham Metropolitan Borough Council out of her income support.

4. The provisions entitling this to be done on the application of a local authority will have to be looked at in more detail in a moment; but the issue on the appeal, put quite simply, is that the primary legislation only authorises any such deductions to be made where there is a liability order against the claimant and an outstanding sum in respect of which that liability order was made, and the claimant here disputes that this is so in her case at all. She said before the tribunal, and maintained before me, that the whole attempt to operate the procedure against her is the result of a muddle amid the chaotic conditions prevailing in the town hall as a result of the difficulties experienced with poll tax; and that she was actually in credit on her community charge account at the material time, as evidenced by an account she produced to the tribunal and to me from the local authority acknowledging that they owed her about £111 rather than her owing anything.

5. The contrary contention, maintained by the adjudication officer before me and accepted by the tribunal, is that none of this matters: even if everything she says is true there is nevertheless no way in which the adjudication officer or the tribunal or I (or presumably the Court of Appeal or the House of Lords) can stop the machinery grinding and deductions being made from her income support; and no necessity on anybody's part to demonstrate that the conditions for operating the machinery approved by Parliament have been complied with at all.

6. Consistently with this approach, no evidence was placed before the tribunal to support the assertion that there was an outstanding amount due from the claimant under a liability order. Even the application document in which this assertion was made by the local authority was not produced to the tribunal, although it has been included in the papers before me. The tribunal accepted the adjudication officer's submission that all that was necessary was that a reference should have been made to an adjudication officer by the Secretary of State to calculate whether the claimant had available income support to meet the deduction, as had undeniably been done.

7. The legislation permitting unpaid poll tax liabilities to be recovered out of income support where there is a proper liability order is contained in s.22(3) and sch. 4, Local Government Finance Act 1988. This legislation (which continues in effect as regards any community charge in respect of a day falling before 1 April 1993 by virtue of s.118 Local Government Finance Act 1992) provides by para 6(1) of sch. 4 that:

"(1) Regulations under this schedule may provide that where a magistrates' court has made a liability order against a person (the debtor) and the debtor is entitled to income support within the meaning of the Social Security Act 1986 - (a) the authority concerned may apply to the Secretary of State asking him to deduct sums from any amounts payable to the debtor by way of income support, in order to secure the payment of any outstanding sum which is or forms part of the amount in respect of which the liability order was made, and (b) the Secretary of State may deduct such sums and pay them to the authority towards the satisfaction of any such outstanding sums.
(2) The regulations may include - (a) provision allowing or requiring adjudication as regards an application, and provision as to appeals and reviews ; (b) a scheme containing provision as to the circumstances and manner in which and times at which sums are to be deducted and paid, ... and provision as to the circumstances in which the Secretary of State is to cease making deductions; (c) provision requiring the Secretary of State to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of the notification; (d) provision that, where the whole amount to which the application relates has been paid, the authority shall give notice of that fact to the Secretary of State."

8. Although sub-para (2) thus appears to envisage that the provisions for adjudication, appeal and review under (a) are to apply as regards "an application", the regulations themselves have emerged in a much more restricted form. The deduction regulations sought to be applied to the claimant are the 1990 Regulations referred to above, which were expressed to come into force on 1 April 1990. Under reg. 1 "debtor" is defined as a person against whom a liability order has been made, and "liability order" means an order under reg. 29 of the Community Charges (Administration and Enforcement) Regulations 1989 SI No 438. This is an order made by a magistrates' court, of the kind envisaged by para 6(1) of sch. 4 to the Act referred to above.

9. Under reg. 2(1), where a debtor is entitled to income support, an authority may apply to the Secretary of State by sending an application in respect of the debtor to an appropriate social security office asking the Secretary of State to deduct sums from any amount payable to the debtor by way of income support. Reg. 2(2) stipulates that such an application shall be in writing and shall contain certain specified particulars including the name and address of the debtor, the name and place of the court which made the liability order, the date it was made and the total amounts of arrears specified in the order and to be deducted. Under reg. 2(3) where it appears to the Secretary of State that an application from an authority gives insufficient particulars to enable the debtor to be identified, he may require the authority to furnish such further particulars as may reasonably be required.

