IN THE UPPER TRIBUNAL Case No  CF/395/2010

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE WARD

 

Decision:  The appeal is allowed (but that only benefits the claimant to a limited extent.) The decision of the First-tier Tribunal sitting at Middlesbrough on 12 January 2010 under reference 227/09/02543 involved the making of an error of law and is set aside.  Acting under section 12 of the Tribunals, Courts and Enforcement Act 2007 I substitute a decision that:

 

(a) During the period from 18.12.2006 to 14.10.2007 the claimant failed to disclose the material fact that M was being looked after by the local authority

 

(b) During the period from 15.10.2007 to 14.01.2008 the claimant was not under a duty to make further disclosure.

 

(c) By 15.01.2008 the claimant ought to have raised that the disclosure via the JobCentre Plus in October 2007 had been ineffective and so came under a further duty to disclose, which she did not comply with.

 

(d) As a consequence, child benefit paid during the period from 18.12.2006 to 14.10.2007 and from 15.01.2008 to 14.03.2008 was paid which would not have been paid but for the failure to disclose and is recoverable from the claimant.

 

(e) Child benefit paid during the period from 15.10.2007 to 14.01.2008 is not recoverable.

 

(f) The amount of the child benefit recoverable in respect of the period referred to at (d) is to be calculated by the Secretary of State.  If the claimant does not agree that calculation, she may refer the matter to the Upper Tribunal in writing within one month of the date on which the letter notifying her of the calculation is sent to her.

 

REASONS FOR DECISION

 

1. This case concerns an overpayment of child benefit. It arose because the claimant’s child, M, had been taken into care. Briefly, schedule 9 of the Social Security Contributions and Benefits Act 1992 means that in certain circumstances child benefit may not be claimed in respect of a child who is in care, unless regulations otherwise provide.  M’s circumstances were such that he fell within schedule 9: see in particular regulation 18 of the Child Benefit (General) Regulations 2006. Although regulation 16 then does “otherwise provide”, none of its provisions help the claimant in respect of M.  None of this is in dispute and I need not say any more about it.

 

2.  The claimant has mental health problems and epilepsy, of a severity reflected in the other benefits she receives, which include severe disablement allowance and disability living allowance (at the lower rate of the mobility component and the middle rate of the care component).

 

3. It was her case that on two occasions, one shortly after M had been taken into care and again in or around October 2007, it had become evident in the course of discussions with different officers of the DWP that she was receiving child benefit when she was not entitled to do so and that the relevant officer on each occasion had assured the claimant that the officer would notify HMRC to stop payment.  The claimant’s oral evidence contained a certain amount of circumstantial detail about these conversations, each of which was with a different officer.  The officer involved in the first was Mrs S.  The identity of the other is not known.

 

4. When the matter came before the tribunal on 1 September 2009, it adjourned, with a direction that “[HMRC] to request Mrs [S] if she has any record or recollection of conversation with [the claimant] and to produce further submission within 28 days.  HMRC wrote to Mrs S setting out the claimant’s version (including as to the contacts with the DWP) and in due course receiving a reply from Mrs S:

 

“…I have made reference [in statements drafted by Mrs S and signed by the claimant] to her receiving Child Benefit in respect of [M] but have not included that I would deal with the error and  inform Child Benefit on her behalf which I would have put in the statement had I done so.  I would have advised her that she should report all changes to all   sections she was receiving benefit from.  Prior to the visit on 12/04/07 I had not spoken to her before and then following the office interview on 13/04/2007 and 12/07/2007 I have not spoken to her since.”

 

The reply did not address the conversation said to have occurred in October 2007, by which time as is apparent from the above, Mrs S no longer had any dealings with the claimant.

 

5. The evidence before the tribunal included extracts from leaflet CH1715 Notes (version for use from April 2006). They said, among other things:

 

“These notes tell you about getting your Child Benefit.  They also tell you the changes that can affect the amount of money we pay you.  You must tell us straight away if any of these changes happen.  If you do not and you are paid too much, action may be taken against you.”…

 

“You must tell us if a child has lived away from you for… at least one day each week in the last 8 weeks and they are being looked after by a local authority…”

 

There is also a section entitled “how to contact us for help”, giving details of the Helpline, HMRC website and the postal address of the Child Benefit Office.

 

There was however no evidence that this leaflet had ever been sent to the claimant.

 

6. The case was restored on 12 January 2010 before a different judge and so took the form of a full rehearing, at which the tribunal had the benefit of the written evidence from Mrs S.

 

7. The tribunal’s decision notice was in the following terms:

 

“The appeal is disallowed.

The decision of the Secretary of State issued on 24/09/08 is confirmed.

