Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL File No: CDLA 2321/09

Administrative Appeals Chamber

27 April 2010

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

SOCIAL SECURITY ACTS 1992-2000

APPEAL FROM DECISION OF FIRST-TIER TRIBUNAL

Appellant: [the claimant]

Respondent: Secretary of State for Work and Pensions

Claim for: Disability Living Allowance

First-tier Tribunal: Leicester

Tribunal case ref: 038/08/00318 & 038/09/00186

Tribunal date: 26 March 2009 (reasons issued 22.06.09)

DECISION OF THE UPPER TRIBUNAL

The claimant’s appeal is allowed in part. The first-tier tribunal’s decision is set aside as erroneous in law and replaced under section 12(2)(b) of the Tribunals, Courts and Enforcement Act 2007 with this decision, that the sum of £5943.15 overpaid to the claimant for mobility component of disability living allowance from 3 November 2004 to 3 July 2007 (both dates inclusive) is legally recoverable from her under section 71 of the Social Security Administration Act 1992 but the balance of £2255.45 overpaid to her for care component over the same period has not been proved to be so recoverable.

REASONS

Mr P L Howell QC:

1. This appeal by the claimant must be allowed in part, as in my judgment the tribunal which decided the two issues of entitlement to, and recoverability of, overpaid disability living allowance at Leicester on 26 March 2009 (Mr J Marston, first-tier judge, sitting with medically qualified and disability experienced members) misdirected itself in holding that the whole of the overpaid benefit in question was legally recoverable from the claimant under section 71 of the Social Security Administration Act 1992 when the evidence did not support this for the entire amount. On the basis of the restatement of the law as to recoverable overpayments of social security benefit in Hinchy v Secretary of State [2005] 1 WLR 967 and by the Court of Appeal in R(IS) 9/06 B v Secretary of State [2005] 1 WLR 3796 which were of course binding on the tribunal, the evidence before it was capable of establishing only that the amounts paid to the claimant over the material period for the mobility component of the allowance were legally recoverable from her, and not those she also received for the lowest rate care component. I therefore set the tribunal’s decision aside and in exercise of the power in section 12(2)(b) of the 2007 Act substitute the decision I am satisfied is the only proper one the tribunal could have given on the material before it and the primary findings it made, reducing the amount legally recoverable to £5943.15 which is the mobility component of the total overpaid amount of £8198.60 received by the claimant over that period, as determined by the Secretary of State in the original decisions under appeal and confirmed by the tribunal.

2. The claimant is a lady now aged 69 who (it is not disputed) has for years suffered from breathing difficulties. From 1999 she was awarded the lowest rate care component of disability living allowance, according to the departmental computer records on the ground of inability to prepare a cooked main meal for herself, on consideration (only) of a report from her GP. A copy of that report dated 14 October 1999 was before the tribunal (at pages 2-5 under reference 038/08/00318: it was the only evidence from the time of the original award, as neither the award itself nor any other documents such as the claim form had apparently been retained). In the report the GP said that because of the asthma from which the claimant had suffered since 1984, and recurrent chest infections involving hospital treatment in the last few months, when her chest problems were aggravated she was unable to do such things as use a cooker and cope with pans safely for herself though she could at other times. The award of the lowest rate care component made at that time must, I infer, have been on the basis of giving her the benefit of any doubt about how much of the time her breathing difficulties would cause such problems, even though elsewhere in the report the doctor estimated her walking distance as 50 to 100 yards despite those difficulties and she was refused any award for mobility.

3. Some five years later, on 28 October 2004, the claimant contacted the department and asked for her award to be looked at again and altered so as to include a mobility component, on the ground that her condition had deteriorated and her walking disability was now more severe. She was sent a set of forms to fill in, which she completed and returned on 4 November 2004: pages 6 to 35 of the same file. In these she stated that she had severe lung disease and got out of breath very easily, that her walking ability was now very restricted indeed and she had suffered a number of falls: she could only walk slowly and could not carry anything as this made her out of breath, and had to avoid stairs and inclines.

