[1998] UKSSCSC CA_2985_1997 (24 November 1998)

DW/f

THE SOCIAL SECURITY COMMISSIONERS

Commissioner’s Case no:	               CA/2985/1997

SOCIAL SECURITY ADMINISTRATION ACT 1992
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992

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

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Mr Commissioner David Williams

[ORAL HEARING]

1	I allow the claimant’s appeal, which was brought by leave of the chairman from the decision of the Birmingham social security appeal tribunal. The decision was that attendance allowance was not payable from and including 4 September 1995. For the reasons given below, the decision was  erroneous in law.  I therefore set it aside. I refer the appeal to a freshly-constituted tribunal for rehearing.

2	The appeal was the subject of an oral hearing by me on 3 November 1998 at which the claimant was represented by her appointee and the adjudication officer was represented by Mr Heath of the Department of Social Security  Solicitor’s Department. I am grateful to both for their thorough and helpful presentations. This appeal is linked to an appeal on a question of entitlement to income support, and was heard with that appeal by the tribunal. I confirmed a ruling that the oral hearing of this appeal should proceed separately from the income support appeal, and it was therefore only the issue of attendance allowance that was addressed at the oral hearing.

3	The claimant was born in 1919. Throughout the period relevant to this appeal, she was represented by her son as her appointee. He was also her receiver under an order of the Court of Protection. On 1 September 1995, she was admitted to hospital as an in-patient. On 14 November 1995, she was discharged from the hospital, and taken into a registered home known as The Woodlands on a temporary placement. On 12 December 1995, that placement was converted into a permanent placement. The claimant stayed until 24 July 1996, when she had to go back to hospital. Notice was given to end her stay at The Woodlands, but payment was made up to 20 August 1996. After leaving hospital, the claimant did not return to The Woodlands, but went to a nursing home where she was under the care of the national health service. She owned her own home during this period. It was sold under the Court of Protection Order on 21 August 1996. 

4	A claim for attendance allowance was made for the claimant on 4 September 1995. An adjudication officer decided that attendance allowance was not payable to the claimant and, on review, another adjudication officer confirmed that the claimant was entitled to attendance allowance but that it was not payable. The tribunal decision on 18 December 1996 confirming the decision of the adjudication officer to refuse payment of attendance allowance from 4 September 1995 is a fully argued decision with extensive findings and reasons. No purpose is served by repeating the decision here. 
But the appointee challenged several of its conclusions.

5	The claimant does not dispute non-payment of attendance allowance while the claimant was in hospital. She also does not dispute the fact that during the initial period that she spent at The Woodlands the Council met part of the cost of the accommodation and that therefore attendance allowance was not payable. This covers the period to 11 December 1995. Finally, she does not dispute that entitlement to attendance allowance ended, at the latest, on 20 August 1996 because after that time she was in hospital and then in residential accommodation maintained and financed under the national health service. The appeal therefore relates to the period from 12 December 1995 to either 23 July 1996 (when the claimant went into hospital) or 20 August 1996 (when the obligation to pay The Woodlands ended), save to the extent that consideration of the issues in this appeal causes those other periods to be reconsidered.    

The law

6	The central provision in this appeal is Social Security (Attendance Allowance) Regulations 1991, regulation 7, the relevant parts of which are:

7 	(1) Except in the cases specified in paragraphs (2) and (3) and subject to regulations 7A and 8, a person shall not be paid any amount in respect of an attendance allowance for any period where throughout that period he is a  person for whom accommodation is provided -
	(a)	in pursuance of -
		(i)	Part III of the National Assistance Act 1948 ... 
	(b)	in circumstances where the cost of accommodation is borne wholly or 	partly out of public or local funds in pursuance of those enactments or of any 	other enactment relating to persons under disability; or
	(c)	in circumstances where the cost of the accommodation may be borne 	wholly or partly out of public or local funds in pursuance of those enactments or of 	any other enactment relating to persons under disability.

