Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No.  CIS/2429/2010

ADMINISTRATIVE APPEALS CHAMBER

 

Before Judge S M Lane

 

 

This decision is made under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007.

 

The decision of the tribunal heard on 2 June 2010 under reference 068/09/02194 is SET ASIDE because its making involved an error on a point of law, but is REMADE in the same terms.  This means that, although the appellant is successful in her appeal, it is of no practical advantage to her. 

 

 

REASONS FOR DECISION

 

1       The claimant, who is the appellant, appealed against the decisions of the First-tier Tribunal in relation to Income Support with my permission.  The decisions were that the appellant was not entitled to Income Support as a lone parent and that she was liable for a large overpayment, having misrepresented the true position which was that she was a member of a couple in the same household, at all material times.  The Secretary of State’s decision on the former issue was made on 11/11/08 (p164-6) while his overpayment decision was made on 3/12/08. 

 

2       The appellant appealed to the Upper Tribunal against the Income Support decisions and, at the same time, a decision on the overpayment of Housing Benefit and Council Tax Benefit based on those decisions.  The reference number of that appeal is CH/2428/2010.  I stayed that appeal pending the outcome of the Income Support appeals. I will lift that stay in a separate notice.

 

3       The tribunal confirmed that the appellant was not entitled to Income Support as a lone parent for the period from and including 02/09/99 because she and her husband were members of the same household at all material times.  Accordingly, she could only have claimed Income Support as a member of a couple.  However, since her husband was in remunerative work, there was no basis for entitlement to that benefit (Social Security Contributions and Benefits Act 1992, sections 124(1)(c) and 137).  The tribunal also confirmed that the appellant was liable for an overpayment of Income Support of £29,605.72 for the period 13/3/03 – 12/8/08 because she had misrepresented the material fact that she and her husband were members of a the same household, on the basis of which benefit was paid. 

 

4       The appellant’s representative submitted to the UT that the tribunal erred in law in that it failed to make adequate findings of fact on the question of whether the appellant and her husband were estranged, and that the tribunal made technical errors in relation to the process by which the decisions relating to the awards of Income Support were revised and/or superseded as required under section 71(5A) of the Social Security Administration Act 1992. 

 

5       I granted permission to appeal on the limited ground that there was arguably an error of law in the way the Secretary of State dealt with revising and/or superseding the decisions under which payment of benefit was made.  I did not consider there to be any arguable error that the tribunal failed to deal correctly with whether the appellant and her husband were estranged.  In the response to the appeal, however, the Secretary of State submitted that the tribunal failed to make the necessary findings in relation to whether the appellant and her husband were members of the same household, as well as a number of other procedural errors.  He suggested that I remit the appeal to a First-tier Tribunal (FTT) for rehearing.

 

6       I decline to do so.  I do not agree that the tribunal erred in relation to whether the couple lived in a household.  I also consider that any technical errors that the tribunal may have made in relation to the requirements of section 71(5A) are amenable to correction by the UT by virtue of section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007 (the Act), making such findings of fact as are necessary by virtue of the power given under section 12(4)(b) of the Act.

 

Did the Secretary of State and Tribunal comply with section 71(5A)?

 

7       Section 71 of the Social Security Administration Act 1992 sets out the requirements by which the Secretary of State may recover an overpayment of various benefits, including Income Support.  The provisions of section 71 that are relevant are:   

 

71.— Overpayments - general.

 

(1)                                 Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure—

 

                      i.          a payment has been made in respect of a benefit to which this section applies; or

 

                     ii.          any sum recoverable by or on behalf of the Secretary of State in connection with any such payment has not been recovered,

 

the Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose.

 

(2) Where any such determination as is referred to in subsection (1) above is made, the person making the determination shall in the case of the Secretary of State or [ the First-tier Tribunal ] , and may in the case of [ the Upper Tribunal ] or a court—

 

                    iii.          determine whether any, and if so what, amount is recoverable under that subsection by the Secretary of State, and

 

                    iv.          specify the period during which that amount was paid to the person concerned.

 

(3) An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it.

 

(5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under section 9 or superseded under section 10 of the Social Security Act 1998.

Revision or supersession?  Of which decision(s)?

