Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CH/491/2012

ADMINISTRATIVE APPEALS CHAMBER

Before Judge Mark

Decision:  The appeal is dismissed.

REASONS FOR DECISION

1.      In this case the claimant repeatedly failed to disclose to the council that he was in receipt of an occupational pension from Dorset County Council, although he did make available to the council copies of bank statements from which it could be seen that he had been receiving what were apparently monthly payments from that council described as salary.  The council did enquire whether he was receiving salary from Dorset County Council but he replied, correctly, that he was not, having ceased to work for that council because of ill health some years earlier.  For reasons best known to itself, the council made no further enquiry as to what the payments in question represented.

2.     Because the council failed to take into account the occupational pension from Dorset County Council, the claimant was overpaid housing benefit and received too much council tax benefit for a number of years from 2006 to 2011 when the omission was discovered.  Corrected assessments of benefits entitlement were then issued by the council and a decision was made that the claimant had been overpaid £1589.08 housing benefit and £481.62 council tax benefit between 22 May 2006 and 13 October 2008.

3.     The claimant had literacy problems and needed help completing forms.  He had been in receipt of housing and council tax benefit continuously from September 2004 but for a brief period of about a week in April/May 2007 when he had been homeless after having to leave his matrimonial home and find other accommodation.  He failed to disclose receipt of the pension, which commenced in May 2006.  The first bank statements that he produced were two statements for the period from the end of May to the end of July.  These were produced in August 2006.  It was these that first revealed two monthly payments of £72.62 each by bank giro credit “reference Dorset CC salaries”.  A rather belated subsequent enquiry by the council by letter of 16 January 2007 as to whether the claimant may be working for Dorset County Council produced a response received on 22 January 2007 that he used to work for them but retired 6 years earlier because of ill health.  He was not then working and was permanently signed off sick. 

4.     For reasons best known to the council, this still did not produce any follow up as to the monthly payments.

5.     On 21 November 2007, as the tribunal found, the claimant was visited by an officer of the council who may also have been shown monthly bank statements – the council appears to have conceded that this would probably have been the case.  The tribunal found that on that basis it would have been reasonable to ask specific questions about the credits from Dorset County Council.  It found, however, that on each occasion the claimant materially contributed to any mistake by not volunteering that he had a county council pension.  It found that it was highly improbable that the council officer had not asked him about his income and there is no challenge to that finding.  The tribunal pointed out that the officer had elicited that the claimant had applied for disability living allowance and concluded that the probable explanation was that the claimant had forgotten about his pension, which was relatively small.

6.     Finally the tribunal concluded that neither overpayment arose in consequence of an official error and both were therefore recoverable.

7.     The claimant appealed, contending that the overpayments were the result of an official error and were not, therefore, recoverable.  It is plain that there was no official error before receipt of the bank statements in August 2006, and that the error if there was one from that time was in failing to make further enquiries which would ultimately have revealed the pension. The initial cause of the overpayment was the claimant’s failure to disclose his new source of income, as required to do by both regulation 89 of the Housing Benefit Regulations and regulation 74 of the Council Tax Benefit Regulations 2006.   

8.     This case differs from CH/2935/2005, where I held that a claimant who had given full disclosure of his income could not, on the facts of that case, be expected to work his way through the council’s calculations of his benefit entitlement and realise that he was being overpaid. 

9.     The decision of Mr. Commissioner Mesher, as he then was, in CH/602/2004, is closer to these facts.  There, the claimant had been awarded council tax benefit by decisions dated 9 April and 29 November 2002.  In that case the Commissioner substituted his own decision for that of the tribunal, finding that the two decisions awarding benefit fell to be revised on the ground of official error.  He was not prepared to find that the decisions were made in ignorance of the material fact that the claimant was in receipt of disablement benefit.  This was because on 4 April 2002 the claimant had copied three pages of bank statements to the council covering the period from 14 February to 28 March 2002 which showed payments-in of two monthly instalments of industrial injuries benefit clearly identified as such (see para.6 of the decision).  He found in para.30 of the statement that these were clear evidence from which anyone reading them in full would have concluded that the claimant was receiving an industrial injuries benefit paid monthly.  He went on to find that either the officer making the decision to award council tax benefit did not at the time actually have in mind that evidence or s/he could have concluded wrongly that such income should be disregarded.  In either case, this would have been a mistake by the person making the decision and could be revised on the ground of official error if the claimant did not cause or materially contribute to the error.

10. In paragraph 31 of his decision, Mr. Commissioner Mesher continued as follows:

“The situation is then as follows. Either the officer who made the decision of 9 April 2002 did not at the time actually have in mind the evidence of receipt of industrial injuries benefit or the officer did have that in mind. If the officer did not, then the decision was made in ignorance of a material fact and can be revised on that ground. It is no part of the meaning of ignorance in this context that the person concerned should have been blameless in their ignorance. If the officer did have that evidence in mind, then a decision awarding CTB without taking the benefit into account as income could only have been given as the result of some kind of error by the officer. The error could have been of an administrative kind (a clerical or transcription error or simply overlooking the significance of what was known) or an error of law (wrongly considering that receipt of industrial injuries benefit, including disablement benefit, does not affect the amount of CTB). In either case, the decision, and the element of the decision requiring revision, would have arisen from a mistake by a person authorised to carry out a function of the local authority relating to CTB. There can therefore be revision on the ground of official error if the further condition of the definition in regulation 1(2) of the HB and CTB Decisions and Appeals Regulations is met, that the error was not wholly or partly caused by a non-official, eg the claimant. Here the omission of disablement benefit from the claim forms completed by the claimant played a part in the background. But the circumstances being assumed are that the officer, having the evidence of receipt of industrial injuries benefit in mind, nonetheless failed to take that benefit into account and awarded the wrong amount of CTB. On those circumstances, neither the claimant nor any other non-official even partly caused that error by the official, and all the conditions in the definition of official error would be met.”

