UK Social Security and Child Support Commissioners' Decisions

[2003] UKSSCSC CTC_5401_2002 (23 December 2003)

 


CTC/5401/2002

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I treat the claimant's appeal as being also an appeal by her husband insofar as it relates to the recoverability from him of an overpayment. I set aside the decision of the Keighley appeal tribunal dated 16 October 2002, but I substitute a decision to almost the same effect. The sum of £507.24 in working families' tax credit in respect of the period from 9 April 2002 to 6 May 2002 has been overpaid to the claimant and is recoverable from her husband.

REASONS

2. On 23 March 2002, a Saturday and the first day of the school Easter holidays, the claimant and her husband completed a claim form for working families' tax credit. She declared that she was a classroom assistant, employed by a local education authority to work 27½ hours a week. He declared that he did not have a job and he did not disclose any earnings. On 8 April 2002, working families' tax credit was awarded from 9 April 2002 at the rate of £126.81 per week. The claim was a repeat claim and I think that explains the date from which the tax credit was awarded. However, on 4 April 2002, the Inland Revenue had asked the local education authority to provide details about the claimant's husband. On 10 April 2002, they received information that he was employed by the local education authority and his gross pay at the end of December, January and February had been £4,526.51, £3,978.21 and £3,601.13 respectively. The informant stated that the claimant's husband's job was expected to last for (at least) five weeks from 24 March 2002, although he qualified the answer with the words "as far as I know – employment is casual". The claimant's husband's earnings were considerably greater than her own. Her gross pay in the three four-week pay periods before the claim for tax credit had been £500.05, £500.05 and £562.55 respectively. On 30 April 2002, the Inland Revenue revised the award of tax credit, taking into account the claimant's husband's earnings and deciding that the claimant had not been entitled to tax credit from 9 April 2002. The overpayment, covering the period of four weeks up to 6 May 2002, was calculated to be £508.12. By my calculation, the figure should be £507.24. It was decided that the overpayment was recoverable from the claimant's husband, who had completed the relevant part of the claim form. An appeal was dismissed by the tribunal and this further appeal is now brought with my leave.
3. The claimant's husband was a teacher. He has described himself as a supply teacher and contended that he accurately stated on the claim form that he had no job because he was not working on the day he completed the form. There are no doubt supply teachers whose employment is truly casual and who can properly describe themselves as unemployed between contracts. However, in the present case, the claimant's husband was not in that position. He was employed by the local education authority on a sessional basis to teach children who were not in school, whether due to ill health or because they had been suspended or expelled. Like other teachers, he did not teach during school holidays. It is plain that he was employed virtually full-time – and certainly for longer hours than his wife – in the months before the claim for tax credit was made and he knew when he completed the form that his employment would continue after the Easter holidays. No challenge is now made to the tribunal's finding that he was in employment when he completed the claim form.
4. For there to be any entitlement to working families' tax credit, it was necessary for either the claimant or her husband to be "engaged and normally engaged in remunerative work" at the date of claim (see section 128(1)(b) of the Social Security Contributions and Benefits Act 1992) but, as the claimant satisfied that condition, the relevance of her husband's employment was simply that he had earnings. The Inland Revenue submits that earnings were relevant only if the earner was "engaged in remunerative work" (or, presumably, part-time work) at the date of claim. I am not satisfied that that is correct. Like the appellants' representative, I do not see why earnings from recent employment should not be relevant. Schedule 1 to the Family Credit (General) Regulations 1987 contains no provision akin to paragraphs 1 and 2 of Schedule 8 to the Income Support (General) Regulations 1987. The question is not unimportant because "engaged in remunerative work" has a more limited meaning that merely being in employment and it is not clear that a cycle of work had been established so that the claimant's husband could be treated as engaged in remunerative work at the date of claim during what may have been a period of "no work" rather than a period of holiday (see R(JSA) 2/03 and R(JSA) 5/03). In my view, the appellants' representative is correct to concede that the claimant's husband's earnings were relevant even if he was not "engaged in remunerative work" on the date of claim.
5. It being accepted that the claimant was not entitled to working families' tax credit, the issue on this appeal is simply whether the tribunal erred in law in holding the overpayment to be recoverable from the claimant's husband under section 71 of the Social Security Administration Act 1992, which permits the recovery of an overpayment only if, "whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, a material fact". The Secretary of State submits that there was a misrepresentation because incorrect answers were given to questions on the claim form. The claimant's case before the tribunal was that the claim form had not been completed inaccurately. So far as the specific answers given, the claimant's argument is clearly not sustainable. At question 2.2, "Are you an employee ?", the answer "No" was ticked. At question 2.18, "How many jobs do you have ?", the answer given was "0" and no answers were given to the following questions asking for details of the "main job". Even if the claimant's husband was not actually engaged in work on the day the form was signed, he had a job. A person who works full-time from Monday to Friday each week does not cease to have a job at week-ends or when on holiday and a person who works an irregular pattern of days on and days off still has a job on the days off. In the present case, as is now conceded, the tribunal was entitled to conclude that the claimant's husband was "in employment" at the date of claim, even if he was not technically "engaged in remunerative work". It follows that he had a job and that the answers given on the claim form were inaccurate.
6. However, the Inland Revenue accept that that is not an end of this case because the declarations signed by the claimant and her husband at the end of the claim form were in the following terms:

"I declare that the information I have given on this form is correct and complete to the best of my knowledge and belief."