 

Reasons

 

[The claimant] knew that [M] had ceased to live with her at the time he went into the care of the local authority.  This should have been disclosed to the child benefit office.

 

The Tribunal could not be satisfied officers of the DWP agreed to let the child benefit section know that [M] was not living with her.

 

In any event the responsibility is on [the claimant] to inform the child benefit section that [M] was not living with her.”

 

The decision maker was wrongly identified in the decision notice as being the Secretary of State rather than HM Revenue and Customs, but that was a slip.

 

8. The claimant, acting in person, indicated her wish to appeal.  No statement of reasons additional to the decision notice was requested and none prepared. Permission to appeal was refused. The district tribunal judge (who had also given the original decision) indicated that he considered the reasons were adequate and in line with CIS/4022/2007 and H v East Sussex County Council [2009] EWCA Civ 249. I gave permission to appeal.

 

9. The respondent accepts that it should be inferred from this that the judge was content to proceed on the basis that the summary reasons in the decision notice  should be treated as the statement of reasons. The respondent further accepts that the summary reasons do not provide a sufficient explanation for the decision given.

 

10. Section 71(1) of the Social Security Administration Act 1992 presupposes that before benefit can be recovered from someone on the basis that s/he has failed to disclose a material fact, that person must have been under a duty to disclose. The relevant duty for child benefit purposes is to be found in regulation 23 of the Child Benefit and Guardian’s Allowance (Administration) Regulations SI 2003/492 (“the 2003 regulations”), which is in the following terms:

 

“ (1) This regulation applies to any person entitled to child benefit or guardian's allowance and any person by whom, or on whose behalf, payments of such benefit or allowance are receivable.

 

(2) A person to whom this regulation applies must furnish in such manner and at such times as the Board may determine such information or evidence as the Board may require for determining whether a decision on an award—

(a) in relation to benefit or allowance under the Contributions and Benefits Act, should be revised under section 9 or superseded under   section 10 of the Social Security Act 1998;

(b) in relation to benefit or allowance under the Contributions and Benefits (NI) Act, should be revised under Article 10 or superseded under Article 11 of the Social Security (Northern Ireland) Order 1998.

 

(3) A person to whom this regulation applies must furnish in such manner and at such times as the Board may determine such information and evidence as the Board may require in connection with the payment of the benefit or allowance.

 

(4) A person to whom this regulation applies must notify the Board or a relevant authority of any change of circumstances which he might reasonably be expected to know might affect—

(a) the continuance of entitlement to the benefit or allowance; or

(b) the payment of it,

as soon as reasonably practicable after the change occurs.

 

(5) A notification under paragraph (4)—

(a) must be given by notice in writing or orally; and

(b) must be sent, delivered or given to the appropriate office.

 

The expression “relevant authority” is defined by regulation as meaning (so far as relevant) “in relation to child benefit or guardian's allowance under the Contributions and Benefits Act, the Secretary of State or a person providing services to the Secretary of State.”  The expression “appropriate office” is not defined.

 

11. There is a difference under the regulation between paragraphs (2) and (3), which are concerned with the requirement to provide “such information as the Board [of HMRC] may require” and paragraph (4), which is concerned with the requirement to notify changes of circumstances  which a person might reasonably be expected to know might affect their benefit.  In the former case, the information is to be provided “in such manner and at such times as the Board may determine”, but in the latter case, it is expressly provided that notification may be made to the Board or to (among others) the Secretary of State and how it is to be given is addressed in paragraph (5).

 

12. The tribunal did not set out what is considered the source of the duty to notify the child benefit office to be.  This was a potentially important issue, given the matters I have referred to in [11].  If it was adopting the reasoning of the submission on behalf of HMRC (which argued that the duty arose under paragraph (2)), this should have been stated.

 

13. If this was the tribunal’s position, it was relying on the (incomplete) copy of leaflet CH1715 as establishing the information the Board required and the manner in which it was to be provided. There was no evidence that this leaflet had been provided to the claimant, which there should have been, and thus the tribunal made no findings on the point.

 

14. There were also potentially issues about how the leaflet required a matter to be reported but as I have now seen the full leaflet rather than the extracts originally in evidence I am satisfied that there is no point of substance here.

 

15. The tribunal observed:

 

“The Tribunal could not be satisfied officers of the DWP agreed to let the child benefit section know that [M] was not living with her.

 

In any event the responsibility is on [the claimant] to inform the child benefit section that [M] was not living with her.”

