UK Social Security and Child Support Commissioners' Decisions

[2005] UKSSCSC CH_602_2004 (27 May 2005)

 


DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The decision of the Sheffield appeal tribunal dated 30 October 2003 is erroneous in point of law, for the reasons given below, and I set it aside. It is expedient for me to substitute the decision on the claimant's appeal against the decisions made by Sheffield City Council on 16 July 2003 having made the necessary findings of fact (Child Support, Pensions and Social Security Act 2000, Schedule 7, paragraph 8(5)(b)). My decision is that the decisions dated 9 April 2002 and 29 November 2002 awarding the claimant council tax benefit fall to be revised on the ground of official error, the revised decisions are as set out in the Council's letters dated 16 July 2003 and that as a result excess benefit amounting to £429.81 was allowed for the period from 24 December 2001 to 20 July 2003, but that none of that excess benefit is recoverable from the claimant by virtue of regulation 84 of the Council Tax Benefit (General) Regulations 1992. My decision has the same effect as that of the appeal tribunal, so that Sheffield City Council's appeal to the Commissioner achieves no practical success.

The background

2. This is an overpayment recoverability case, involving what is technically called excess benefit in relation to council tax benefit (CTB). Regulation 84 of the Council Tax Benefit (General) Regulations 1987 provides:

"(1) Any excess benefit, except benefit to which paragraph (2) applies, shall be recoverable.

(2) Subject to paragraphs (4) and (5) and excepting any excess benefit arising in consequence of a reduction in tax or substitution to which regulation 83 refers, this paragraph applies to excess benefit allowed in consequence of an official error, where the claimant or a person acting on his behalf or any other person to whom the excess benefit is allowed could not, at the time the benefit was allowed or upon the receipt of any notice relating to the allowance of that benefit, reasonably have been expected to realise that it was excess benefit.

(3) In paragraph (2), `excess benefit allowed in consequence of an official error' means an overpayment caused by a mistake made whether in the form of an act or omission by--

(a) the relevant authority;

(b) an officer or person acting for that authority;

(c) an officer of--

(i) the Department for Work and Pensions; or

(ii) the Commissioners of Inland Revenue,

acting as such; or

(d) a person providing services to the Department or to the Commissioners referred to in (c),

where the claimant, a person acting on his behalf or any other person to whom the payment is made did not cause or materially contribute to that mistake, act or omission.

(4) and (5) [not relevant]."

The relevant authority is the local authority concerned. Regulation 83 provides, so far as relevant:

"In this Part `excess benefit' means any amount which has been allowed by way of council tax benefit and to which there was no entitlement under these Regulations (whether on the initial decision as subsequently revised or further revised)."