10. Reg. 2(4) which is the one primarily at issue in the present case is as follows:

"(4) Subject to paragraph (5) where the Secretary of State receives an application from an authority, he shall refer it to an adjudication officer who shall determine the following questions -
(a) whether there is sufficient entitlement to income support to enable the Secretary of State to make any deduction -
(i) where a liability order is made against a single debtor ... at a rate of 5% of the personal allowance set out in Schedule 2 to the Income Support (General) Regulations 1987 paragraph 1(1)(e) (single claimant aged not less then 25); ... and if the amount payable by way of income support to the debtor were to be 10 pence or more after any such deduction, the adjudication officer shall determine that there is sufficient entitlement;
(ii) the priority of any sum to be deducted as against payments to third parties where there is insufficient entitlement to income support to meet the deduction in respect of arrears of community charges and those payments to third parties, and the following priorities shall apply -" [and there then follows a list of priorities establishing a pecking order between various types of liability as regards which deduction may be made from income support under various provisions, such as for example the payment of arrears of mortgage interest direct to a lender]...
"...and the adjudication officer shall determine these questions so far as is practical within 14 days of receipt of the reference."
Then under reg. 2(6) it is provided that "Subject to any right of appeal or review under these Regulations, the decision of the adjudication officer shall be final."

11. What happens after the adjudication officer has made his pronouncement on the questions referred to him under reg. 2(4) is dealt with by regs. 3 and 4. Reg. 3 requires the Secretary of State to notify the debtor in writing of the adjudication officer's decision as soon as is practicable after he receives that decision, together with a notification of his right of appeal. Then under reg. 4(1) the Secretary of State is placed under a duty to make deductions from income support, but only where the debtor is entitled to income support throughout any benefit week and the amount to which he is entitled is sufficient to enable him to make the deductions; and only in respect of one application at a time.

12. The condition about the income support entitlement being sufficient appears to be satisfied if the adjudication officer has so determined, which he is bound to do under reg. 2(4)(a) in every case where the claimant will be left with the not very large sum of 10 pence of income support to provide for his needs for the week. Reg. 4(2) imposes an unqualified duty on the Secretary of State to make deductions from income support at a time which corresponds to the payment of income support to the debtor, save that he is to cease making deductions when any one of five conditions applies, such as that entitlement to income support ceases or that the debt in respect of which he was making the deductions is discharged. Finally it is provided by reg. 4(3) that payments are to be made to the local authority at such intervals as the Secretary of State may decide.

13. The remaining substantive regulations 5 to 11 inclusive and schedules 1 and 2 to the regulations contain detailed provisions for review of any decision made by the adjudication officer under the regulations, together with machinery for appeals from the decisions of adjudication officers to a social security appeal tribunal and thence to a Commissioner, and the procedure to be adopted for such appeals. As observed by Mr Commissioner Walker in a case on the corresponding Scottish legislation on file CSIS 55/91 these constitute a self contained code, though I echo his observation that it seems a cumbersome procedure to achieve the same practical effect as the normal procedural regulations governing any decision of an adjudication officer on a social security matter.

14. The striking feature however of the machinery set up by the deduction regulations is that while there are all these elaborate provisions for rights of appeal and review in the normal way as regards decisions of adjudication officers on the quantification and priority questions set out in reg. 2(4), no provision whatever is made for any appeal against any decision or action by the Secretary of State; and nothing at all is said about how a claimant who wishes to dispute the lawfulness of the whole operation of the machinery against him is to proceed.

15. If the submissions on behalf of the adjudication officer are right, a claimant who wishes to say that he is not a debtor at all, and that therefore the attempt to take away the income support to which he is otherwise entitled is without lawful authority, is not provided with any avenue of appeal by which he can do so. That would mean that the provision contemplated by Sch 4 para 6(2)(a) in the primary legislation for adjudication as regards an application, and provision as to appeals and reviews, would not have been carried into effect as regards the most basic question, namely the validity or otherwise of the initial application by the local authority for a deduction to be made in its favour.