 

It is not at all clear on what basis the tribunal reached this conclusion.  Even if one is prepared to infer that as regards contact between Mrs S and the claimant, the tribunal preferred the evidence of Mrs S to that given by the claimant, that does not provide an answer in relation to the October 2007 incident, with which Mrs S could not and did not deal. It is not possible to discern how the claimant lost on the latter aspect.

 

16. The respondent accepts that the deficiencies in the reasons identified in [12] and [15] and the lack of findings set out in [13] mean that the tribunal was in error of law.

 

17. I am in a position to make the necessary further findings of fact and consider it preferable that I do so in order to bring these proceedings to a conclusion, as the First-tier Tribunal is unlikely to be better placed to get any useful further evidence.  I do so in part based on what is contained in submissions from the respondent.  These have demonstrably been prepared in a responsible manner so as to assist the Upper Tribunal and I have no hesitation in accepting the facts set out in them as such, even though not formally given by way of evidence.

 

18. I find that leaflet CH1715 was sent to the claimant with the notification of the decision on her claim on 8 August 2006.  Further copies of the leaflet were sent on 18 January 2007 and 10 March 2008. Leaflet CH1715 contained no alternative contact points to which information should be provided other than those provided “for help” as set out in [5] above.

 

19. I find on the balance of probability that Mrs S did not undertake to notify the child benefit office of the claimant’s continuing receipt of benefit.  I do so with some hesitation.  The claimant’s child benefit was not the focus of Mrs S’s dealings with her, which were concerned with investigating some specific issues about capital.  This perhaps makes it more likely that, if an assurance about reporting child benefit had been given, it might not have been recorded in statements prepared for the purpose of the capital investigation.  On the other hand, the fact that such an assurance was not the main issue makes it more likely that a note would have had to have been made, at any rate somewhere, by way of a reminder to do it.  Mrs S‘s evidence is that she would have put the assurance in the statement.  Such a matter, about her own working methodology, is something which she will be the best placed to know; her evidence on the point is not intrinsically improbable and I therefore consider that the lack of a mention of the assurance, where there would have been one, sufficient to outweigh the claimant's evidence.

 

20. The same is not true in relation to the October 2007 incident involving an officer of JobCentre Plus.  That there was such an incident has been part of the claimant’s contentions at least since her notice of appeal against the original decision by HMRC. There is no evidence contradicting the claimant’s account.  I gave both parties an opportunity to provide further evidence on that aspect, but neither has taken it up.  The claimant’s account contains a certain amount of circumstantial detail, and is not intrinsically improbable.  Nor do I see any necessary contradiction between finding that there was no assurance given by Mrs S but that there was one given by a JobCentre Plus officer.  It is entirely possible that this claimant was mistaken as to what was said at which episode of dealing with the DWP.  I therefore find that an officer of the JobCentre Plus in October 2007 did advise the claimant that the officer would take steps to ensure that the continuing payment of child benefit would be stopped.  I cannot say exactly when this happened, so find it as being 15^th October, the middle of the month and (conveniently) a Monday.

 

21. The issue then arises of what difference, if any, this finding makes. I accept that on the findings I have now made, the claimant would (leaving aside her contact with the JobCentre Plus in October 2007) have been under a duty under paragraph (2) of regulation 23 to comply with the instructions in leaflet CH1715.  However, such a duty may be qualified by oral representation: see [13] of R(A)2/06.  Leaving aside for a moment that the representation was by an officer at the JobCentre Plus (and hence of the DWP), rather than of HMRC, my findings in this case would support that the duty was qualified.

 

22. However, the DWP and HMRC are not the same organisation. HMRC’s representative submits that:

 

“[the duty to make the required disclosure to HMRC] was not…capable of being modified by an officer from an entirely different government department that had no interest in, or responsibility for, the administration of child benefit.”

 

23. I would accept that proposition, but I do not accept that it can be said that the DWP has no interest in, or responsibility for, the administration of child benefit.  While section 50 of the Tax Credits Act 2002 transferred functions relating to child benefit to HMRC, there has not been a total exclusion of the DWP for all purposes.  This comes about because of the 2003 regulations, the enabling powers for which (set out in schedule 1 thereof), particularly section 5 of the Social Security Administration Act 1992, allow for provision to be made for an ongoing administrative role for the DWP in certain respects.  Thus, for changes of circumstances which it is reasonable to suppose might affect child benefit, it suffices to tell the DWP (regulation 23 (4)). Paragraph (5) of regulation 23 is subordinate to paragraph (4), thus whatever the “appropriate office” means in the context of notifying the DWP, it clearly does not mean the child benefit office, which is run by HMRC.

