UK Social Security and Child Support Commissioners' Decisions

 


DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The claimant's appeal to the Commissioner is allowed. The decision of the Bolton appeal tribunal dated 5 November 2001 is erroneous in point of law, for the reasons given below, and I set it aside. It is expedient for me to substitute a decision on the claimant's appeals against the decisions dated 7 June 2000 and 11 December 2000 having made the necessary findings of fact (Social Security Act 1998, section 14(8)(a)(ii)). That decision is that the claimant's right to payment of sums by way of benefit (disability living allowance) for the periods from 9 March 1998 to 6 December 1998 and from 5 May 1997 to 8 March 1998 has not been extinguished by virtue of the effect of regulation 38 of the Social Security (Claims and Payments) Regulations 1987. Paragraphs 21 and 22 below deal with where that leaves the case.
2. This is a case which I hope is very unusual, where the administration of the claimant's benefit has gone badly wrong. It potentially raises some quite difficult points of law and fact. However, on the view which I have taken of the central events, I do not in the end have to grapple with the most difficult points.
3. The claimant was born on 16 February 1932. His health is now poor, and he has had health problems for some years. He does not read or write English. On 6 August 1996 he was awarded the higher rate of the mobility component of disability living allowance (DLA) and the lowest rate of the care component from 17 May 1996 for life. Payment of the benefit was made by the income support section of the local social security office, combined with the payment of income support. The claimant went abroad for a period which has been accepted for DLA purposes as lasting from 24 June 1997 to 24 December 1997. A decision was given on 6 September 2001 that the change of circumstances did not alter the claimant's entitlement to DLA or the payability of DLA during his absence. However, the last payment of income support made to the claimant apparently covered the period to 29 June 1997 and the last payment which was combined with a payment of DLA covered the period to 4 May 1997. DLA ceased to be paid by the income support section after that date and it is clear that the income support section did not tell the Disability Benefits Unit that payment had ceased until a form DLA 609D was sent, arriving on 7 December 1999. That form appeared to say that there had not been any authority to pay DLA since 11 September 1996.
4. On the claimant's return from abroad, he apparently made a new claim for income support from 9 March 1998 (his wife had been claiming for herself and the family during his absence). He also signed an attendance allowance claim form on 21 April 1998, which was received by hand on 22 April 1998. On the form it was ticked that the claimant was getting a state retirement pension and income support, but there was no tick against DLA and it was ticked that he had never claimed attendance allowance before. This was first accepted as a claim in the alternative for DLA and then treated as an application to review the decision of 7 August 1996. A decision was made on the application on 30 June 1998 after a report had been obtained from the claimant's GP. The appeal tribunal was told that the decision was that on review for change of circumstances the existing decision was not revised. That seems to be confirmed by documents produced by the Secretary of State after the oral hearing before the Commissioner, although one page of the decision seems not to have been copied and no copy or standard form of the letter notifying the decision is available.
5. On receipt of the form DLA 609D, the Disability Benefits Unit wrote to the claimant to ask if he had received any DLA since 11 September 1996 and, if not, why he had not contacted the Unit about it. He replied on 27 December 1999 that as far as he knew he had not been paid and that he had re-applied for the benefit. He was upset at not having received money to which he was entitled and which he needed. On 25 April 2000 another form DLA 609D was received from the local social security office stating that there was no authority to pay DLA from 9 March 1998 when income support was reinstated from that date. On 6 June 2000 payment of DLA for a period of 12 months prior to 7 December 1999 was authorised. It is now known that a girocheque for £4009.10, apparently covering the period from 6 December 1998 to 13 June 2000, was issued on 9 June 2000. But the question of whether the right to payment for the period from 9 March 1998 to 6 December 1998 had been extinguished was put to a decision-maker. The decision given on 7 June 2000 was as follows:

"DLA amounting to £1921-75 for the period from 9/3/98 to 6/12/98 cannot be paid. This is because payment was not obtained within 12 months from the date that [the claimant] had the right to be paid and I am not satisfied that there was continuous good cause for not asking for payment from a date within that 12 month period up to the day on which the request was made. There is no evidence to show requests for arrears of DLA to be made between 9/3/98 and 7/12/99. The right to be paid is treated as arising on 7/12/98."

