UKSSCSC CFC_13585_1996 (02 February 1998)
Mr. D. G. Rice CFC/13585/1996
Notional income - mortgage repayments in respect of claimant's home paid by her husband - whether "payment of income ... made ... to a third party"
In her claim for family credit, the claimant stated that she did not receive any help with the mortgage for the property that she occupied as her home and in which she had a beneficial half share. When the Department became aware of the fact that her husband was paying the mortgage on the property, the adjudication officer reviewed the amount of family credit awarded and reduced the weekly payment from £57.50 to £49.06 per week. He also decided that there had been an overpayment of benefit for 26 weeks from 13 September 1994 amounting to £214.24 which was recoverable from the claimant by reason of her failure to disclose a material fact. The claimant appealed to the Commissioner contending that she should be treated as living rent free and that the mortgage payments did not constitute income.
Held, allowing the appeal in part, that:
- the payment of the claimant's half share of the mortgage obligations constituted "payment of income … made ... to a third party" and was "notional income" of the claimant within regulation 26(3)(a) of the Family Credit (General) Regulations 1987 (para. 5);
- the value of that "notional income" was only half the total of the repayments as the claimant only had a half share in the property and did not own it outright (para. 6);
- £15 per week had to be deducted from the notional income as it was maintenance within paragraph 14 of Schedule 2 to the 1987 Regulations (para. 7);
- disclosure of the material fact that the mortgage was being paid by her husband was reasonably to be expected and so the claimant had failed to disclose that fact (para. 9);
- but there was clear evidence that the Department became aware of the true situation by 1 March 1995 and the tribunal should have reduced the amount of overpayment accordingly (para. 10).
DECISION OF THE SOCIAL SECURITY COMMISSIONER
"26. (3) Any payment of income ... made-
(a) to a third party in respect of a member of the family (but not a member of the third party's family) shall be treated as possessed by that member of the family to the extent that it is used for his food, ordinary clothing or footwear, household fuel or housing costs [my emphasis] ..."
The claimant was clearly "a member of the family" by reason of the definition of the word "family" contained in section 137 of the Social Security Contributions and Benefits Act 1992. For that provides as follows:
(a) a married or unmarried couple;
(b) a married or unmarried couple and a member of the same household for whom one of them is or both are responsible and who is a child or a person of a prescribed description;
(c) except in prescribed circumstances, a person who is not a member of a married or unmarried couple and a member of the same household for whom that person is responsible and who is a child or a person of a prescribed description."
Manifestly, the claimant and her daughter fell within (c). "Housing costs" are not defined in the Family Credit (General) Regulations 1987, but whatever their extent, they certainly encompass mortgage repayments.
"£15 of any payment of maintenance, whether under court order or not which is made or due to be made by-
(a) the claimant's former partner; or
(b) the parent of a child or young person where the child or young person is a member of the claimant's family except where that parent is the claimant or the claimant's partner."
As I understand it, both the adjudication officer and the tribunal made the necessary deduction in arriving at the extent of the overpayment.
"Do you, or your partner, or any of the children you are claiming for have any other money coming in regularly?
Money coming in includes
help with the mortgage ...
This may mean that someone pays these things for you."
To this the claimant answered "no". The claimant clearly should not have answered in the way she did. She must have known that she was to make proper disclosure, and she failed to do so. Moreover, she was also guilty of a clear misrepresentation, an alternative ground on which the overpayment was recoverable pursuant to section 71 of the Social Security Administration Act 1992.
Date: 2 February 1998 (signed) Mr. D. G. Rice