In the light of Sharples v. Chief Adjudication Officer (reported as R(IS) 7/94), it is conceded that the tribunal erred in failing to consider whether the claimant's husband believed that the answers he had given were accurate, even though they were actually inaccurate. Nonetheless, the Inland Revenue suggests that it is clear that the claimant's husband did not believe that the information he had provided was correct and complete and I am asked to substitute a decision to the same effect as the tribunal's. On the other hand, the claimant's husband asks me to substitute a decision to the effect that the overpayment is not recoverable. Neither party has asked for an oral hearing.

7. The history of this case is material. In February 2001, an earlier claim for working families' tax credit was withdrawn following a discussion between the claimant's husband and the Inland Revenue as to the relevance of his earnings. He was told that they were relevant if he was still "on the books" of the local education authority. It appears that another claim form was sent and that the claimant successfully claimed working families' tax credit with effect from April 2001 and October 2001, presumably on the basis that her husband had no earnings. On 20 October 2001, the claimant's husband wrote to the local education authority, saying –

"I would like to inform you that starting from today I will no longer be on the payroll of [the authority] and wish to be taken off the supply register. I would appreciate this letter being kept on file for future reference."

The letter is annotated with a hand-written note, saying –

"rang – [the claimant's husband] says put on file only, says not to be taken off."

The claimant's husband subsequently explained that he had been told by an employee of the local education authority that a lot of paper work would be involved if he was to be taken "off the books" and so he had said that she should do what she wanted so long as the letter remained in the file. The tribunal found that "the effect of that letter was clearly spent as soon as [the claimant' husband] began working again for the local authority after October 2001".

8. I am prepared to accept that the claimant's husband believed that he should not be treated as being in employment for tax credit purposes during school holidays and, as I have indicated, it is in fact possible that he was not to be treated as "engaged in remunerative work" during those holidays. However, I do not accept that he believed that the Inland Revenue would take the view that he was not in employment and neither do I accept that he believed that he did not "have a job", which was the question asked on the claim form. He knew full well that the Inland Revenue would regard him as being in employment during school holidays and other periods of "no work" as long as he was on the payroll of the local education authority and, furthermore, despite the letter he had written in October 2001, he knew that he was still on the payroll. Whether the Inland Revenue's test was, strictly speaking, the right one is irrelevant. They were right that his earnings were relevant, even if their reasons were not entirely correct. Furthermore, I do not believe that the claimant's husband would have described himself as jobless to anyone other than the Inland Revenue. As a matter of ordinary language, it was not an accurate description of his situation any more than it would have been had he been away from work due to illness or holiday.
9. The Inland Revenue are entitled to ask in a claim form broad questions in a non-technical form with a view to determining later whether the technical criteria for entitlement to a tax credit are satisfied. A person who provides a narrower answer because he believes that that is all that is technically relevant does so at his own peril. Of course, if he is correct, there is no question of an overpayment arising. Further, if the answers on the form are qualified in the way they were on this form, he may avoid having to repay an overpayment caused by an answer that is wrong because it is based on too narrow a construction of the question, provided he genuinely believed that the narrow answer was the one wanted by the Inland Revenue. But if he knows that the narrow construction given by him to the question is not the one intended by the Inland Revenue and he knows that the answer is also not a correct and complete answer to the broad question being asked, he must repay any overpayment arising because the answer is too narrow. There may not be dishonesty in those circumstances, but section 71 of the 1992 Act does not require dishonesty. It does not impose a penalty. It merely provides for the repayment of a tax credit that should not have been paid in the first place.
10. In the present case, the claimant's husband knew that he had a job and, while he may have thought that he should not be regarded as being in employment at the date he signed the claim form, he knew that the Inland Revenue were likely to take a different view. I am not satisfied that it is relevant that previous claims had been successful, because there is no evidence that not only were the circumstances the same but there had also been fuller disclosure than there was on this occasion so that the claimant's husband could reasonably believe that such disclosure was unnecessary. That seems highly improbable. It seems to me likely that either the claimant's husband was not in employment when the previous claims were made or that the forms were not completed accurately on those occasions either. I am satisfied that the answers given by the claimant's husband on the form signed on 23 March 2002 amounted to misrepresentations as to his employment status and a failure to disclose his receipt of earnings, even though the answers were qualified by the form of the declaration. Accordingly, the resulting overpayment is recoverable from him.

(Signed) MARK ROWLAND

Commissioner

23 December 2003