UK Social Security and Child Support Commissioners' Decisions

 


R(H) 2/03

Secretary of State for Work and Pensions v. Chiltern District Council and Warden Housing Association [2003] EWCA Civ 508

Mr. E. Jacobs CH/4943/2002

15.7.02

CA (Brooke, Hale, & Arden LJJ)

26.03.03

Tribunal procedure – jurisdiction over exercise of a local authority's discretion as to the person from whom they will recover an overpayment of housing benefit

Calculation of overpayment -– whether offset should be applied before termination of housing benefit where a "passport benefit" ceases

The tenant received housing benefit paid direct to his landlord. The local authority determined that there had been a recoverable overpayment of housing benefit following the termination of his income-based jobseeker's allowance (the "passport benefit"). They sought to recover the overpayment from the landlord. The landlord appealed to an appeal tribunal and then to the Commissioner, who held inter alia that (1) there was no right of appeal against the exercise of a local authority's discretion as to the person from whom they would recover an overpayment, as it was not a decision under regulation 101 of the Housing Benefit (General) Regulations 1987 ("the Regulations") and (2) before terminating entitlement on cessation of a passport benefit, the authority must, under regulation 104 of the Regulations, consider whether there was continuing entitlement in the changed circumstances.

The Secretary of State appealed to the Court of Appeal on the above issues.

Held, allowing the appeal, that:

1. without regulation 101 there would be no power to choose the person from whom to recover an overpayment, so the exercise of that power of choice must be a decision under that regulation. It was quite clear that the legislation contemplated a right of appeal against the exercise of that power (paras. 14-15);
2. under regulation 67 of the Regulations the cessation of a passport benefit had the effect of ending the benefit period, whereupon the authority was required by regulation 72(14)(a) to invite a fresh claim. That process was quite separate from determining any offset to the overpayment under regulation 104. There was no power to postpone the termination of the award while obtaining information in order to apply regulation 104 (paras. 19-21).

The case was remitted to an appeal tribunal for determination.

DECISION OF THE COURT OF APPEAL

Miss M. Demetriou (instructed by Office of the Solicitor, DWP, New Court, 48 Carey Street, London) appeared on behalf of the Appellant.

The respondents did not appear and were not represented.

Judgment

LADY JUSTICE HALE:

3. This is the Secretary of State's appeal under paragraphs 8(2)(a) and 9(3)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000 against the decision of Mr. Commissioner Jacobs, dated 15 July 2002. The Commissioner himself granted the Secretary of State permission to appeal on 21 October 2002.
4. The case concerns the recovery of overpayment of housing benefit. The parties to the appeal before the Commissioner were respectively the local authority concerned and the Warden Housing Association, the landlord to whom the benefit in question had been paid. Neither of those parties has appeared before this court.
5. The facts are simple. Mr. McVeigh, who has played no part in these proceedings at all, was in receipt of housing benefit of some £108 a week while on jobseeker's allowance. This was paid to his landlord. His jobseeker's allowance ended. Accordingly, the local authority determined that he was no longer entitled to housing benefit from 23 October 2000. On 8 January 2001 they wrote to Mr. McVeigh stating that he had been overpaid housing benefit (totalling some £769) and that the overpayment would be recovered from his landlord. That same day they wrote to the landlord stating:

"… no further payments will be made, as Mr. McVeigh is no longer entitled to Housing Benefit from 23rd October 2000.

As a result of this change, Mr. McVeigh has been overpaid Housing Benefit totalling £769.86. This covers the above period at a weekly amount of £109.98.

An invoice is attached in respect of this overpayment and I should be obliged if you would settle this as soon as possible."

The Appeal Tribunal held that the overpayment could be recovered from the landlord.

6. The Commissioner commented that:

"If anyone involved in housing benefit work is looking for a Commissioner's decision to take to a desert island, this is the one."

The appeal before him raised a number of issues, but before us there are only two; so it is not such acceptable reading for a desert island as is his decision.

7. The first is whether an Appeal Tribunal has jurisdiction to hear an appeal against the local authority's exercise of their discretion as to the person from whom they will recover any overpayment. The Commissioner held that it does not. The Secretary of State argues that it does. Miss Demetriou, on behalf of the Secretary of State, points out that landlords may well have legitimate complaints against the exercise of the local authority's discretion to recover the money from them. It is of course easier for the local authority to recover the money from the landlord, to whom it has been paid, but it may be unfair. The reasons for the overpayment are often within the control of the claimant, and within the knowledge of the claimant, but not within the knowledge of the landlord. The landlord simply continues to provide accommodation at the lawful rent in return for the money. He has not necessarily any reason to suppose that the claimant has ceased to be entitled to the benefit in question.
8. The second issue to arise on this appeal is whether the local authority must terminate housing benefit when a passport benefit ceases, or whether they must first determine whether other factors gave the claimant a continuing entitlement. The Commissioner held that they must consider other factors first. The Secretary of State argues that housing benefit should cease once entitlement to the passport benefit ceases.
9. Presumably, had they been here, the landlord would have supported the Secretary of State on the first issue and not on the second, and the local authority would have supported the Secretary of State on the second issue but not on the first.
10. First, the Tribunal's jurisdiction. Section 75 of the Social Security Administration Act 1992 deals with overpayment of housing benefits. At the material time section 75(3) provided:

"An amount recoverable under this section is in all cases recoverable from the person to whom it was paid; but, in such circumstances as may be prescribed, it may also be recovered from such other person as may be prescribed."

