Upper Tribunal (Administrative Appeals Chamber)

 

DECISION OF THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

 

The claimant's appeal to the Upper Tribunal is allowed. The decision of the Newcastle-upon-Tyne First-tier Tribunal dated 30 January 2009 involved an error on a point of law and is set aside. It is appropriate for the Upper Tribunal to re-make the decision on the claimant's appeal against Newcastle City Council's decisions dated 8 November 2007 and 18 December 2007 (Tribunals, Courts and Enforcement Act 2007, section 12(2)(b)(ii)). The decision as re-made is that the appeal is allowed and that the various decisions relevant to the periods identified in the notice of decision dated 6 May 2008 did not as at 18 December 2007 fall to be revised or superseded in respect of the period from 8 December 2006 to 23 September 2007, because the claimant was throughout that period on income support, so that the amount of her capital was to be disregarded for housing benefit and council tax benefit purposes, and that there is on the current state of the decisions no overpayment of housing benefit or excess council tax benefit for that period. In relation to the period from 24 September 2007 to 31 March 2008, where the claimant's appeal against the decision dated 8 November 2007 that the awarding decision was to be superseded and excess council tax benefit was recoverable was also before the tribunal of 30 January 2009, the decisions under appeal are confirmed except for the amendment of the period of excess council tax to 24 September 2007 to 9 December 2007 (to take account of the subsequent award of housing benefit and council tax benefit with effect from 10 December 2007 made on 14 February 2008). The amount of the consequent excess council tax benefit recoverable from the claimant under regulation 83 of the Council Tax Benefit Regulations 2006 is to be calculated by the Council in accordance with paragraph 18 below. If the result of that calculation cannot be agreed on behalf of the claimant, the case is to be referred back to me or to another judge of the Administrative Appeals Chamber for further decision. I deal in paragraph 20 below with how all that leaves the case for the future.

 

 

REASONS FOR DECISION

 

1. This is a case with quite considerable complications, but it turns out that at the present stage a decision can be made relatively shortly. That is by no means the end of the story for the claimant and she and her representatives will have to be prepared for the possibility of further overpayment recoverability decisions being made against her by the Council (see paragraph 20 below).

 

2. The tribunal was concerned in the main with the decisions apparently made on 18 December 2007, but notified in the Council's letter to the claimant dated 6 May 2008, which stated that:

 

"As a result of the recent change in the assessment of your Housing / Council Tax Benefit entitlement, the benefit granted has been overpaid and the Council is required to seek recovery of the overpayment. The amount overpaid and the period(s) covered together with brief details of how the overpayment occurred, are shown in the schedule attached."

 

The schedule gave the reason for the overpayment as "income support termination". It showed an overpayment of housing benefit of £2733.45 in total for periods running from 11 December 2006 to 23 September 2007 (subject to a deduction for £162.60 already recovered from housing benefit payments). In relation to council tax benefit (CTB) it showed an overpayment of £1053.60 in total for periods running from 11 December 2006 to 31 March 2008 (including £422.04 for the period from 24 September 2007 to 31 March 2008).

 

3. However, there had earlier been a decision terminating entitlement to housing benefit and CTB with effect from 23 September 2007 (see the letter dated 8 November 2007 on page 28) and a decision that excess CTB of £422.04 for the period from 24 September 2007 to 31 March 2008 was recoverable (see the letter of the same date on pages 30 and 31). There was no overpayment of housing benefit because payment had already been suspended. An appeal was apparently lodged against the excess CTB recoverability decision (pages 72 and 73). Because the Council's letter of 6 May 2008 incorporated in the schedule the excess CTB deriving from the CTB decision notified on 8 November 2007 I regard the appeal against that decision as also before the tribunal of 30 January 2009.

 

4. The appeal against the decision notified on 6 May 2008 made by Andy Malik of Newcastle Law Centre, acting on behalf of the claimant, was on the ground that none of the alleged overpayment was legally recoverable because she had not received any decision that her income support had been terminated for the periods in question.

 

5. The tribunal's statement of reasons included the following:

 

"2. A decision dated 5 November 2007 (page 33) superseded the award of Income Support on the grounds that following her receipt of a divorce settlement of £58,000 on 8 December 2006 her `savings' for Income Support purposes were in excess of £16,000. This supersession decision was apparently not notified to [the claimant] until 7 August 2008 [probably a reference to the issue to the claimant of the Council's written submission on the appeal, including copies of DWP documents relied on by the Council].