11. Mr. Commissioner Mesher concluded that on either of those two alternatives there was a ground for revising the decision of 9 April 2002, and that the decision of 29 November 2002 also fell to be revised on the ground of official error and for the same reasons the claimant did not wholly or partly contribute to that error by omitting to refer to disablement benefit in his claim forms.  He then went on to consider whether the excess benefit was recoverable from the claimant.  This raised a different question from that raised in relation to the question of revision of the original decisions.  His decision concerned only council tax benefit and Mr. Commissioner Mesher referred in paragraph 33 of his decision to regulation 84(2) and (3) of the Council Tax Benefit Regulations (General) Regulations 1987, under which the relevant question was whether the overpayment was caused by an official error as defined rather than whether the awarding decision arose from an official error.  He applied the test of causation in R (on the application of Sier) v Housing Benefit Review Board of Cambridge City Council, [2001] EWCA Civ 1523 that

“the test is whether the overpayment was caused by an administrative error and not by any fault on the part of the claimant (Latham LJ) or by a wholly uninduced official error rather than by the claimant’s own failings (Simon Brown LJ).  There is not relief from recoverability if official error is merely a cause of the overpayment.  Each awarding decision must be considered separately.”

12. Under regulation 100(2) and (3) of the Housing Benefit Regulations 2006, and regulation 83(2)-(3) of the Council Tax Benefit Regulations 2006, the two issues relevant to this appeal are whether any overpayment was “in consequence of an official error”, that is whether it was caused by a relevant mistake, act or omission, and whether “the claimant … did not cause or materially contribute to that mistake, act or omission”.

13. In the present case, the first decision on the file is that dated 17 August 2006 setting out the benefits which the claimant had been awarded from 1 April 2006 to 1 April 2007.  However, it is clear that the claimant had been paid benefit before that date.  The decision letter itself refers to small overpayments that had been made that would be recovered from the claimant.  It is clear that further overpayments prior to 17 August 2006 could not have been caused by any official error in coming to that decision but were due to the claimant failing to disclose his new occupational pension.  The two bank accounts which showed the credits from Dorset County Council are date stamped 14 August 2006 by the council and it does not appear to me that there was any delay in dealing with the decision following them.

14. It further appears to me that in the ordinary course of events, the council would have been expected to enquire about the two entries on the statements before taking any action to reduce or withhold benefit and that its error was in failing to make those enquiries on 17 August 2006 rather than immediately issuing its revised decision.  It appears to me that it would reasonably have taken perhaps two weeks to make proper enquiries, particularly bearing in mind that an initial enquiry as to whether a salary was being received from Dorset County Council would have produced a response such as that given in January 2007, when the question was raised.  It does not appear to me therefore, that any payments made before the end of August 2006 were in consequence of any official error.  With the correct information, the previous decision awarding benefit would have been superseded by a new decision at about the end of August or beginning of September awarding reduced benefit from the commencement of the pension, and the overpayment to that time would have been recoverable, as it still is.

15. There is then the question whether there was an official error by the council in failing to take account of the income disclosed by the bank statements.  For the reasons given in CH/602/2004, there was an official error and the claimant did not wholly or partly cause that error.  That decision was therefore capable of being revised on the grounds of official error under regulation 4 of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001.  It was also capable of revision on the basis that it was made in ignorance of, or based on a mistake as to, the claimant’s income from Dorset County Council.

16. It is here that there appears to me to be a significant difference between this case and CH/602/2004.  In that case there had been an earlier unsuccessful claim for council tax benefit, but it was in connection with a new claim that the bank statements were submitted without any other reference to the industrial injuries benefit.  It appears to me that Mr. Commissioner Mesher proceeded on the basis that the existence and amount of the industrial injuries benefit had been sufficiently disclosed in the bank statements to draw the attention of the council to it and that the council could not then allege that there had been a wrongful failure to disclose by the claimant.

17. In the present case, the bank statements do not refer to any pension payment.  They do indicate salary payments from Dorset County Council, but when enquiry was made of the claimant as to whether he was in receipt of a salary from Dorset County Council he simply, and correctly, explained that he was not.  It appears to me that it was an official error on the council not to follow up the references in the bank statements, and in subsequent bank statements which are said to have been produced at subsequent reviews, so that subsequent decisions revising the amounts of benefit were also capable of revision on the grounds of official error and ignorance of a material fact.  It does not appear to me, however, that the existence of the pension was ever clearly disclosed by the claimant and it remained the case that the claimant ought to have disclosed the pension but did not do so.  The bank statements in the present case put the council on notice that there was something to look into but did not amount to proper disclosure of the pensions by the claimant.

18. The overpayments were caused not only by the error of the council in failing to enquire properly into the payments shown on the bank accounts, but also by the claimant’s failure properly to disclose his new pension.  The overpayments, as opposed to the council’s decisions, were caused not just by the council’s error but by the claimant’s failure to disclose and they are therefore recoverable from him.  The appeal is therefore dismissed.

(signed) Michael Mark

Judge of the Upper Tribunal

10 October 2012