Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CH/2369/2010

ADMINISTRATIVE APPEALS CHAMBER

Before Judge Robin C A White

Decision: The decision of the tribunal of 22 June 2010 is erroneous in law and I set it aside.

It is appropriate that I remake the decision which the tribunal should have made.

My decision is that an overpayment of housing benefit of £1,667.90 in respect of the period 6 April 2009 to 15 February 2010 is not recoverable from the appellant.

REASONS FOR DECISION

The issue in this appeal

1.       This appeal raises a single issue, since the respondent concedes that the overpayment was the result of an official error within the local authority.

2.       That issue is whether the overpayment is nevertheless recoverable from the appellant under regulation 100(2) of the Housing Benefit Regulations 2006 which provides that an overpayment is not recoverable where the provision applies:

… this paragraph applies to an overpayment which arose in consequence of an official error where the claimant or a person acting on his behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.

The background

3.       The appellant was in receipt of housing benefit. In April 2009, he increased his hours from part-time work to full-time work. He notified the respondent. He sent them his pay slip for April 2009.

4.       The respondent concedes that, as a result of the introduction of a new workflow system, that information was not recorded and acted upon. The appellant continued to receive housing benefit based upon his part-time earnings.

5.       The change in the appellant’s circumstances came to light in February 2010, and on 14 February 2010, the supersession and overpayment decision the subject matter of this appeal was made.

6.       The appellant has all along argued that he was meticulous in reporting changes of circumstances to the respondent, and that he should not be prejudiced by a failure in the respondent’s systems to act upon information he supplied.

7.       The respondent argues that he should have realised that when his pay went up, his benefit would go down.

8.       The appeal came before a First-tier Tribunal, which was attended by both the appellant and a representative of the respondent. The outcome was confirmation of the respondent’s decision that there was a recoverable overpayment.

9.       The appellant appealed against that decision on the same grounds that he had raised before the First-tier Tribunal. The appeal comes before me with the permission of a Judge of the Upper Tribunal.

The grant of permission to appeal

10.   In granting permission to appeal, the Judge of the Upper Tribunal referred to regulation 100(2) and went on to observe:

b. In the present case, [the appellant’s] housing benefit was paid to his landlord. He received no notices relating to the payment at all during the relevant period.

c. Did the tribunal err in law by failing to apply the stipulations as to time in the words quoted above and so … apply the wrong test?

Did the tribunal err in law?

11.   In their observations, the respondent rather misses the point, arguing again that the appellant should have expected his benefit to go down, which would mean that his contribution to his rent would go up. When it did not, he should have realised something had gone wrong.

12.   The appellant continues to maintain that the respondent should bear the consequences of their mistake, not him.

13.   In its statement of reasons, the tribunal has adopted the argument put forward by the respondent which is based on rather broader considerations of reasonableness than the test in the words of regulation 100(2).

14.   The regulation is explicit that the person should realise that there has been an overpayment at the time either of receiving the payment or of receiving notice of a payment. In the first instance, the regulation contemplates a situation where the recipient of a payment can reasonably be expected to know that it is too much and must be an overpayment. In the second instance, the realisation must reasonably flow from a notice relating to a payment.

15.   At all material times throughout the period in respect of which recovery from the appellant is sought, on the evidence in the bundle before me he neither received a payment (the payment went direct to his landlord), nor any notice of a payment.

16.   The tribunal has not picked up this important aspect of the application of regulation 100(2) of the Housing Benefit Regulations. This constitutes an error of law. For this reason I set the tribunal’s decision aside.

My substituted decision

17.   This is a case in which it is appropriate for me to substitute a decision of my own for that which the tribunal should have made.

18.   Since the appellant (on the papers before me) neither received any payment of housing benefit (because it was paid direct to his landlord) nor any notice of a payment, the question of whether he could reasonably be expected to realise that there was an overpayment of benefit does not arise.

19.   It follows that the overpayment of housing benefit is not recoverable from him.

20.   My formal decision in substitution for that of the tribunal can be found at the head of this decision.

Signed on the original Robin C A White

on 7 January 2011 Judge of the Upper Tribunal