UK Social Security and Child Support Commissioners' Decisions

[2000] UKSSCSC CIB_5170_1999 (09 October 2000)

THE SOCIAL SECURITY COMMISSIONERS

Commissioner's Case No: CIB/5170/1999

SOCIAL SECURITY ADMINISTRATION ACT 1992

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992

SOCIAL SECURITY ACT 1998

APPEAL FROM A DECISION OF A SOCIAL SECURITY APPEAL TRIBUNAL

ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

COMMISSIONER: MR J MESHER


 


DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The claimant's appeal is allowed. The decision of the St Helens security appeal tribunal dated 15 January 1999 is erroneous in point of law, for the reason given below, and I set it aside. The case is referred to an appeal tribunal constituted under the Social Security Act 1998 and regulation 36 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 for determination in accordance with the directions given in paragraphs 22 to 25 below (Social Security Act 1998, section 14(8)(b)).
2. This is an overpayments case which goes back some years. The claimant had been in receipt of invalidity benefit from January 1976, on account of eczema of the hands/dermatitis. His benefit included an increase for his wife. On 5 December 1994 he started part-time work for a car dealership, working as a driver for about 10 hours a week. That fact seems never to have been disputed, nor that he earned the amounts shown on page 5 in the tax years mentioned. I shall have to return to the evidence on the precise weeks worked. What the claimant has disputed is whether he informed the invalidity benefit or incapacity benefit authorities. It appears, though, that those responsible for making decisions on his entitlement (which in April 1995 became an entitlement to long-term incapacity benefit) did not know of his part-time work.
3. So far as they are concerned the matter came to light following a survey of the employer by Department of Social Security investigators. The first note in the papers is on 30 September 1996, of a telephone call to the employer in which it was said that the claimant had worked there since 5 December 1994, for approximately 10 hours a week and being paid £50+. It was also said that he had not worked every week since December 1994, but had worked every week over the last months. A form QB9 was sent to the employer, asking about dates of work, but the reply signed on 28 October 1996 (page 5) only gave totals of earnings for tax year 1994/95 (weeks 37 to 52), 1995/96 (weeks 1 to 52) and 1996/97 (weeks 1 to 29). There is a note of another telephone call to the employer on 15 November 1996, recording that the claimant had not done any driving in that week and had done one day in the week ending 8 November 1996. The claimant was interviewed under caution, but there is no record of any interviews in the papers before me.
4. I cannot tell when any question was referred to an adjudication officer for determination, but it looks as though some kind of decision may have been made on 29 November 1996. Payment of benefit continued down to the payment covering the period ending on 3 December 1996. The decision which was before the appeal tribunal was issued on 13 May 1997. According to the first page of the form AT2 it was in these terms:

"This decision is given in respect of [the claimant's] claim for Invalidity Benefit (Incapacity Benefit from 13.04.95). [The claimant] is treated as capable of work on each day of the week from and including 05.12.94. This is because he has worked and that work does not fall in an exempt category.

Social Security (Incapacity for Work) (General) Regulations 1995, regulations 16, 17, 19 and 20

I have reviewed the decision of the Adjudication Officer awarding Invalidity Benefit from and including 16.01.76 (Incapacity Benefit from and including 13.04.95). There has been a relevant change of circumstances since the decision was given. This was that [the claimant] started work at [the employer] on 05.12.94.

Social Security Administration Act 1992, section 25(1)(b)

My revised decision only for the period from and including 05.12.94 is as follows:- [the claimant] is not entitled to Invalidity Benefit from and including 05.12.94 (Incapacity Benefit from and including 13.04.95).

Social Security Contributions and Benefits Act 1992, section 30A

As a result of the review decision dated 29.11.96 an overpayment of Invalidity Benefit (Incapacity Benefit from 13.04.95) has been made from 05.12.94 to 03.12.96 (both dates included) amounting to £8886.46 as shown on the attached schedule.

[The claimant] failed to disclose the material fact that he had started work at [the employer] on 05.12.94 or as soon as possible afterwards. As a consequence, Invalidity Benefit (Incapacity Benefit from 13.04.95) amounting to £8886.46 from 05.12.94 to 03.12.96 (both dates included) was paid which would not have been paid for the failure to disclose. Accordingly that amount is recoverable from [the claimant].

Social Security Act 1992, sec 71(1) (2) (3) and (5)"

The schedule simply set out a statement of the number of weeks paid at each annual rate of benefit, plus a total for the increases for the claimant's wife (which were detailed later in the adjudication officer's written submission).