3. The Department for Work and Pensions (DWP) notified the local authority on the 5 December 2007 that [the claimant's] income support had been superseded on the grounds of her having capital in excess of £16,000.

...

10. The sole point raised by Mr Malik was - in the Tribunal's view - an important procedural matter and one which had troubled the Tribunal. It was accepted by Mrs Austin [the Council's presenting officer] that no formal supersession decision had been issued to [the claimant], the local authority relying simply on the information provided by the DWP and not contradicted by [the claimant]. Mrs Austin was not in a position to show whether or not the original Income Support entitlement decision had been appropriately notified to [the claimant] and on the evidence the Tribunal would accept that it had not. Mr Malik's argument, therefore, was that as there was no notification of the Income Support decision (at least prior to the local authority's decision on entitlement and overpayment) those decisions by the local authority are invalid. ...

...

14. In the Tribunal's view, therefore, if there has been a valid supersession decision in respect of the Housing and Council Tax Benefit there can then be a valid overpayment decision irrespective of whether or not the information suggests that the Income Support entitlement decision had not been properly notified to the appellant prior to the Housing Benefit and Council Tax Benefit decisions. Put simply they are two separate matters."

 

6. The claimant now appeals against that decision with the permission of Judge Bano. The case was transferred to me following the initial round of written submissions, when I invited the Secretary of State for Work and Pensions to become a party to the proceedings and to make a submission. The Secretary of State did become a party and the initial submission on her behalf did not support the claimant's appeal. A copy of a computer print out of letters sent to the claimant was attached.

 

7. On 21 January 2010 I directed further submissions, suggesting that the representative of the Secretary of State might like to take legal advice. My observations included the following:

 

"3. The main issue of legal principle which has not so far been squarely addressed on behalf of the Secretary of State and the local authority is this. If a decision was made by a decision-maker on behalf of the Secretary of State purporting to supersede the decision of 23 March 2005 awarding the claimant income support and to give the decision that she was not entitled to income support on capital grounds for the period from 8 December 2006 to 17 September 2007 that was not notified to the claimant, does the decision of the House of Lords in R v Secretary of State for the Home Department, ex parte Anufrijeva [2003] UKHL 36 [2004] 1 AC 604 compel the conclusion that the claimant's entitlement to income support for that period remained intact, with the consequence that the decisions awarding her housing benefit and council tax benefit (CTB) could not be superseded in respect of that period for a change of circumstances in the form of ceasing to be entitled to income support and having capital over the limit?

 

4. Lord Steyn, with whom Lord Hoffmann, Lord Millett and Lord Scott agreed, stated at [26], referring to fundamental principles of United Kingdom law, that:

 

`Notice of a decision is required before it can have the character of a determination with legal effect because the person concerned must be in a position to challenge the decision in the courts if he or she wishes to do so.'

 

I think that was the authority that the claimant's representatives intended to refer to at paragraph 2(a) of the skeleton argument faxed to the tribunal on 24 January 2009. However, Lord Millett at [40] expressed the view that the determination of the asylum application in issue in Anufrijeva, being final and not provisional, had immediate legal effect for some purposes, but not ([43]) for the purpose of ending her entitlement to income support. Also, in addition to the Commissioners' decisions recognising the force of Anufrijeva cited in that skeleton argument (copies of all of which, but not of directions or written submissions identifying the claimants concerned, should be attached to the Secretary of State's submission), the effect on the decisions in R(U) 7/81 (Tribunal of Commissioners) and R(P) 1/04 (paragraph 29) might need to be considered.

 

5. If the answer to the question posed in paragraph 3 above is yes, its significance stems from the tribunal's finding in paragraph 10 of its statement of reasons that on the evidence before it "the original Income Support entitlement decision" had not been appropriately notified to the claimant prior to the local authority's decision on entitlement to housing benefit/CTB and overpayment. If that was a finding that the tribunal was entitled to make (see paragraphs 6 to 8 below), then it is hard to see how the tribunal could then have upheld what it called the separate housing benefit/CTB supersession decision in relation to the period from 11 December 2006 given the rules in paragraph 12 of Schedule 4, paragraph 4 of Schedule 5 and paragraph [5] of Schedule 6 to the Housing Benefit Regulations 2006 (and the CTB equivalents) disregarding all of the earnings, other income and capital of a person who is "on income support". If the claimant's entitlement to income support for the period in question had not in law been taken away, she was still on income support for that period.