7	Regulation 7A is not relevant to this case. The relevant part of regulation 8 is:

(6)	Regulation 7 shall not apply except in a case to which paragraph (7) applies in any particular case of any period during which-
(a)	the person for whom the accommodation is provided-
	(i)	is not entitled to income support or income-based jobseeker's allowance;
	(ii)	is not entitled to housing benefit; or
	(iii)	is not a member of a married or unmarried couple for whom an amount is 	included for income support or income-based jobseeker's allowance purposes in the 	weekly applicable amount of the other member; and
(b)	the whole of the cost of the accommodation is met-
	(i)	out of his own resources, or partly out of his own resources and partly with 	assistance from another person or a charity;
	(ii)	on his behalf by another person or a charity.

(7)	 This paragraph applies in the case of a person who is residing in a home owned or managed, or owned and managed, by a local authority.

8	The relevant parts of Part III of the National Assistance Act 1948 are sections 21, 22 and 26. Section 21 provides, so far as relevant:

21 	Duty of local authorities to provide accommodation

(1)	Subject to and in accordance with the provisions of this Part of this Act, a local authority may with the approval of the Secretary of State, and to such extent as he may direct shall, make arrangements for providing-
	(a)	residential accommodation for persons aged eighteen or over who by 	reason of age, illness, disability or any other circumstances are in need of care and 	attention which is not otherwise available to them ...

(2)	In making any such arrangements a local authority shall have regard to the welfare of all persons for whom accommodation is provided, and in particular to the need for providing accommodation of different descriptions suited to different descriptions of such persons as are mentioned in the last foregoing subsection.

Section 22 deals with the financial arrangements. Section 26 allows local authorities to provide accommodation through the use of voluntary and private residential homes. The Secretary of State for Health has given directions and approval in circulars, some of which were before the tribunal. They give general power to local authorities to make provision under the Act. An extract from the most recent is set out below.

Regulation 7(1)(a)

9	The decision of the tribunal is based on regulation 7(1)(a) of the Social Security (Attendance Allowance) Regulations 1991. As both parties agreed, this requires consideration of section 21 of the National Assistance Act 1948. Mr Heath submitted that if there were any question whether the Council was acting under this power, I should assume that it was. Against this, the appointee argued: (1)  that the claimant was not someone for whom accommodation had been provided, in other words that the Council had not provided the accommodation at all;  and (2) that if it did provide the accommodation it did not do so in pursuance of the National Assistance Act 1948. 

10	These arguments were before the tribunal. The tribunal decided that “the true contractual position” was that the Council was involved in the placement and that it had entered into a contract with The Woodlands to pay for the claimant. It noted that the appointee accepted that the Council was involved up to 12 December 1995. The tribunal therefore found that the Council was involved but it assumed, rather than decided that the Council had the power to be involved.

Did the Council provide the accommodation? 

11	This is a question of fact, subject to interpretation of the various documents. The tribunal listed the documents available in its decision. There is now further documentation available. This includes the full version of the agreement to pay signed by the appointee (documents 212-3),  an Individual Care Instruction, signed on behalf of the Council and The Woodlands (documents 214-7) and an NHS care programme (documents 218-9). As the matter must go to another tribunal, it will be for that tribunal to decide, with the benefit of the additional documentation now available. 

Did the Council act under Part III of the National Assistance Act 1948? 

12	It was the duty of the Council under Part III to provide appropriate accommodation for local residents “who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them”. It was agreed that the claimant was someone who by reason of age, illness and disability needed care and attention. That is why the claim for attendance allowance was made and, at the level of entitlement, accepted. That being so, was the tribunal right to assume that the Council had power to provide the claimant with accommodation under Part III? Mr Heath argued that it was. The claimant challenged this. It is clear from the decisions of the House of Lords to which the tribunal was referred that the Council could only act under Part III if the conditions of sections  21 and 26 were met: Chief Adjudication Officer v Quinn; CAO v Gibbon [1996] 4 All ER 72 (House of Lords). It is also clear that if those conditions were met, the Council was under a duty to make that provision: R v Sefton MBC ex p Help the Aged and Charlotte Blanchard [1997] 4 All ER 532 (Court of Appeal), to which I was also referred.