 

8       The Secretary of State must show that he has complied with section 71(5A) by revising or superseding the determinations (decisions) under which the payment of benefit was made. He proceeded by superseding the original decision of 02/09/99 which awarded the appellant Income Support (p164-6).  I shall call this the original entitlement decision and refer to later decisions which may have affected entitlement as later entitlement decisions.  The representative says the Secretary of State did not deal with all of the relevant decisions correctly and this was an error of law.  He further argues that the tribunal did not deal correctly with the amount of the overpayment because it did not deal with each decision affecting benefit individually.  Accordingly, he submits that the decision should be set aside.  That is not necessary. 

 

9       The procedural issues must be broken down into two parts:  (i) the process used to change the original entitlement decision and (ii) the process to be used in relation to later entitlement decisions which operated to affect benefit.

 

10   In his Response, the Secretary of State acknowledges that he made an error in (i) because the decision maker purported to supersede that decision under section 10 of the Social Security Act 1998 when he should have revised it under section 9.  This can be a serious error because of the different dates from which supersessions and revisions operate.  The general rule is that where the Secretary of State initiates the supersession of an award of benefit, it only operates from the date of the Secretary of State’s decision: section 10(5) of the Social Security Act 1998 (the Act).  This would mean that, although the Secretary of State thought he was reversing the decision back to 1999, the decision could only operate from 11/11/08 onwards.  This, of course, would mean that there was no decision effectively removing entitlement for the earlier period.  This was not a case in which any of the exceptions to the general rule in section 10, which are set out in regulation 7 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (‘the Regulations’), applied. 

 

11   It is plain, however, that although the decision maker used the word ‘supersession’ in the decision (p164) he meant his decision to operate from 2/09/99 (p166).  That is the result that he specifically states that he intends to achieve.  The tribunal, which stands in the Secretary of State’s shoes and can make any decision the Secretary of State could or should have made, should have corrected the error:  R(IB)2/04 at [72] – [74] and [192].  Instead, it simply asserted that it was satisfied that ‘all of the decisions had been revised or suspended [sic] or varied on appeal’.  This was not sufficient, especially since the decision maker’s further submission to the FTT perpetuated the error by maintaining that the supersession impliedly superseded any and all following decisions. 

 

12   Nevertheless, this is certainly not a case in which the Secretary of State decision was so lacking in coherence that it cannot be corrected.  I therefore correct this error by treating the supersession as a revision operating from 02/09/99.

 

13   Step (ii) is whether there were any further decisions under which payment was made, and whether they were revised or superseded. The representative cites CIS/3228/2003 in which Commissioner (now Judge) Bano cites with approval the decision of Commissioner (now Judge) Mesher in CIS/764/2002.  Judge Bano does not dispute the principle in CIS/764/2002, nor do I.  The Secretary of State must revise or supersede all decisions which were made in relation to an award which affect the rate at which benefit was paid.  These would include, for example, changes which arise from the receipt of a new source of income or a change in the family unit, but not those which arise from, say, the annual uprating of the amount of benefit.  These do not require a formal decision by the Secretary of State, by virtue of section 159(2) of the Social Security Administration Act 1992.  They are not operative for the purposes of section 71(5A), though it would avoid much confusion if the Secretary of State identified this type of change for the benefit of the tribunal and the appellant in the Submission papers. 

 

14   Although section 71(5A) states that all decisions must be revised or superseded in an overpayment decision, it often happens (as here) that, where an award is affected by ignorance of a material fact from the outset, that ignorance will continue to affect later decisions in the life of the award.  In these circumstances, I agree with Judge Mesher in CIS/48/2004 at [23] that it is not necessary for the tribunal to specify each and every decision with precision in order to comply with the section:  each one would be affected by the same lack of knowledge. 

 

23. “There may well have been decisions made subsequent to that of 8 November 1996 which gave authority for the payment of income support through the period down to November 2000. A lot of changes, eg in standard benefit rates, would take effect automatically, but others would need review or supersession decisions. All the operative decisions need to be altered to form the basis for a calculation of the amount of benefit paid in excess of entitlement in the period in issue. I do not need to identify all those decisions with any precision as they and the initial decision of 8 November 1996 were all made in ignorance of the material fact that the claimant was in receipt of an occupational pension at the rates later confirmed by the City of Edinburgh Council… As the result of that ignorance the decision was more advantageous to the claimant than it otherwise would have been. That is a ground for revision, rather than supersession, and the revision takes effect from 9 May 1996 and from the effective date of any other decisions which fall to be revised. I am satisfied that the revised decision on entitlement is that the claimant's entitlement is only to the amounts shown as payable in the schedule on pages 89 and 90.”