 

6. The documents before the tribunal on 30 January 2009 as to the income support decisions therefore require close scrutiny. The local authority's written submission to the tribunal referred to separate notifications being received by it from the DWP on 6 November 2007, as to the termination of entitlement to income support on capital grounds with effect from 18 September 2007, and on 5 December 2007, as to the termination of entitlement to income support on capital grounds with effect from 10 December 200[6]. The supersession of entitlement to housing benefit following the first notification led to no overpayment of housing benefit, because its payment had earlier been suspended following an earlier notification of suspension of payment of income support from 18 September 2007. There was only what is sometimes called a "technical" CTB overpayment for [a] period forward from 24 September 2007 to the end of the council tax year (page 31). So it is the second notification that is crucial to the real overpayment of housing benefit and CTB.

 

7. The first notification dated 6 November 2007 was from a Jobcentre Plus office in North Shields and was headed "Council Tax Benefit" (page 26). It informed the local authority that entitlement to income support had terminated because capital owned by the claimant exceeded the income support limit. The date of termination was stated as 18 September 2007. The second notification, received on 5 December 2007, consisted of two documents. The first (page 32), dated 29 November 2007, was from a Jobcentre Plus office in Gateshead to the local authority, and was headed "Income Support - decision notice". It stated that the claimant's income support had ceased from 8 December 2006 on a change of circumstances relating to capital and that the period of overpayment was 8 December 2006 to 17 September 2007. Attached was a page from a LT54 form (page 33). This had typed in the name of an officer and the date of 5 November 2007, but there was no signature in the box and nothing in the boxes to show that the system had been noted or the customer notified. A decision was typed on the form that the claimant was not, on supersession, entitled to income support from and including 8 December 2006 and some more detail of the capital involved was given. There must therefore be some doubt, in view of the absence of any signature or other written completion of the form, whether this document ever reached the stage of an actual decision, rather than a draft of a potential decision, or whether it reached that stage at some later date.

 

8. It had been asserted on behalf of the claimant that she had never been notified by the DWP of the decision on page 33 and only learned of it on receipt of the local authority's written submission to the tribunal in the present case. I wish both the Secretary of State and the local authority to comment on whether the tribunal was entitled to find as a fact that a decision as set out on page 33 had not been notified to the claimant by the DWP. Could it possibly be argued, in view of the local authority's presenting officer on 30 January 2009 stating that she was not in a position to show whether or not that decision had been appropriately notified to the claimant, that the tribunal should have adjourned to allow the local authority to seek further evidence from the DWP? Or had the local authority already had a fair opportunity to do that following the raising of the issue of non-notification in the letter of appeal dated 8 May 2008?

 

9. If this issue can at a later point be reconsidered with the addition of the evidence of the computer print out now at page 151, that does not, it seems to me, support the approach of the author of the Secretary of State's submission of 1 October 2009. The print out shows only one change of circumstances decision leading to the "end of a claim" at the relevant time, notified on 6 November 2007. That would be evidence of notice being sent to the claimant's last-known address, whether or not it was actually received. But it does not help on the nature of the decision notified on 6 November 2007. Was that merely a decision in relation to the period from and including 18 September 2007 or was it a decision in relation to the period from 8 December 2006? The print out certainly indicates that, if it was the former, no notification of any later decision in relation to the period from 8 December 2006 was ever sent to the claimant by the DWP."

 

8. In response, a detailed and closely argued submission for the Secretary of State, dated 23 March 2010, was produced by Sam Nafissi and Anna Powick. The Council responded in a letter dated 13 May 2010, received on 26 May 2010. Desmond Rutledge of counsel, who had been instructed by Mr Malik on behalf of the claimant from an early stage, replied on 30 June 2010.

 

9. Taking matters slightly out of the order they were dealt with in the submission of 23 March 2010, it was first accepted for the Secretary of State that it had been open to the tribunal to find as a fact that the relevant income support supersession decision had not been notified to the claimant without giving the Council an opportunity to come forward with further evidence of notification by the DWP. I agree. The issue had been raised from the outset of the appeal and the Council had had ample opportunity to seek further evidence.