16. The consequence would be that the only remedy for a claimant who wished to bring an appeal against the whole basis of the application would be not by way of an appeal at all but by way of an application for judicial review, for which leave and in practice legal representation would be required, and the claimant would have to take his or her place in the already overburdened lists for judicial review hearings once these two hurdles were surmounted. Apart from the dubious practicality of this as a remedy for a claimant in receipt of income support facing a deduction of £2.30 a week, this result leaves a most puzzling discrepancy in the scheme of the regulations between the detailed rights and procedures laid down for appeals on the motes of the calculation and priorities of amounts to be deducted, and the total absence of such rights to deal with the beam of whether the conditions exist for making a deduction in the first place.

17. I note also that although under reg. 2(3) the sufficiency of the particulars given in an application is a matter for the Secretary of State to determine, there is no provision under which he is required or empowered to make any determination on whether the conditions for making an application at all are met: crucially in the context of the present case, on whether what the local authority says about the existence of a liability order is correct. His duties under this regulation, and under regs. 3 and 4 dealing with notification and the actual making of deductions once these are quantified, are almost entirely mechanical, and mandatory. The only two matters on which the Secretary of State appears to be required to make any decision at all are whether the written application from the local authority contains sufficient particulars to enable the debtor to be identified, under reg. 2(3); and at what intervals he is to hand over to the local authority any money he in fact collects out of claimant's income support, under reg. 4(3). It is not perhaps surprising that the regulations do not contain provisions for appeal as regards the exercise by the Secretary of State of these mechanical functions: they hardly involve anything to appeal about. In particular, they do not extend to his having to make any form of decision on the validity or otherwise of the whole process that is set in motion by the local authority sending an application to him in the prescribed form.

18. Moreover, the mandatory nature of the Secretary of State's functions under reg. 4 appears to make it inevitable that once the appeal process provided has been gone through and an adjudication officer's decision that there is income support available for deduction confirmed, the Secretary of State will necessarily start making the deductions from the claimant's income support under reg. 4(2). He would be in breach of the duty imposed by that regulation if he did not.

19. The practical reality therefore is that a tribunal considering an appeal under these regulations must know that the inevitable consequence of a decision confirming that of an adjudication officer under reg. 2(4) that a "debtor" has sufficient income support entitlement to meet a deduction, is that the claimant so identified as a "debtor" will have the money taken out of his or her legal entitlement to income support. A tribunal in these circumstances must also know that there is no provision under the regulations for raising with the Secretary of State or any separate tribunal the question of whether that process is a lawful one under the relevant primary legislation.

20. In these circumstances, it seems to me that a tribunal hearing an appeal under these regulations must necessarily be concerned with the major question of whether the whole application, whose one end is to take away money from the claimant which it has otherwise been enacted by Parliament that he or she is to have for basic subsistence, is or is not being conducted in accordance with statutory powers. If the whole thing is in fact being done without any lawful authority, the tribunal's decision is being used as the final stage in what is really no better than a piece of banditry.

21. I have carefully considered the arguments addressed to me to the effect that this is no business of the tribunal or a Commissioner, but I have no doubt where the true answer lies. I hold that in a case such as the present where the jurisdictional issue of whether the claimant is a "debtor" at all within the meaning of the regulations is clearly raised on reasonable grounds by the claimant, the tribunal is necessarily concerned to be satisfied that the basic conditions for the operation of the whole procedure exist: namely that there is in fact a subsisting liability order, properly obtained, under which there is outstanding a sum due of the amount sought to be deducted from income support. These appear to me to be the minimum conditions laid down by Parliament to justify the operation of the procedure at all under para 6 sch 4 to the 1988 Act.