5. That decision contains a number of inconsistencies. If there had been a relevant review decision on 29 November 1996, there would have been no need (and indeed no power) to carry out a review in relation to the period from 5 December 1994 in the decision of 13 May 1997. That is why I think that the decision on 29 November 1996 must have been limited to removing entitlement from and including 4 December 1996, leaving the past period still to be dealt with. I proceed on that basis. Second, there was a confusion between the conditions to be applied to the period when the claimant received invalidity benefit and the conditions to be applied to the period when he was receiving incapacity benefit. There was only an express reference to the regulations on incapacity benefit.
6. The claimant appealed. In the written submission to the appeal tribunal the adjudication officer explained why in his view the work which the claimant had done from 5 December 1994 meant that the claimant was not entitled to invalidity benefit. That was put in terms of the legislation on invalidity benefit in force until 12 April 1995. The basis was roughly that if a claimant did some significant work that showed that he was capable of work, including in weeks in which he did not work (unless there was some special incapacity for work in those weeks). There was an exception where a claimant had good cause for doing the work, which required encouragement from a doctor, some therapeutic purpose or some other exceptional reason. The adjudication officer submitted that the exception did not apply. But the submission said nothing about the conditions of entitlement to incapacity benefit under the legislation in force from 13 April 1995 onwards. It was simply asserted that the claimant was not incapable of work for the whole period and that the whole of the overpayment down to 3 December 1996 was recoverable on the ground of failure to disclose a material fact.
7. When that submission was sent to the Independent Tribunal Service (ITS) on 1 October 1997, the adjudication officer requested that the appeal should not be listed for hearing as a prosecution of the claimant for fraud was going forward. The appeal was not listed. I cannot tell from what is now in the ITS file what information, if any, the claimant was given about the deferring of his appeal. The submission was evidently sent to him, because he wrote a letter received by ITS on 11 November 1997 in reply to it. On 3 October 1998 the ITS wrote to the Department of Social Security asking what the position was on the prosecution and saying that the appeal would be listed unless there was a reply by 19 October 1998. The reply on 7 October 1998 was that the prosecution was due to be heard on 27 October 1998. It was requested that the appeal should not be listed until the outcome of the prosecution was known. Then on 3 December 1998 a memo from the appeals officer in the Department of Social Security to ITS stated that court proceedings (ie the prosecution) had been terminated and that the appeal could be listed. Someone has written in pencil on that memo "not listable". However, the appeal was listed for determination in a "paper hearing". That presumably was based on the claimant's reply on a form that would have been sent out when his appeal was notified to ITS in July 1997, to say that he did not want an oral hearing. I cannot tell whether anything was sent to the claimant to say that his appeal was about to be determined.
8. What is clear is that there was no addition to the written submission which had already been prepared. Thus the papers before the appeal tribunal on 15 January 1999 did not contain any information about the proposed prosecution or its abandonment, or about the reasons for the lapse of time from the making of the appeal by the claimant. At a session of "paper hearings" there would be no presenting officer there on behalf of the adjudication officer, who could give any explanations from the Department of Social Security file. I also think that it would be very unlikely that the members of the appeal tribunal would have any access at that point to the ITS administrative file. They would simply have the papers listed in the schedule of documents, form AT47.
9. The appeal tribunal did decide the appeal on 15 January 1999. It was recorded that there were no documents submitted which were not on the schedule of evidence, that there was a certificate that neither party had requested an oral hearing and that it was not appropriate to adjourn the case for an oral hearing. The decision was to confirm the adjudication officer's decision. Its reasoning, in the full statement of material facts and reasons, was that the claimant was throughout not incapable of work and had therefore not been entitled to invalidity benefit or incapacity benefit. It rejected the claimant's case that he had notified the Department of Social Security of his work and found the overpayment recoverable. It said that although the evidence was that the claimant had last worked for one day in the week ending 8 November 1996, it was reasonable to assume that he continued to be capable of work after that date.
10. The claimant now appeals against that decision with the leave of a Commissioner. The appeal was supported in the initial submission on behalf of the Secretary of State (who has taken over the functions of adjudication officers) dated 7 January 2000. But that support was on the very limited ground that the period of the recoverable overpayment should have stopped at 30 September 1996, when the Departmental investigators knew of the claimant's work. Otherwise, it was submitted that the appeal tribunal's decision was right and adequately explained.
11. A legal officer to the Commissioners directed a further submission about the effect of the transition from invalidity benefit to incapacity benefit, with its different provisions about working. A detailed further submission, dated 13 April 2000, was made on behalf of the Secretary of State. The essential point made in that submission was that it was irrelevant that the appeal tribunal had not dealt with the incapacity benefit rules on working. It was rightly said that on the transition from invalidity benefit to incapacity benefit regulations provided that a person entitled to invalidity benefit immediately before the changeover day was to be treated as having an award of long-term incapacity benefit. It was then submitted that as the claimant in the present case was not, following the review decision, entitled to invalidity benefit immediately before the changeover day, he could not be treated as having an award of incapacity benefit. As he had not made a separate claim for incapacity benefit, he was not entitled to incapacity benefit at all, so that all the incapacity benefit paid to him was recoverable as resulting from the failure to disclose which led to the overpayment of invalidity benefit. I return below to the reasons why that submission must be rejected.
