UK Social Security and Child Support Commissioners' Decisions

PLH Commissioner's Files: CIS 3382 & 3383/06

SOCIAL SECURITY ACTS 1992-1998

APPEAL FROM DECISION OF APPEAL TRIBUNAL

ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Outcome

1. These two appeals on behalf of the claimant are dismissed, as in my judgment there was no material error of law in either of the decisions of the Ashford income support tribunal sitting on 25 May 2006.

Decisions under appeal

2. By those two decisions the tribunal (Mr D Geen, chairman, sitting alone) confirmed, for the reasons explained in a combined decision notice and statement of reasons issued to the parties on 15 June 2006 at pages Q1 to Q3 of the first of the two appeal files before me, two decisions of the Secretary of State on the mortgage costs the claimant was seeking to have paid for him by income support for periods in 2003 and 2004, notified to him in separate letters dated 18 January 2006 at pages S66 and S64-65. The first was that from 25 July 2003 his allowable housing costs as an existing income support claimant were limited to a loan amount of £53,000 (the purchase loan allowed till then on his previous house), refusing his application for an increase to cover much higher borrowings on a new house from that date. The second was that from 10 May 2004 he was not entitled to have his income support increased or reinstated because of additional loans totalling £9630 then incurred for repairs and improvements to the new house.
3. A third decision also dated 18 January 2006 (at page S63) had terminated his income support entitlement altogether from 11 November 2003, from which date he no longer qualified for a child allowance previously included in his benefit. The effect in conjunction with the first decision was that his "applicable amount" became less than his income from other sources; and that remained the case even allowing for the extra borrowings in May 2004. There was no separate appeal on the child allowance and I take it thus to be common ground that whether there was any continued entitlement from 11 November 2003, and whether there was any benefit to adjust for the extra £9,630 for improvements from 10 May 2004, each stand or fall by the result of the first question.

Past history

4. The matter has a tortuous procedural history, not helped by the rather complicated way the decisionmaking processes on cases of this sort have been divided up within the department: though some confusion is admittedly understandable, given the unusual nature of the claimant's domestic arrangements and the variety of contentions raised on his behalf from time to time. At least some of the past history has to be rehearsed to enable the issues on the present appeals to be understood.
5. The claimant is a man now aged 45, accepted for many years as suffering a degree of disability from chronic fatigue syndrome and other problems. From November 2000 until the summer of 2003 he claimed and was paid income support on the basis that he was a single person. The amounts awarded included allowances for children living in his household, and also for mortgage interest on a purchase loan of £53,000 for the house he lived in down to 25 July 2003, which had been adapted with the help of grants and additional loans to make it suitable for his needs as a disabled person.
6. Also living in the same house (though they are formally separated) was his present wife. She acts as his carer and appointee for social security purposes. From 2001 onwards they were making joint efforts to find another house for them both to move to. They were well aware that the income support he could get as an existing claimant for a mortgage on any new property would be limited to his previous purchase loan, unless it could be got within the exception for the purchase of accommodation more suited to his needs as a disabled person; in which case the ceiling would almost double, to £100,000.
7. By mid-2003 they had had three attempted purchases fall through and were under pressure because they did not wish to lose the purchaser they had found for their present house. In July 2003 they went ahead at short notice with the purchase of another which, though larger, was then in a very bad state and not in a condition that the claimant could live in. They completed the purchase with the aid of a new and much bigger mortgage of over £100,000 from their existing mortgagee, given in the belief that the department would meet the interest on the new loan up to that amount though no decision or assurance to that effect had been given. The claimant's wife had written to press the department for such a decision, assuring them how suitable the new property was for his needs (documents F-G) but in the end she (and the mortgagee) went ahead without it.
8. The claimant attempted to move into the new house on 25 July 2003, but within a week had to move out again and into rented accommodation. As confirmed by his own doctor's statement at document H, he was advised on medical grounds to leave the new house at once: its dampness and general state made the accommodation completely unsuitable for him, at any rate until major reconstruction work had been carried out. His wife nevertheless pursued the attempt to get his income support increased to cover their higher mortgage on the basis that having moved in he was now only temporarily absent.
9. Meanwhile, the department had been separately reconsidering if the apparent closeness of the domestic arrangements made it right to accept that the claimant was entitled to income support as a single person at all. A decision was made on 31 July 2003 and issued the following day, determining that for income support purposes they were living together as husband and wife. If that was correct, it followed that he was no longer entitled to income support and his benefit ought to be stopped, and after an interval the department actually did stop paying him any income support from 8 September 2003. However it later transpired that the payments section had jumped the gun, as no formal decision to terminate his still current benefit award had been made or issued, and it therefore simply continued in force.
10. Unaware of the move to take away the income support altogether, another officer of the department dealing only with housing costs had in the meantime made a separate decision refusing the application for increased housing costs, and determining that from 25 July 2003 none at all were allowable as he did not reside in the new house. That decision was notified to the claimant's wife as his appointee in a letter dated 7 August 2003 at document S30 in the first appeal file, and since its contents are relied on by the claimant's solicitors I will quote the relevant passages in full:

"About the interest on your mortgage

I am writing to inform you that we have made a decision on the two issues concerning the assistance that we can allow towards the mortgage on [the new house]. The issues are what level of assistance we could provide towards the mortgage on the property, and whether we can currently treat [the claimant] as being resident at the property.

In relation to the first issue we have decided, on the basis of the information that you have provided, that we could allow mortgage interest assistance on an outstanding balance of £100,000. This is because we have deemed that the new property is more suitable for the needs of a disabled person under our regulations.

In relation to the second issue we have determined that [the claimant] cannot be treated as usually or normally residing at the property. This means that we cannot currently provide assistance towards the mortgage, although this does not preclude the provision of assistance from a date in future if [the claimant] fulfils the conditions of our regulations in this regard at that date."

11. She brought appeals on the claimant's behalf, against the decision of 31 July on living together and that of 7 August 2003 disallowing housing costs from 25 July. In due course both came before the appeal tribunal at Ashford (Mrs S Elias, chairman, sitting alone) on 26 April 2004, when it was decided that (1) the decision that the couple were living together had been correct, and accordingly he had not been entitled to income support as a single parent at all over the whole period of the claim back to 21 November 2000; and (2) it necessarily followed that he should not have any of his housing costs paid by income support from 25 July 2003. In a very clear and well set out statement of reasons dated 25 May 2004 at document L, the chairman did however comment that had the main decision on the question of entitlement been otherwise, she would have accepted in the unusual circumstances that the claimant counted as normally resident in his new house despite only having moved into it for such a short time.
12. Those decisions in turn were appealed to the Commissioner, and both of them were set aside almost exactly a year later in the combined decision of the Deputy Commissioner dated 27 April 2005 at pages S47 to S50. Accepting a concession by the Secretary of State that there never had been a legally effective decision to terminate the claimant's income support, the Deputy Commissioner substituted an agreed decision on the first appeal confirming that the previous entitlement had simply continued to run, and income support ought not to have stopped being paid on 8 September 2003. That meant that what, if any, allowance it ought to have included for housing costs from 25 July 2003 became a live issue again, and on the second appeal the Deputy Commissioner therefore substituted the decision he was satisfied the tribunal ought to have given, defined by him in paragraph 18 on page S50 as

"... to set aside the decision of the secretary of state as to the claimant's entitlement to housing costs and to remit the question of the claimant's entitlement to be determined by the secretary of state in the light of the guidance contained in this decision."