Should the Council be assumed to be acting within its powers?

13	Mr Heath submitted that the Council had said that it was acting under Part III and it should therefore be assumed to be doing so. He drew attention to Commissioner’s decision CA/7126/1995. This was also a case where there was an argument about whether the local authority was acting under Part III. At paragraph 6, the Commissioner said:

When the local authority has statutory powers under which it is empowered to act it would to my mind be a considerable step (in the absence of clear evidence) to hold that they were acting ultra vires. Though Plas Cwmcynfelin is a private nursing home run for profit I think it is within the provisions of Part III section 26(1) of the National Assistance Act 1948.  In answering the question 1 on the attendance allowance form DS46(NX) dated 6 December 1993 the authority ticked the "yes" box-the question being "was your authority involved in placing this person in the residential accommodation?"  I do not think I need go so far as to say that involvement is a word of wide meaning - I think the local authority were involved in that they provided the necessary cash.

Mr Heath also drew my attention to the support for this approach in decision CA/11185/1995 on similar facts. I note that this decision, while agreeing with CA/7126/1995, also agrees that the basis of a council’s actions may be considered if there is clear evidence on which to do so.

14	A comparison with CA/11185/1995 shows a number of factual differences. The local authority in that case accepted that it had a responsibility to meet the claimant’s fees at an early stage and at the request of the claimant’s son. The son acted only after agreement with the local authority. The owners of the residential home looked to the local authority for payment. This was confirmed by the matron. By contrast, in this case, the Council commented that the claimant was the only client who was given provision in this way who was paying for herself on a monthly basis. The Woodlands stated that the Council did not make the arrangements. This suggests that the owners of The Woodlands were not looking to the Council to pay the fees. If they were, they would presumably have asked for the standard rate of fee, and not agreed a lower one with the appointee. The appointee also contended that the accommodation could have been provided for without the Council being involved, and that involvement was a matter of convenience. These factors are sufficiently different to distinguish this case from CA/7126/1995 and CA/11185/1995, at least by reference to the proviso about “clear evidence”.

15	In this case there was a genuine question which the appointee put in issue whether the Council was empowered to act under Part III. The tribunal should have considered this. The view of the Council about what it was doing is part of the answer but is not determinative of it. A tribunal might be reluctant to take a view on the facts that conflicted with a formal opinion of the Council after advice, such as a decision taken after assessment under section 47 of the 1990 Act (see below). It need not, in my view, feel the same reluctance if there has been no such assessment and the only opinion is the view of an official who may or may not be aware of the specific requirements of the National Assistance Act 1948. My conclusion is that the tribunal should not have assumed that the Council was providing the accommodation in pursuance of Part III but should have reached findings about whether the claimant was someone within the scope of Part III. The decision of the tribunal is therefore erroneous in law in not having dealt with this issue. 

“Not otherwise available”

16	The appointee argued that the reason why the power of the Council to act was in issue was that accommodation was otherwise available for the claimant.  The appointee argued before me, as he did before the tribunal, that this issue was raised in the case of Steane v Chief Adjudication Officer [1996] 4 All ER 83 (House of Lords). That case concerned a continuing claim for benefit for Mrs Steane at a residential home called Elmdon. She had been accommodated there while it was a local authority home, and remained there after the home was taken over by a voluntary organisation.  It was found that she had paid for the Elmdon charges herself. In that case Lord Slynn, after discussing issues arising under statutory powers not in issue here, said (at p 90):

The position under Pt III of the 1948 Act is different. There it seems to me that if Mrs Steane was at the relevant time a person who by reason of age was in need of care and attention which was not otherwise available to her then the authority could have made arrangements for her accommodation under s 26(1) of the 1948 Act so long as they provided for the making of payments by them to the voluntary organisation. They clearly had power to arrange the accommodation and to bear part or all of the cost. But since Mrs Steane was living at Elmdon and cared for there under the arrangements with Islecare it seems to me that she was not a person who was in need of care and attention not otherwise available to her so long as she remained there. Accordingly it seems to me that since she did not fall within the category of persons described in s 21(1)(a) of the 1948 Act as being in need of care and attention the local authority do not have statutory power under Pt III of that Act to provide for her accommodation the cost of which could be borne out of local authority funds.