12. I should note here that the claimant has commented on both the submissions from the Secretary of State, complaining about the general way in which the Department of Social Security has handled his case and returning to his main point that he had disclosed his work to the Department.
13. My conclusion is that there was a much more fundamental error of law in the appeal tribunal's decision than suggested by the Secretary of State. There was a breach of natural justice in that the claimant was not given a fair opportunity to meet the case against him.
14. It seems to me that in a case such as this, the adjudication officer should have given information about the termination or withdrawal of the prosecution by way of a proper submission to the appeal tribunal, on which the claimant would have had the opportunity to comment, rather than by merely writing to the administrative authorities in ITS. That would have been consistent with the duty of the adjudication officer to bring all relevant evidence to the attention of an appeal tribunal. But I do not need to decide where the precise limits of that duty lay. The case as it actually was on 15 January 1999 was one which cried out for an oral hearing. If the claimant had opted for a paper hearing when his appeal was first registered or when the submission was sent out, the information that the prosecution had been terminated was a significant change of circumstances. The claimant should have been asked again whether he wanted an oral hearing, or given a specific opportunity to make a further submission on the effect of or reasons for the termination of the criminal proceedings. He was not given that opportunity, but the appeal was listed for a "paper hearing". The appeal tribunal considered whether to adjourn for an oral hearing, but almost certainly did not have the relevant information. In those circumstances there was clearly a breach of natural justice in the making of the decision without an oral hearing, which requires the appeal tribunal's decision to be set aside.
15. I am also satisfied that the appeal tribunal erred in law in not considering the conditions of entitlement to incapacity benefit. The Secretary of State's submission that those were irrelevant to the questions before the appeal tribunal, as summarised in paragraph 11 above, cannot be accepted. It is true that the appeal tribunal was entitled on the evidence to conclude that the claimant was not entitled to invalidity benefit from 5 December 1994 to 12 April 1995 because the work he did showed that he was not incapable of work. (Indeed, the claimant has not disputed that element of the case: it is the question of recoverability which he contests.) Therefore, the claimant was not entitled to the benefit of the special deeming rule so as to be treated as having been awarded incapacity benefit. But that cannot mean that when giving a revised decision on review, in a case where the benefit had actually been paid, it can simply be said that there was no entitlement to any incapacity benefit from 13 April 1995 onwards in the absence of a claim for incapacity benefit being made. The principle that on review the question of entitlement must be considered in relation to each week within the period in issue must be applied in such a case as if a claim for incapacity benefit was in being. Take the following example. A recipient of invalidity benefit starts work in March 1995 and does not tell the Department. He goes on receiving invalidity benefit and moves on to incapacity benefit. He stops work completely in May 1995. This is all discovered in 1998, when the person has passed several all work tests. The Secretary of State's submission would mean that the revised decision would be that there was no entitlement to incapacity benefit at all and that all the incapacity benefit paid down to 1998 would be recoverable as resulting from the failure to disclose. Such a result cannot possibly be accepted. There should in my example be no revision in relation to the period after the person stopped work.
16. A similar conclusion has recently been reached by Mr Commissioner Bano in CIB/5759/1999. I agree with his analysis, especially in paragraph 9.
17. The decision of Mrs Deputy Commissioner Parker in CS/12476/1996, relied on in the Secretary of State's submission of 13 April 2000, is not to the contrary. She was dealing there with a case in which an adjudication officer in January 1995 made a decision terminating the claimant's entitlement to invalidity benefit on review on the basis that he was not incapable of work. The claimant's appeal against that decision was ordered by the Commissioner to be reheard by an appeal tribunal. In accordance with the principles of law then in force, the new appeal tribunal would have to look at the whole period from January 1995 down to the date of the rehearing. The Commissioner directed that if the new appeal tribunal concluded that the claimant was entitled to invalidity benefit immediately before 13 April 1995, it could go on and consider entitlement to incapacity benefit week by week. However, she directed that if the claimant was not so entitled immediately before 13 April 1995, and therefore not entitled to the deeming of entitlement to incapacity benefit, the new appeal tribunal could not consider the question of entitlement to incapacity benefit at all. I agree with that conclusion, but the situation in CS/12476/1996 was not the same as that in the present case. There, the review decision was made before the changeover day and I agree that if the claimant in that case was not entitled to invalidity benefit immediately before 13 April 1995 entitlement to incapacity benefit could only be established following a claim for that benefit. In the present case, the review decision was made in May 1997 and affected retrospectively the period for which incapacity benefit had actually been paid on the authority of the award of invalidity benefit. That is a significant difference, which means that the principle applied in CS/12476/1996 does not apply in the present case.