22. I do not think this is in any way imposing an excessive duty on either adjudication officers or tribunals. It ought to be perfectly easy to establish these basic jurisdictional facts in every case where a deduction is sought, by producing the relevant magistrate's court order and an up to date account or certificate from the local authority borough treasurer confirming the liability still outstanding. These seem to me to be basic requirements of common sense and justice that should be complied with by anyone seeking to use a legal procedure to get money out of someone else, and I decline for my part to hold that the claimant's right to a minimum standard of fairness in these respects has in some way been excluded by the way these particular regulations are worded.

23. On behalf of the adjudication officer Miss Perez drew to my attention the decision of the Court of Session under the corresponding Scottish legislation on appeal from the decision of the Commissioner in case CSIS 55/91 to which I have already referred. The issue in that case was whether a claimant was entitled to raise, by way of appeal to the tribunal and the Commissioner, arguments on whether the particulars supplied by the local authority to the Secretary of State in its application under reg. 2(2) were sufficient. The Court of Session, wholly rightly in my respectful view, confirmed the decision of Mr Commissioner Walker that he was not; the sufficiency or otherwise of the form and content of the application document was a matter for the Secretary of State and not for the adjudication officer or the tribunal. As Lord McCluskey observed (Murdoch v. Chief Adjudication Officer, unrep. Court of Session 22 April 1993, transcript pp 13-14) it was for the Secretary of State to determine whether or not the application from the levying authority was adequate for his purposes. Even assuming that the application in this case was deficient in the respects alleged, that did not automatically make the application a nullity. The Secretary of State might well have rejected the application on the ground of some important deficiency in its form; but he was entitled not to do so. Any question of the validity of such an application was for him to determine; whatever determination he makes in that regard, the regulations provide no form of statutory appeal in respect of it. Accordingly, the court declined to accept the contention that an application by a local authority would be invalid simply because it did not contain every detail envisaged by reg. 2(2), as the Secretary of State was entitled to treat it as sufficient for his purposes. On the facts of the case, they held that the particulars given did comply with the requirements of reg. 2(2) in any event.

24. In my judgment, it is apparent from the passage I have referred to that their Lordships were concerned in that case with questions of formal validity of the application alone. Their decision makes no reference to the entirely different issue of whether the precondition in the primary legislation for making any application at all had been fulfilled; and if anything the distinction drawn between formal deficiencies in the particulars given in an application, and the whole application being a complete nullity, appears to me to support rather than detract from the conclusion I have arrived at approaching the matter from basic principle.

25. In the present case, neither the alleged liability order against the claimant, nor any evidence from the local authority to substantiate the assertion that an amount was due from the claimant, was produced to the tribunal at all. Since they accepted the adjudication officer's submission that the lawfulness or otherwise of the whole procedure was nothing to do with them, the tribunal failed altogether to satisfy themselves that the process in which they were being asked to play a crucial part was a lawful one. Nor was there evidence before them on which they could properly be so satisfied, on a matter involving taking money away from the claimant to which she was lawfully entitled. She had clearly and on reasonable grounds raised an issue about whether the whole process was unlawful, and produced unanswered evidence from the council which appeared to substantiate what she said. In my judgment the tribunal were wrong in the circumstances to ignore the issue. For those reasons, the decision of 24 April 1995 was in my judgment erroneous in point of law and I set it aside.

26. Both parties submitted that if I were to take this course I should give the final decision on the case myself instead of remitting it to another tribunal. It was not argued before me that I had no power to do this, although this legislation has the further peculiarity that (unlike the provisions setting out the appellate jurisdiction of the Commissioners in Social Security and Child Support matters) it nowhere says what a Commissioner is to do with a case that comes before him on appeal under reg. 5(2). For the sake of completeness, I record that in my judgment the conferring of a full right of appeal on law to a judicial body necessarily involves a power to hear and determine all issues of law in the case and to give such decision on them as the justice of the case may require. A jurisdiction of this kind is wider than a power of judicial review where the scope of judicial intervention may be limited to setting aside inferior decisions or making declarations, with any corrective action being for some other body to implement. A right of appeal on law against a decision must in my judgment mean that the appellate body is able to correct the decision itself. I therefore consider the parties were right to assume that I had the jurisdiction to substitute my own decision in this case, and I consider it the proper course to take in the circumstances.