17	Lord Woolf in the Court of Appeal commented in the Sefton case (at p 543):

	The statutory scheme rests on the assumption that care and attention is not to be regarded as “otherwise available” if the person concerned is unable to pay for it according to the means test regime provided for in s 22... Any other approach is incompatible with the language of the relevant statutory provisions.

18	Since the Sefton case, section 21 has been amended by the Community Care (Residential Accommodation) Act 1998. This added a new section (2A) providing that in determining whether care and attention is otherwise available, a local authority shall disregard so much of the person’s capital as does not exceed the limit provided for that section in section 22. While that Act only received the Royal Assent on 11 June 1998, and therefore does not directly affect this case, it does not appear to alter what was previously widely understood to be the law. The Act was followed by a Circular from the Department of Health (LAC (98) 19), which contains a useful summary of the Department’s view of the relevant law:

8	Local authorities are under a legal duty under the NHS and Community Care  
1990 [ section 47] to assess the care needs of anyone who, in the authority's view, may be in need of community care services. It is the Department's view that the law does not allow authorities to refuse to undertake an assessment of care needs for anyone on the grounds of the person’s financial resources, eg because they have capital in excess of the capital limit for residential accommodation. Even if someone may be able to pay the full cost of any services, or make their own arrangements independently (but see paras 9 and 10), they should be advised about what type of care they require, and informed about what services are available.

9 	The legislation regarding Part Ill residential accommodation provides for authorities to assess under section 21 of the National Assistance Act 1948 whether anyone requiring residential care services is 'in need of care and attention which is not otherwise available to them'. Once the LA has completed a financial   assessment of a resident's resources and their capital is above £16,000, this means that the resident has to pay the full charge, and may be in a position to make their own arrangements. However, that does not exempt Social Services Department from its duty to make arrangements for those people who are themselves unable to make care arrangements and have no-one to make arrangements for them. Under the NHS and Community Care Act 1990 local authorities are required to provide information to the public. The Department's 1991 publication of Practice Guidance and Care Assessment identified that published information as the first stage of the care management process.

10 	It is the Department's view that having capital in excess of the upper limit of £16,000 does not in itself constitute adequate access to alternative care and attention. Local authorities will wish to consider the position of those who have capital in excess of the upper limit of £16,000 and must satisfy themselves that the individual is able to make their own arrangements or has others who are willing and able to make arrangements for them, for appropriate care. Where there is a suitable advocate or representative (in most cases a close relative) it is the Department's view that local authorities should provide guidance and advice on the availability and appropriate level of services to meet the individual's needs. Where there is no identifiable advocate or representative to act on the individual's behalf it must be the responsibility of the LA to make the arrangements and to contract for the person’s care.

I emphasise that this is a statement of the Department of Health view, published after the recent Act. 

19	A number of possible interpretations of “not otherwise available” were canvassed before me. The Sefton case clearly establishes that a claimant who does not have the means to pay for accommodation is someone for whom accommodation is not “otherwise available” (see paragraph 17 above).
But that does not apply to this case, because it was not disputed that the claimant could, and for a large part of the time did, meet the full costs of the accommodation. 

20	Subject to the issue of means, it seems to me in the light of the approaches taken above that this phrase does not have any special meaning. Whether provision is “otherwise available” is to be decided on all the facts of a case. It is a question of fact whether appropriate accommodation could have been provided for the claimant otherwise than by the Council using its powers under Part III. The advice in the circular is that a key aspect apart from means is whether the claimant (or someone else appropriate) is capable of organising the accommodation.  In this case the appointee was clearly such a person. 