4. As is clear from the terms of the form and the entries she made as shown at page 34, the claimant only asked at that time for the question of a mobility award to be looked at again. She did not complete the part of the form relating to personal care needs, answer any questions or volunteer any information about that. That was because she was not required to, and was entirely in accordance with the instructions given to her on the form itself which said:

“Please tick the box that applies to you and give us the information that we need. What do you want us to look at again?”

Immediately under that was the first box, the only one the claimant ticked, which said:

“The part of the allowance for help with getting around. Please fill in form DLA434 … You only need to fill in section 1 and the help with getting around part of section 2.”

5. Section 1 of the enclosed DLA434 form pack contained general questions which the claimant duly answered with her personal details, nature of her condition, medication she was currently taking and so forth. Together with that section she also completed, signed and sent back dated 4 November 2004 the “help with getting around” part of section 2 which asked for information about her mobility needs. She did not however complete the “help with personal care” part of section 2 asking for information about personal care needs: nor did she give any statement or provide any information about those at that time at all. As is plain from the passages already quoted from page 34, that was because she was not being required to do so unless she was asking for the question of her care needs to be looked at again as well as that of mobility, and she was not.

6. On the basis of that information (and so far as the evidence goes, apparently without any further enquiry or medical report) a decision was given on behalf of the Secretary of State on 22 December 2004 superseding her original award on the ground of a change of circumstances and replacing it with an award of the higher rate mobility component plus the lowest rate care component she already had, in each case indefinitely from the date of her application, 28 October 2004. The reasons were noted as follows (page 38 ibid):

“C[hange] O[f] C[ircumstances]. Mobility now severely restricted. No evidence of any change in care needs. Increased from date of request as not within one month of change.”

7. The claimant received the two components under that award until a benefit investigation some 2½ years later in 2007 revealed she had in fact been working for some years on a regular basis for the local council as an area cleaning supervisor. That was a job that by its nature involved a considerably greater ability to get around unaided than was consistent with the basis of her mobility award as a person “virtually unable to walk”; and it also brought into question whether even the lowest rate care component was justifiable given the level of physical ability it demonstrated. By a decision made on 3 July 2007 (pages 148 to 150) the Secretary of State then revised and revoked the award of 22 December 2004 in its entirety on the ground that it had been based on ignorance or mistake of material fact as to the true level of the claimant’s abilities. On the true facts as revealed by the work she had been doing, it was now decided she had not met the conditions of entitlement for either component at any time from the starting date of that award on 28 October 2004 so her entire entitlement was revoked from that date.

8. The claimant appealed to the tribunal against that (entitlement) decision on the ground that in fact her asthma was getting worse and she ought not to be penalised for doing her best to keep going. At the initial hearing of the appeal on 24 July 2008 it transpired that she had also been issued with a related (overpayment recovery) decision on 24 January 2008 determining that she was liable to repay the total of £8,198.60 paid to her for both care and mobility components from 3 November 2004 to 3 July 2007, on the ground of alleged misrepresentation by her on 4 November 2004. After viewing video surveillance evidence which suggested the claimant had a serious case to answer on both aspects, the tribunal very fairly and sensibly adjourned to enable an appeal against the overpayment decision to be brought before it as well so that the two related issues could be dealt with together at the same time: see page 176.

9. The effective hearing of the two combined appeals took place before the same tribunal members on 26 March 2009: the record of proceedings and copies of the extra documents supplied are at pages 7 to 22 of the present appeal file. The terms of the overpayment decision of 24 January 2008 are at pages 2-6 (though a fuller record is at pages 164-170 of the tribunal’s main bundle on the entitlement appeal) determining that the whole total of both care and mobility components received by the claimant was recoverable from her because:

“On 04/11/2004 [the claimant] misrepresented a material fact when declaring that her care and mobility needs were greater than they actually were. As a consequence, Disability Living Allowance – Care/Mob amounting to £8198.60 from 03/11/2004 to 03/07/2007 (both dates included) was paid which would not have been paid but for the misrepresentation.”