 

15   Judge Mesher considered it sufficient, in such cases, to make the necessary findings on revision in the following terms, as set out in [1a] of CIS/48/2004:

 

(a)- the decision dated 8 November 1996 awarding the claimant income support from and including 9 May 1996 and any subsequent decisions which may have been made authorising the payment of income support in the period down to 27 November 2000 fall to be revised with effect from 9 May 1996 on the ground that they were made in ignorance of a material fact and were more advantageous to the claimant than they otherwise would have been[1];

 

16   The print out at page 18 of the Submission shows that no operative changes were made to the award, despite occasional reviews, from 20/10/04 through 11/08.  The adjudication history from 13/3/03 to 11/10/04 is not shown at page 18, but the figures relating to that period, shown on the schedule at p167, do not indicate any decisions relating to levels of payment.  The figures themselves are likely to derive from a clerical exercise carried out by the decision maker.  I do not consider it strictly necessary, in the circumstances, to carry out the revision exercise as Judge Mesher did.

 

17   It follows from that the Secretary of State has done enough to relate the rates of payment at each stage to the award, and that the decision sets out sufficiently the amounts to which the appellant was entitled in each benefit period.  CIS/3228/2003 at [19] and [20] does not assist the appellant. 

 

The period of overpayment

 

18   The Secretary of State submits that the tribunal erred in law by not explaining why the overpayment was confined to the period 13/3/03 – 12/8/08, when the revision went back to 2/9/99.  I do not find there to be an error in this regard.  At [6] and [7] of the Statement of Reasons, the tribunal relies on the Secretary of State’s submission as a clear account of how he reached his decisions.  This includes the Secretary of State’s submission that the earlier records had been destroyed. 

 

19   The Secretary of State also notes that if the overpayment had been taken back to 1999, it would have been much larger than the £29,605.72 currently at stake.  It is open to the Secretary of State to raise an overpayment in relation to the outstanding period if he so wishes.

 

Did the tribunal make insufficient findings in relation to membership of the same household?

 

20   Under section 124(1)(c) of the Social Security Contributions and Benefits Act 1992, a member of a couple who is not in remunerative work is not entitled to Income Support if the other member of the couple is in such work.  For heterosexuals, a couple is defined in section 137 of the same Act as a man and woman married to each other and who are members of the same household.  There is no doubt that the appellant is still married to her husband. 

 

21   The next question for the tribunal was whether they lived in the same household.  In CIS/2127/2010, I briefly set out the fundamentals of this concept: 

 

8 “‘Household’ is an ordinary word for there is no legislative definition, but case law has endowed it with certain characteristics to distinguish it from a situation where parties merely occupy the same house.  Whether a household exists is ‘is a question of fact and degree, there being no certain indicia the presence or absence of which is by itself conclusive’:  Simmons v Pizzey [1979] AC 37, House of Lords, per Lord Hailsham [59].  At the end of the day, the question of whether people are part of the same household must be decided as a matter of common sense and common experience:  R(SB)4/83 [19]. 

 

9 The basic characteristics of a household are identified in authoritative case law:  A household as a unit bound together by a ‘particular tie’ that the mere physical separation of the parties does not necessarily negate:  Santos v Santos [1972] 2 All ER 246 [255].  There must be something which amounts to a domestic establishment, which involves a group of two or more persons living as a unit where that group enjoys a reasonable level of independence and self sufficiency:  (R(IS)1/99 (file no. CIS/4935/1997 [21]); CIS/671/1992 [4]. 

 

10 These propositions do not take things much further and have therefore been supplemented by guidance on factors which may be relevant in determining whether a married couple are members of a household.  In CJSA/1321/07 at [24] Deputy Commissioner White (as he then was) emphasised that, while all of the circumstances of a case had to be considered in deciding whether a household existed, certain matters were commonly associated with a household and should therefore be explored by tribunals in coming to a common sense and realistic conclusion.  With some minor rewording, they are:

 

                                                    i.     the circumstances in which the appellant and spouse came to be living in the same house;

                                                   ii.     payment for the accommodation made by the appellant/spouse;

                                                  iii.     arrangements for the storage and cooking of food;

                                                  iv.     separate eating arrangements;

                                                   v.     domestic arrangements such as cooking, cleaning, gardening and bits of household maintenance;

                                                  vi.     financial arrangements and

                                                 vii.     evidence of family life. 