3. The case raises some difficult legal and factual issues. I therefore need to go in some detail into the documents as they were put to the appeal tribunal. The overpayment was said to arise from two awards of CTB to the claimant. The first was at the weekly rate of £8.25 for the period from 24 December 2001 to 31 March 2002 and of £9.08 for the period from 1 April 2002 to 29 December 2002. The letters notifying the decision were sent out on 9 April 2002. In the absence of any evidence to the contrary, I assume that the decision was made on that day. The second award was at the weekly rate of £9.08 for the period from 25 November 2002 to 28 December 2003. The letter of notification of the second award was sent out on 29 November 2002 and again I assume that the decision was made on the same date. A copy of that letter is in the papers, but there is no copies of the letters relating to the earlier award.
4. The claimant had made an earlier unsuccessful claim for CTB on 22 August 2001. On that claim he declared that he was receiving wages from his employer while off sick and that he and his wife both received incapacity benefit. At the time that was an accurate statement of their benefit income. It was not until the claimant received the letter dated 29 August 2001 from the Area Disablement Benefit Centre (DBC) in Wakefield (page 60) that he was informed of the award to him of industrial injuries disablement benefit in relation to an industrial accident on 31 March 2000. What was obviously the first assessment of disablement resulting from the injury was at 20% for the period from 17 July 2000 to 14 February 2002, and disablement benefit was awarded from 12 November 2000 to 14 February 2002 at the weekly rate of £21.86, rising to £22.58 from 11 April 2001. The claimant later became entitled to both components of disability living allowance (DLA) for the period from 19 July 2001 to 18 July 2003 on an award made by an appeal tribunal on 31 January 2002. The CTB claim of 22 August 2001 had been disallowed on 29 November 2001 as his income was too high for him to be entitled.
5. The claimant submitted a CTB claim form, that had been attached to a Benefits Agency claim form, on 14 December 2001 and a few days later a letter saying that his circumstances had changed since the earlier disallowance. In particular, he had stopped receiving any wages from work. The only pages from the form which the local authority included in the papers for the appeal tribunal were the first page with the names of the claimant and his wife and page 7 with his signed claim and declaration. Therefore, I do not know for sure whether the claimant sent in or completed any other pages or, if he did (which seems likely), what he wrote on them about his income. It looks as though some details were given, because the local authority wrote to the claimant on 18 December 2001 asking whether the statutory sick pay he would be receiving from 14 December 2001 would be paid by his employer or through the Benefits Agency and telling him to supply proof of the amounts. On 9 January 2002, he produced at the area office a letter dated 7 January 2002 from the Chesham House office of the Benefits Agency in Sheffield confirming the amount of incapacity benefit in payment to him (£69.75 per week) and a final payslip from his employment, apparently for 20 December 2001. Copies were taken by the local authority and retained. I shall come back later to the question of whether any other documents were produced on that date.
6. On 6 February 2002, the claimant told the local authority on a change of circumstances form that he had been awarded DLA from 19 July 2001. On 18 March 2002, he wrote expressing concern at the delay in dealing with his claim and enclosed more letters about the amounts of other benefits, including the increased amount of his incapacity benefit from 11 April 2002. I shall come back later to the question of what telephone calls to the local authority the claimant might have made before he wrote that letter. On 22 March 2002, the claimant submitted another claim form, apparently completed at an interview at the area office, on which the benefits recorded were incapacity benefit for himself (£69.75) and his wife (£79.05) and his own DLA (£53.30 in total). The printed form indicated that proof was needed of the amount of any income or capital declared and there was a written note in the section of the form on capital that proof was to be provided. The receipt for the form referred to proof of state pension/benefits, apparently referring to his wife's incapacity benefit order book, the relevant pages from which had been copied. On 4 April 2002 a number of further documents were seen and copied by the local authority, including a proof of earnings form from his ex-employer and three pages of bank statements from the claimant's current account (joint with his wife) covering the period from 14 February 2002 to 28 March 2002. The statements showed not only payments-in of incapacity benefit and DLA (clearly identified as such ("DSSINCAP" and "DLA") against the claimant's national insurance number), but also payments-in of industrial injuries benefit of £67.74 on 20 February 2002 and £90.32 on 20 March 2002 (also clearly identified as such ("DSS IIB") against his national insurance number). The award of CTB made on 9 April 2002 was calculated without including the amount of the claimant's industrial injuries disablement benefit as part of his income.
7. On 20 November 2002 the claimant submitted a renewal claim form. On that form the claimant recorded the amount of disablement benefit received as £22.58 per week, along with the current amounts of incapacity benefit and DLA. A letter dated 19 February 2002 from the Area DBC in Wakefield, giving the amount of benefit to be paid from 15 February 2002 to 29 January 2003 as £22.58, was submitted with the claim. That letter followed a new assessment of disablement at 22% for the period identified, which would have led to no increase in the amount paid over the previous assessment of 20%. In fact, that rate of payment was out of date by November 2002. There would have been an annual uprating in April 2002 and the statement of payments made obtained by the local authority on 9 July 2003 (confirmed by the claimant in his notice of appeal) shows that the weekly rate was £22.96 from 10 April 2002. On 29 November 2002, CTB at the weekly rate of £9.08 was awarded for the period from 25 November 2002 to 28 December 2003. Income from disablement benefit had not been taken into account. The notification letter asked the claimant to check carefully the details used to work out benefit and let the local authority know if anything was wrong. So far as money coming in was concerned, the letter recorded nil for earnings and for assumed income from capital of £1888. For "anything else" was recorded £151.36 (ie apart from a few pence the total of the incapacity benefit for the claimant and his wife declared on the form) and for income ignored (disregarded income), nil. The reverse page of the letter contained much information, including about changes in circumstances that had to be reported in writing, such as an increase or decrease in income or savings.
8. The statement of disablement benefit payments also records an increase to £34.44 per week from 5 February 2003, uprated to £35.04 per week from 9 April 2003. The claimant must have received an increased assessment of disablement for the period down to 29 January 2004 on the expiry of the 22% assessment in force down to 29 January 2003 and presumably would have received a notification letter similar to that of 19 February 2002.
9. There was then apparently on 19 May 2003 a matching check by the local authority's verification framework team against records held by the Department for Work and Pensions. That revealed that the claimant was in receipt of disablement benefit as well as incapacity benefit and DLA, although the papers before me do not show how much detail was given. On 9 July 2003, the details of the amounts of disablement benefit in payment from 15 November 2000 to the present were received from the DBC and the fraud section sent a recommendation that the claimant's CTB be cancelled with effect from the start of his claim. On 16 July 2003, decisions were made altering the amount of CTB payable for various periods in the overall period from 24 December 2001 to 28 December 2003. No copies of those decisions, or the notification letters, were originally in the papers before me or the appeal tribunal, but the letters are listed in the computer record at page 66. New prints using the precedent in use on 16 July 2003 and the information available on that date have now been produced following a direction. The letters merely state that the claimant's entitlement to CTB had been assessed and set out the entitlement for the period in question, without any reference to any previous decision or entitlement. Also on 16 July 2003, letters were issued notifying the claimant of recoverable overpayments of council tax benefit for the periods 24 December 2001 to 31 March 2002 (£63.22), 1 April 2002 to 31 March 2003 (£255.70) and 1 April 2003 to 20 July 2003 (£110.89).

The appeal to the appeal tribunal

10. The claimant appealed "against our arrears as per your letters". I interpret that as an appeal against both the decisions altering the amount of CTB entitlement and the decisions on overpayment recoverability. He authorised Firth Park Advice Centre to represent him. His main case was that he had told the local authority about his disablement benefit, either in one of the documents produced to the area office or in one of the several telephone calls he had made to the local authority's benefit service. Copies of the claimant's telephone bills for November 2001 and January and February 2002 were produced, showing a total of seven calls to the number for that service, amounting to over 70 minutes.
11. The local authority's written submission stated that it had no record of receiving any information about the claimant's disablement benefit until 20 November 2002. It was submitted that even if he had already provided information, the claim form received on 22 March 2002 omitted the disablement benefit and that that omission contributed to any subsequent error on behalf of the local authority. It was accepted that the overpayment for the period from 24 November 2002 to 9 February 2003 was caused by official error, but submitted that that error ended on 9 February 2003 because of the claimant's failure to report the increase of his disablement benefit to £34.44 per week from 5 February 2003. However, it was submitted that for all those periods the claimant should have realised that he was receiving an incorrect amount of benefit, because of the information given on his award letters, including information on the amount of income taken into account.
12. The claimant and his wife attended the hearing before the appeal tribunal on 30 October 2003 and were represented by Mr S Glaves of Firth Park Advice Centre. The local authority was represented by Mr A Thorpe. The case was repeated that the claimant had kept the local authority informed by telephone of any changes prior to the first award being made in April 2002, although a search of the local authority's records had only found one telephone call on 11 March 2002, asking for further time in which to get proofs in. The appeal tribunal allowed the claimant's appeal. It found the claimant and his wife to be entirely credible witnesses and fully accepted their evidence. The statement of reasons continued:

"The Tribunal found, on the balance of probabilities, that the Appellant had informed SCC that he was in receipt of IIB on a date prior to 20/11/2002 and, having declared his income fully, bearing in mind his depressive illness and the fact that he did not know what benefits were or were not assessable for CTB purposes, he was entitled to rely on SCC [to] assess correctly his CTB. He would not have been aware that the amount of benefit he was receiving was incorrect."

The appeal to the Commissioner

13. The local authority now appeals against that decision with leave granted by Miss Commissioner Fellner. Following a round of written submissions, the Commissioner granted the local authority's request for an oral hearing of the appeal. The hearing took place before me at Doncaster County Court on 12 July 2004. The local authority was represented by Mr B Twomey. The claimant was present and was represented by Ms A Griffiths and Mr Glaves of Firth Park Advice Centre.
14. At the hearing, I raised for the first time a number of issues, in particular about the relationship between regulation 84(2) of the CTB Regulations and the terms of the legislation allowing revision of decisions and about the meaning of "official error" and "ignorance of or mistake as to a material fact", which might be relevant if the decision of the appeal tribunal were set aside and the appeal were to be determined afresh either by a new appeal tribunal or by me. I directed further written submissions, to give both parties the opportunity to think about the problems involved. Unfortunately, despite the local authority's prompt compliance with that direction, there has been long subsequent delay. That is partly because the Secretary of State for Work and Pensions became a party to the proceedings, at his request, and the copy of the local authority's submission, with the accompanying request for a submission, did not arrive at the first attempt. Then, after Ms Griffiths had replied on behalf of the claimant, I gave the local authority the opportunity to make a final submission, particularly in view of the intervention of the Secretary of State and the views expressed on his behalf. That final submission was received at the end of November 2004. However, in the course of working out my decision, further points of law arose and I had to have another round of written submissions, which of course took even more time. I am grateful for all the submissions made, both oral and written, although they have not made difficult questions any easier to answer.
15. I record that at the oral hearing, and in my direction following the joinder of the Secretary of State as a party, I disclosed that I pay council tax to Sheffield City Council. No-one raised any objection in consequence.

Did the appeal tribunal err in law?

16. I have no doubt that the appeal tribunal did err in law. Mr Twomey put forward three particularly powerful points that in my judgment undermine the argument made for the claimant that the appeal tribunal had, by clear implication, accepted that the claimant had provided full information of all benefits received before April 2002 (not just before November 2002), that the official error was the local authority's failure either to record or to take into account that information when it was received and that throughout he could not reasonably have been expected to have realised that excess benefit had been allowed.
17. The first point arises from the fact that the definition of "excess benefit allowed in consequence of official error" in regulation 84(3) requires that the claimant did not cause or materially contribute to the error and that the overpayment was caused by the error. Mr Twomey submitted that, if the appeal tribunal found the local authority to have made an error in failing to take account of information as to the receipt of disablement before making the award on 9 April 2002, it needed to deal specifically with the question of whether the failure to mention receipt of disablement benefit on the claim forms of 14 December 2001 and 22 March 2002 amounted to a material contribution to the local authority's error. He submitted that a similar question arose on whether, in those circumstances, the overpayment was caused by the official error or by the omission on the claim forms. I agree that, on the view taken by the appeal tribunal, if it was to explain its decision adequately, it needed to explain why the claimant did not materially contribute to the error. It did not expressly mention that question and could not be taken to have answered the question by implication without having identified much more specifically the exact nature of the official error relied on. Nor could the question of causation properly be dealt with without that more specific identification.
18. The second point relates to the question of whether the claimant could reasonably have been expected to realise that he had been allowed excess benefit, which would only arise in relation to any overpayment found to have been caused by an "uninduced" official error. Mr Twomey submitted that, to explain its conclusion in favour of the claimant adequately, the appeal tribunal needed to deal specifically with the effect of what was said in the letters notifying the claimant of the awards of CTB. The local authority's case was that the information given in the letters was sufficient that the claimant should reasonably have realised that his disablement benefit had not been taken into account. The appeal tribunal rejected that overall case, with reasons, but did not deal specifically with the effect of the notification letters.
19. The third point relates to the period from 10 February 2003 to 20 July 2003. The local authority had accepted that the overpayment from 25 November 2002 under the award made on 29 November 2002 was caused by an official error, because the claimant had declared his disablement benefit (although not the absolutely correct amount) on the claim form of 20 November 2002. Its case was first that the overpayment was nonetheless recoverable because the claimant should have realised that excess benefit had been allowed. That case was rejected by the appeal tribunal, and I have dealt with its reasoning on that point in the previous paragraph. However, the local authority also made the case that as from 10 February 2003 the overpayment ceased to be caused by its admitted official error, because the claimant failed to notify the local authority of the increased amount of disablement benefit awarded from 5 February 2003. If that was right, what the claimant could or could not reasonably have realised about excess benefit would become irrelevant. If an overpayment for any period was not caused by official error, there can be nothing to stop it being legally recoverable. The appeal tribunal did not say anything about that case, and the particular questions arising as from 10 February 2003 cannot be regarded as covered by its general reasoning.
20. For those reasons, the appeal tribunal's decision was erroneous in point of law. Overall, I rather agree with Mr Twomey that the complicated circumstances, differing over different periods, could not be dealt with adequately by general findings of the kind made by the appeal tribunal. I think that the defects are extensive enough that, even though I reach similar conclusions by a different route, the appeal tribunal's decision must be set aside. It is then clearly expedient, in the light of all the further submissions made, for me to substitute a decision on the claimant's appeal against the decisions of 16 July 2003.

