UK Social Security and Child Support Commissioners' Decisions

[2005] UKSSCSC CDLA_3742_2004 (12 December 2005)


CDLA/3742/2004

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. This is an appeal brought on behalf of the claimant by his appointee (his father) against the decision of the appeal tribunal held on 10 June 2004. Leave to appeal was granted by a district chairman. I set aside the decision of the tribunal for error of law. I substitute my own decision. It is set out in detail in paragraph 16.
2. By a decision dated 14 July 2000 the claimant was awarded the lower rate of the mobility component and the middle rate of the care component of disability living allowance ("DLA"). The father became the appointee on 17 July 2003. In a renewal claim it was disclosed that the claimant had, from September 2001, been in residential care. That care was provided at "the Glasshouse Project", funded by the relevant local authority through the Learning and Skills Council. The decision-maker, in the light of that information, on 13 October 2003 superseded the decision dated 14 July 2000 on the basis of a change of circumstances, namely that the claimant had been in local authority funded residential accommodation. The rates of DLA remained as before, but the period of entitlement was extended to 5 November 2005. The period of the award, then, ran from 29 September 2001 to 5 November 2005. Although entitlement remained unchanged it was decided that the claimant, during the periods of his stay in the accommodation, should not be paid the care component of DLA.
3. By a further decision dated 30 January 2004 it was said that an overpayment for the period 3 October 2001 to 20 May 2003 had arisen. The decision, at document 82, said that the total overpayment was £3,186.60. The decision-maker did not go on to seek recovery of the overpayment, for two reasons. First, in view of the claimant's medical condition disclosure of his stay in residential accommodation could not reasonably have been expected of him and, second, during the period of the overpayment he had no appointee. The decision-maker, however, sought to offset the arrears of DLA in the sum of £1,744.75 from the total amount of the overpayment. This figure had arisen because the claimant would have been entitled to DLA for the periods that he was residing at home during college half term and holidays. From that decision the claimant appealed to the tribunal who, in the event, dismissed the appeal.
4. The first submission provided on behalf of the Secretary of State addressed the nub of the claimant's argument, to the effect that, if the total overpayment were not recoverable the Department could not lawfully seek to offset arrears, arising in respect of a later period, against that overpayment. In that submission the Secretary of State's representative accepted that the tribunal had erred in law in failing to address that essential argument. Nonetheless that submission invited me to substitute my own decision, to the same effect as that of the tribunal.
5. It was argued on behalf of the Secretary of State that the decision-maker had accepted that there should be no recovery under section 71 of the Social Security Administration Act 1992 but that did not preclude recovery under operation of any other legislative provision. The Secretary of State's representative relied on regulation 5(1) and 5(2) case 2 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 to the effect that "… any sum already paid for the period that is covered by a later decision shall be offset against any arrears due under the new decision and it shall be treated as properly paid on account of the arrears." I think the reference to case 2 was an error and that it should have been to case 1. That meant, the Secretary of State's representative argued, that any DLA paid in the period covered by the new award (29 September 2001 to 5 November 2005) had to be offset against any arrears due in that period.
6. At the request of the appointee I directed an oral hearing but that was postponed since the appointee wished to obtain legal representation. A further hearing was arranged. The appointee attended that hearing and was represented by Mr P Stagg, the Secretary of State being represented by Mr J Heath. I am grateful to both for their help. Mr Stagg relied on detailed submissions provided shortly before the hearing but they had had not been copied to Mr Heath. In those circumstances I allowed the Secretary of State's representative a further, short, period in which to respond to Mr Stagg's submissions.
7. Mr. Stagg refers to a number of legislative provisions. Regulation 9(1)(b) of the Social Security (Disability Living Allowance) Regulations 1991 provides that the care component of DLA shall not be payable where the claimant is "… a person for whom accommodation is provided … where the cost of the accommodation is borne wholly or partly out of public or local funds in pursuance of … any other enactment relating to persons under disability or to young persons or to education and training". Regulation 10(1) of the DLA regulations provides that regulation 9 does not apply to a person for the first 28 days of a period covered by regulation 10(4). Regulation 10(4)(b) refers to a person prevented from receiving the care component of DLA by virtue of regulation 9. Under regulation 10(5)(a), however, for the purposes of paragraphs (1) and (2) "2 or more distinct periods separated by an interval not exceeding 28 days, or by two or more such intervals shall be treated as a continuous period equal in duration to a total of such distinct periods and ending on the last day of the latter or last such period ...". One of the issues in the appeal is, then, how the periods in regulation 9 accommodation are to be linked and this turns on the interpretation of regulation 10.
8. Mr Stagg refers also to section 71(6)(b) of the Social Security Administration Act 1992:

"(6) Regulations may provide –

(a) ... for treating any amount paid to any person under an award which is subsequently determined was not payable –

(i) as properly paid; or

(ii) as paid on account of a payment which it is determined should be or should have been made, and for reducing or withholding any arrears payable by virtue of the subsequent determination."

