UK Social Security and Child Support Commissioners' Decisions

[2006] UKSSCSC CF_2311_2006 (12 December 2006)

CF 2311 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. I allow the appeal. For the reasons below, the decision of the tribunal is wrong in law. I set aside that decision. But this is not to the advantage of the appellant. The decision is set aside and replaced to correct technical errors in it. The substance of the decisions is the same as of those under appeal. I replace the tribunal decision with the decisions that the tribunal should have taken. These are:

Appeal dismissed.

The appellant is not entitled to child benefit for her two daughters from and including 2 05 2005. This is because they have been in the care of a local authority in prescribed circumstances for at least one day a week for a minimum of eight consecutive weeks.

As a result, an overpayment of child benefit was made by HMRC to the appellant amounting to £228.00.

During the period from 2 05 2005 the appellant was under a duty to disclose the above facts to HMRC but failed to do so.

Of the overpayment of £228, £208.20 is recoverable from the appellant by HMRC as it would not have been paid but for the failure to disclose. The balance of the overpayment, £22.80, is recoverable from the appellant as it was paid by credit transfer and the necessary conditions have been met for its recovery.

2. The claimant and appellant (Miss B) is appealing against a decision of the York appeal tribunal. The tribunal decided the appeal on 19 01 2006 under reference U 01 009 2005 00753. She is appealing with my permission.

REASONS FOR THIS DECISION

The facts

3. Miss B was receiving child benefit from Her Majesty's Revenue and Customs, the respondents in this appeal (HMRC), for her two named daughters. On 25 08 2005 an officer acting for HMRC superseded the decision awarding child benefit with effect from 2 05 2005 because the two daughters were in local authority care. The officer decided that there was therefore an overpayment of £228 child benefit. The officer also decided that this was recoverable from Miss B because she had failed to disclose to HMRC that her daughters were in local authority care. Part of the benefit had been paid to Miss B by credit transfer so was automatically recoverable from her.
4. Miss B's case was put for her by a tenancy support worker of the local tenancy support service. The support worker appealed on Miss B's behalf after having failed to be able to get any response from HMRC to telephone calls and faxes. It was stated that Miss B had been wrongly advised about her position because the daughters were only being taken into care on a temporary basis. They had been taken into temporary care on 11 03 2005, but that arrangement had since become permanent. HMRC established that during the period of care the cost of care was met by the local authority. The support worker also stated that Miss B had contacted the Tax Credit office at the time about her position. The support worker later candidly admitted that she had been responsible at least in part for the wrongful advice.
5. A different support worker represented Miss B at the tribunal hearing. Miss B was not present. Nor was any representative of HMRC. The tribunal confirmed the decision under appeal after a short hearing.

The tribunal decision

6. In its reasons, the tribunal examined the decision making process. It confirmed that there were grounds to supersede the decision awarding child benefit to Miss B. It decided that clearly there was an overpayment. It also decided that there had been a failure to disclose or a misrepresentation that caused the overpayment. It accepted that Miss B had acted on wrongful advice, but found that there was no provision of law under which this could absolve her from her responsibilities. Its formal decision confirmed "the decision of the Secretary of State". And it formally decided that the £228 overpaid benefit was recoverable because of the failure to disclose.
7. A citizens advice bureau was asked to act for Miss B on appeal to the Commissioner. The CAB most helpfully submitted a skeleton argument in support of the application to appeal. I granted permission to appeal as a result. I also raised another issue – was information given to HMRC as administrator of child tax credits a disclosure for the purposes of child benefit?

The submissions of the parties

8. The submission from HMRC supported Miss B's appeal on one issue. The officer making the submission for HMRC agreed that the tribunal had erred in introducing the issue of misrepresentation. HMRC had not alleged misrepresentation and had not provided any evidence of it. The case was based solely on failure to disclose.
9. At my request, the officer also provided information about the contacts between Miss B and the Tax Credits Office. These show that there were a number of contacts between Miss B and the Tax Credits Office during the relevant period but that Miss B did not disclose that her daughters had been taken into care. Having noted the "no comment" of Miss B's representative in reply to this, I accept that information. It follows that there was no relevant disclosure to the Tax Credits Office. The question whether such disclosure was relevant to child benefit does not therefore arise. While I note the full submission of the officer about the legal significance of any such disclosure, it is not necessary to deal with that issue further in this appeal.

My decision

10. Turning to the grounds of appeal put forward for Miss B, the officer supported the decision of the tribunal by reference to the decision of the Court of Appeal in B v Secretary of State for Work and Pensions [2005] EWCA Civ 929, [2005] 1 WLR 3796. That case directly concerned the failure of a mother to disclose that her children were taken into care. In that case the relevant benefit was income support. The officer submitted that there was a similar duty of disclosure on child benefit claimants to disclose similar facts. The duty arises under regulation 23 of the Child Benefit and Guardian's Allowance (Administration) Regulations 2003 (SI 2003 No 492) read together with the standard literature given to claimants of child benefit. I agree that B v Secretary of State applies equally to the equivalent duty of someone to disclose relevant changes to HMRC in connection with child benefit. The tribunal was entitled on the evidence put before it to accept that there was a duty on Miss B to report the fact that her daughters has been taken into care at the latest when they have been away for eight weeks. She had a duty to disclose this to HMRC and she had failed to disclose.
11. The decision that the overpayment was recoverable under section 71 stands good in so far as it is based on failure to disclose. It must also follow that there is no reason to disturb the decision for HMRC with regard to recovery of the money paid by credit transfer, provided the requirements of the legislation relating to such payments are met. The only stray element in that part of the tribunal decision is the reference by the tribunal in its reasons to misrepresentation. The tribunal was wrong in fact and in law to introduce that issue. While there was a failure to disclose by Miss B, there is no basis for claiming that, even innocently, she misrepresented anything.
12. There is also a technical error in that there were separate decisions under appeal about the initial overpayment of the benefit directly to Miss B, with the later overpayment made by credit transfer. The initial overpayment is covered by section 71(1) of the Social Security Administration Act 1992. The credit transfer is covered by section 71(4) read with regulation 35 of the Child Support and Guardian's Allowance (Administration) Regulations 2003. The submission to the tribunal sets this out properly. The papers also contain the proper certificate necessary to meet the procedural requirements of regulation 35. But the tribunal did not pick up the point. Instead, it gave a composite decision and thereby did not deal expressly with the credit transfer. The officer representing HMRC picked the point up in passing in the submission to the Commissioner. Miss B's representative made no comment about it either in the grounds of appeal or the reply to the HMRC submission.
13. I must also note, as I have done in several other appeals against decisions of HMRC, that HMRC is not the Secretary of State. The tribunal's decision that "the decision of the Secretary of State issued on 25 08 2005 is confirmed" is wrong in fact – there were a series of decisions. It was also wrong in law – they were decisions of an officer of HMRC. And it is HMRC, not the Secretary of State, who is entitled to recover the overpaid benefit.
14. I am fully satisfied that the tribunal should have confirmed each of the decisions of HMRC. In not doing so, but using its own wording, it introduced errors. But there is no undecided area of fact and no point now in issue requiring further consideration. The most expedient course of action is therefore for me to take the decisions that the tribunal should have taken, and I do so.

David Williams

Commissioner

12 12 2006

[Signed on the original on the date stated]