Such circumstances are prescribed by Regulation 101 of the Housing Benefit (General) Regulations 1987. At the material time, regulation 101(1) provided:

"Subject to paragraph (2) a recoverable overpayment shall be recoverable from either-

(a) [concerns cases in which the overpayment was a consequence of a misrepresentation or failure to disclose]; or

(b) in any case, the claimant or the person to whom the overpayment was made."

11. The right of appeal to a tribunal in housing benefit cases is governed by paragraph 6 of Schedule 7 to the Child Support, Pensions and Social Security Act 2000. Paragraph 6(1)(a) applies to any relevant decision of a relevant authority which is made on a claim for, or an award of, housing benefit, subject to the exceptions in paragraph 6(2). These include in subparagraph 6(2)(e):

"any such other decision as may be prescribed."

Paragraph 6(6) provides:

"Where any amount of housing benefit or council tax benefit is determined to be recoverable under or by virtue of section 75 or 76 of the Administration Act (overpayments and excess benefits), any person from whom it has been determined that it is so recoverable shall have a right of appeal to an appeal tribunal."

Regulation 16(1) of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 provides:

"No appeal shall lie against a decision specified in the Schedule to these Regulations."

Paragraph 1(f) of the Schedule provides:

"No appeal shall lie against a decision made by virtue of, or as a consequence of ... and Part XIII (overpayment) of the Housing Benefit Regulations except a decision under …

(f) regulation 101 (person from whom recovery may be sought);"

Paragraph 3 of the Schedule states:

"Subject to paragraphs 1(f) and 2(c), no appeal shall lie against a decision as to the exercise of discretion to recover an overpayment of housing benefit or, as the case may be, excess council tax benefit."

12. At first sight, it looks as if anyone from whom it has been determined that an overpayment is to be recovered, may appeal by virtue of paragraph 6(6) of Schedule 7 to the Act. The Decisions and Appeals Regulations exclude many decisions, but in paragraph 1(f) of the Schedule they preserve decisions under regulation 101. Paragraph 1(3) of the Schedule excludes the exercise of discretion, but subject to the preservation of appeal rights against decisions under Regulation 101. Thus it contemplated that there might be an appeal against the exercise of a discretion.
13. The Commissioner, however, drew a distinction between the decision that the overpayment was "recoverable from a person" and the decision that the overpayment would be recovered from that person. Section 75(3) of the 1992 Act talked of an overpayment being "recoverable" from the person to whom it was paid, but provided that it "may also be recovered" from someone else. It was, therefore, concerned with recoverability not actual recovery. That was left to the discretion of the local authority. Regulation 101 was, in terms, concerned only with recoverability. It is limited to identifying the circumstances in which and the person, other than the payee, from whom recovery may be sought:

"The local authority's discretion is not a decision made under that regulation. The exercise of the discretion is independent of that regulation. Either the discretion is … exercised directly under section 75 or it is a matter that is left outside the legislation altogether." (Paragraph 54 of his decision.)

Hence, he concluded, there is a right of appeal against the decision that the overpayment is recoverable from that person but not against a decision that it will actually be recovered from him rather than anyone else.

14. Miss Demetriou argues that that conclusion is wrong. Firstly, Regulation 101 must contemplate a decision being taken by the local authority. Paragraph 1(f) of the Schedule to the Decisions and Appeals Regulations refers to a decision under Regulation 101: what decision could this mean other than a decision to seek recovery from one rather than the other? Secondly, section 75(3) gives no power to recover from anyone other than the payee without further provision. That further provision is in Regulation 101. That is the only source of the power to recover from someone other than the payee. Hence it must also be the source of the power to choose. Thirdly, a decision that the overpayment might be recovered from either (a) or (b) is not a decision at all. It is simply a ground for the real decision, which is whom to choose as between the two. Fourthly, paragraph 3 clearly refers to the exercise of a discretion. The question of whether someone is either a payee or a claimant is a question of fact not an exercise of discretion. The only discretion which could be contemplated by paragraph 1(3) is the choice between them.
15. Miss Demetriou also, for what it is worth, refers to a parliamentary written answer from Angela Eagle, MP, who was a junior minister in the Department at the time in question, given on 10 January 2001, stating:

"We have decided that in cases where more than one person may be liable under the legislation to repay an overpayment, the person from whom the local authority decides to seek recovery should have a right of appeal to an Appeal Tribunal against that decision."

