UK Social Security and Child Support Commissioners' Decisions

[2006] UKSSCSC CIS_4422_2002 (10 October 2006)

PLH

Commissioner's File: CIS 4422/02

SOCIAL SECURITY ACTS 1992-1998

APPEAL FROM DECISION OF APPEAL TRIBUNAL

ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Claim for: Income Support

Appeal Tribunal: Liverpool

Tribunal Case Ref: U/06/071/2002/00765

Tribunal date: 5 August 2002

Reasons issued: 22 August 2002

1. This long-delayed appeal by the claimant, against a decision that £720.80 accidentally overpaid income support was recoverable from him, succeeds. The tribunal which dealt with the case at Liverpool on 5 August 2002 (Mr L L Lewis, chairman, sitting alone) in my judgment erred in law in failing to identify and deal with a relevant distinction between a claimant's obligation to notify to his local benefit office as a "change of circumstances" the actions of another office of the Department for Work and Pensions, and a case such as the present where, on the tribunal's own finding, everything that affected the claimant's benefit was being dealt with inside the same local office. In the latter case it is established on well founded authority that the requirement to disclose material changes to that office does not mean the claimant has gratuitously to notify it of the actions of its own staff.
2. I accordingly set the decision aside and on the basis of the evidence and material placed before the tribunal by the Secretary of State exercise the power in section 14(8)(a) Social Security Act 1998 to substitute the only decision the tribunal could properly have given, namely that the case against the claimant of "failure to disclose" to the Secretary of State the fact of an increase in his wife's retirement pension was not made out; the sum of £720.80 overpaid income support was therefore not recoverable from him under section 71 Social Security Administration Act 1992 on the only basis alleged.
3. This appeal along with a large number of other cases was extensively delayed because of uncertainties over the last few years in the previously well-settled law of recoverable overpayments of social security benefit, pending the decision of the House of Lords in Hinchy v Secretary of State [2005] 1 WLR 967 and that of the Court of Appeal in R(IS) 9/06 B. v Secretary of State [2005] 1 WLR 3796. Following those cases and the directions given by the Legal Officer further submissions in the present case were received both from the claimant's representative Mr G Friday of the Sefton District CAB and from Mrs J Douglas on behalf of the Secretary of State. I now proceed to give the final decision on the basis of the written and oral evidence presented at and recorded by the tribunal at its extensive hearing on 5 August 2002, there being in my judgment no virtue at all in sending the case back for yet another tribunal after such a long time.
4. So far as the facts are concerned there is no dispute that this claimant was accidentally overpaid £720.80 income support by way of "minimum income guarantee" payments on his retirement pension over the period 5 February to 11 November 2001, or that this happened because the departmental staff calculating his guarantee amount miscalculated the retirement pension his wife would also be receiving from the time he was 65, accidentally using only the lower amount she had been receiving in her own right before. The only issue is whether the overpayment is recoverable from the claimant under section 71 on the ground of "failure to disclose" when (as was the case) he did not spot and notify the department of its own mistake.
5. As now re-stated in the authorities cited in paragraph 3 above the "failure" that must be proved against a claimant in order to found recovery under that head of section 71 is a non-compliance with some specific instruction shown to have been given to him by the Secretary of State or some other specific duty of disclosure or notification imposed on him expressly by regulations. The first defect in the claim presented by the Secretary of State to the tribunal in the present case was that the evidence failed to show the relevant decisions on entitlement and what, if anything, the claimant had been told as regards the requirements on him to notify changes or other events potentially affecting the calculation of his income support benefit. However that was partly remedied for them by his own representative at the tribunal, who very fairly and honourably accepted that the claimant could be assumed to have been provided with the usual pages in his order book when his income support started, and these would have told him to notify changes in his circumstances to the local office handling his benefit claim.
6. The claim relevant for present purposes was for income support, though some confusion in the mind of an ordinary person is understandable since it was the type of income support then described as the "minimum income guarantee" on the claimant's own retirement pension, the two being to some extent blended together for cosmetic reasons so as not to discourage elderly people reluctant to get involved with the means-testing system. Both were handled together by the same office and paid to the claimant as one single benefit, by means of a benefit book which I have no doubt he regarded as his "pension". This claimant's income support top-up from 5 February 2001 was thus included with the retirement pension for which he qualified on attaining 65 on 21 December 2000 and received from 28 December 2000, the start of the next benefit week. He was not previously an income support claimant or recipient.