10. In support of the decision that the whole £8,198.60 was recoverable from the claimant on the ground of her misrepresentation on 4 November 2004, the department pointed out in a supplemental written submission (at page 183 of the main bundle) that in order to gain entitlement to the higher rate of mobility component in 2004 the claimant had declared she could only walk 12 to 15 yards in 30 seconds before having to stop, got out of breath very easily and had to use either a walking stick or a trolley to support her; yet at the time she had actually been in employment doing duties inconsistent with an award of DLA or her claimed needs. Consequently disability living allowance had been paid that would not have been paid but for her misrepresentation. The department’s original submission to the tribunal, maintained at the hearing, emphasised that its case was not based on any assertion that the claimant’s condition had improved since the date of the award in 2004: rather, that award had been given in ignorance as to the true extent of the claimant’s physical capabilities so that the ground for revising it was ignorance or a mistake of the true state of the facts at the time of the award: page 1E of the main bundle.

11. The later submission also drew the tribunal’s attention to the alternative ground in section 71 entitling the Secretary of State to recover overpayments due to failure to disclose a material fact, even though that had not formed any part of the basis of the actual overpayment decision under appeal; and enclosed a copy of a more recent departmental leaflet dated December 2006 headed “Notes for people getting disability living allowance”. This identified “The changes you must tell us about” such as having to go into hospital, leaving the country and so forth. There was no evidence as to whether anything in these or similar terms had been given to the claimant in 2004; though anyway there is nothing in this leaflet that tells disability living allowance claimants to inform the department if they happen to be working or able to work. (Passages elsewhere in the leaflet, that draw claimants’ attention to other benefits or help available in conjunction with disability living allowance and cite jobseeker’s allowance and working tax credit as examples, if anything suggest the reverse, by showing that work or ability to work are not seen as bars to continued entitlement.) Nor for that matter is there anything in the leaflet that instructs claimants to inform the department if they are aware their award has been made on a mistaken factual basis. In sum there was no evidence of any kind produced to the tribunal to show that the claimant had ever been required by or on behalf of the Secretary of State to report either of those two things.

12. At the hearing on 26 March 2009 the presenting officer on behalf of the Secretary of State confirmed that the original care component award from 1999 had been made on the basis of the main meal test, and the tribunal referred to the GP’s report at that time as providing some evidence. However the claimant herself gave express evidence that at all times she had in fact been able to get a meal for herself and had “never said she couldn’t.” The remainder of the evidence was concerned with the question of her walking ability over the period from 2004, and whether it was consistent with the work she did and the evidence shown in the video. The presenting officer drew attention to various screen prints from the computer records showing the basis on which the award in 2004 had been made, and submitted it had been correctly revised for mistake of fact as regards both components.

13. The tribunal’s combined decision notice, at page 23 of the present appeal file, dealt with both entitlement and overpayment recovery issues. On entitlement, the Secretary of State’s decision of 3 July 2007 that the claimant had not in fact been entitled to either component of the benefit from 28 October 2004 onwards was confirmed as correct for the reasons the tribunal set out in its full statement issued to the parties on 22 June 2009, at pages 24 to 28. The decision on overpayment recovery was to confirm the Secretary of State’s determination of 24 January 2008 that the whole amount overpaid was recoverable though with a partial revision of the legal grounds, in that the mobility component was confirmed as recoverable on the ground of the claimant having misrepresented her walking ability on 4 November 2004, but the ground for recovering the care component was instead held to be a “failure to disclose” the material fact of her ability to prepare a main meal.

14. On 10 November 2009 I refused the claimant leave to appeal against the decision on entitlement as I was, and have been, unable to identify any arguable error of law on the tribunal’s part in relation to that issue. The issue in the present appeal, which I did give her leave to pursue, is whether it was also correct in law to hold her liable under section 71 to repay the whole amount she had been overpaid for the two components from 3 November 2004 onwards.

15. That issue has to be judged on the basis of the tribunal’s decision on entitlement which is not now open to question: that the award of disability living allowance made to the claimant from 28 October 2004 had been correctly revised and removed in its entirety by the later decision of 3 July 2007, on the ground of ignorance or mistake as to the true state of the facts about the claimant’s walking ability and care needs as they stood at the end of 2004 when that award decision was made; and not for any other reason.

16. In its decision notice the tribunal said:

“The decision on overpayment dated 24 January 2008 is revised in part. On 4 November 2004 [the claimant] misrepresented a material fact when declaring her ability to walk out of doors for the purposes of the mobility component of the disability living allowance. On 4 November 2004 [she] failed to declare the material fact that she had the ability to prepare a main meal for one person.”