The reasons why it was thought appropriate to allow such an appeal are, of course, those mentioned at the outset of this judgment.

16. There is to my mind no real ambiguity about the statutory position which requires us to consider the parliamentary answer. Appeals are against decisions, not against the basis or grounds for the decision, just as appeals are against orders and not the reasons for the orders. There would be no power to choose without Regulation 101. The exercise of that power of choice must be a decision under that Regulation. It is quite clear that the legislation contemplates a right of appeal against the exercise of a discretion in this context. This is clear without reference to Miss Eagle's statement of policy.
17. So, on this aspect of the matter, I would allow the appeal, while recognising the much greater familiarity with this area of law enjoyed by the Commissioner. In this case, in my judgment, he allowed himself to be beguiled by an unusually seductive argument, presented to him in the face of clear and sensible provision the other way.
18. Secondly, as to cessation of benefit. Regulation 67(1)(a) of the Housing Benefit Regulations provides that where a claimant is on income support and/or income-based jobseeker's allowance and ceases to be so entitled, then the benefit period ends with the last day of the benefit week in which the change of circumstances occurs, unless subparagraph (b) applies. Subparagraph (b) applies where a claimant ceases to be entitled to income support or income-based jobseeker's allowance because of an award of benefit under the benefit Acts. In that case, the benefit period ends at the end of the benefit week in which payment of income support or income-based job seeker's allowance ceases.
19. Regulation 72(14)(a) provides that a local authority shall invite a person to whom housing benefit has been granted to make a claim for a further grant of that benefit where the benefit ended in circumstances to which Regulation 67(1)(a) and (b) refer, in other words the cessation of a passport benefit.
20. These provisions are quite separate from Regulation 104 of the Housing Benefit Regulations which is concerned with reducing the amount of a recoverable overpayment:

"(1) Subject to paragraph (3), in calculating the amount of a recoverable overpayment, the relevant authority shall deduct any amount of housing benefit which should have been determined to be payable in respect of the whole or any part of the overpayment period–

(a) on the basis of the claim as presented to the authority;

(b) on the basis of the claim as it would have appeared had any misrepresentations or non-disclosure been remedied before the decision; or

(c) on the basis of the claim as it would have appeared if any change of circumstances had been notified at the time that change occurred.

(2) For the purposes of paragraph 1(c), where the change of circumstances is the cessation of entitlement to income support or income-based jobseeker's allowance the deduction shall be made as if that change of circumstances had not ended the benefit period."

21. In this case, the local authority had asked the claimant to make a fresh claim for housing benefit for the period of the overpayment under Regulation 72(14)(a) so as to be able to determine the amount of any offset under Regulation 104. The Commissioner, however, found that the local authority must not end housing benefit at all until it has obtained enough information to be able to apply Regulation 104 and, indeed, had applied that Regulation. They should have used the power under regulation 73(1) to require information from the claimant; this applied whenever there was doubt about whether there would be continuing entitlement. Regulation 104 is mandatory. It had to be applied as part of the process of determining the overpayment. Until it was applied, the authority did not have the information to decide whether to terminate the award altogether or merely to reduce the amount of any overpayment or duration.
22. Miss Demetriou argues that the Commissioner failed to apply regulation 67(1) at all. Indeed he does not mention it. This states quite clearly that entitlement to housing benefit ends once entitlement to, or payment of, a passport benefit has ended. There is no power to postpone termination until the local authority has the required information. The local authority must invite a fresh claim and can use that fresh claim in order to apply Regulation 104 so that the claimant is not disadvantaged by the amount of the overpayment sought to be recovered.
23. Clearly, in my judgment, ending the benefit period under regulation 67 is quite separate from determining the amount of any offset under regulation 104. Regulation 104(2) makes that plain because it saves it for the purpose of calculating the offset. Again, in my judgment, the Secretary of State succeeds on this issue as well.
24. I would allow the appeal on both points.

LADY JUSTICE ARDEN:

25. I agree. The Commissioner's memorable allusion to a person finding use of his decision on a desert island, to which my Lady has drawn attention, may connote a tinge of regret on the Commissioner's part about his conclusion that there is no right of appeal for a landlord to a specialist tribunal, even where the landlord considers that it has an arguable case to contest a decision to seek recovery of the overpayment of housing benefit from it. On these colder shores, with non-tropical temperatures and vegetations, a right of appeal to a specialist tribunal is a matter of importance particularly in the light of the European Convention on Human Rights.
26. In my judgment, the Secretary of State's construction is correct in law and, with respect to the right of appeal, is consistent with sound principle and policy.

LORD JUSTICE BROOKE:

27. I agree with both judgments.

Order: Appeal allowed. Decision of Commissioner set aside. The matter remitted to an Appeal Tribunal for determination.