 

24. Nor is regulation 23(4) the full extent of the DWP’s ongoing interest in, or responsibility for, the administration of child benefit.  Thus, notice in writing amending a claim may be given to the DWP under regulation 8; notice of withdrawal of a claim may be served on the DWP under regulation 9; and the DWP may become involved in sorting out defective claims under regulation 10 which, when corrected, will have to be transmitted to HMRC as the body responsible by statute for determining them. To give effect to these provisions there will clearly have to be channels of communication between the DWP and HMRC, in order to transmit a variety of documents, notices and notifications.  In submissions to the First-tier Tribunal it was asserted that “there are no procedures in force, or any legislation in effect, whereby an office of the DWP must inform an office of Her Majesty’s Revenue and Customs about any change of circumstances they learn about.” As regards the legislation, that is erroneous, as the need for the DWP to inform HMRC is implicit in the structure allowing notification to the DWP under regulation 23(4), while responsibility for decision-taking is vested in HMRC and it would be such a shortcoming in implementing the legislation if there were no such procedures, that I do not accept the quoted assertion.

 

25. HMRC’s present representative accepts that the duty under regulation 23(4) could be modified by oral representations by an officer of the DWP but not that under regulation 23(2).  However, it seems to me that the actual authority of a DWP officer to do one is likely to cloak him with ostensible authority to do the other.  Clearly the DWP can and does pass on information regarding child benefit in the circumstances outlined in [22] above. In the specific context of disclosure, it is part and parcel of administering the disclosure process that on occasion oral representations may come to be made: paragraph [13] of R(A)2/06 gives examples which I need not repeat here.  

 

26. I am concerned with whether the officer had from the circumstances ostensible authority to make such a representation and I conclude that the officer did.  This arises principally from the legislative structure as set out above and the inferences which it is possible to draw as to how it falls to be implemented on the ground.  Nor is it possible entirely to ignore questions of appearance- the distinction between the two bodies is not clear cut: the HMRC appeals officer in the present case communicates with a DWP officer by what looks like an internal memo rather than correspondence with a separate organisation and even the First-tier Tribunal itself was drawn into the error of naming the Secretary of State as the Respondent. Small wonder is it therefore that a claimant with existing dealings with the DWP about other benefits takes at face value an assurance that from an officer of the DWP that her child benefit would be stopped. 

 

27. While ostensible authority could be negatived by an awareness that the authority of the DWP does not actually stretch so far, claimants do not go to the JobCentre Plus equipped with a copy of the Child Benefit and Guardian’s Allowance (Administration) Regulations, close study of regulation 23 of which is all that might indicate that.

 

28. I am not saying that it suffices to report to the DWP something which is required under CH1751 (and thus regulation 23(2)) to be reported to the child benefit office of HMRC, but that in my judgment the DWP does have ostensible authority to make a representation that it will transmit information to the HMRC, irrespective of which limb of regulation 23 the matter arises under, and to that extent modify the duty to provide information.  It follows that I consider that the tribunal’s comment that “the responsibility is on [the claimant] to inform the child benefit section that [M] was not living with her” would have been in error of law if material to the First-tier Tribunal’s decision (which it may not have been).

 

29.  However, in my judgment the claimant came under a continuing obligation to disclose. The position is summarised in Social Security Legislation 2010/11, vol.III, page 81, in a passage which was approved in CIS/14025/1996.  (In the present case, references to the Department must be read as though they were to the Board (of HMRC), because of the particular allocation of responsibility for decision-taking in relation to child benefit.)

 

“(2) A continuing obligation to disclose will exist where a claimant (or someone acting on the claimant’s behalf) has disclosed to an officer of the Department either not in local office or not in the section of that office administering the benefits.  Such disclosure will initially be good disclosure provided that the claimant acted reasonably in thinking that the information would be brought to the attention of the relevant officer.  But if subsequent events suggest that the information has not reached that officer, then it might well be considered reasonable to expect a claimant to disclose again in a way more certain to ensure that the information is known to the relevant benefit section.  How long it will be before a subsequent disclosure is required will vary depending on the particular facts of each case.”

 

30. If this principle applies to disclosure to officers of the same body but who are not in the relevant office or section of the office, it should apply equally to attempted disclosure via a person who is not an officer of the relevant body but who, as I have held, has ostensible authority to receive the information and transmit it, as there may be at least as much scope in the latter circumstances for the information not to reach its intended destination.

 

In the present case, I consider that despite the claimant’s difficulties, she ought to have realised after three months that the initial disclosure had not been effective. It is not unreasonable to expect a person operating a number of accounts, as did the claimant, to check the statements occasionally.

 

31. It follows that this appeal succeeds on a technical level, to the limited benefit of the claimant.

 

 

 

 

CG Ward

Judge of the Upper Tribunal

11 January 2011