13. Pursuant to that combined decision the Secretary of State gave a further decision on 20 June 2005 (S51-52), formally accepting that the original basis of the claimant's income support award as a single parent was to be left undisturbed, so he had remained continuously entitled to income support from 31 July 2003 onwards and was due arrears from September of that year, though the amount remained to be calculated. It was also accepted that in principle the claimant was entitled to an allowance for housing costs included in his income support, but only for the single week from 25 July to 1 August 2003 when he was actually in the new property attempting to live there. After that, in the light of the Commissioner's decision, it was still considered there were no housing costs payable because he was not resident at the property. The new decision specifically reserved any question of the amount of any housing costs so allowable to the claimant while resident, as he already had a separate appeal in progress dealing with that issue.
14. That he did, because following the stopping of his income support in September 2003 his wife had put in at least one fresh claim for the same benefit on his behalf; the papers contain reference to a fresh claim being made on 17 September 2003 and there may well have been others. In all of them she continued to press for the increased mortgage interest on their new house to be met by income support, and she sought yet further allowances from 10 May 2004 when the loan was increased for improvements. In response the Secretary of State gave a decision on 9 September 2004 that on the facts as by then understood, the claimant's allowable housing costs from 25 July 2003 were limited to the previous purchase loan of £53,000; it was not now accepted that the new house had been more suitable for his needs so as to escape the normal restriction.
15. Again the decisionmaking on the housing costs appears to have proceeded separately from, and without apparent reference to, the main question of whether there was any income support entitlement on the new claim; on which a decision had in fact already been given on 16 July 2004 disallowing the claim in its entirety. What happened about that July decision and any appeal against it is obscure: but in any event it is academic, as the Secretary of State has later acknowledged, in my view quite correctly, that no adverse decision on entitlement under a new claim for the period from September 2003 onwards could be of any legal effect against the claimant when as confirmed by the Deputy Commissioner's decision of 27 April 2005 he then had a still running entitlement under his previous award, needing no fresh claim to establish it: see the letter dated 18 January 2006 at document S59.
16. The claimant's wife appealed against the decision of 9 September 2004 restricting the allowable housing costs under his new claim, and also against that of 20 June 2005, limiting them on the original award to the single week from 25 July 2003. On 1 August 2005 those appeals came together before a further tribunal chairman (Mrs D Bates). She allowed the second appeal, holding the claimant in principle entitled to an allowance for housing costs on the new house from 2 August 2003 as he could still count as in occupation while absent because of the repairs. In the course of her statement of reasons on this issue dated 9 August 2005 at document D she commented that:

"It was clear from what I heard that the previous house had been unsuitable for him because of its size and the new house was in such a condition that it required significant work to be done before he could live there. He had attempted to live in it for a short period, and had to move out again because his health started to be affected and he developed a chest infection. The work on the new property started in approximately October 2003 and he was able finally to move into it permanently in about May 2004."

17. However as also recorded in that statement, the actual amount of any housing costs to be allowed was a separate issue, and the subject of the separate appeal which she did not decide but adjourned for further evidence. The separate directions she gave on the adjournment, at document N23, indicate that further accounts and other documentary evidence needed to be produced by the claimant's wife to make good her case as to how much she said should be allowed, but also that the department was to prepare a submission dealing with two legal issues: whether the decision of the Deputy Commissioner on 27 April 2005 had anyway superseded that of 9 September 2004 altogether; and whether in the light of his decision the department was bound by what had been said in the letter of 7 August about the calculation of housing costs.
18. Following that direction the department reconsidered the position about the decision of 9 September 2004, and in the letter already noted at page S59 acknowledged that it could be of no continuing effect against the claimant to limit any entitlement he had to housing costs under his still continuing award in September 2003, any more than the decision of 16 July 2004 itself disallowing the (now superfluous) new claim. Accordingly the decision of 9 September 2004 was withdrawn altogether as having no legal effect, and the department further decided not to appeal against the chairman's decision that there was a continuing entitlement to housing costs from 2 August 2003, the amount of which yet remained to be determined.
19. Instead, the department took what in my view was the entirely sensible step of carrying out a comprehensive reassessment of the claimant's entitlement to income support, including any allowances for housing costs, over the whole of the period at issue, and embodying the results in fresh decisions, untainted by any of the previous procedural doubts as to their validity. Those decisions were issued on 18 January 2006 and of course carried fresh appeal rights enabling the substance of the dispute to come back before the tribunal, similarly untainted. I see nothing wrong in any of that as a matter of procedure or propriety. The claimant's solicitors voiced a suspicion that it was all a manoeuvre by the department to avoid a potential decision in the claimant's favour by the chairman who heard the case on 1 August 2005, but I find no proper grounds for the suggestion. There were good legal reasons for not seeking to uphold the decision of 9 September 2004 on the new claim as if it had been given on the old award, and the department could not possibly know if the case, no doubt by now a familiar one to the tribunal authorities, would be reassigned to the same chairman or a different one.