18. The Secretary of State's submission of 13 April 2000 also relied on the decision of Mr Commissioner Williams in CIB/335/1998. That was another overpayment case which covered both invalidity benefit and incapacity benefit. The Commissioner said in paragraph 21 that as the entitlement to incapacity benefit depended on entitlement to invalidity benefit under the transitional regulations, and there was found to be no entitlement to invalidity benefit, there was therefore no entitlement to incapacity benefit either. The overpayment of both benefits was recoverable. However, that was a case where the evidence was that the claimant had worked on a regular and continuous basis and there was no suggestion that there might be some weeks for which the incapacity benefit rules on working produced a different result from the invalidity benefit rules. There appears to have been no argument on the point I now have to consider. In those circumstances, the Commissioner's statement is not to be regarded as necessary to his decision and as laying down any principle of law to be followed in other cases. The decision on CIB/335/1998 is therefore not inconsistent with the principle I have set out above.
19. Accordingly, I conclude that the appeal tribunal in the present case erred in law in not considering the application of the incapacity benefit rules to the period from 13 April 1995 onwards. Under those rules incapacity for work is essentially judged, in long-term cases, by whether or not the all work test is satisfied. Regulation 16 of the Social Security (Incapacity for Work) (General) Regulations 1995 provides that a person is deemed to be capable of work for any week in which he does some work (subject to the exceptions in regulation 17). The doing of work in one week does not have any effect as such on entitlement in other weeks. In the present case there was evidence that the claimant had not worked every week, but no evidence of the precise weeks of work and no work (the detailed schedule on pages 6 to 8 relates to his wife and not to him). The appeal tribunal was not in a position to decide that the claimant was not entitled to incapacity benefit for any particular week in the period from 13 April 1995 to 3 December 1996 (except perhaps for the particular weeks at the end where there was evidence that he had not worked). It was an error of law to conclude that the claimant was not entitled to incapacity benefit for the entire period without adjourning for further evidence to be obtained.
20. Finally, even if there had been no errors of law in the appeal tribunal's concluding that there was no entitlement to incapacity benefit for the period down to 3 December 1996, it should not have found any overpayment after 30 September 1996 to be recoverable, for the reasons given by the Secretary of State in the submission of 7 January 2000.
21. For those reasons, the appeal tribunal's decision of 15 January 1999 must be set aside as erroneous in point of law. The claimant's appeal against the adjudication officer's decision issued on 13 May 1997 must be referred to an appeal tribunal constituted under the Social Security Act 1998 and regulation 36 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 for determination in accordance with the following directions. No-one who was a member of the appeal tribunal of 15 January 1999 is to be a member of the new appeal tribunal.
22. There must be a complete rehearing of the appeal on the evidence produced and submissions made to the new appeal tribunal, which will not be bound in any way by any findings made or conclusions expressed by the appeal tribunal of 15 January 1999. I suggest that the complexity of the case is such that an oral hearing is necessary and that consideration should be given by a chairman to giving a direction under regulation 39(5) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999.
23. The new appeal tribunal must apply the legal approach set out above and in particular must when considering any revised decision to be given on review relating to the period from 13 April 1995 to 3 December 1996 apply the approach in paragraphs 15 to 19 above. The Secretary of State should prepare a fresh written submission in advance of the rehearing which deals in detail, and by reference to the relevant regulations in force at different dates, with the revised decision which it is submitted should be given by the appeal tribunal for the whole period from 5 December 1994 to 3 December 1996. The Secretary of State will need to supply evidence of the weeks during which the claimant worked and the weeks in which he did not work. The Secretary of State should also provide a statement of the reasons why the prosecution of the claimant against the claimant was not proceeded with. Of course the Secretary of State may also put forward any other evidence which is considered relevant to the questions to be decided by the new appeal tribunal.
24. The claimant will then have the opportunity before the rehearing takes place to think about the case being made against him and about what evidence he might want to give or comments he might want to make either in person or in writing, or both. I should remind the claimant, since this point has been mentioned in the papers, that there can be many circumstances in which a prosecution of a person is not possible or is thought unnecessary, yet an overpayment is recoverable from the person under section 71 of the Social Security Administration Act 1992. I do not know exactly what offence the claimant was charged with, but most of the offences relating to overpayments of benefit require the proof of some kind of dishonesty, and proof beyond a reasonable doubt. By contrast, an overpayment can be recoverable under section 71 without there having been any dishonesty, but merely an innocent failure to disclose or misrepresentation of some material fact. And the high criminal standard of proof beyond reasonable doubt does not apply.
25. I stress that the evaluation of all the evidence will be entirely a matter for the judgment of the new appeal tribunal. Although the claimant has been successful in this appeal to the Commissioner on questions of law, the decision on the facts in his case remains open.

(Signed) J Mesher

Commissioner

Date: 9 October 2000