As a consequence Disability Living Allowance (Care and Mobility component) amounting to £8198.60 from 3 November 2004 to 3 July 2007 (both dates included) was paid which would not have been paid but for the misrepresentation and failure to declare.”

17. In its statement of reasons the tribunal recorded that the amount of benefit overpaid was not in issue and that as matters of fact, the claimant did suffer from breathing difficulties and was receiving treatment, though the tribunal did not accept that this limited her to the extent claimed. It found as facts that as at 28 October 2004 and thereafter she was able physically to prepare a main meal for one person, and was able to walk steadily and at a reasonable pace a distance of 400 yards or more before having to stop because of severe discomfort; so that at no time in this period had she met the conditions of entitlement for either of the components she had been getting.

18. Referring to the forms the claimant had completed and signed on 4 November 2004 asking for the question of her mobility to be considered again, the tribunal said:

“9. She was aware of and had signed the declaration that what she was saying in the form was true and correct. The tribunal inferred that she had signed a similar declaration in respect of the award of the care component although that was not in the evidence pack. The tribunal found that as a matter of fact [the claimant] knew that she was able to walk in excess of the distance stated in the form in which she asked the Secretary of State to look at her walking ability in 2004. She knew that she was able to walk at least several hundred yards before she would have to stop through severe discomfort. Similarly, as a matter of fact she was aware that she was able to make a main meal for one person.

10. Furthermore, the tribunal found that the conditions of entitlement to both the care and the mobility component were known to [her]. She knew that she was in receipt of the care component at the lowest rate on the basis that she could not make a main meal. She had been in receipt of benefit for some time at the lowest rate on the basis of the main meal. She was aware that the mobility component was based on the assertions in her supersession pack and that the decision had been based on her statement that she was able to walk 12 to 15 yards before the onset of significant breathing problems when this would cause her severe discomfort. She was aware of the correct position as regards her care and mobility and had misrepresented the position with regard to the latter and had failed to disclose the correct position with regard to the former.”

19. On that basis the tribunal held the decision awarding benefit had been correctly revised and removed in its entirety by the Secretary of State for mistake of fact, pursuant to section 9 of the Social Security Act 1998 and regulation 3(5)(c) Social Security and Child Support (Decisions and Appeals) Regulations 1999 SI No. 991. It is a condition of that revising power that at the time the award decision to be revised was made the claimant knew or could reasonably have been expected to know the true facts about which the Secretary of State had been unaware or mistaken, and that these were relevant to the decision. The tribunal members’ conclusion, as recorded in the paragraph quoted above, that this condition was met was in my judgment entirely justified as a matter of law as to both components, having regard in particular to (a) their own properly based findings from the evidence they saw and heard as to the distance the claimant had actually been able to walk at all material times; and (b) her own express and unchallenged evidence that at all times, even before 2004, she had in fact been able to cope with cooking a main meal for herself and had never said she couldn’t; from which it had to follow that (c) the award of benefit made for her assumed inability to cook a main meal must have been made by some mistake, which she ought reasonably to have realised.

20. In her appeal against the tribunal’s decision the claimant evinces some surprise that the whole of her allowance should have been taken away, and questions whether that was the intention: she emphasises that she has never said she could not cook a meal for one person and explains how she manages to cope in her kitchen with a chair and her nebulizer easily to hand in case her breathing difficulties get too bad. She considers the real effect of the decision has been to penalise her for struggling to keep her independence despite her admitted difficulties. As recorded by the tribunal it does not appear that she has obtained legal advice despite having been urged by it to do so, and her submissions do not delve into any issues of law beyond expressing puzzlement at the whole process.