The tribunal decisions of 25 May 2006

20. I finally come to the tribunal decisions which are the subject of the present appeals to me. As already noted they were given on appeals in the name of the claimant against the two decisions of the Secretary of State issued on 18 January 2006, first to refuse any increase in allowable housing costs on his income support from 25 July 2003 beyond the amount allowable for the previous purchase loan of £53,000, and second to refuse any increased or reinstated income support entitlement on the ground of increased allowable housing costs from 10 May 2004 reflecting the further loan for improvements.
21. The chairman's decision, having heard full evidence and submissions from the claimant's wife at the hearing on 25 May 2006, was to dismiss both appeals. In his statement of reasons at document Q issued to the parties on 15 June 2006, he directed himself, entirely correctly, that the first issue to be decided was whether the additional housing costs incurred by the claimant in connection with his purchase of the new house could be met. As he was already in receipt of income support at the time the property was purchased, the housing costs allowable could only exceed the amount he had already borrowed to buy his previous home if the new one was more suitable for his own needs as a disabled person: see paragraphs 4(2), 4(9) Schedule 3 Income Support (General) Regulations 1987 S.I. No. 1967. The second issue, of whether the additional loan cost attributable to repairs and improvements on the same property could be allowed as housing costs from 10 May 2004, followed on from the first. If the first issue was not resolved in the claimant's favour then it had the result that he would no longer qualify for income support anyway as his income would exceed the applicable amount.
22. For practical purposes therefore everything turned on the facts about whether the new borrowing met the condition in paragraph 4(9) that

"the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant"

and indeed whether the new house fitted within that description at all. The chairman went through the evidence and the full submissions the claimant's wife addressed to him on the issue. He noted that the previous property had already been improved with the aid of a council grant and further mortgage advance for the express purpose of providing for the claimant's needs as a disabled person, and concluded that in fact the main reason for wishing to move had not been those needs, but to accommodate the two-household status that existed between the claimant and his wife and children which necessitated more space because they were legally separated.

23. On the new house itself, and the circumstances in which it came to be bought, the chairman made a further express finding that it was not more suitable for the claimant's "claimed disabled needs" than the couple's previous house. The claimant's wife herself had described it as being in a bad state, and when he had in fact attempted to live there he had to move out after a very short period of time as it was adversely affecting his health. The evidence suggested that this was a property the claimant and his wife purchased hurriedly, and contrary to the contentions about its suitability it could only be made habitable to the extent they wished by undertaking extensive alterations involving further borrowing. The chairman rejected an argument by the claimant's wife that earlier letters written by officers of the department in relation to different properties had amounted to binding assurances preventing anyone deciding that the house actually purchased failed to qualify for the increased limit. He said, wholly correctly, that those letters did not give carte blanche to purchase any property with a mortgage of up to £100,000 with interest being paid by the department, and in any case the doctrine of estoppel by representation had no application: cf. R(SB) 4/91.
24. Accordingly the tribunal held that the claimant's allowable housing costs from 25 July 2003 were limited to a loan of £53,000, and he did not have any continuing or revived entitlement to income support from 10 May 2004 when his borrowings were further increased for the repairs and improvements.