27. The terms of the adjudication officer's decision which the tribunal was asked to confirm (page T1a) were that "An amount of £2.30 per week shall be paid directly to Oldham Metropolitan Borough Council in order to recover a community charge debt of £456.10." Miss Perez submitted that that was on any footing the wrong form in which an adjudication officer's decision under these regulations should be made, and that for that reason if no other the tribunal was wrong to confirm it: the decision I should substitute should therefore be in the much more restricted terms of reg. 2(4) that there was sufficient entitlement to income support for a deduction of that amount to be made, no question of priorities in this case arising. However for the reasons I have given it appears to me that, like the tribunal, I have first to be concerned in this case with the wider issue of whether I am being asked to take part in a lawful process at all.

28. Despite Miss Perez's efforts following the hearing, it has turned out to be impossible to produce evidence which I regard as satisfactory of the alleged liability order which is the precondition for it. The only evidence to support the whole process is a computer produced document addressed to the DSS Direct Payments Office from the Oldham Metropolitan Borough Council and dated 16 January 1995, which is at pages 31 to 32 in the appeal papers. This gives the name and address of the claimant, and two reference numbers. It alleges that the claimant is in arrears with community charge payments, and that what is described as "a summary warrant or decree/liability order" was obtained on 16 January 1991 from the Oldham Magistrates Court against her, the amount specified on the court order and to be recovered from income support being given as £456.10. It then asks the DSS to make deductions from income support to clear the amount thus specified. It bears no signature, or any other indication of being the work of a human hand or brain.

29. Against this, there is the documentary evidence produced by the claimant to the tribunal and to me from the same council, showing that her community charge account was in credit on 23 March 1995 in the sum of £111.95, for which sum a cheque was in fact sent to her the following month; and her consistent oral evidence that the council's computer records were for a long time in a complete muddle, and that although she was sent summonses she was told these were a mistake and would be put right, and was unaware of any liability order ever being made against her.

30. The most obvious resolution of this apparent conflict in the evidence would of course be to produce the magistrates' court liability order itself, or some confirmation from the court records to show that it exists. However Miss Perez' enquiries following the appeal hearing before me have revealed that the magistrates' court keeps no records whatever of community charge liability orders issued; and so is unable to confirm or deny whether such an order has ever been made against the claimant. All the records, such as they are, relating to poll tax liability orders obtained by the council are said to be kept and stored by the council itself.

31. The council, however, has failed to produce any original liability order. It has informed Miss Perez that if it were asked to produce a record of the order said to have been made against the claimant, what would be produced would be a fresh document off the same computer, rather than the original liability order itself. I do not regard that kind of evidence from a computer system, which appears admittedly to have had its problems with the poll tax, to be adequate for the purpose of proceedings to take money away from people when they are otherwise entitled to it, at any rate where there is credible documentary and oral evidence to show that it may be defective. For that reason, it did not appear to me that any useful purpose would be served by asking Miss Perez to pursue further enquiries, which it appears would necessarily have to be made by searching the same computer records that according to the claimant have been responsible for all the trouble.

32. That being the totality of the evidence, it has not been shown to my satisfaction on the balance of probabilities that the claimant is a debtor at all under the regulations or that these permit the procedure for deduction of community charge from income support to be operated against her. The basic precondition for me to confirm the decision of the adjudication officer and to allow the procedure authorised by Parliament under the Local Government Finance Act 1988 to be operated is therefore lacking, as I have not been satisfied that the jurisdiction exists for either the adjudication officer or me to give any decision at all which will result in deductions being made from income support otherwise belonging to the claimant.

33. For those reasons, I set aside the decision of the adjudication officer given on 26 January 1995, with the result that no deduction from the claimant's income support by reference to the computer generated application on pages 31 to 32 is justified under the Local Government Finance Act 1988 and the Community Charge Deduction Regulations 1990 referred to above. The claimant's appeal is allowed accordingly.

(Signed)

P L Howell
Commissioner
10 January 1997