Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No. CPC/1728/2011 

ADMINISTRATIVE APPEALS CHAMBER

Before Judge Mark

Decision:  The appeal is allowed.  I set aside the decision of the tribunal and I substitute my own decision setting aside the decision of the decision maker dated 23 April 2010 that there had been an overpayment of state pension credit of £372.93 of which £276.69 was recoverable from the claimant and substituting my own decision that there has been no overpayment of state pension credit.

REASONS FOR DECISION

1. This appeal is brought with the permission of an Upper Tribunal Judge and is supported by the Secretary of State, who asks me to set aside the decision of the tribunal and remit the matter for rehearing on the basis that further facts need to be found to enable a decision to be arrived at.

2. The appeal to the tribunal was expressed to be from a decision dated 22 April 2010 that there was a recoverable overpayment of pension credit from 25 August 2009 to 29 March 2010 because the claimant failed to disclose the material fact that a lodger had been living with her.  In fact the overpayment decision relates only to alleged overpayments to 1 February 2010, because disclosure was then made, although payments were not reduced for some time afterwards.

3. It is plain that the claimant was in receipt of state pension credit during that period on the basis of an earlier decision awarding that credit.  For it to become an overpayment, there is first needed a decision superseding or revising the original award for the period of the alleged overpayment.  In the present case there is no evidence of such a decision on the file.  Instead it is asserted in the submission to the tribunal that there was a decision dated 23 March 2010 that the claimant’s state pension credit fell to be superseded with effect from 23 March 2010.  That did not affect her entitlement prior to that date.

4. This is not a matter to which attention has previously been drawn.  Further, although the appeal against the overpayment decision is on grounds which would affect the correctness of the decision of 23 March, no appeal appears to have been brought against that decision.

5. The basis of the appeal has at all times been that the person living with the claimant is not a lodger for the purposes of the State Pension Credit Regulations 2002, but a non-dependant.  The tribunal found that JH, the person who had moved in to live in the claimant’s flat, was a former boyfriend of her granddaughter who had become homeless.  The claimant was in receipt of housing and council tax benefit and the terms on which he had moved in were that he would have to re-imburse her for whatever was the non-dependant deduction for housing benefit purposes.  The tribunal further found that this was not £50 per week, the figure which formed the basis of the overpayment decision, but £42.80 until 17 May 2010, when it had reduced to £25.65. 

6. While the tribunal concluded that JH was a lodger and that his presence and the terms on which he was there should have been disclosed to the pension credit office, it set aside the overpayment decision and directed the recalculation of the overpayment on the basis of the reduced payments.  It also expressed the hope in its statement of reasons dated 15 April 2011 that the claimant’s entitlement would be recalculated for the period from 30 March 2010 on the basis of those findings.  I do not know whether there has been any revision or supersession of the decision of 23 March 2010 on that basis.

7. The tribunal concluded that the payments which were received by the claimant were to be classed as her income and taken into account under regulation 15(5)(e) of the State Pension Credit Regulations 2002, because they were “payments due from any person in respect of board and lodging accommodation provided by the claimant.” Permission to appeal to the Upper Tribunal was granted because the tribunal overlooked the definition of board and lodging accommodation in paragraph 1(2) of those Regulations, which defines the expression as meaning “accommodation provided to a person or, if he is a member of a family, to him or any other member of his family, for a charge which is inclusive of –

(i)              the provision of that accommodation, and

(ii)             at least some cooked or prepared meals which are both cooked or prepared (by a person other than the person to whom the accommodation is provided or a member of his family) and are consumed in that accommodation or associated premises,

but not accommodation provided by a close relative of his or of his partner, or other than on a commercial basis”.

8.  The Secretary of State on this appeal accepts that the tribunal failed to deal with this and submits that the evidence available does not indicate the terms under which JH paid money to the claimant in return for being allowed to stay at her address, and that the matter should be remitted to a new tribunal for appropriate findings to be made. 