21	Further, as the circular emphasises, where it appears to a local authority that a person may be in need of local authority services, the local authority is required by section 47 of the National Health Service  and Community Care Act 1990 to conduct an assessment of needs, and to decide what those needs are. This applied at the time of this case. Whether there was a section 47 assessment of the claimant, and if so what was decided, do not appear to have been considered here. It will be for the new tribunal to decide, in the light of these considerations, whether accommodation was or was not otherwise available for the claimant. The Council had power to act under Part III only if this precondition was met.  If the Council had power to act, and the tribunal finds as fact that it did act, then regulation 7(1)(a) applies. Otherwise it does not. That also applies to the period when the Council paid part of the claimant’s accommodation costs. 

Regulation 7(1)(c)

22	Regulation 7 applies not only if the Council acted under Part III but also if the claimant “is a person for whom accommodation is provided ... in circumstances where the cost of the accommodation may be borne wholly or partly out of public or local funds...”. But since the adoption on 1 April 1993 of the community care policies discussed in the Sefton case, regulation 7(1)(b) and 7(c) are deprived of effect in England and Wales (though possibly not elsewhere). From that date, section 21 of the 1948 Act was amended (by the National Health Service and Community Care Act 1990, section 42) to cover cases of illness and disability, and other powers of local authorities were repealed (by Schedules 9 and 10 of the 1990 Act) . The effect is to turn the powers to provide accommodation under Part III into  one of last resort. Regulation 7(1)(c) therefore has no effect in a case such as this. (See Adjudication Officer's Guide, paragraph 77723; Clements, Community Care and the Law, 1996, p64; Department of Health Circular LAC (93) 10 which replaced Circular (92) 19, to which the tribunal was referred, with effect from 1 April 1993; Jones,  Encyclopedia of Social Services and Child Care Law, vol 3, Part D, setting out the various sources). The adjudication officer now acting had, in any event, already submitted that the effect of the Steane judgment was that regulation 7(1)(c) did not apply because the claimant had met the full costs of her accommodation. The tribunal to which this case must go need not consider regulation 7(1)(c) or 7(1)(b). 

Regulation 8(6)

23	As Mr Heath noted at the hearing, the claimant can escape the effects of regulation 7(1)(a) if any of the exemptions in regulation 8 apply. The only general exemption that can apply is regulation 8(6) (set out above at paragraph 7). This paragraph  was in question in CA/7126/1995, but the extract of the paragraph quoted in that decision is wrong. The passage contains a double negative, and the extract has the unfortunate effect of removing one, but not both, of the negatives. The provision was also discussed by the Commissioner in CA/11185/95. In that case, the Commissioner took the view that the reference to “the whole cost” in regulation 8(6)(b) “is restricted to the case where the payment is made to meet a liability owed directly by the person concerned to the provider of the accommodation.”  However, this has been superseded by the Steane decision. 

24	Lord Slynn states in that case (at p 91):
	In my opinion the reference to paying “the whole cost” is to be read as meaning the payment of the charge fixed for residents in respect of their individual accommodation. If this is paid wholly by the resident, regulation 7(1)(c) ... does not apply. If it is paid wholly or partly by others including payment our of public or local funds, then the resident is required to satisfy the other provisions of regulation 7(1)(c).

The reference to “the whole cost” in that passage was to the proviso to regulation 7(1)(c) set out in regulation 7(3)(b). This disapplied paragraph (1)(c) where the “person himself pays the whole cost”. This was why the adjudication officer now acting conceded that the paragraph did not apply in this case. In my view, the wording in paragraph 8(6)(b), namely, “the whole of the cost of the accommodation is met ... out of his own resources” is effectively the same as that in regulation 7(3)(b). The same interpretation should therefore be given to it, and the test of “directly” should not therefore be added. 

25	The availability of the exemption in regulation 8(6) should be considered by the tribunal rehearing this appeal. This requires the tribunal to look also at the other conditions in the provision, specifically in regulation 8(6)(a).  The adjudication officer submitted that regulation 8(6) did not apply “since the claimant was in receipt of income support”. The drafting of this provision is slightly clumsy because of the cumulative negatives it contains. In particular, it is not obvious whether the three factors listed as (i), (ii), and (iii) are all to be satisfied for regulation 7 to be disapplied, or whether, as the adjudication officer assumed, it is enough to establish that only one was satisfied. In my view, each of the tests should be satisfied. Further, it is not enough to show that income support was received because the test is whether the claimant was “entitled” to income support. Whether the claimant was entitled to income support during any relevant period is the subject of a separate appeal by the claimant, as to which see the directions to the new tribunal below.  