7. On the form he had been asked to complete in advance of attaining 65 he had correctly entered details of the category A retirement pension his wife, then already over her own retirement age of 60, was currently receiving on her own contributions. As she had only a partial contribution record, this was at a reduced rate of some £24 per week, but as soon as the claimant attained 65, her entitlement automatically increased under section 51A Social Security Contributions and Benefits Act 1992 to the category B level for which she otherwise then also qualified on his contributions as his wife: a little over £40 per week. She was duly notified by the local benefit office of this increase in her pension during January 2001, at or around the same time as the claimant was also notified by the same local office of his combined pension and income support top-up entitlement. However the staff in the local office charged between them with calculating the couple's pensions, and the top-up taking into account their joint income level, failed for some reason to allow in the top-up calculation for the increase, using only the reduced pension she got before he was 65, with the result of course that his total benefit award was higher than it should have been. A calculation of how the income support element in his benefit was worked out was sent to him at some point (page 3) and this contained an unexplained, apparently inaccurate, figure of £26-odd for his wife's pension. The claimant's evidence to the tribunal that he had not realised the department had made a mistake, and believed they must have their own calculations right, was not challenged. Conversely he freely acknowledged that he had not (for that reason) sent back any separate notification to the same office of the effect on his wife's retirement pension of his attaining 65, either before or after it wrote to her to tell her about the increase. There is some confusion over what the tribunal was told about when that letter was sent to her: the claimant's representative has since been able to confirm, by reference to the actual document, that this was during January 2001 but the exact date does not matter for the present purpose. She was awarded her increased pension with effect from 25 December 2000, the start of the first of her benefit weeks after he reached 65 (page 11).
8. The tribunal's findings of fact reflect, as was the fact, that all relevant notifications and correspondence relating to the couple's pensions, and the minimum guarantee top-up, emanated from the same local social security office in Stanley Precinct, Bootle, Merseyside: but it further recorded that income support and retirement pension were administered by different sections within that local office: page 22. Referring to reported decision R(SB) 15/87 to the effect that a claimant's obligation is to disclose to a member or members of the staff of an office of the department handling the transaction giving rise to the expenditure, the chairman held that "the Appellant should have reported the increase in his wife's Retirement Pension to the Income Support Section of his Local Office" (page 24) and held him liable for "failure to disclose" contrary to section 71 accordingly.
9. In my judgment the chairman misdirected himself in so holding on the evidence before him, and the decision has to be reversed. That evidence actually failed to show any material change of circumstances after the start of the claimant's own benefit, since the automatic increase had already applied under section 51A to his wife's separate pension from the start of her benefit week a few days before his pension commenced, and there was nothing to show that her increase took place after his income support from 5 February 2001 was calculated and awarded. If there was no material change of circumstances, the claimant cannot be held liable for failure to report one. Nor had he given any incorrect information to the local office of the department, since the details of his wife's pension that he entered on the form before he started to draw his own were correct at the time he gave them. Nor was there any evidence before the tribunal to show that he was in breach of any instruction given to him as to the reporting or disclosure of information, since there was no evidence of when the order book was issued, the only "changes" referred to in the standard instructions it contained would have been those after the start of the benefit payments in the book itself, apparently 5 February 2001, and there is nothing in those instructions to require a claimant to notify the department of its own miscalculations; even if he recognises them as such, which this claimant did not.
10. In any event, there was no evidence of any requirement on him to send any separate notification to any separately identified section of the staff working within what was otherwise presented to him as a single local office of the Department for Work and Pensions, of the activities within that office of any other. As far as that last point goes, the evidence and the findings of the tribunal in this case show that it falls within the same principle as that explained in CSB/677/86 and CIS/1887/02, there being nothing before the tribunal to suggest that the staff in this claimant's local office had been physically separated as a matter of fact so as to constitute two distinct "offices" of the department albeit in the same building (so as to make the facts analogous with those accepted by the Commissioner in CIS/3700/05, on which the Secretary of State's submission relied); or that any such division had in any way been identified to the claimant.
11. Furthermore, now that the question appears to be simply whether there has been a literal non-compliance with the requirements of some regulation, the decision in B. v Secretary of State seems to admit no room for or relevance in any inquiry into whether or when a reasonable person in the position of the claimant should have realised a mistake had been made in his favour and ought to have done something to draw it to the attention of the department. It follows that there can be no question here of any recovery under section 71 based on what would formerly have been considered the continuing duty on a benefit recipient to make the disclosures reasonably to be expected of him in such circumstances: R(SB) 54/83 paragraph 18. I cannot myself regard that as sensible but the Secretary of State must live with the fruits of his victory in B.
12. The appeal is allowed and my decision substituted accordingly.

(Signed)

P L Howell

Commissioner

10 October 2006