The Commissioner's decision against the decisions of 16 July 2003

Revision of the awarding decisions

21. It is first necessary to look at whether the relevant decisions awarding CTB properly fall to be revised so as to give rise to excess benefit under regulation 83 of the CTB Regulations for the periods put forward by the local authority.
22. The difficulty for the local authority is that, if the ground of revision it relies on is that the decision arose from official error (Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001, regulation 4(2)(a)), the definition of "official error" in regulation 1(2) must be applied. The definition applies to errors made by local authorities or persons acting on their behalf for housing benefit (HB) and CTB purposes or by officers acting on behalf of the Department for Work and Pensions or the Commissioners of Inland Revenue (as they were until very recently). But it excludes errors caused wholly or partly by any other person. The local authority did not admit that it or any of its officers made any error in relation to the award of 9 April 2002 and argued that, if there was any such error, the claimant had materially contributed to it by failing to mention his disablement benefit on the claim forms of 14 December 2001 and 22 March 2002. If a claimant materially contributed to an official error, he might have to be accepted as having partly caused the error. Therefore, as Mr Twomey thought at the oral hearing, without any chance for research or reflection, the local authority might rather wish to rely in relation to the decision of 9 April 2002 on the alternative ground of revision of ignorance or mistake of material fact. If neither of those grounds of revision was available, no others seemed relevant, so that the local authority would have to rely on supersession, under which any superseding decision could not be effective before 16 July 2003. In relation to the decision of 29 November 2002, the local authority had admitted that that decision was caused by an uninduced official error, so that there would be no difficulty in relying on that ground of revision.
23. Regulation 4(2)(b) of the HB and CTB Decisions and Appeals Regulations allows revision when a decision "was made in ignorance of, or was based upon a mistake as to, some material fact and as a result of that ignorance of or mistake as to that fact, the decision was more advantageous to the person affected than it would otherwise have been but for that ignorance or mistake". In my direction following the oral hearing I posed a number of questions both about revision for official error and about whether there could be said to have been ignorance of a material fact on 9 April 2002 in the face of the local authority's possession from 4 April 2002 of the claimant's bank statements as described in paragraph 6 above (leaving aside the question of whether the claimant had given information about his disablement benefit by telephone or by some other means).
24. The submission dated 6 August 2004 on behalf of the local authority was that the officer who made the decision of 9 April 2002 relied on the claimant's statement of his sources of income on the claim form of 22 March 2002 and was therefore ignorant of the material fact of the claimant's receipt of disablement benefit. It was submitted that it would be inconsistent with the practical operation of the HB and CTB schemes if, where false or incomplete information is given by a claimant, a local authority were unable to rely on revision for ignorance or mistake of material fact because hidden somewhere in the detail of supporting documentation was a reference to that fact. It was also submitted, in relation to official error, that it was open to a local authority to consider a variety of errors in relation to a particular decision and, if one was not wholly or partly caused by a non-official, rely on that as a ground of revision. Then, it was said, a different error could be looked at when considering recoverability and that it was possible that if an error was not wholly or partly caused by a claimant, he might nevertheless be said to have materially contributed to an error under regulation 84(3) of the CTB Regulations.
25. The submission dated 16 September 2004 on behalf of the Secretary of State was that, as "relevant decisions" are made by "relevant authorities", the question in relation to ignorance or mistake of material fact is what information the local authority has in its possession, not what information was before any individual person within the authority. It was further suggested that a failure to take into account information known to the local authority would be an official error and one that could not usually be said to have been partly caused by the claimant, because of the stage in the process at which the error was made. In the circumstances as found by the appeal tribunal, there was a ground to revise both awarding decisions for official error. The difference in wording between "arose from" in regulation 1(2) of the HB and CTB Decisions and Appeals Regulations and "caused by" in regulation 84(3) of the CTB Regulations was said to make no difference in substance, so that the overpayment would then be caused by official error and not recoverable if the claimant could not reasonably have realised that excess benefit had been allowed.
26. In reply, Ms Griffiths for the claimant agreed with the Secretary of State on those matters, with the addition that it was necessary in considering official error to link the substance of the decision to some substantial act relating to its making, rather than relying on trivial, perhaps procedural, errors during the process leading up to the decision.
27. As noted above, I gave the local authority the opportunity to reply to what had been submitted for the Secretary of State in particular.
28. I look first at some of the submissions about whether the local authority can rely on the revision ground of ignorance of material fact in relation to the decision of 9 April 2002. I reject the Secretary of State's submission that, as the decision was given by the local authority, the authority cannot be said to have been ignorant of anything that was within its corporate knowledge. As the local authority pointed out, that proposition would have startling consequences, such as any information in the hands of, say, the refuse or social services department being treated as known when an officer in the finance section was making a decision about HB or CTB. It is true that under paragraph 1 of Schedule 7 to the 2000 Act, decisions about entitlement are to be made by the relevant local authority administering HB or CTB. But paragraph 23(3) provides:

"(3) For the purposes of this Schedule any decision that is made or falls to be made--

(a) by a person authorised to carry out any function of a relevant authority relating to housing benefit or council tax benefit, or

(b) by a person providing services relating to housing benefit or council tax benefit directly or indirectly to a local authority,

shall be treated as a decision of the relevant authority on whose behalf the function is carried out or, as the case may be, to whom the services are provided."