Issues on the present appeals

25. The appeals on behalf of the claimant against that combined decision do not seek to suggest that the chairman's actual findings on the facts and the evidence were perverse or unreasonable, nor in my judgment could they properly do so. On the contrary, the crucial findings that the new house was not in fact more suitable for the claimant's needs as a disabled person than the one he was already occupying, and that the real purpose of the move had been to acquire accommodation to suit the broader needs of the household rather than his disability specifically, seem to me altogether proper and reasonable on the facts. The evidence here showed that so far from being more suited to the claimant's needs as a disabled person than where he was living before, the new house was in fact impossible for him to live in at all: his token attempt to move in there having hurriedly to be abandoned on medical advice because it was damaging to his health. Nor does it my judgment affect the validity of the tribunal's conclusion that the claimant and his wife were (perforce) intending to embark on an extensive programme of repairs and improvements to put the new house into a fit condition. The condition in paragraph 4(9) is that the new loan is "taken out…to acquire alternative accommodation more suited to the special needs of a disabled person…". Of course there must be a measure of flexibility and factual judgment in whether a particular loan or property meets that description, but there can be no legitimate criticism of the conclusion that here it did not include a new and larger house not fit for the disabled person to move into at all, and only able to be made suitable for his or her occupation with lot of further building work and expense.
26. As I have already indicated no such challenge to the chairman's factual conclusions is in fact mounted here on the claimant's behalf, the express opportunity afforded by my direction of 7 March 2007 at pages S10 to S11 not having been taken up. The only grounds on which the appeals are pursued by his solicitors are technical and jurisdictional. The contention is that the tribunal had no power to make the decisions it did on the question of the claimant's housing costs, on the ground that (a) the Secretary of State, in the letter dated 7 August 2003 quoted in paragraph 10 above; and/or (b) the tribunal chairman Mrs Bates, in the passage from her decision of 1 August 2005 quoted in paragraph 16, had already decided with binding effect that he was entitled to housing costs on loans of up to £100,000 in his income support at all material times from 25 July 2003 onwards. It is further contended that no subsequent decision to the contrary could be of any legal effect because the doctrine of res judicata makes the "decision" to that effect conclusive for all purposes regardless of any subsequent inquiry into the actual facts, and prevents the issue from being reopened: see the grounds for seeking leave to appeal at documents R5 and S5 to S7, the further submissions and grounds at pages S14 to S22 submitted on 12 April 2007 in response to my earlier direction, and the observations in reply submitted on 18 July 2007 at pages 96 to 98 of the second file.
27. I can deal quite shortly with what was said by Mrs Bates in the course of her decision on the appeal about the claimant's residence from 1 August 2003. There is no way any reasonable person could read the passage set out in paragraph 16 above (or even the half of it quoted by the claimant's solicitors at page 96, leaving out what she actually said about the new house) as a formal decision that the new house met the condition of being more suitable for the claimant's needs as a disabled person than his previous one. That was not an issue before the tribunal in the appeal she was then deciding, which was solely concerned with the question of his residence. As expressly recorded in the immediately preceding paragraph of the same statement of reasons, the amount of any housing costs to be allowed was a different issue, the subject of the separate appeal which she was adjourning for further evidence with no decision on it being given.
28. The point on the departmental letter of 7 August 2003 does at first sight merit more serious consideration, because of the use of the words "we have decided" in saying that housing costs on a mortgage of up to £100,000 for the new house were on present information accepted as allowable, and the comment in the Deputy Commissioner's judgment of 27 April 2005 that there had been no appeal by the claimant against that aspect of the decision. However the carefully researched and well argued submission on behalf of the Secretary of State in this appeal by Mr D Scholefield (at pages S71 to S74) is in my judgment right in saying that the letter was no bar to the question being looked at again, and a proper decision being given on the basis of the true facts, when or if the purpose of acquiring the new house and its suitability to the claimant's needs should actually became material to any question of entitlement: which on 7 August 2003 they were not, because the decision was to refuse entitlement on residence grounds.
29. This is a statutory inquisitorial jurisdiction, whose purpose is to ascertain and award a person's true entitlement, not the adversarial one of identifying a "winner". Normal litigation principles of estoppel have no application, and the general principle of res judicata has a modified, and restricted, application by the express provisions of section 17 Social Security Act 1998. That section (in chapter II of part I of the Act, which sets out the basic machinery of social security decisionmaking by the Secretary of State, his powers to correct earlier decisions by revising or superseding them, and the rights of appeal to tribunals and beyond) provides:

"17. - (1) Subject to the provisions of this Chapter, any decision made in accordance with the foregoing provisions of this Chapter shall be final;…

(2) If and to the extent that regulations so provide, any finding of fact or other determination embodied in or necessary to such a decision, or on which such a decision is based, shall be conclusive for the purposes of –

(a) further such decisions;…"

30. The "decisions" accorded statutory finality by the section are thus limited: the word in this context bears a restricted meaning and does not include by any means every determination implicit or recorded in the administration of the social security system. Absent specific provision, it only covers those of the more formal type required by the Act itself which have come to be known as "outcome" decisions, having a direct and immediate effect on whether a person is entitled to benefit on a given date, and if so how much; typically, an award or refusal of a given amount of benefit on a claim, an increase or reduction of the amount of benefit under a current award, or the renewal or termination of such an award. The making of a defined award of a particular amount from a particular date may of course depend on multiple exercises of factual judgment on whether particular conditions of entitlement are met, especially with a complex means-tested benefit such as income support; and to avoid over-rigidity, the effect of section 17(2) is that unless there is some specific provision to "lock" the determination of such incidental matters for other purposes beyond those of the one particular decision that depends on them, there is nothing to prevent their being reopened and looked at afresh in the context of any other decision on entitlement that has to be given: for any other benefit at any time, or for the same benefit at a different time.
31. Looked at in that context, what was said in the letter of 7 August 2003 about housing costs on an increased loan being allowable was not in my judgment within the kind of "decision" that is alone capable of being final for social security purposes under section 17. It is I think unfortunate that the word "decided" was used in the first part of the letter at all, because the only substantive and material decision it recorded and communicated was that the claimant's housing costs on his current award of income support were not going to be increased as requested, but instead reduced to zero from 25 July 2003 for the reason that he was not considered to be resident in his new house. The expression of a view in the first part of the letter about the amount that might have been allowed if the answer on his residence had been different, though of course intended to be helpful, could not in my judgment have amounted to a decision on actual entitlement in the sense required by section 17(1) at all. Nor could it have been a "finding of fact or other determination embodied in or necessary to" the actual decision of a nil entitlement so as to get any binding force under section 17(2). The reason for purchasing the new house was immaterial if the claimant did not reside there, and anyway there are no regulations making factual findings on such points generally binding even if material.
32. Insofar as the letter of 7 August 2003 embodied any decision on the claimant's entitlement to housing costs it was expressly set aside by the Deputy Commissioner's decision of 27 April 2005, which remitted that question to be determined again by the Secretary of State: CIS 2283/04 paragraph 18, page S50. In my judgment nothing said in the letter of 7 August 2003 could thereafter retain any effect at all as a "decision". All relevant and material questions affecting the amount, if any, of the claimant's entitlement to housing costs from 25 July 2003 were required to be determined afresh.
33. I would add that even if all that had not been so, and even supposing the letter of 7 August 2003 had made the claimant an actual award of housing costs on his increased borrowing, it would still have been open to the Secretary of State on fuller consideration of the actual facts to revise or supersede any such award so as to remove it from the outset. This would have in my view been an entirely proper course: either on the basis that the view initially taken of the suitability of the new house at the time of the letter of 7 August 2003 had been based on ignorance or mistake of the true facts about the state it was in; or if (as seems barely credible) it was made in actual knowledge of the true facts, for misdirection in law over whether it could possibly fall within the description "more suited" to the needs of a disabled person when it was unsuitable for him to live in at all.
34. For those reasons the arguments pursued on the claimant's behalf in these appeals are not in my judgment well founded, the decisions of 18 January 2006 were validly made by the Secretary of State and validly confirmed by the tribunal, and both of these appeals are accordingly dismissed.

(Signed)

P L Howell

Commissioner

4 October 2007