 

10. The information recorded in paragraph 16 of the submission of 23 March 2010 has enabled the substituted decision that I have given to be put on a somewhat firmer basis, but one entirely consistent with the tribunal's findings at least as far as the Secretary of State's decision copied on page 33 is concerned. Having considered what I said in paragraph 9 of the directions of 21 January 2010 about the new evidence of the computer print out, it was agreed for the Secretary of State that that print out was not evidence that a decision removing entitlement to income support for the period from 8 December 2006 to 17 September 2007 had been sent to the claimant. It was said that the records suggested that only one letter was sent to the claimant, namely that dated 6 November 2007, a copy of which was attached to Mr Rutledge's submissions of 14 December 2009 (at pages 164 and 165). The letter plainly states the change being notified as that the claimant was not entitled to income support from 18 September 2007 because she had savings of more than £16,000. I agree, as the print out shows no letters issued after 6 November 2007 until some generated on a new claim in February 2008. That is all confirmed by a check of the case papers reported in paragraph 16 of the submission of 23 March 2010, revealing no record of any notification of a decision relating to the period from 8 December 2006 to 17 September 2007.

 

11. The primary submission for the Secretary of State was that, on that basis and applying the binding authority of Anufrijeva, the decision copied on page 33 was:

 

"valid, but legally ineffective. The decision could only have legal effect once notified. Consequently, (1) [the claimant] will continue to have been entitled to IS for the period from 8 December 06 to 17 September 07 until such time as she is notified of the IS disallowance decision; and (2) it follows from (1), that her housing benefit (HB) and council tax benefit (CTB) awards should not have been disallowed from December 2006 by the local authority at the material time (December 2007) because she continued to be on IS for that period and was therefore passported onto HB/CTB."

 

12. The submission also expressed the opinion that the outcomes of the Commissioners' decisions mentioned in paragraph 4 of my directions of 21 January 2010 (R(U) 7/81 and R(P) 1/04) and of R(P) 1/85 were consistent with the application of that principle, in that decisions could be not completely invalidated, but nonetheless be of no legal effect until notified. It was suggested that the statement in R(I) 14/74 that "it is not possible to make an effective decision without communicating it to the person whose rights are dealt with" remains good law. I think it best not to speculate about how the Anufrijeva principle might operate in other circumstances. I have no doubt that the central importance given in that case to whether a person is in a position to challenge through legal process a decision that would affect his or her rights is reinforced in the case of a social security decision that purports to take away entitlement for a past period, especially where benefit has been paid for that period. I therefore agree that the decision on page 33, on the assumption that it was a decision and not merely a draft, could in law not have had the effect of altering the claimant's entitlement to income support for the period from 8 December 2006 to 17 September 2007 unless and until it was notified to her on behalf of the Secretary of State.

 

13. Accordingly, the claimant had in December 2007 to be regarded as "on income support" throughout the period down to 17 September 2007. By virtue of paragraph 5 of Schedule 6 to the Housing Benefit Regulations 2006 (and the CTB equivalent) the whole of any capital she in fact possessed in that period had to be disregarded for housing benefit and CTB purposes. There was therefore no basis on which the decisions awarding housing benefit and CTB could be superseded so as to take away entitlement for the period from 11 December 2006 to 23 September 2007 and so as to create an overpayment for that period. The decision of the tribunal must be set aside for error of law in reaching an inconsistent conclusion. Although the tribunal was entirely right to identify the point as troublesome and difficult, the fundamental error was in taking the approach that the income support decisions and the housing benefit and CTB decisions were separate matters. When the effect of the income support decisions is that a claimant is entitled to income support, there is then a direct connection through paragraph 5 of Schedule 6 to the Housing Benefit Regulations and the other provisions mentioned in paragraph 5 of my directions of 21 January 2010.

 

14. The Council's argument in support of the tribunal's decision has been, as confirmed in the reply received on 26 May 2010, that:

 

"it would be perverse to reinstate Housing and Council Tax Benefit based on entitlement to Income Support when it would appear from the established and undisputed facts that there is no prima facie entitlement to either Income Support or Housing and Council Tax Benefit as the appellant has capital in excess of the prescribed amount set out in Regulation 43 of the Housing Benefit Regulations 2006 and Regulation 33 of the Council Tax Benefit Regulations 2006."

 

However, like it or not, the Council, just as all others affected by the housing benefit and CTB system, are stuck with the provisions mentioned at the end of the previous paragraph. An entitlement to income support is something that is established by decisions. For the period down to 17 September 2007 the claimant had been awarded income support by a decision that had not as at December 2007 been altered by any other decision that could have that effect in law. Entitlement is not removed merely because the Secretary of State or the Council has evidence establishing that there are good grounds for its removal.