Thus when a decision is made by an authorised officer of a local authority (and there is no reason to think that there was any lack of authority in the present case), that is a decision within paragraph 1 of Schedule 7. At the point that the decision is made, the officer is acting for the local authority for benefit purposes, so that in my view the question to be asked is whether that officer was ignorant of or mistaken as to some material fact.

29. However, I also have difficulty with the local authority's submission that the officer who made the decision of 9 April 2002 was ignorant of the material fact that the claimant was in receipt of disablement benefit. That seems to be based on no more than an assertion of what the officer looked at, which well after the event is very unlikely to be supported by direct evidence. Often it will be proper to take the view that, if the decision made could only have been made in accordance with the law by someone who did not know of the fact in question, the officer can be assumed not to have known it (compare the approach of Lord Hoffmann at [11] of his speech in Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16 [2005] 2 All ER 129, 134). But that has the disadvantage of allowing the local authority to gain an advantage from its own inefficiency and is rather undermined here by the failure of the officer on 29 November 2002 to take the claimant's disablement benefit into account when it was clearly declared exactly where it should have been. And of course on the approach above, there is another possible explanation - that the officer did know of the evidence showing receipt of disablement benefit, but thought for some reason that that did not affect the amount of CTB to be awarded.
30. After a lot of anxious thought about just what might come within "ignorance of a material fact" in circumstances like those of the present case, I have concluded that that last point in the previous paragraph provides the key, and that I do not need to go into all the complications. I stress that my approach is on the basis that the three pages of bank statements mentioned in paragraph 6 above were clear evidence from which anyone reading them in full would have concluded that the claimant was receiving an industrial injuries benefit paid monthly. I do not need to decide whether the claimant had given information to the local authority about his disablement benefit in any other way. The case is not in the category where the officer did not have evidence from which the material fact could be deduced, which would clearly fall within the revision ground of ignorance of material fact.
31. The situation is then as follows. Either the officer who made the decision of 9 April 2002 did not at the time actually have in mind the evidence of receipt of industrial injuries benefit or the officer did have that in mind. If the officer did not, then the decision was made in ignorance of a material fact and can be revised on that ground. It is no part of the meaning of ignorance in this context that the person concerned should have been blameless in their ignorance. If the officer did have that evidence in mind, then a decision awarding CTB without taking the benefit into account as income could only have been given as the result of some kind of error by the officer. The error could have been of an administrative kind (a clerical or transcription error or simply overlooking the significance of what was known) or an error of law (wrongly considering that receipt of industrial injuries benefit, including disablement benefit, does not affect the amount of CTB). In either case, the decision, and the element of the decision requiring revision, would have arisen from a mistake by a person authorised to carry out a function of the local authority relating to CTB. There can therefore be revision on the ground of official error if the further condition of the definition in regulation 1(2) of the HB and CTB Decisions and Appeals Regulations is met, that the error was not wholly or partly caused by a non-official, eg the claimant. Here the omission of disablement benefit from the claim forms completed by the claimant played a part in the background. But the circumstances being assumed are that the officer, having the evidence of receipt of industrial injuries benefit in mind, nonetheless failed to take that benefit into account and awarded the wrong amount of CTB. On those circumstances, neither the claimant nor any other non-official even partly caused that error by the official, and all the conditions in the definition of official error would be met.
32. Accordingly, on either of the possible alternatives, there is a ground for revising the decision of 9 April 2002 with effect for the whole period of the award and I do not need to investigate further to decide between the alternatives. I deal below with the effect on the recoverability of the resulting excess benefit. There is no dispute that the decision of 29 November 2002 falls to be revised on the ground of official error, and that for the same reasons as given above, the claimant did not wholly or partly cause that error. Nor is there any dispute as to the proper amount of CTB to be awarded for the periods concerned in the revised decisions and as to the amount of excess benefit arising. The revised decisions can take into account changes in circumstances prior to 16 July 2003, for instance the increase in the amount of disablement benefit from 5 February 2003. I adopt the figures set out in the local authority's written submission to the appeal tribunal. The excess benefit over both periods is £429.81.

Is the excess benefit recoverable from the claimant?

