UK Social Security and Child Support Commissioners' Decisions

[2004] UKSSCSC CIS_1846_2004 (30 November 2004)

 


CIS/1846/2004

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I allow the claimant's appeal. I set aside the decision of the Telford appeal tribunal dated 6 October 2003 and I refer the case to a differently constituted appeal tribunal for determination. I draw the parties' attention to my directions in paragraph 18 below.

REASONS

2. The claimant separated from her husband in November 2001. He remained in the matrimonial home. By virtue of section 134(1) of the Social Security Contributions and Benefits Act 1992 and regulation 45 of the Income Support (General) Regulations 1987 (S.I. 1987 No. 1967 as amended), a person is not generally entitled to income support if she has capital exceeding £8,000. When the claimant first claimed income support, from 24 May 2002 to 28 October 2002, her interest in the matrimonial home was disregarded, although the ground upon which it was disregarded is not revealed. However, when she claimed again on 17 January 2003 and, after a brief return to work, yet again on 4 March 2003, the claimant was regarded as having capital taken to be of a value equal to half the value of the property after deducting the mortgage and the presumed costs of sale. On that basis, her capital exceeded £8,000. Accordingly, her claims were disallowed.
3. In a letter, written on behalf of the claimant on 6 May 2003, which was taken as an appeal against the disallowance of the second claim, a solicitor pointed out that the claimant was threatened with possession proceedings for non-payment of rent in respect of her new home and said that, although she had an interest in the matrimonial home, she would not have any capital until matrimonial proceedings had been dealt with. A letter of explanation in vague terms was written to the solicitor by the Department. It referred to guidance but referred to no legislation or clear principles behind the decision. The Secretary of State's submission to the tribunal was hopelessly inadequate. Insofar as any explanation for the decision under appeal was given at all, the Secretary of State appeared to be relying on regulation 51(1) of the 1987 Regulations which has the effect that a person shall be treated as possessing capital of which she has deprived herself for the purpose of securing entitlement to income support. No representative of the Secretary of State appeared at the hearing. The claimant was also unrepresented at the hearing but she attended herself and told the tribunal that divorce proceedings had been commenced.
4. The tribunal entirely ignored the Secretary of State's submission. It was right to do so. As the Secretary of State's current representative, Ms Susan Sedgwick, says in her helpful written submission, there was no question of the claimant having deprived herself of capital. She still had an actual capital interest in the matrimonial home. The real questions in this case were whether that capital fell to be disregarded under any of the provisions of Schedule 10 to the 1987 Regulations and whether it had, in any event, been correctly valued.
5. The tribunal did not expressly refer to any provision in Schedule 10 to the 1987 Regulations but appears to have had paragraph 26 in mind. That paragraph provides for the value of premises to be disregarded for at least 26 weeks while attempts are being made to dispose of those premises. The tribunal found that the matrimonial home was not "on the market for sale" and dismissed the appeal on that ground.
6. The claimant applied for leave to appeal on grounds drafted by Mrs Sally Everett of the specialist unit of the Shropshire, Telford and Wrekin Citizens Advice Bureaux, who argued that the tribunal had erred in failing to consider whether paragraph 4(b) of Schedule 10 might be applicable in the light of CIS/4843/02. Leave to appeal was refused by the chairman but granted by me. The Secretary of State submits that paragraph 4(b) was not applicable but supports the appeal on the ground that the tribunal misapplied paragraph 26.
7. Paragraphs 4(b), 25 and 26 of Schedule 10 provide for the following items of capital to be disregarded –

"4. Any premises occupied in whole or in part by –

(a) …;

(b) the former partner of a claimant as his home; but this provision shall not apply where the former partner is a person from whom the claimant is estranged or divorced.

25. Where a claimant has ceased to occupy what was formerly the dwelling occupied as the home following his estrangement or divorce from his former partner, that dwelling for a period of 26 weeks from the date on which he ceased to occupy that dwelling or, where that dwelling is occupied as the home by the former partner who is a lone parent, for as long as it is so occupied.

26. Any premises where the claimant is taking reasonable steps to dispose of those premises, for a period of 26 weeks from the date on which he first took such steps, or such longer period as is reasonable in the circumstances to enable him to dispose of those premises."

