UK Social Security and Child Support Commissioners' Decisions

 


[2004] UKSSCSC CH_609_2004 (28 June 2004)

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is given under paragraph 8(4) and (5)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000. It is:

I SET ASIDE the decision of the Oxford appeal tribunal, held on 11 December 2003 under reference U/04/048/2003/00800, because it is erroneous in point of law.

I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.

My DECISION is:

The overpayment of housing benefit and the excess council tax benefit for the inclusive period from 1 April 2002 to 24 June 2002 is recoverable from the claimant. (This is the only period in issue on the appeal.)

The appeal to the Commissioner

2. This is an appeal by a claimant, brought with the leave of Mr Commissioner Williams. The other party to the appeal is the claimant's local authority.
3. Mr Commissioner Williams directed an oral hearing of the appeal. As he was not available to take the hearing, it was held before me in London on 24 June 2004. The claimant attended and was represented by Mr O'Donoghue. The local authority was represented by Mr Underwood, of counsel. I am grateful to both representatives for their arguments.

The issue

4. The claimant has been overpaid housing benefit and paid excess council tax benefit between 3 December 2001 and 1 April 2003. The only period in issue before the tribunal and before me was the inclusive period from 1 April 2002 to 24 June 2002. There is no dispute that the claimant was not entitled to the money he received. The issue is whether the benefit paid can be recovered from the claimant.

The legislation

5. The local authority accepted that the claimant received too much benefit because the local authority had delayed in acting on the information he provided. In the words of the legislation, there was an official error. However, the legislation provides that the benefit may still be recovered from the claimant in certain circumstances. For the purposes of housing benefit, those circumstances are set out in regulation 99(2) of the Housing Benefit (General) Regulations 1987:

'(2) Subject to paragraph (4), this paragraph applies to an overpayment caused by official error where the claimant or the person acting on his behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.'

There is equivalent provision for council tax benefit in regulation 84(2) of the Council Tax Benefit (General) Regulations 1992.

A three stage approach

6. In a number of decisions, I have said that tribunals should take a three stage approach to the application of these provisions:

•    First, the tribunal must direct itself correctly on the law.

•    Second, the tribunal must identify the information that the claimant had about the housing benefit and council tax benefit schemes.

•    Third, the tribunal must determine what the claimant could reasonably have been expected to realise from that information.

7. In this case, the tribunal decided that it did not have to apply this approach, because the facts were different from those in the cases in which I had set it out. This issue of whether my approach applied to the facts of this case was pursued at the oral hearing.
8. I see nothing controversial about the approach I suggested. It follows from the terms of the legislation. The first stage must surely be right. The third stage merely repeats the words of the legislation. That cannot be controversial. The second stage follows from the nature of the test that the tribunal has to apply and from the wording of the provision. The issue is what the claimant or other person could have realised, not what a claimant or other person could have realised. That puts the focus on the individual claimant. And what an individual claimant could reasonably have been expected to realise must depend on what information that person had about the schemes.
9. Given that the approach is dictated by the terms of the legislation, I do not understand how the facts of the case can be relevant to whether or not it is applied. If the legislation requires it, it has to be applied.
10. The tribunal went wrong in law in its approach to the case. It declined to take an approach that was dictated by the terms of the legislation it had to apply. It believed that the facts of the case affected that approach. How the terms of legislation can be affected by the facts of the case, I do not understand.

What information was available to the claimant?

11. As Mr Commissioner Williams pointed out in granting leave, the issue in this case was what the claimant could reasonably have been expected to realise at the time of receipt of the payments. The tribunal had to begin with the position at the start of the period. But it also had to consider whether circumstances changed during that period.

At the start of the period in question

12. The tribunal referred to a letter written by the claimant on 24 March 2002. It said that this 'makes it quite clear that he believed his income would bring to an end benefit'. The claimant objected to that reading of his letter. I agree with him that that is not quite what it says. The claimant referred to the fact that he had previously not claimed benefit when entitled to it and had incurred debts, which he now had to repay from his income. In effect, he asked the local authority to take this into account in fixing the precise date when his entitlement came to an end. In other words, he did not believe that his entitlement had ended. He believed that in some way his existing debts would or could be taken into account in setting the time for payment to come to an end. To put it another way, he believed that his entitlement was determined not just on his present employment status or income, but on his financial position as a whole. I accept that he believed that he was entitled to what he was being paid for a period of time, albeit not a precisely defined period. The claimant's belief was, of course, wrong in law.
13. However, the recoverability issue is not determined by the fact that the claimant believed that he was entitled to the benefit he was receiving. This is determined by what he could reasonably have been expected to realise on the information available to him. This test has to be applied in the context that the claimant had started to work full-time. He told me that involved working about 50 hours a week as a surveyor for £1250 to £1500 a week gross. The issue is: on the information available to him, could he reasonably have been expected to realise that this change of circumstances would reduce the amount of benefit payable to him?
14. What was the information available to him? Mr O'Donoghue set it out at the oral hearing.