A loan arrangement?

26	At the hearing, Mr Heath drew my attention to Commissioner’s decision CA/4723/1995. This concerned a similar claim to the present one. In that case the evidence was that the claimant’s son had reached an arrangement with the local authority whereby the local authority paid the private residential home fees, and the son repaid the money to the local authority on sale of the claimant’s home. This was found to be a temporary loan arrangement, and no more. The argument that this was a provision of funds by the local authority and that there was no power for the local authority to make loans generally was briefly dismissed by the Commissioner:

The transaction described in the letter ... was clearly that of a loan.  It is not material that the actual word “loan” was not used in the letter, nor was it necessary to consider the powers of the Council to make such a loan.

The Commissioner therefore confirmed the decision of the tribunal.

27	In this case, the power of the Council to act is in question. This would apply equally to the question of a loan. In the light of the authorities stated above, the Council was either acting under Part III in this case, or it had no power to act save for the provision of advice. It may be that on the particular facts of CA/4723/1995 that decision was right. I express no view on that because, as the tribunal stated, there was no evidence in this case that there was a loan, and CA/4723/1995 can be distinguished. The tribunal also added a caution about such a loan being made in breach of the Council’s powers. The conclusion of the tribunal on this issue does not contain any error of law. 

The final period of claim

28	The claimant went back into hospital on 24 July 1998. Benefit during the period starting on that date stops for the same reason as during the first period after 4 September 1995. Regulation 6 stops payment of benefit while the claimant was receiving national health service  treatment free of charge. 
The claimant is not entitled to exemption from regulation 6 for the first 28 days in hospital under regulation 8(1) unless it is found that the claimant was entitled to attendance allowance until she entered hospital. The tribunal will need to consider this if it finds that attendance allowance was payable.

Natural justice

29 	The appointee’s final argument was that the tribunal decision was in breach of natural justice because it was unfair. Although the claimant had paid all the accommodation costs after the first few weeks, she was being denied benefit because the Council might have had to pay. He therefore submitted that I should use my judicial discretion to achieve the fair result. Mr Heath reinforced the view that I expressed at the hearing that I have no such power. He drew attention to the comments of the Commissioner in concluding his decision in CA/7126/1995 that he was a creature of statute. So am I. This case must be decided on the  rules laid down by or with the authority of Parliament. The facts in this case are clearly somewhat unusual. It may be that the Council should never have become involved in this case. I say this because it may be that the involvement of the Council was because of misplaced good intentions on several parts rather than any actual need of the claimant. It will be for the tribunal to decide if that is the case. If it is not then the claimant cannot receive attendance allowance. 

Direction to the new tribunal

30	The new tribunal should therefore consider afresh whether the Council was involved in providing the claimant’s accommodation, and if so whether it acted within its powers under Part III of the National Assistance Act 1948. If it did, then regulation 7(1)(a) applies, and the tribunal should consider whether regulation 8(6) applies. If it did not, the tribunal need not consider regulation 7(1)(b) or (c), but should consider the operation of regulation 6 and regulation 8(1) for the final period under review. 

31       In considering regulation 8(6), if that is relevant, the tribunal may have to consider if the claimant was entitled to income support during any relevant period. I have before me a concurrent appeal to this appeal about the claimant’s entitlement  to income support during that period.  My decision in that appeal (CIS/2984/1997) is that the appeal is allowed. I direct that the tribunal to which this appeal goes should also have before it the appeal in CIS/2984/1997, and that the two matters should be heard together, either concurrently or consecutively as the tribunal decides. This will allow the tribunal to have all the relevant issues before it in one hearing.			

								David Williams
								Commissioner
								24 November 1998