Regulation 5 of the Payments on Account, Overpayments and Recovery Regulations provides:

"(1) ... any sum paid in respect of a period covered by a subsequent determination in any of the cases set out in paragraph (2) shall be offset against arrears of entitlement under the subsequent determination and, except to the extent that the sum exceeds the arrears, shall be treated as properly paid on account of them.

(2) Paragraph (1) applies in the following cases –

Case 1: Payment pursuant to a decision which is revised, or superseded, or overturned on appeal.

Where a person has been paid a sum by way of benefit pursuant to a decision which is subsequently revised under section 9 of the Social Security Act 1998, superseded under section 10 of that Act or overturned on appeal."

The other issue in this case, then, is whether the benefit overpaid for one period can be offset against benefit awarded for another period.

9. Mr Stagg argues that, in summary, the tribunal failed to address the substance of the issues before them. The Secretary of State's representative does not dissent from that submission. The claimant had originally complained that there was a significant element of unfairness in the decision from which he appealed in that he questioned how it could be, if the overpayment for one period was not recoverable (because the criteria for recovery were not satisfied), nonetheless the Secretary of State was entitled to offset amounts otherwise payable to the claimant in respect of dates falling outside the overpayment period. I understand the feelings of the appointee but I hope that he, in turn, will understand that what governs the outcome of his appeal is the proper construction and interpretation of the relevant legislative provisions.
10. Mr Stagg argues that the withholding of arrears may occur in a random and capricious way dependent on the timing of the decision-making. He goes on to argue that case 1 of regulation 5 of the 1988 regulations is clearly designed to prevent a claimant being paid benefit twice in respect of the same period. Referring to regulation 5(1) of the 1988 regulations, he argues that the decision-maker was not entitled to treat monies payable in respect of periods arising outside the overpayment period (that is to say periods when the claimant was at home and not in residential care) since the later periods could not properly be said to be "covered by" the determination to supersede the original decision. Also, referring to case 1, he says that the claimant had not been "paid a sum by way of benefit" in respect of the periods covered by the offset. That construction of the regulations is not accepted by the Secretary of State's representative who argues that the effect of regulation 5, case 1, is that DLA paid under the decision of 14 July 2000 for the period starting on 29 September 2001 (that is to say the start of the period covered by the superseding decision of 30 January 2004) must be offset against arrears due under that superseding decision.
11. Ingenious though Mr. Stagg's arguments are in relation to the recovery of the offset I do not accept them. Regulation 5(1) of the 1988 regulations provides that: "any sum paid in respect of the period covered by a subsequent determination … shall be offset against arrears of entitlement under the subsequent determination …" It does not, however, refer to "arrears of entitlement in respect of the same period …" No such limiting or qualifying words as those which I have indicated appear in regulation 5.
12. In my judgment one has to consider what is covered by the "subsequent determination" since the arrears of entitlement must necessarily arise under that determination. Regulation 5(2) provides for the cases in which regulation 5(1) applies to the subsequent determination. Case 1 applies "where a person has been paid a sum by way of benefit pursuant to a decision which is subsequently … superseded under section 10". There was, of course, in the instant appeal such a supersession decision. In my view what is relevant for consideration under regulation 5 is the scope of the "subsequent determination", not the narrower construction of the periods covered by the overpayment and the arrears. I have not forgotten Mr. Stagg's point about the capricious effect of the date on which the decision-making takes place. That may be right but it seems to me that the provisions in issue provide a mechanism for automatic recoupment of benefit where there has been an overpayment. The alternative, which would hardly be satisfactory and even more open to criticism on the basis of unfairness, would be the payment of arrears to which a claimant was entitled and then (in most overpayment cases although not this one) separate decision to recover money overpaid.