21. The Secretary of State opposes the appeal and in the written submission dated 12 January 2010 by Mr R Atkinson at pages 39 to 41 submits that the decision making the whole amount paid from 3 November 2004 recoverable should simply be confirmed. In response to the question I raised in the grant of leave to appeal dated 10 November 2009 at page 38, of whether there was a sufficient basis for the tribunal’s finding that the care component was recoverable from the claimant on the basis of failure in a duty to disclose material facts, the submission refers in particular to the findings already noted that she knew or could reasonably have been expected to know that she could in fact cook a main meal for herself at all times and of the relevance of this to the award she had been getting since 1999. Basing itself on the tribunal’s recorded assumption that the forms completed by the claimant on 4 November 2004 would have included the “help with personal care” part of section 2 of the DLA434 questionnaire as well as that for help with getting around, so that there would have been a similar declaration in respect of the care component even though there was no sign of one in the evidence, the submission suggests there was really no practical difference between making a misrepresentation on the form, and signing it as true and correct when in fact not all of the correct information had been given, so that the tribunal’s decision was sustainable on either basis.

22. As regards the payments of mobility component there are in my judgment no grounds for criticising the tribunal’s decision. The disparity between the claimant’s actual walking ability as the tribunal found it to have been throughout the material period, and the virtual state of immobility she described in the “help with getting around” form she signed on 4 November 2004 saying that she could manage only 12 to 15 yards before feeling severe discomfort, was simply and obviously far beyond any genuine margin of error or imprecise description. What she wrote about this on the form and formally declared to be correct, leading directly to her award of mobility component, was therefore rightly found by the tribunal to have been a material misrepresentation of the true position: it does not matter for this purpose whether it was deliberate or innocent as in either case the conditions for legal recovery under section 71 are satisfied.

23. As regards the payments of the care component however the tribunal’s decision was not in my judgment sustainable and that part of the decision has to be set aside.

24. In the first place it was plainly right not to confirm the Secretary of State’s determination that these payments too had been made as the result of a misrepresentation about care needs in the forms the claimant completed and submitted on 4 November 2004. As the statement of reasons points out there was nothing in the actual evidence before the tribunal to show any representations by her at that time about her care needs at all, and her own explicit and entirely frank evidence to the tribunal at the hearing, not in any way challenged so far as the record goes, was that she had never at any time said she was unable to cook a main meal for herself; the material fact on which her award of the care component from 1999 depended. Given the complete lack of evidence to sustain any finding of misrepresentation about her care needs on 4 November 2004 as alleged, no tribunal could have accepted that as a ground for recovery of the care component.

25. I cannot agree with the Secretary of State’s suggestion that the tribunal’s own recorded inference as to the claimant having completed a (missing) further form about her care needs at the same time would have been a proper basis for such a finding. The tribunal itself obviously and rightly thought such an inference (really it was no more than a guess) insufficient for any actual finding of misrepresentation; and in any case when one looks at the actual evidence it was unjustified as a matter of fact. What the evidence before the tribunal, and in particular the completed parts of the DLA434 application form pack dated 4 November 2004, showed was that as already noted the claimant had not been asked to give any information about her care needs which she was not asking to be looked at again and she had not done so, the only evidence of any representations she made at that time being confined to the questions she was asked about her mobility.

26. The tribunal was therefore in my judgment also right to take the view that the claim to recover the overpaid care component depended on the evidence showing that the payments of that component from 3 November 2004 had been made in consequence of a relevant “failure” on her part to disclose at that time the material fact that she had been able to cook a main meal all along, so her care component must have been a mistake.

27. However the conclusion the tribunal reached on this aspect of the case was not in my judgment sustainable either. What the evidence showed was that in making her application in early November 2004 to have the mobility component added to her existing disability living allowance award, the claimant simply said nothing about her care needs because she was not asked to. On her own admission and the tribunal’s findings, she knew she could in fact cook a main meal for herself all along, and knew the basis for her existing award of care component was a mistaken assumption that she could not reasonably do so. What she did then was simply to keep mum, and not volunteer any information to the department from which they could see they had made a mistake.

28. Was that a “failure to disclose” material information within the meaing of section 71, capable of giving rise to a legal right of recovery of the overpaid care component from 3 November 2004 onwards, as the tribunal held?