33. The excess benefit is recoverable from the claimant unless he comes within the exception in regulation 84(2) of the CTB Regulations. Regulation 84(3) specifies the relevant question as whether the overpayment of CTB was caused by an official error as defined, rather than whether the awarding decision arose from an official error as defined. The focus is thus slightly different, and perhaps rather wider, but I do not think that it makes any difference in the present case. I apply the broadly expressed principle as to causation in R (on the application of Sier) v Housing Benefit Review Board of Cambridge City Council, [2001] EWCA Civ 1523, 8 April 2001, that the test is whether the overpayment was caused by an administrative error and not by any fault on the part of the claimant (Latham LJ) or by a wholly uninduced official error rather than the claimant's own failings (Simon Brown LJ). There is not relief from recoverability if official error is merely a cause of the overpayment. Each awarding decision must be considered separately.
34. In relation to the decision of 9 April 2002, it does not matter which ground of revision is applied. If it is ignorance of material fact, in that the officer did not actually have the evidence of receipt of industrial injuries benefit in mind, there was nonetheless an official error in the failure to observe and note the significance of the evidence in the bank statements. That error comes within the suggestion by Mr Commissioner Howell QC in decision R(H) 2/04 of the seriousness of mistake that is necessary - "a clear and obvious error of fact or law made by some officer on the facts disclosed to him, or which he had reason to believe were relevant". The notion of an error of fact must not be restrictively construed and can in appropriate cases include "administrative" failures by an officer in considering the evidence actually before him. It may be that there was other official evidence of the amounts of the benefits that the claimant had stated on the claim forms, so that the main reason for looking at the bank statements was to check the capital balances. However, it is by no means uncommon for the claimants (some of whom find forms intimidating and difficult) to miss off important information from claim forms. That can be through honest error (as I am sure was the case here) or from an intention to gain a dishonest advantage. Nor is it unknown for there to be mistakes in the information provided by particular offices of agencies of the Department for Work and Pensions. It would have been an obvious step, and the work of only a minute or two, to check the bank statements to see if the amounts of declared income received tallied with the other evidence and if there were any other sources of income. Then, the receipts of industrial injuries benefit for the claimant, labelled as such, would immediately have stood out, on one page only two lines below the entry for receipt of DLA. The case is quite different from CH/69/2004, where Mr Commissioner Rowland suggested that a local authority, looking at bank statements mainly for capital purposes, could not have been expected to investigate further regular "bank credits" with no other identification. If the ground of revision is official error, then in the circumstances the overpayment was caused by that official error.
35. Then, I am satisfied that the claimant did not cause or materially contribute to the officer's error, whatever the proper ground of revision. I take the same general view as in paragraph 31 above. The omission of disablement benefit from the two claim forms signed by the claimant, to which I would add the failure to produce any documents relating to disablement benefit when documents relating to other benefits were produced, played a part in the background. I do not accept the claimant's case that the local authority receipt on page 76 (for receipt of proof of private pension on 9 January 2002) must have been for a document showing entitlement to disablement benefit, as he did not receive any private pension. It is much more likely to have been for the payslip for the final payment from his work (page 15, stamped as received on 9 January 2002). One of the items on the deduction side on the slip is described as pension (pre-tax) and I think that the person who took and copied the documents was simply confused about what the payslip was meant to be proof of. However, looking at the particular nature of the error by the officer at the particular stage the case had reached on 9 April 2002, I am satisfied that the claimant did not cause or materially contribute to that error.
36. The question of whether the overpayment was caused by the official error, within the Sier test, is more difficult. It might be said that the claimant had materially contributed to the making of the overpayment, as distinct from the officer's error, and was to some extent at fault for the omissions described above, even though they were honest errors. But the circumstances are quite different from those of Sier. There the claimant had taken out a second tenancy in another place and claimed HB for it from the other local authority and did not tell the local authority paying out HB for his first tenancy in Cambridge. He argued that there was official error by the income support office in not informing the local authority through a standard form of the change of address for income support purposes. Latham LJ said:

"The overpayment occurred because the appellant continued to claim Housing Benefit for the Cambridge property and failed, in breach of his duty under Regulation 75 of the 1987 Regulations, to notify the Cambridge City Council of what in my judgment was clearly a relevant change in his circumstances and one which he would have appreciated. The administrative failure, if that is the appropriate way of describing it, to send form NHB8 of [to?] the Cambridge City Council did not cause any payments to be made. The most that could be said was that as a result of that failure Cambridge City Council was not alerted to the fact that the appellant was no longer entitled to the relevant payments."

37. Similarly, in R(H) 2/04, awards of HB were made on the basis of the amounts of awards of working families' tax credit (WFTC) that the claimant thought she was going to get. When the final calculation by the Inland Revenue turned out to be higher, which meant a lower entitlement to HB, she did not tell the local authority. Mr Commissioner Howell QC, as well as holding that there had been no official error, also held that what had caused the overpayment was the claimant's own failure to notify the Council of the true amount of her entitlement to WFTC. In R(H) 1/04, the claimant had been awarded HB without considering his income, because he was in receipt of income support. His entitlement to income support was then removed from the outset because he had not declared his occupational pension to the Benefits Agency. Mr Commissioner Turnbull, considering the recoverability of the consequent overpayment of HB, found that there had been no official error, but that, if there had been, it would not have made the overpayment irrecoverable, because it was substantially caused by the claimant's own fault. The results of both those cases are clearly right, but the circumstances are very different from those of the present case.
38. Here, when the decision awarding what turned out to be excess benefit was made, the evidence on which an award of the correct amount of CTB could have been made was in the hands of the officer acting for the local authority. I have already concluded that the claimant did not contribute to the officer's error in failing to take account of that evidence. Looking at the wider question of the overpayment of excess benefit, I consider that the substantial cause of the overpayment was that official error. In the particular circumstances, the faults of the claimant at an earlier stage of the case were not such that one could say that he was substantially responsible for the overpayment or that the overpayment was due to his fault rather than the official error.
39. The claimant must, though, satisfy a final condition if the excess benefit stemming from the decision of 9 April 2002 is not to be recoverable from him, that he could not at the time the excess benefit was allowed or on the receipt of any notice relating to the allowance of benefit reasonably have been expected to realise that it was excess benefit. I do not at this point have to consider any difficulties about just when CTB is "allowed".
40. The local authority submitted that, as the calculation of CTB was explained in the letters notifying its award, the claimant should have realised that his disablement benefit had not been taken into account and that he had therefore been awarded too much CTB. No copy of the letters notifying the decision of 9 April 2002 is available, but a copy of the letter notifying the decision on 29 November 2002 is in the papers. I proceed on the basis that the letters of 9 April 2002 would have been in the same form. I set the letter of 29 November 2002 out in full, only omitting some references:

"YOUR COUNCIL TAX BENEFIT

Your claim has been assessed.