13. Applying that reasoning in the circumstances of this case the "subsequent determination" is the decision dated 13 October 2003. In substance, in my view, it covers the issue of supersession and entitlement. That it does not deal with overpayment is not determinative since that is not a requirement of a case 1 decision. The decision of 13 October 2003 is expressed to be by way of supersession of the decision dated 14 July 2000. It is not entirely clear what period was covered by the latter decision but the claimant (through his appointee) completed a renewal claim pack on 22 May 2003 and the later overpayment decision (document 83) relates to the period from 3 October 2001 to 20 May 2003, that indicating that that was the end date of the period of the July 2000 award. The decision-maker on 13 October 2003 ticked the box to the effect that "any DLA already paid shall be treated as paid on account of the benefit now awarded". The decision then goes on to find entitlement to lower rate mobility and middle rate care from 29 September 2001 to 5 November 2005 but that the care component was not payable for any day after the claimant was in relevant accommodation. There was an award of the care component for a continuous period from the day the claimant entered the accommodation until 5 November 2005, therefore qualifying entitlement giving rise to arrears when the actual periods of home leave had been established. Those arrears could then be offset.
14. In summary, then, for the reasons set out above I accept the argument advanced on behalf of the Secretary of State in relation to the application of regulation 5 of the 1988 regulations and reject the construction argued for by Mr Stagg. The upshot is that the decision-maker was entitled to offset arrears in the way that he did.
15. The second of Mr Stagg's arguments relates to regulations 9 and 10 of the DLA regulations. As he says, regulation 9 introduces an exception where a claimant should not receive DLA to which he is otherwise entitled but regulation 10(1) has the effect that regulation 9 is inapplicable for the first 28 days of the period to which regulation 10(4) applies. Regulation 10(5) then provides linking rules "for the purposes of paragraphs (1) and (2)". It is Mr. Stagg's argument that the "periods" referred to in regulation 10(5)(a) are periods to which regulation 10(1), not 10(4), apply. The reverse construction is that argued for on behalf of the Secretary of State.
16. Mr Stagg supports his argument by an example in which, in week 1, a claimant goes into accommodation provided by the local authority under Part III of the National Assistance Act 1948, returning home in week 7, going back into the local authority accommodation in week 10 and returning home again in week 13 before finally entering the local authority accommodation permanently in week 16. Mr Stagg says that if the "periods" referred to in regulation 10(5)(a) are periods to which paragraph (4) applies then the claimant only receives the care component for weeks 1 to 4. There are less than 28 days between weeks 7 and 10 and between weeks 13 and 16 so the periods of residence in the accommodation surrounding those weeks are treated as a continuous period. Adopting his construction, to the effect that the "periods" referred to in regulation 10(5)(a) are periods to which paragraph (1) applies, then the claimant receives the care component in weeks 1 to 4 and then for weeks 7 to 20.
17. Mr. Stagg argues, then, that in his example if his construction of regulations 9 and 10 were not adopted the claimant would not be entitled to benefit in weeks 7 to 10 and 13 to 16. That, however, in my view overlooks the fact that regulation 9 only takes away entitlement for periods throughout which the claimant is in accommodation, decided on a daily basis. Thus, when a person is at home he or she is not in regulation 9 accommodation at all so benefit would be payable for all of those days irrespective of how short an interval there is between the periods at home. Regulation 10 in my judgment simply provides an artificial period of grace from the effect of regulation 9 for the first 28 days of the person being in that accommodation. Regulation 10(5) links the period in accommodation of less than 28 days so that if a person goes home for a period of less than 28 days they do not then have the benefit of another 28 days period of grace.
18. Both parties agree, as do I, that the tribunal erred in law in failing to provide adequate reasons for their decision and in particular in failing to address the substance of the argument advanced by the appointee. For that reason I set aside their decision. Notwithstanding that, however, in the light of what I have said above I conclude that the tribunal reached the right technical decision in dismissing the appeal. There is nothing to be gained by remitting the case for rehearing before a differently constituted tribunal since the facts are known. Accordingly I substitute my own decision which is that an overpayment in the sum of £3,186.60 of DLA has arisen in respect of the period from 3 October 2001 to 20 May 2005 but this sum is not recoverable from the claimant. The claimant is entitled to be paid the care component of DLA for the days not in residential care and subsequent arrears of DLA in the sum of £1,774.75 are to be offset against the overpayment.

(Signed) S J Pacey

Commissioner

(Date) 12 December 2005