•    The claim forms asked questions about work and income. That showed that the benefits were income-related. It was reasonable to assume that the benefit was only paid to those on relatively low incomes. The questions also asked about some outgoings. But the questions were limited. Apart from the amount of rent, they involved costs related to children or students as well as pension contributions. The questions would not suggest that a person's debts or liabilities were otherwise relevant.

•    These impressions would have been confirmed by the guidance notes provided for claimants. They told claimants to report changes in their income and gave no reason to suppose that debts and liabilities were relevant.

•    The notification letters again showed that income was taken into account.

15. On the basis of that information, I consider that on the information available to him, he could reasonably have been expected to realise that no one earning the amount he was would be entitled to benefit. He had accumulated debts to meet from those earnings, but I consider that he could reasonably have been expected to realise that those debts were not going to be taken into account.
16. There is also the issue that the local authority might have had some discretion in the date from which the award was terminated. I can find nothing in the information available to the claimant that could reasonably have led him to believe there was this power.
17. I have not so far mentioned the relevance of the claimant's award of working families' tax credit. This was a fixed period award to which the claimant remained entitled despite any changes in his circumstances. The claimant had no previous experience of the benefit scheme. It is understandable why he might have believed that the same approach applied to other benefits. This belief may have been reinforced by the reference to benefit periods - he was told in his notification letter that his benefit would be reviewed in July 2002. However, against this has to be set the clear advice in the notes of guidance that claimants must report any change in their income. Why would that be necessary if the benefit entitlement would not change? I do not consider that it was reasonable to believe that the benefit would be unaffected by changes in income.
18. I have also not mentioned Mr O'Donoghue's detailed argument in support of the claimant. I will not set it out. I must, though, explain why I am not persuaded by it. My key reason is that it assumes too much knowledge. It is true for example, as Mr O'Donoghue argued, that the claimant could not have been expected to realise from the information that some income or capital was disregarded or that there was a taper on excess income. But the information to the claimant could not have alerted him to those complexities.
19. I also rejected the argument because of the amount of the claimant's income. The points made by Mr O'Donoghue about disregards, tapers and the rest might be relevant to someone whose income was at best going to have a marginal effect on entitlement. but in this case the claimant began earning the equivalent of £65000 a year. Given that, it was reasonable to expect him to realise that he would not retain his full entitlement to benefit, if he retained any entitlement at all.

Later

20. It is possible that information that is later available to the claimant may affect what the claimant could reasonably have been expected to realise. What happens if the claimant reports a change of circumstances to the local authority, but hears nothing in reply? I cannot imagine any circumstances in which the claimant could reasonably conclude from silence that benefit was being correctly paid. In the absence of confirmation that there was no change in entitlement, there are always other possibilities that at least require investigation. One is that the local authority did not receive the claimant's notification. Another is that it has been mislaid or overlooked. A third is that the local authority has not yet got round to dealing with it.
21. In this case, the claimant says that having heard nothing from the local authority, he telephoned to find out what was happening. The information provided in that call might have affected what the claimant could reasonably have been expected to realise. The tribunal did refer to this call. But it did not express any conclusion on whether or not it was made or, if it did, on what was said. Nor did it indicate that it would deal with the case on the basis that the call had been made as the claimant alleged. It thereby went wrong in law by failing to make a relevant finding and, perhaps, by failing to concentrated on the time of receipt of payment.
22. The claimant's evidence is that the call was made some weeks after he sent notification of his work, probably in April 2002. He did not remember the precise details of the call, but believes that he may have been advised that the claim would continue until the review date in July 2002.
23. Mr Underwood made a number of criticisms of the claimant's evidence about the call. He pointed out that the claimant could not remember exactly when the call was made, precisely what was said or who he had spoken to. All those points would be valid, if the claimant knew at the time that the call would later be important. But he had no reason to suspect at the time that he would have be asked questions about the call over 2 years later. Looking just at the claimant's evidence, I find his account credible. But that does not help the claimant. I have to decide what he could reasonably have been expected to realise from the information given to him during that phone call. What he recalls of the call is too vague and qualified to form the basis of any reasonable assumption about his entitlement to benefit.
24. I have not so far referred to the local authority's evidence. It produced evidence of the computer record of all telephone calls logged on its system. I was told how the system worked and how it was impossible for a call to be made without a computer record being made. I take a slightly more realistic, some might say cynical, view. Operators do make mistakes. Records are lost rather than saved. Systems crash or are not available. I do not regard the local authority's evidence as conclusive that no call was made. It is evidence going to show that there would have been a record of a call if one had been made. But it remains possible that some calls could be made that do not appear in the record. The claimant's evidence still has to be considered. The issue is whether, on the evidence as a whole, the call was made. In this case, I do not need to come to a conclusion. I can deal with the case simply on the claimant's own account of the telephone call. My analysis is set out in the previous paragraph.

Disposal

25. As the tribunal went wrong in law, I must set aside its decision. I have dealt with the matter afresh, but have come to the same decision as the tribunal did. I have substituted my own decision to that effect.

Signed on original on 28 June 2004

Edward Jacobs Commissioner