The law used was regulation 38 of the Social Security (Claims and Payments) Regulations 1987.

6. The claimant wrote complaining about not being paid for the period before 7 December 1998, still then referring to the date of 10 September 1996. After the local social security office stated that it had paid DLA down to 4 May 1997, a further decision under regulation 38 was given on 11 December 2000:

"DLA for the period from 5/5/97 to 8/3/98 cannot be paid. This is because payment was not obtained within 12 months from the date that [the claimant] had the right to be paid and I am not satisfied that there was continuous good cause for not asking for payment from a date within that 12 month period up to the day on which the request was made. There is no evidence to show requests for arrears of DLA to be made between 5/5/97 to 8/3/98. The right to be paid is treated as arising on 8/3/99 [possibly a slip for 98]."

7. Appeals against both decisions were admitted. The claimant said that he had written to the Disability Benefits Unit in 1996, 1997 and 1998 about the missing payments. There was a "paper hearing". The appeal tribunal dismissed the appeals. It found that there was no evidence that the claimant had requested payment of DLA from 5 May 1997 to 6 December 1999 and that there was insufficient reason to show good cause for not doing so. It stated that the claimant's right to be paid arose when the cancellation of authority to pay was received on 7 December 1999. The statement of reasons continued (I have shown corrections to what I think are obvious slips):

"In accordance with Regulation 38 of the Social Security (Claims and Payments) Regulations 1987 the right to payment of benefit is extinguished if payment is not obtained within 12 months from when the right is to be treated as [arising]. As the right [to] payment arose on 7 December 1999, payment cannot be made before 7 December 1999, ie from 6 December 1998 and the good cause is [not] shown for not requesting payment from 5 May 1997."