9. The Secretary of State submits that there are three possibilities.  The first is that the arrangements amounted to the provision of board and lodging within the definition.  I am satisfied that the tribunal’s finding that JH was only to compensate the claimant for her loss of benefit and nothing else, so that she was not out of pocket in that respect, together with the finding that he was an acquaintance who had become homeless, precludes such a finding, as it is plain that the arrangement was not on a commercial basis.  Indeed she would still seem to be out of pocket in respect of electricity and other services used by him at the flat.

10. Secondly, the Secretary of State submits that the claimant may be found to have become a sub-tenant of the claimant, when the sums paid would have to be taken into account under regulation 15(5)(i) of the 2002 Regulations.  It is pointed out that in paragraph 5 of the Secretary of State’s submissions to the tribunal it is stated that the weekly income was included in the claimant’s pension credit assessment as income from a sub-tenant.  That does appear to have been the basis of the assessment as appears from the disregard of £20 per week at, for example, p.28 of the file, where, had the occupation been on a board and lodging basis, the disregard would have been greater under paragraph 8(1)(b) of Schedule 4 to the 2002 Regulations.

11. The third possibility is that JH was simply a non-dependant, in which case the Secretary of State accepts that any payments received from him would not count as income for state pension credit purposes, and the claimant’s appeal from the decision of the decision maker should succeed.

12. The question whether an occupier is a licensee or a tenant has been considered in many cases.  Generally, a lodger who has no separate apartment is only a licensee (Halsbury’s Laws of England, 4^th ed., 2006 re-issue, vol.27(1) para.16).  In Street v Mountford, [1985] AC 809, at p.818, Lord Templeman quoted with approval the words of Blackburn J in Allan v Liverpool Overseers (1874), LR 9QB 180 at 191-2):

“A lodger in a house, although he has the exclusive use of rooms in the house, in the sense that nobody else is to be there, and though his goods are stowed there, yet he is not in exclusive possession in that sense, because the landlord is there for the purpose of being able, as landlords commonly do in the case of lodgings, to have his own servants look after the house and the furniture, and has retained to himself the occupation, though he has agreed to give exclusive enjoyment of the occupation to the lodger.”

13. “Lodger” in this context is not limited by the definition of “board and lodging accommodation” in the 2002 Regulations. 

14. Further, there are many examples in the reported cases of family arrangements and acts of friendship or generosity not being treated as giving rise to a tenancy even where exclusive occupation is given to the person alleged to be a tenant (see examples in Halsbury’s Laws of England, 4^th ed., 2006 re-issue, vol.27(1) at paras 8-16).

15. There is no finding by the tribunal as to whether JH was given exclusive occupation of a bedroom, or indeed anything in the record of proceedings as to the terms other than monetary on which the claimant permitted part of her flat to be used.  There is, however, a finding by the tribunal that the claimant needed to disclose that the payment was for board and lodgings, and no facts were put forward by the Secretary of State to support the contention that there was a sub-letting.  I would also expect any such sub-letting to be contrary to the terms of the claimant’s lease from the local authority.

16. The amount of the overpayment of which recovery is sought is relatively small, and the question whether the occupation was by way of licence or tenancy is dependent on the special facts of this case.  I do not consider that it is appropriate to remit the case to a new tribunal, and consider that I should substitute my own decision.  Indeed, given the apparent absence of any relevant supersession of the previous award covering the period of the alleged overpayment, this appeal must succeed in any event and the overpayment decision must be set aside.

17. I am satisfied that on the evidence before me, on the balance of probabilities JH became a lodger and had no exclusive right of occupation of any part of her flat.  Further, I consider that even if the terms of occupation were such that the claimant retained nothing of her own in the room other than furniture, and he was given exclusive occupation, that was by way of an act of generosity on the part of the claimant with no benefit to herself, and was one of those special cases where no tenancy would have arisen as a result.

18. Accordingly, although the claimant ought to have reported the change of circumstances sooner than she did, JH was simply a non-dependant and his presence and the payments made by him, such as they were, did not affect the claimant’s entitlement.  It follows that the supersession decision ought to be revised if still possible, and if that has not already happened, or, if it cannot now be revised, it ought to be superseded.  That is not something that I can direct on this appeal, but I can and do set aside the overpayment decision.

(signed on the original) Michael Mark

Judge of the Upper Tribunal

29 March 2012