I set out paragraph 25 because it is obviously related to paragraph 4(b). The extension of the disregard in paragraph 25 where the former partner is a lone parent was introduced only from 1 April 2003, after the claim was made in this case although just before the decision, but in any event was inapplicable because the claimant's husband appears to have been living in the matrimonial home by himself.

8. CIS/4843/02 is a very short decision. The evidence that was before the tribunal is not recorded, save that, as in the present case, the claimant was living apart from her husband who remained living in what was described as the "former matrimonial home". Having referred to paragraph 4(b) of Schedule 10 , the learned Commissioner said –

"The premises were, at the relevant time, occupied by the claimant's husband. She was separated from him, but they were not divorced. So, she was entitled to the disregard, unless she and her husband were estranged. The tribunal found that they were estranged. At the least, the tribunal failed to explain why it made that finding. At worst, it equated separation and estrangement."

In his directions to the tribunal he said –

" 'Estranged' bears its normal meaning. The Secretary of State cites R(SB) 2/87. The Commissioner there made some comments on the nature of estrangement in paragraph 8. However, he was not defining the word. And, anyway, any definition by a Commissioner of an ordinary word would not be binding."

9. Ms Sedgwick argues that "estranged" means that the relationship between the former partners has broken down and distinguishes that situation from the position of a married couple who still regard themselves as a couple even though one of them is in residential accommodation and so they are treated as no longer being members of the same household and they may make separate claims for income support.
10. Mrs Everett responds by submitting that the reference to "former partners" suggests that the partners no longer regard themselves as a couple so that the disregard would not apply in the situation envisaged by Ms Sedgwick. Instead, she submits that, just as "divorced" refers to the end of a relationship between spouses, so "estranged" refers to the end of a relationship between unmarried partners and that, where a person is merely separated, having moved out of a house and being undecided as to whether to terminate or to try to repair the relationship, she should have the benefit of paragraph 4(b).
11. I commend Mrs Everett for her ingenuity but I cannot accept her submission. Regulation 2(1) of the 1987 Regulations provides that, where the claimant is a member of a married or an unmarried couple, "partner" means the other member of that couple. The terms "married couple" and "unmarried couple" are defined in section 137 of the 1992 Act. The concepts require that the couple be living in the same household and be either married or be living together as husband and wife. "Living together" implies having a common household. The circumstances in which persons are to be treated as being or not being a member of the same household are set out in regulation 16 of the 1987 Regulations. It is clear, therefore, that, contrary to Mrs Everett's submission, there are circumstances, of which Ms Sedgwick's example is one, in which two people can cease to be "partners" because they have ceased to have a common household, even though they still regard themselves as a couple.
12. It seems to me that the two terms "estranged" and "divorced" are both used in paragraph 4(b) of Schedule 10 because one does not usually talk of a divorced person as being merely estranged. "Estranged" is a term used in respect of people who are still married or who have never been married. Like the Commissioner in CIS/4843/02, I do not propose to try to define the term "estranged" but I agree with the suggestion in R(SB) 2/87 that it has a "connotation of emotional disharmony". Separation has different meanings in different contexts and, as was held in CIS/4843/02, it does not necessarily imply estrangement. However, when a woman talks of being separated from her husband, she is not usually talking just of physical separation but of a separation prompted by emotional disharmony. That is not always so and I accept that there are cases, of which CIS/4843/02 may have been one, where the circumstances need to be investigated in order to decide whether the parties are estranged. The question will be whether the parties have – to use Mrs Everett's expression - ceased to consider themselves to be a couple and not whether, despite that, they continue to maintain friendly relations. This will not be a live issue very often because, by virtue of regulation 16(1), members of a married or an unmarried couple remain "partners" – and therefore unable to make separate claims for benefit – during any period of temporary absence from one another, save in circumstances set out in regulation 16(2) and (5). Therefore, the circumstances in which a person can be entitled to income support without being a member of a couple but also without being estranged or divorced from her former partner are relatively few and it will be fairly clear in most cases that those circumstances do not exist. Of course, in reality, there may be a degree of uncertainty when a relationship breaks up and a period when the breakdown may not be irretrievable but if the conditions for separate entitlement to income support exist, it is likely there will be something that can properly be regarded as a state of estrangement. Members of a couple do not usually choose to live in separate houses in the same town (as the present claimant and her husband were doing) in circumstances where they are likely to be absent from each other for more than 52 weeks (see regulation 16(2)(b)) unless they are estranged.