8. The claimant now appeals against that decision with my leave. In the written submission dated 18 November 2002, the representative of the Secretary of State submitted that the appeal tribunal had erred in law and that the case should be referred to a new appeal tribunal for rehearing. It took the claimant some time to find a representative who felt able to deal with the legal issues involved. A detailed reply was made on his behalf and received on 7 January 2003 (which I now formally validate by extending the month's time-limit). An oral hearing was requested. I granted that request, as there were difficult questions of law raised and I hoped to be able to substitute a decision.
9. The claimant did not attend the oral hearing, because of his poor state of health, but was represented by Mr Mahmood Khan, barrister, of the Legal Action Forum. The Secretary of State was represented by Miss Rosemarie Topping of the Office of the Solicitor to the Department for Work and Pensions. I am grateful to both representatives for their submissions. I gave the Secretary of State a month after the date of the hearing in which to produce whatever documents or evidence could be found of the decision made on 30 June 1998 and of the notification given to the claimant. Mr Khan's response to what was produced was received on 7 April 2003.
10. The whole of regulation 38 of the Claims and Payments Regulations, as in force after amendments coming into effect on 6 September 1999 and 5 October 1999, was set out in the Secretary of State's submission of 18 November 2002. I shall not lengthen this decision by setting out the whole regulation again, but reference to it will be necessary in order to understand my decision.
11. There is first a question of the jurisdiction of the appeal tribunal. Secretary of State's decisions under regulation 38 are plainly decisions that fall to be made under or by virtue of a relevant enactment (Social Security Act 1998, section 8(1)(c)). In my judgment, such decisions to extinguish a right to payment are made "on an award of a relevant benefit", so that there is a right of appeal to an appeal tribunal under section 12(1)(a) of the 1998 Act, unless the decision is taken out of the rule by Schedule 2 to the Act. Schedule 2 itself does not do so, but it allows other decisions to be prescribed in regulations. From their coming into force in relation to DLA on 18 October 1999 down to an amendment coming into force on 20 May 2002, regulation 27 of and Schedule 2 to the Social Security and Child Support (Decisions and Appeals) Regulations 1999, provided that no appeal lay against a decision of the Secretary of State under the Claims and Payments Regulations, except for decisions under a number of provisions including "regulation 38 as to the extinguishment of the right to payment of sums by way of benefit where payment is not obtained within the prescribed period" (paragraph 5(c)). I agree with the Secretary of State's representative in paragraph 7 of the submission of 18 November 2002 that the effect of paragraph 5(c) is that there is a right of appeal which covers all aspects of a decision under regulation 38, not merely the final decision on extinguishment, but also issues such as the date on which a right to payment of a sum by way of benefit is to be treated as having arisen. The position appears to be different as from 20 May 2002 under paragraph 5(x) of Schedule 2 to the Decisions and Appeals Regulations.
12. Thus, the appeal tribunal of 5 November 2001 had jurisdiction to hear the two appeals and was required to consider all the constituent parts of the decisions. There is no doubt that the appeal tribunal's statement of reasons was fundamentally confused and flawed. If the claimant's right to payment of the various sums by way of benefit was truly to be treated as having arisen on 7 December 1999, there had certainly been a request for payment within 12 months of that date (in the reply dated 27 December 1999). Twelve months had not expired by the date of the first decision, so that on that basis it could not have been decided that the right to payment for the period from 9 March 1988 to 6 December 1998 had been extinguished. The decision in relation to the period from 5 May 1997 to 8 March 1998 was given on 11 December 2000, more than 12 months after 7 December 1999. But there had been a request for payment within the 12 months and I think that the scheme of regulation 38 must impliedly require that a right to payment should not be extinguished in such circumstances. However, the appeal tribunal not only failed to explain why it took 7 December 1999 as the date on which the right to payment of all the sums involved, but then used that date to justify extinguishing the right to payment for any period before 7 December 1998. That does not make sense. The appeal tribunal may well have been led astray by some statements in the Secretary of State's written submission to the appeal tribunal and by the use of the date of 8 March 1999 (possibly by mistake) in the decision of 11 December 2000, but it failed to sort out the necessary elements of the application of regulation 38. In addition, it did look properly at the issue of good cause and take into account the failures of good administration within the Department which led to DLA not having been paid to the claimant at the right time.