 

11 It is, however, necessary for tribunals to appreciate that these are matters or signposts which may be relevant in deciding whether a married couple’s living arrangements import the existence of a household.  But they are not writ in stone.  They may need to be adapted or, indeed, abandoned where common sense and experience dictates. 

 

12 In deciding whether these matters need to be explored in the decision, it is important to focus on the case the appellant is putting to the tribunal, and to bear in mind that the cases from which the matters to be considered emerged involved claimants and their spouses who were either living in the same premises but were said to be estranged, or living in different rooms in the same residential home (and in one case, in the same room) but suffering from senile dementia to the extent they no longer recognised each other as husband and wife.  In these circumstances, it was plainly necessary for a tribunal to make careful findings if they were to find that the particular tie or domestic establishment which were the hallmark of a household.”

 

 

22. In CIS/2127/2010 the appellant’s case was that she and her husband had separated many years previously but that although her husband was a frequent, if not daily, visitor, he only came to help her with their granddaughter, over whom she had custody.  Anything the appellant and her husband did for each other was said to be no more than an act of friendship.  She claimed to have no idea where her husband lived.  In essence, she denied that he lived with her at all, let alone in the same household.  There was no evidence on the usual factors in (i) – (vi).  There was some evidence of (vii) family-type activities, but it had to be set against the strong denials of any subsisting tie between them. 

 

23 In circumstances such as those, it would have been pointless for the tribunal to attempt to solve the problem of whether there was a household by reference to the standard factors in the case law cited above.  At the end of the day, the case turned on the credibility of the appellant’s assertion that there was no relationship and the husband lived elsewhere.  :

 

13    “…Once the tribunal rejected their evidence as an elaborate fabrication, there was nothing left except a married couple who were not telling the truth about living together in a domestic establishment tied by the bonds of marriage and family, at the very least.  In other words, they were a household.  There was nothing material in the evidence (apart from denials which were rejected either expressly or by necessary implication) that would lead the tribunal to think otherwise. “

 

Accordingly,

 

15“…once the Tribunal had found to be untrue the assertion by the appellant as to why she was entitled to the relevant benefits, namely, that she was not living in the same household as was her husband, the appellant’s appeal had to fail.  The tribunal was not required to Tribunal to engage with an alternative scenario which was never part of the appellant’s case and for which there was no other evidential basis.

 

 

24 I have come to the conclusion that the same principles apply to this appeal.  The appellant’s case was that she and her husband did not have any relationship and did not even live in the same house.  He was no more than a visitor. Her husband’s evidence about his living arrangements during the interview under caution was so far fetched that it did nothing to bolster her explanation.  No tribunal could have accepted their accounts. 

 

25 Once the foundation of the appellant’s case was rejected, the conclusion that the appellant and her husband were members of the same household was inescapable.  All that was left was a married couple who were living together as married couples do, in a domestic establishment tied by the bonds of marriage and family.  The only distinction was that they were not telling the truth about doing so.  

 

26 The tribunal were not required to embark upon an elaborate fact finding exercise on the factors set out in CJSA/1321/07.  To do so, it would have had to engage in pure speculation on factors i – vi, while the evidence on family life (factor vii) would not, of itself, have established that they lived in the same house, let alone in a household.  The conclusion that they did live in the same household derived from the rejection of their claim to be living apart. 

 

27 I did not give permission to appeal on the issue of the meaning of the word ‘estranged’.  It is a word that can have different shades of meaning in different contexts.  Not every couple which separates lives in a state of perpetual disharmony.  A couple may decide that their relationship is at an end, live separate lives in separate premises, but remain friends.  They are nevertheless estranged from the marital relationship.  The tribunal’s explanation of estrangement in [21] did no more than buttress its view that the couple lived in the same household. 

 

 

 

 

 

[Signed on original] S M Lane

Judge of the Upper Tribunal

[Date] 18 May 2011