13. Mrs Everett submits that her construction of paragraph 4(b) would enable couples to have a period of reflection without rushing headlong into divorce. However, she appears to have overlooked paragraph 25. Subject to the new exception where the former partner is a lone parent, the scheme of the legislation is that a claimant who has left the matrimonial home should have the 26 weeks allowed under paragraph 25 for reflection before she has to consider using capital tied up in the home to support herself (having the advantage of paragraph 26 while she takes reasonable steps to liberate the capital) or taking alternative action such as borrowing money on the strength of that capital.
14. Although, as the claimant's solicitor pointed out, the claimant did not have any capital in her hand when she made her claims for income support, she did have an interest in the matrimonial home and the value of that interest had to be taken into account as capital in assessing her claim for income support, subject to Schedule 10 to the Regulations. In my judgment, it is quite clear that the claimant in the present was estranged from her husband at the time she made her three claims for incomes support. She was therefore not entitled to have the value of that interest disregarded under paragraph 4(b). The period of 26 weeks mentioned in paragraph 25 had expired long before the claim to which this appeal relates (and, indeed, from near the beginning of the period of her first claim). Therefore paragraph 25 did not apply either. Given that there was no specific argument addressed to the tribunal in relation to those provisions and they so clearly did not apply, the tribunal did not err in not expressly mentioning either of them.
15. That leaves paragraph 26, which was apparently considered but rejected by the tribunal on the ground that the matrimonial home was not on the market. I agree with Ms Sedgwick that the tribunal did err in its consideration of paragraph 26 because it took too narrow a view of the phrase "reasonable steps to dispose of those premises", given the evidence that divorce proceedings were on foot at the time of the hearing and it was unclear when they had been started. The bringing of ancillary relief proceedings within a divorce suit may have been a necessary preliminary step before the matrimonial home was put on the market and there also seems to me no reason why paragraph 26 should not apply while arrangements are being made for a former partner to buy the interest of the claimant, which avoids putting the home on the market at all. (If the claimant is proposing to buy out the former partner and move back into the matrimonial home herself, paragraph 27 may be applicable instead.)
16. I also agree with Ms Sedgwick that this issue needs further investigation in this case because it is not clear when any steps to dispose of the premises were first taken. It might have been before divorce proceedings were issued because correspondence with the claimant's husband about the disposal of the matrimonial home could amount to reasonable steps (see CIS/1644/04, to which Ms Sedgwick draws my attention). As Ms Sedgwick says, the tribunal had to consider what the position was at the date of claim. It would also have been able to take account of any change of circumstances before the date of the decision under appeal. Section 12(8)(b) of the Social Security Act 1998 prevented the taking into account of any change of circumstances after that.
17. Finally, Ms Sedgwick submits, and Mrs Everett agrees, that the claimant's capital in this case was valued on the wrong basis. The district valuer was asked to state the open market value of the property rather than the open market value of the claimant's share, which Ms Sedgwick submits is not necessarily half the market value of the whole property, particularly when the property is occupied by a joint owner who has contributed to the purchase of the property and may not be willing to sell. I agree. See R(JSA) 1/02.
18. In these circumstances, I allow the claimant's appeal and refer the case to another tribunal for determination. However I direct that, before the tribunal sits, (a) the Secretary of State must obtain a valuation of the claimant's capital on the correct basis and (b) the claimant must provide to the tribunal and to the Secretary of State evidence as to when she first took reasonable steps to dispose of her share of the matrimonial home. In the light of the new information, it is possible that the Secretary of State will be able make a decision that makes a hearing before the tribunal unnecessary. I further direct that the letter of 6 May 2003 should be taken as being an appeal against the decision disallowing the claim of 17 January 2003 as well as the decision disallowing the claim of 4 March 2003. I note that there was a refusal to revise the decision on the earlier claim on 7 April 2003, which is after the decision of 3 April 2003 on the later claim. Plainly the decisions on both claims were in issue.

(signed on the original) MARK ROWLAND

Commissioner

1 December 2004