13. For those reasons the appeal tribunal went wrong in law. I set its decision aside. I am satisfied that it is expedient for me to substitute a decision on the claimant's appeals against the decisions of 7 June 2000 and 11 December 2000.
14. Miss Topping submitted that my decision should first be that the right to payment of a sum by way of each week's DLA within the periods in issue was to be treated as arising on the Monday of each benefit week, ie the day on which each weekly order could have been cashed, if an order book had been issued (as in paragraph 8(a) of the submission of 18 November 2002). She then submitted that payment for none of the weeks within the period in issue had been obtained within 12 months of the date on which the right to payment arose, so that the right was extinguished unless good cause was shown under regulation 38(2A). She submitted that the case for good cause was weak, because it would have been obvious to the claimant that payment of DLA had ceased and he did nothing to make enquiries about payment. Mr Khan made submissions to the contrary. In particular, he stressed the overall justice of the case and submitted that when the attendance allowance claim form was received in April 1998 that should have alerted the Disability Benefits to the fact that the claimant was not receiving payment of DLA and put them on enquiry to find out what had been happening. He also submitted that a case where the Department simply stops making payment on an award of DLA without giving any notice to the claimant is not one which falls within the proper scope of regulation 38 of the Claims and Payments Regulations at all. I intend no disrespect to Mr Khan's submissions by not setting them out in more detail. That is because I have concluded that the Secretary of State's case falls down at an early stage in the reasoning.
15. I start with the overall scheme of regulation 38 of the Claims and Payments Regulations. It is concerned not with payment of benefit in a general sense, but with the extinguishment of a "right to payment of any sum by way of benefit" (regulation 38(1)). The basic condition for such extinguishment is that "payment of that sum is not obtained within the period of 12 months from the date on which the right is to be treated as having arisen". Mr Commissioner Levenson has in decision CU/2604/1999 (in the papers under that reference, but now reported as R(U) 1/02) stressed that some meaning must be given to the word "sum". So he held there that where a Commissioner had decided that unemployment benefit was payable to a claimant for a specified period, without quantifying the amount of benefit, there was no sum identified to which a right of payment attached which could be extinguished. Likewise, it seems to me that some weight must be attached to the use of the term "any sum by way of benefit" and to the test being in terms of "obtaining" payment of such a sum. The use of language does not point towards a situation where benefit of a sufficiently ascertainable amount has been merely been awarded by a decision on entitlement and payability, so that the Secretary of State is under an obligation to pay the benefit as soon as reasonably practicable (Claims and Payments Regulations, regulation 20). It points towards a situation where a particular sum has been allocated to the claimant and some steps along the administrative process of making payment have been taken, leaving the claimant with some relatively mechanical steps to take to "obtain" payment.
16. That view is also consistent with the provisions of subparagraphs (a) to (b) of regulation 38(1), which define the dates on which the right to payment of a sum by way of benefit is to be treated as having arisen in certain circumstances. The rules are that: where the claimant has been given or sent an instrument of payment or an instrument has been made available for collection, the right arises on the date of the instrument or any replacement instrument (subparagraph (a)); where a sum is payable by means of an instrument for benefit payment (see regulation 20A), the right arises on the first date on which payment could be obtained by that means (subparagraph (aa)); and, where subparagraph (a) does not apply and notice is given or sent that the sum is available for collection, the right arises on the date that the notice is sent (subparagraph (b)). It makes perfect sense to say in all those situations that a right to payment of the particular sum by way of benefit had arisen and that, if the claimant does not take the other necessary steps to get paid (even in a situation, for instance, where a letter gets lost in the post), payment has not been obtained. The final provision in regulation 38(1), the crucial provision in this case, is subparagraph (c), under which the right to payment is to be treated as having arisen:

"(c) in relation to any such sum to which none of (a), (aa) or (b) apply, on such date as the Secretary of State determines or the [Board of Inland Revenue] determine."

17. It is plainly arguable that subparagraph (c) does not give the Secretary of State an unfettered discretion to choose any date whatsoever, but must be interpreted in accordance with the overall scheme and scope of regulation 38(1) and by reference to the circumstances of subparagraphs (a) to (b). It is true that regulation 38(2A) on good cause is drafted on the assumption that regulation 38(1) can apply in a case where no instrument of payment was given or sent to the claimant, but I do not think that that undermines what I have said above. Miss Topping submitted that, although subparagraph (c) might exclude irrational or completely unreasonable choices, it certainly allowed the Secretary of State to determine that a right to payment of a sum by way of benefit arose on the date on which a weekly payment of benefit would have been made in the ordinary course of things, even though no administrative steps at all had actually been taken towards making payment.
18. The difficult question is how and how far I could give effect to my view of the overall scheme and scope of regulation 38 if I concluded that it did limit the application of regulation 38(1)(c). It may be that, in relation to periods before the coming into force of the Decisions and Appeals Regulations and after the amendment to paragraph 5 of Schedule 2 to those Regulations on 20 May 2002, on appeal neither an appeal tribunal nor a Commissioner can overturn a determination by the Secretary of State under regulation 38(1)(c) that a right to payment of a sum by way of benefit is to be treated as having arisen on a particular date. In relation to appeals made in those periods, if an appeal tribunal or a Commissioner disagrees with the date determined by the Secretary of State, as inconsistent with the overall scheme and scope of regulation 38, it may be that the response would have to be similar to that of Mr Commissioner Levenson in R(U) 1/02. That would involve a decision that sidestepped the Secretary of State's determination under regulation 38(1)(c) by concluding, for example, in a case where no administrative steps at all had been taken towards making payment in relation to a period, that the case was one where there was no right to payment of a sum by way of benefit, so that regulation 38 did not apply at all. Reaching such a conclusion would require much more detailed analysis of Commissioners' decisions and probably further submissions. I acknowledge that there are several Commissioners' decisions which appear to accept results consistent with Miss Topping's submission (although sometimes deciding for the claimant on other grounds). But there are also decisions such as R(F) 1/66, although about rather different legislation, which seem to point in the opposite direction.
19. However, I do not need to enter into that analysis in order to decide the present case. At the date when the decisions under appeal and the appeals were made, all the issues arising under regulation 38, including the application of regulation 38(1)(c), came within the jurisdiction of the appeal tribunal. The same applies to me when substituting a decision on the appeals. I can consider regulation 38(1)(c) afresh, as no instrument of payment or instrument of benefit payment or notice of a sum awaiting collection was issued in relation to the relevant periods before the decisions under appeal were made (I come back below to the payment apparently made by the income support office on 23 March 2001: page 123). I must make a determination consistent with the overall scheme and scope of regulation 38, as I am inclined to think, or constrained only by the bounds of rationality and reasonableness, as Miss Topping suggested.
20. On either basis, I conclude in relation to DLA in both periods in dispute that no right to payment of any sum by way of benefit had arisen by the dates of the decisions under appeal or has arisen since. On the former basis, since payment of DLA to the claimant in accordance with the award in his favour simply stopped by mistake after 4 May 1997 and no administrative steps had been taken towards making payment of benefit for any day in the period from 5 May 1997 to 6 December 1998, no right to payment of any sum by way of benefit in the form of DLA had arisen. On the latter basis, I take account of the same factors and all the circumstances of the case. I take account in particular of the non-payment arising from a clear failure of good administration when entitlement to income support ceased, of the failure of the Disability Benefits Unit to consider the implications of all the answers on the attendance allowance claim form received in April 1998 or to make enquiries of the income support office or the claimant about payment and of the fact that in December 1999 the Disability Benefits Unit did not know from its own records whether its responsibility to make payment of benefit to the claimant had or had not been discharged, but had to ask the claimant whether he had received payment. I do not need to make findings on what the claimant did or did not do otherwise to contact any offices of the Department about lack of payment or about just what the terms were of the letter notifying him of the decision of 30 June 1998. I have no doubt that in the exercise of the discretion under regulation 38(1)(c), even if its scope is as wide as Miss Topping submitted, I should determine that no right to payment of any sum by way of benefit arose before the dates of the decisions under appeal.
21. Accordingly, I substitute the decision on the claimant's appeals which is set out in paragraph 1 above. That is on the basis that no right to payment of sums by way of benefit had arisen by the date of the decisions under appeal (the dates beyond which I am not allowed to take into account changes of circumstances: Social Security Act 1998, section 12(8)(b)). The result, as the claimant is entitled to DLA for the period from 5 May 1997 to 6 December 1998 and that benefit is payable to him, is that it is now for the Secretary of State to make payment for that period. The question of suspension of payment was faintly mentioned at the oral hearing, but I cannot at present see any basis for that under the Decisions and Appeals Regulations.
22. The Secretary of State may of course take account of any payments of DLA which have already been made for the periods in question. The calculation is not a matter for me. In a minute to the Secretary of State's representative who was preparing the submission of 18 November 2002, the local office dealing with the claimant's income support said that it had on 25 March 2001 paid arrears of DLA for the period from 9 March 1998 to 19 December 1999, amounting to £779.75, followed by a compensation payment of £84.13 on 28 June 2001 (page 123). Since any such payment was made after the dates of the decisions under appeal I have left it out of account in accordance with section 12(8)(b) of the Social Security Act 1998. But I have considerable doubts over the accuracy of the minute. If arrears of DLA at the higher rate of the mobility component and the lowest rate of the care component were paid for a period of more than 18 months, the total should have been a great deal more than £779.75. The figure would still be too low if it covered only the period from 9 March 1998 to 6 December 1998. There is therefore a possibility that it represented, say, arrears of the disability premium rather than arrears of DLA. This matter should be investigated carefully if any deduction is to be made from the amount of the claimant's overall DLA entitlement for the period from 5 May 1997 to 6 December 1998, and any calculation fully explained to the claimant and his representative.

(Signed) J Mesher

Commissioner

Date: 15 May 2003