29. Until relatively recently the answer to that question before most tribunals with experience of overpayment recovery would have been a clear yes, and one might perhaps have been thought lacking in common sense in even asking it. Given the tribunal’s findings in this case as to what the claimant knew or could reasonably be expected to have known about the basis of her existing award and thus of the mistake, it is perhaps hard to imagine a clearer case of disclosure being reasonably to be expected as a matter of good faith from a person receiving benefit money out of public funds on such an obviously mistaken basis, at all material times from at least 3 November 2004 onwards: see the former line of authority developed by the Commissioners of which R(SB) 21/82 and R(SB) 54/83 are but two examples.

30. However as noted in my own decisions in cases CIS 1996/06 and CIS 4422/02 all that has been altered and held incorrect by higher and more recent authority in R(IS) 9/06 B v Secretary of State [2005] EWCA Civ 99, [2005] 1 WLR 3796, which was of course binding on the tribunal in the way it had to decide this case. That holds the test of “failure” for the purposes of section 71 to depend not on any general principle or implied obligation arising from the circumstances but solely on the existence or otherwise of an express duty to make the required disclosure, specifically imposed on the person concerned by some other provision outside the section itself.

31. The relevant obligations of disclosure, so far as this claimant at that time was concerned, were those specified in regulation 32 of the Social Security (Claims and Payments) Regulations SI 1987 No. 1968 as follows:

“Information to be given and changes to be notified

32. (1) Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such information or evidence as the Secretary of State may require for determining whether a decision on the award of benefit should be revised under section 9 of the Social Security Act 1998 or superseded under section 10 of that Act.

(1A) Every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such information or evidence as the Secretary of State may require in connection with payment to the benefit claimed or awarded.

(1B) Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom or on whose behalf sums by way of benefit are receivable shall notify the Secretary of State of any change of circumstances which he might reasonably be expected to know might affect –

(a) the continuance of entitlement to benefit; or

(b) the payment of the benefit,

as soon as reasonably practicable after the change occurs by giving notice of the change to the appropriate office …”

32. I have included paragraph 1(B) of the regulation, which imposes a continuing duty on benefit recipients to notify changes of circumstances which may affect their entitlement to a continuing benefit, only in order to demonstrate that it can have no application on the facts here: the Secretary of State’s written submission had made clear to the tribunal at the outset that the case was not put before it on the basis of any assertion that the claimant’s condition had improved, but rather that the existing award had throughout been based on ignorance or a mistake of fact as to the true extent of her physical capabilities. If there had thus been no change, there can of course be no question of any breach of duty by the claimant under paragraph 1(B) in failing to report one.

33. The tribunal’s finding that there had been a “failure to disclose” on the part of the claimant on or after 4 November 2004 could therefore only be properly made in terms of the current authorities if based on evidence of the Secretary of State having made some requirement at that time, in terms of either paragraph (1) or paragraph 1(A) of regulation 32, for the claimant to provide information or evidence as to her care needs, and specifically as to her ability or otherwise to prepare a cooked main meal for herself in terms of section 72(1)(a) Social Security Contributions and Benefits Act 1992, the lowest rate care component provision.

34. As already noted, there was no evidence of her having been required to do anything of the sort at that time, and such evidence as there was showed that she was expressly told she did not have to: see the passage already quoted from the form itself on page 34. Nor as already noted was there any evidence of any such requirement having been made of her in any general literature issued in connection with her benefit. The Secretary of State’s submission says rightly that the inclusion of the later leaflet dated December 2006 as evidence before the tribunal was incorrect and potentially confusing, but the document is actually of some assistance in demonstrating the lack of any general requirement in departmental literature for disability living allowance claimants to notify the department either of the fact that they are working (the tribunal expressly and rightly recorded its acceptance that “there is no reason in law or principle why a person may not work and claim disability living allowance. Such a thing would be applauded by most people and is an aspect of the disability discrimination provisions.”); or of any mistake that appears to have been made in their favour in the rate or nature of the award they have been given.

35. On the evidence placed before the tribunal, the only possible conclusion was that the department’s claim to recover the overpaid care component under section 71 on the ground of a “failure to disclose” (as that expresssion has to be applied in the light of re B) had not been satisfactorily made out, any more than on the original ground of

misrepresentation. This appeal is therefore allowed to that extent and the above decision reducing the amount recoverable to that of the mobility component overpaid from 3 November 2004 onwards is substituted accordingly.

P L Howell

Judge of the Upper Tribunal

27 April 2010

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