UK Social Security and Child Support Commissioners' Decisions

[2007] UKSSCSC CH_48_2006 (24 April 2007)

CH/48/2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. My decision is that the decision of the tribunal held on 4 October 2005 is erroneous in law. I set it aside. I remit the case to the local authority to re-calculate the claimant's entitlement or otherwise to council tax benefit on the footing that the claimant's daughter was at the date of the claimant's claim to benefit earning less than £150 per week.
2. The claimant claimed council tax benefit on 14 April 2005. His claim was disallowed on the footing that his income was too high. In the computation the local authority made the assumption that the highest rate of non-dependent deduction should be made in respect of the claimant's 19 year old daughter who was living with the claimant and his wife, and working: the local authority assumed, in absence of any actual evidence as to what the daughter was earning, that the highest rate of non-dependent deduction was appropriate. The claimant appealed stating that he did not know what his daughter's income was and requesting information about the second adult rebate. The tribunal disallowed the appeal. The claimant appeals with my leave.
3. At the request of the claimant I held an oral hearing of the appeal at which the claimant attended and the local authority was represented by Mrs Crabb, its Appeals Officer. I am grateful to both for their submissions.
4. In my judgment the tribunal erred in law. First, the tribunal failed at all to deal with the claimant's query as to second adult rebate. It is clear that the claimant was assessed under the principal means of assessing council tax benefit, namely by computing the claimant's income. The local authority presumably did not investigate the claimant's entitlement to second adult rebate because neither the claimant's spouse nor the claimant's daughter could be taken into account for the purposes of second adult rebate on account of the provisions of regulation 55 of the Council Tax Benefit (General) Regulations 1992. It is true that the local authority sent the claimant an information leaflet about this on 14 June 2005. However the tribunal in its decision with regard to the second adult rebate simply stated that this was "a separate issue which is not relevant to this appeal". That was incorrect. Any claim for council tax benefit can be decided either under the principal provisions or under the alternative maximum calculation provided for by the second adult rebate scheme. On a claim either method may produce an entitlement to Council Tax Benefit. If a claimant raises the issue of why, on his claim, the second adult rebate was not considered, he is entitled to have this issue determined and explained. Although in the present case the claimant could not establish entitlement to second adult rebate, he nonetheless was entitled to an explanation of why he was not so entitled. This the tribunal failed to provide.
5. The second – and more fundamental – error that the tribunal made was in its assessment and reasoning on the level of the earnings of the claimant's daughter. There was evidence before the tribunal, which was not disputed, that the daughter was engaged to work 20 hours per week at a branch of a multiple clothes shop. It was conceded by the claimant, her father, that his daughter might occasionally work overtime (although he had previously stated in writing that overtime could be remunerated by time off in lieu). He estimated that his daughter earned about £96 per week. He said that his daughter refused to tell him how much she actually had earned. The tribunal decided that since the further information required by the local authority relating to the daughter's income had not been provided the local authority was entitled to assume that the highest rate of non-dependent deduction should apply in the calculation of entitlement to a council tax benefit. The tribunal so decided on the basis that regulation 63 of the 1992 Regulations (relating to the provision of information) had not been complied with by the claimant. Having indicated during the hearing of the claimant's appeal that I was minded to allow it on the first point alone, I took evidence from the claimant (which was not subject to cross-examination by Mrs Crabb): the claimant explained that his daughter was principally employed in the stock room of the shop where she worked, that he did not know how many hours of overtime she worked and that he did not know how much in total she earned. Mrs Crabb, very sensibly, indicated that she would after the hearing send out an enquiry form to the claimant's daughter to enquire of her directly whether she would reveal the amount of her earnings at the relevant time. This was done. The claimant's daughter, however, returned the form uncompleted saying that she was not willing to give her personal details to the local authority.
6. I recognise that the local authority is entitled to require evidence from claimants and that, in the absence of such evidence, it may make adverse inferences. However, any such adverse inferences have to be based in some sense of reality. The claimant's daughter was 19 at the date of the claimant's claim for council tax benefit. She was working in a junior role in an occupation which is not recognised for paying high wages. The national minimum wage for 19 – 21 year olds in April 2005 was £4.10 per hour. This increased in October 2005 to £4.25 per hour. It is inherently unlikely that the claimant's daughter's employer would have paid much, if anything, above the minimum wage applicable to employees of the claimant's daughter's age. It is further inherently improbable that any additional hours worked by a part-time employee would have been paid at anything above the normal hourly rate. For the local authority and the tribunal to impute to the daughter a weekly level of earnings in excess of £322 (the level at which the highest rate of non-dependent deduction came in) was, in my judgment, to lose total touch with reality. Notwithstanding the terms of regulation 63, both the local authority and the tribunal had the duty to assess, on the evidence available and on the balance of probabilities, what the likely level of the daughter's earnings were. This, in my judgment, both the local authority and tribunal failed to do: each proceeded on the basis that because no positive evidence from the daughter or the claimant had been produced, the very worst had to be assumed against the daughter. In my judgment regulation 63 does not drive either the original decision maker or any tribunal to such an irrational result. In my judgment if, on the evidence available, an estimate can be made of a non-dependent's income, with reasonable adverse assumptions being made where inferences have to be drawn because no evidence is available, then that is the appropriate course for the decision-maker or the tribunal to take. In my judgment, on the evidence within the file and on that that I took from the claimant, it is reasonable to assume that as at April 2005 the claimant's daughter's income was less than £5 per hour and that she was doing no more than 10 hours remunerated overtime per week. On these inferences (which I consider are the most adverse that can sensibly be taken in the circumstances of this case) I find that the claimant's daughter was earning less than £150 per week at the date of the claimant's claim for Council Tax Benefit.
7. I accordingly set the decision of the tribunal aside and remit the case to the local authority to recalculate the claimant's entitlement to Council Tax Benefit: on figures within the papers it would appear that this victory will be of little help to the claimant since it appears that any resultant benefit will be 9p per week. The claimant is, nonetheless, entitled to have his claim re-assessed by the local authority. On the other hand, however, the claimant should be aware that, since the matter has been referred to the local authority for the re-calculation of his entitlement (if any) to council tax benefit, all matters relating to his circumstances down to the date of the new decision by the local authority (or the date of any fresh claim, if earlier) can and must be taken into account: therefore, if since the date of his original claim either his income or that of his daughter has changed he should notify the local authority telling them of the change and its date.

(Signed) A Lloyd-Davies

Commissioner

(Date) 24 April 2007