From 25.Nov.02 to 28.Dec.03 you are entitled to £9.08 towards your Council Tax. Your benefit will be paid to your Council tax account and you will receive a new Council tax bill confirming this.

These are the details that we have used to work out your benefit. Please check them carefully. If anything is wrong please let us know. More information is given on the back of the letter.

COUNCIL TAX BEFORE BENEFIT £15.86 a week

Amount the Government rules say you need each week (`applicable amount')

Personal allowance for a couple ages over 24 84.65

Disability premium @ couple's rate 32.80

Total applicable amount 117.45

Money coming in

Earnings (less tax, National Insurance and half of any Pension contributions you pay have been taken off) 0.00

Weekly amount (`assumed income') we take from £1888 capital 0.00

Anything else 151.36

Less income we ignore (`disregarded income') 0.00

Income we have used to work out your benefit 151.36

You do have the right of appeal against this decision. For more information please see the back of this letter. If you need to get in touch with us, please quote the following reference"

On the back of the letter, the explanation of terms says that the income used to calculate benefit "includes things like earnings, social security benefits, savings, private pension, state pensions and even money from friends or relatives". Disregarded income is said to be "income that is ignored when working out your benefit. The amount depends on your circumstances". Claimants are instructed to notify the local authority if things change, including an increase or decrease in income or savings, and if in doubt to let the local authority know.

41. The local authority says that the claimant could see from the information that would have been given about his circumstances as at 9 April 2002 that only his and his wife's incapacity benefit was being taken into account. The submission for the claimant, accepted by the appeal tribunal, was that he did not know the rules about entitlement to CTB and about what other income was taken into account and what was not. He thought that the local authority knew about all his benefit income and reasonably concluded that his CTB had been calculated correctly on that basis.
42. I find that the claimant did as at 9 April 2002 reasonably believe that he had informed the local authority of all of his and his wife's income from incapacity benefit, DLA and disablement benefit, without needing to decide whether or not he had provided the information on the telephone. Not only had that information been provided through the three pages of bank statements, plus other documents, but the fact that the claimant had no qualms about producing those pages, clearly showing the receipt of disablement benefit, supports the case that he thought that the local authority already knew about that benefit as well as about the others. Would the letters of 9 April 2002 then have alerted him to what the local authority had actually taken into account in its calculation of CTB? I agree with the appeal tribunal that they would not. I assume that the two letters, giving the amounts of entitlement for the periods from 24 December 2001 (£8.25) and from 1 April 2002 (£9.08), indicated the amounts of income taken into account under "anything else" as £148.80 and £151.36, as stated in the written submission to the appeal tribunal. £148.80 was the total of the claimant's and his wife's incapacity benefits before the April 2002 uprating and £151.36 was only four pence short of the total after that uprating. But the claimant was also in receipt of DLA and there is no dispute that the local authority knew about that shortly after it was awarded. Yet the letters of 9 April 2002, as I must find from the contents of the letter of 29 November 2002, gave the amount of nil for disregarded income. So, as far as the claimant could tell from the letters, there was a category of benefit income that was not taken into account in the calculation of CTB and yet did not need to be mentioned as disregarded income. Why should he not have thought, on the basis that the local authority officers were the experts and knew what they were doing, that that category included disablement benefit as well as DLA? It would not be at all implausible for the rules to allow CTB claimants to keep a benefit designed to compensate for a particular degree of impairment of bodily or mental function in the same way as a benefit designed to meet some of the extra costs of disablement.
43. Accordingly, I conclude that the claimant could not reasonably have been expected to realise that he had been allowed excess CTB by the decision of 9 April 2002. The result is that the excess benefit incurred in the period from 24 December 2001 to 24 November 2002 is not recoverable from him under regulation 84 of the CTB Regulations.
44. In relation to the decision of 29 November 2002, there is no dispute that for revision purposes it arose from an uninduced official error and the local authority accepted that the excess benefit allowed from the beginning of the period of the award, ie 25 November 2002, was allowed in consequence of official error. However, the local authority submitted that the excess benefit was nonetheless recoverable because the claimant could reasonably have been expected to realise that it was excess benefit. For the reasons given in paragraph 42 above, I reject that submission. Indeed the claimant's case is even stronger in relation to the decision of 29 November 2002, as the apparent experts in the local authority had confirmed the failure to take account of the claimant's disablement benefit with the same level of explanation, or lack of explanation. Accordingly, the excess benefit at the beginning of the period from 25 November 2002 is not recoverable from the claimant.
45. The local authority submitted that the position changed when the claimant's disablement benefit increased from 5 February 2003 and he did not inform them of the increase. To the appeal tribunal and initially to me, it was submitted that with effect from 10 February 2003 the whole of the excess benefit ceased to be a consequence of official error, but was a consequence of he claimant's failure to inform the local authority of the increase. Thus it was said that all of the excess benefit from 10 February 2003 to 20 July 2003 was recoverable. In paragraph 8 of the written submission of 6 August 2004 it was said that only the element of the excess benefit relating to the increase in the amount of disablement benefit from 5 February 2003 was recoverable, but after the Secretary of State had suggested in the written submission of 16 September 2004 that the argument on causation might lead to the whole of the overpayment being recoverable, the local authority rather went back to its earlier position in the written submission of 24 November 2004. I then directed further submissions about the effect on those arguments of the particular terms used in regulation 84(2) of the CTB Regulations, of when CTB is "allowed". Is CTB "allowed" when the award is made or is it "allowed" each time that a claimant pays an amount of council tax that has been reduced by the application of CTB to the claimant's account?
46. All parties acknowledge that there are some difficulties in the use of the term "allowed" rather than "payment" and the methods of crediting claimants with CTB. One potential difficulty that had concerned me turns out to be non-existent when the legislation is examined closely. Regulation 77(1), spelling out the requirements of section 138(1) of the Social Security Administration Act 1992, provides:

"(1) Subject to regulations 80, 81 and 82 (witholding of benefit, payments on death and offsetting), where a person is entitled to council tax benefit in respect of his liability for a relevant authority's council tax as it has effect in respect of the relevant or any subsequent chargeable financial year, the relevant authority shall discharge his entitlement--

(a) by reducing, so far as possible, the amount of his liability to which regulation 20(2) of the Council Tax (Administration and Enforcement) Regulations 1992 (the English and Welsh Regulations) or regulation 20(2) of the Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 (the Scottish Regulations) refers; or

(b) where--

(i) such a reduction is not possible, or

(ii) such a reduction would be insufficient to discharge the entitlement to council tax benefit, or

(iii) the person entitled to council tax benefit is jointly and severally liable for the tax and the relevant authority determines that such a reduction would be inappropriate,

by making payments to him of benefit to which he is entitled rounded where necessary to the nearest penny."

Then the final sentence of section 138(1) provides that:

"References in any enactment or instrument (whenever passed or made) to payment in relation to council tax benefit, include any of those ways of giving the benefit [ie payment, reduction of liability or a combination of the two]."

47. Thus the definition of "excess benefit allowed in consequence of an official error" in regulation 84(3) in terms of "an overpayment" caused by a mistake etc makes perfect sense. The final sentence of section 138(1) plainly applies to references to overpayments as well as to payments. Under regulation 84(3) one must ask, in a case where entitlement to CTB, as initially determined, was discharged by a reduction of council tax liability, whether that reduction was caused by official error. However, there is still a question whether the reduction occurs each time that a claimant makes a payment in discharge of council tax liability or when the decision as to the reduction of liability is made.
48. Regulation 20 of the English and Welsh Regulations referred to in regulation 77(1)(a) of the CTB Regulations provides that a demand notice for council tax is to be issued on a number of assumptions, which are mainly that the person concerned will continue to occupy the same property on the same basis and have the same council tax liability until the end of the tax year. The assumption in regulation 20(3)(g) is:

"if on the day that the notice is issued a determination as to council tax benefit to which the person is entitled is in effect and by virtue of regulations under section 138(1) of the Social Security Administration Act 1992 the benefit allowed as regards that day takes the form of a reduction in the amount the person is liable to pay in respect of council tax for the relevant year, that as regards every day after that day he will be allowed the same reduction in that amount."

Section 131 of the Social Security Contributions and Benefits Act 1992 makes it clear that CTB is a daily benefit. The conditions of entitlement are in respect of particular days and section 131(2) uses the terms of CTB being allowed in respect of particular days. That reflects the daily liability for council tax under section 6 of the Local Government Finance Act 1992. All of that suggests that the "allowing" of CTB is something closer to the awarding of benefit than to payment.

49. However, on the view that I have taken of the evidence, I do not need to work out how that meaning of "allowed", if it is right, affects the meaning of excess benefit allowed in consequence of official error and the identification of the time at which one has to ask whether a claimant could reasonably have been expected to realise that excess benefit had been allowed. My view is this, accepting and applying the general approach of Sier to when an overpayment is caused by official error. There is no doubt that the award of CTB on 29 November 2002 was caused by wholly uninduced official error. I have also concluded that the claimant could not at that point reasonably have been expected to realise that he had been allowed excess benefit. The award and receipt of an increased amount of disablement benefit would normally be a change of circumstances that a claimant has a duty to notify the local authority of under regulation 65 of the CTB Regulations. However, that duty only arises when the change is one that the claimant "might reasonably be expected to know might affect the claimant's right to, the amount of, or the receipt of council tax benefit". It follows from my existing findings that the claimant could not in February 2003 reasonably have been expected to know that any increase in the amount of his disablement benefit might affect the amount of his CTB. His experience from the decisions given on his two claims and the terms of the notification letters was that disablement benefit was something that was not taken into account in calculating CTB. Thus, I conclude that there was no duty on the claimant to notify the change, so that there was nothing to disturb the existing situation of the excess benefit having been caused by a wholly uninduced official error.
50. If it is the case that relevant test does not turn on the existence or otherwise of a duty under regulation 65, but on whether as a broader matter of causation any further benefit from the allowance of CTB was still caused by the official error, rather than some other factor, the result would be the same. In the circumstances, the independent causative potency of the claimant's omission to notify the local authority of the change in circumstances was too weak to disturb the existing situation on causation. The chain of events here is different from that considered in Sier. The excess benefit was initially allowed wholly as a result of official error. That error continued to be the substantial cause of the overpayment after the amount of disablement benefit, and therefore the amount of excess benefit, increased. The claimant's omission was itself contributed to by the initial official error.
51. Accordingly, the excess benefit for the period from 10 February 2003 to 20 July 2003 is not recoverable from the claimant.
52. My decision is therefore to allow the claimant's appeal against the decisions of 16 July 2003 and to conclude that none of the excess benefit amounting to £429.81 is recoverable from the claimant.

(Signed) J Mesher

Commissioner

Date: 27 May 2005