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[2008] UKSSCSC CIS_1733_2008 (13 August 2008)

CIS/1733/2008

NOTICE OF DETERMINATION OF

APPLICATION FOR LEAVE TO APPEAL

Although the application to the tribunal chairman was made late and not accepted, I accept the application for consideration as there are special reasons for doing so.

However, I refuse leave to appeal against the decision of the Luton appeal tribunal dated 10 August 2007.

REASONS

I held an oral hearing of this application without notice to the Secretary of State. The Applicant is a nephew of the deceased claimant who has been appointed to act on behalf of her estate. He was represented by a niece of the deceased claimant, who also represented the Applicant before the tribunal.

This application arises out of a decision of the Secretary of State to the effect that the deceased claimant had been overpaid income support and state pension credit amounting to £10,317.22 from 29 September 1994 to 23 June 2004 and that that sum was recoverable from her estate. On 5 January 2006 a tribunal dismissed an appeal by the Applicant. On 15 February 207, Mr Commissioner Angus allowed a further appeal by the Applicant (CIS/2870/2006) and remitted the case to differently constituted tribunal for determination. He rejected some of the applicant's grounds of appeal and said –

"My remit is limited to the compensation question."

That referred to the question whether an overpayment of state pension credit had been correctly calculated because the previous tribunal had failed to make adequate findings as to whether part of the capital held by the claimant had been derived from a payment of compensation. Accordingly, the tribunal sitting on 10 August 2007 refused to hear argument on other issues, including the two the Applicant has now raised before me. The tribunal allowed the Applicant's appeal, but only to the extent of finding that £1000 of the claimant's capital was derived from compensation and that the amount of the overpayment of state pension credit should be reduced accordingly. The decision notice was not very clear and it was the Secretary of State who sought a statement of reasons, which corrected the impression given by the decision notice. However, it is the Applicant who now applies for leave to appeal.

The claimant's niece submitted that she had wrongly been prevented from arguing two new points before the tribunal, having been told by the clerk to the tribunal, writing on the advice of a district chairman, that the Applicant had no right of appeal to the Court of Appeal against Mr Commissioner Angus' decision because his appeal to the Commissioner had been successful. It is unnecessary for me to decide either whether that advice was correct or whether the tribunal was bound by Mr Commissioner Angus' decision to decline to consider the new arguments, because I am satisfied that neither of the new arguments has any merit.

Both arguments arise out of the claimant's possession of National Savings Certificates, which were purchased in 1968 for £500 and matured in 1973. Their value at 1 July 1994 was £1,845. The claimant was then aged 76.

The claimant's niece had wished to argue that the evidence showed that the claimant did not know she had the National Savings Certificates and therefore she could not have failed to disclose them. Her argument was that the claimant must have forgotten about them, first, because she had moved just before they matured and would not have received the only communication that would have ever been sent to her regarding them and that she had in any event moved again later and, secondly, because, if she had known about them, she would have reinvested them so as to secure more interest. However, such an argument had no prospects of success. A person of sound mind may generally be presumed to have knowledge of her possessions and the evidence to the contrary in this case was quite insufficient to rebut that presumption. I asked how the claimant's possession of the National Savings Certificates had come to light when she died and her niece told me that they were found in a bag in a wardrobe. It is therefore clear that the claimant had taken the National Savings Certificates Certificates with her on each occasion when she moved and it is quite likely, although not certain, that she was reminded of their existence on those occasions. Not reinvesting them would be as consistent with her not understanding the advantage of doing so as it would be with having forgotten about them. This is not a case where the claimant had disclosed all her other capital, which might have led one to infer that the Certificates had indeed been forgotten about: the claimant did not disclose any of her three bank accounts either. As the claimant's niece herself submitted, it is impossible to know what the claimant knew about the Certificates. Although the claimant's niece did not realise it, that submission was really an admission that the evidence she relied upon was not sufficient to show a lack of knowledge of the Certificates on the claimant's part. It is therefore unnecessary for me to consider whether a finding that the claimant had forgotten about the Certificates would in any event have been sufficient to show that she had neither failed to disclose the material fact that she possessed them nor made any misrepresentation when signing any of the various declarations claimants were obliged to sign in the mid-1990s or earlier.

The claimant's niece's other argument was that the Secretary of State had wrongly valued the Certificates at 1 July 1994, rather than valuing them at their purchase price. This argument seems to be based on a misreading of regulation 49(b) of the Income Support (General) Regulations 1987 (S.I. 1987/1967), which, as originally enacted and still in force in 1994, provided that the amount of capital should be calculated –

"in the case of a National Insurance Certificate –

(i) if purchased from an issue the sale of which ceased before 1st July last preceding the first day on which income support is payable or the date of the determination of the claim, whichever is the earlier, or in the case of a review, the date of any subsequent review, at the price it would have realised on that 1st July had it been purchased on the last day of that issue;

(ii) in any other case, at its purchase price."

There was a minor amendment when supersessions replaced reviews upon the coming into force in 1999 of the Social Security Act 1998, but the amendment merely updated and clarified the effect of the regulation.

The claimant's niece argues that, although the Secretary of State's computer system shows the claimant having claimed income support in January 1994, there are indications that she claimed earlier, including a reference in the computer records to a former address. It is certainly odd that a person should first claim income support when aged 76 unless, of course, she had previously had a claim disallowed on the ground that she possessed capital. However, finding that the claimant was first entitled to income support long before 1994 would make no difference. The words "the first day on which income support is payable or", upon which the claimant's niece placed much weight, are relevant only on an initial claim and not on any subsequent review. Thus, except where an advance award is made so that the date of determination of the claim precedes the date from which benefit is payable, the important dates are the date from which income support becomes payable on a new claim and then the date of any subsequent review. Regulation 49(b)(ii) comes into play only if the relevant date on a claim or review occurs while an issue is still being sold or before the next 1st July

In the present case, it has been assumed that the claimant had no relevant capital apart from the National Savings Certificates until 29 September 1994, which is the date of the earliest available bank statement. That assumption is in the Applicant's favour because the overpayment would obviously have been greater had the claimant been found to hold capital from an earlier date. As the value of the National Savings Certificates never exceeded £3,000, it did not matter at what date they were valued until the claimant acquired other capital. As soon as she acquired other capital there would have been a review of her award of income support, had she declared the capital, and the effect of regulation 49(b) would have been that the National Savings Certificates then had to be valued at the price they would have realised on the 1st July last preceding the date of the review. The claimant's entitlement to income support would have ceased in consequence of that review so that she would have had to make a new claim, at which point the National Savings Certificates would have had to be valued at the price they would have realised on the 1st July last preceding the date of determination of the claim or the date from which income support became payable again. Subsequent reviews to take account of increases or reductions in the amount of capital would again have required the National Savings Certificates to be valued from time to time by reference to the date of each of the reviews (and the date of determination of the claim, or the date of reinstatement of benefit, at the end of the period of no entitlement from September 1999 to April 2001). Accordingly, I am satisfied that the Secretary of State was correct to calculate the amount of the claimant's capital on the basis that the value of the National Savings Certificates increased each July.

Because neither of the arguments the claimant's niece wished to raise before the tribunal had any prospects of success, I refuse leave to appeal.

(signed on the original) MARK ROWLAND

Commissioner

13 August 2008