 

15. I also appreciate the difficulty that local authorities may be in when receiving information from the DWP that an award of income support or some other passporting benefit has been terminated from a particular date or for a particular period. A local authority cannot reasonably be expected to go behind such information at that stage and start making enquiries about whether the claimant has been notified of the income support decision. It seems to me that an authority would, unless there was some positive indication to the contrary, be entitled to take the information at face value and make the necessary housing benefit and CTB decisions in consequence. But once the issue of notification of the income support decision by the DWP is raised by or on behalf of the claimant or by some other evidence that comes before the local authority, things are different. Local authorities must then deal with the issue consistently with the approach of law set out above either in its own decisions or before tribunals on appeal.

 

16. For the reasons given above, the decision of the tribunal of 30 January 2009 must be set aside as involving an error on a point of law. Then there is plainly no point in remitting the case to a new tribunal. A decision can be substituted on the basis of the more extensive evidence as to the course of the decision-making.

 

17. In relation to the period from 8 December 2006 to 23 September 2007, also for the reasons given above, the only decision that can be given in respect of both housing benefit and CTB is that the relevant awarding decisions did not fall to be superseded on 18 December 2007 because as at that date the claimant had remained "on income support" throughout that period and the actual amount of the claimant's capital could not affect her entitlement to housing benefit and CTB. No payments could then be found to have been made in excess of entitlement and there was nothing for the provisions on recoverability to bite on.

 

18. So far as the excess CTB for the period from 24 September 2007 to 31 March 2008 is concerned, its recoverability, although included in the schedule to the Council's letter of 6 May 2008, rested on the income support decision details of which were sent to the Council on 6 November 2007 and on the Council's subsequent decisions of 8 November 2007. I am satisfied that through the incorporation of that period into the 6 May 2008 schedule the claimant's appeal against the decisions of 8 November 2007 were before the tribunal of 30 January 2009. Notice of the decision that the claimant was not entitled to income support from and including 18 September 2007 was given to the claimant by the DWP (see pages 164 and 165), so that there is no doubt about its effectiveness. The deeming under paragraph 5 of Schedule 5 to the Council Tax Benefit Regulations 2006 came to an end on the claimant's ceasing to be on income support. The operative decision awarding CTB then fell to be superseded on the ground of relevant change of circumstances. It does not appear to be disputed that, by virtue of the claimant's identification of the amount of her savings on the customer statement of 12 December 2007 as £15,980, her capital prior to 10 December 2007 exceeded £16,000. The superseding decision, but only for the period from 23 September 2007 to 9 December 2007 (the decision of 14 January 2008 having altered the circumstances) is that the claimant is not entitled to CTB. The excess CTB for that period is recoverable from the claimant, as no question of official error arises. Since the period involved is less than 13 weeks there is therefore also no question of the application of regulation 88 of the Council Tax Benefit Regulations 2006 in the calculation of the excess CTB recoverable. However, I am not in a position to calculate the amount recoverable in relation to the above period. I leave that to the Council. If the result of the Council's calculation is not agreed on behalf of the claimant, the case is to be referred back to me or to another judge of the Administrative Appeals Chamber for further decision. It is also for the Council to work out whether any amount is actually required to be repaid by the claimant or whether the lack of entitlement to CTB for the period in question has already been built into her overall council tax account for 2007/2008.

 

19. The formal decisions giving effect to those conclusions are set out at the beginning of this document.

 

20. In relation to the period from 11 December 2006 to 23 September 2007, the decisions I have given are not the end of the story. It remained open to the DWP to give the claimant notice of the decision copied on page 33, thus making it effective. It is now known that that has been done by the letter dated 14 June 2010 (page 195). The time for appealing against the decision therefore started running. While that decision remains operative the claimant is not entitled to income support for the period from 5 December 2006 to 17 September 2007. It then becomes open for the Council to supersede the relevant housing benefit and CTB decisions. In my view the existence of the decision that I have given in this document in relation to the period in question is not an obstacle to the Council simply going ahead, if it wishes, in making a fresh supersession decision in these altered circumstances. A decision making any resulting overpayment of housing benefit or excess CTB recoverable could then follow. In making any such decisions the Council would need to take into account the points raised in paragraphs 10 and 11 of my directions of 21 January 2010 and the comments on behalf of the Secretary of State in paragraphs 17 to 20 of the submission of 23 March 2010.

 

 

(Signed on original): J Mesher

Judge of the Upper Tribunal

 

Date: 17 August 2010