Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to allow the Appellant’s appeal. The decision of the Sutton First-tier Tribunal dated 23 January 2012 under file reference SC154/11/03308 involves an error on a point of law and is set aside.

 

The appeal against the entitlement decision

 

The Upper Tribunal is not in a position to re-make the entitlement decision under appeal. It therefore follows that the appellant’s appeal against the Secretary of State’s decision dated 09 February 2010 is remitted to be re-heard by a different First-tier Tribunal, subject to the Directions below.

 

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

 

The appeal against the overpayment decision

 

The Upper Tribunal is in a position to re-make the overpayment decision under appeal. The decision on that appeal is re-made as follows:

 

The Appellant’s appeal against the Secretary of State’s decision of 23 February 2010 is allowed. The Appellant did not make any misrepresentation about his wife’s immigration status on his SPC claim form. It follows that the Secretary of State has failed to prove that the conditions for recoverability of an overpayment under section 71 of the Social Security Administration Act 1992 have been met. The Secretary of State’s decision of 23 February 2010 is revised accordingly.

 

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

 

DIRECTIONS FOR RE-HEARING OF THE ENTITLEMENT APPEAL

 

The following directions apply to the re-hearing of the appeal against the entitlement decision of 9 February 2010:

 

(1) The re-hearing should be at an oral hearing.

(2) The new tribunal should not involve the tribunal judge who sat on the tribunal that considered this appeal at the hearing in Sutton on 23 January 2012.

(3) The Appellant should write to the regional tribunal office of Her Majesty’s Courts and Tribunals Service (HMCTS) in Sutton (“the FTT Office”), within one month of the issue of this decision, with replies to the questions set out at paragraph 53 below. 

(4) The Secretary of State is directed, within one month of the issue of this decision, to provide the FTT Office with a supplementary submission dealing with the issues see out at paragraph 54 below.

(5) The new tribunal must consider all the evidence afresh and is not bound in any way by the decision of the previous tribunal.

 

 

These Directions may be supplemented by later directions by a Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal. 

REASONS FOR DECISION

 

Summary of Upper Tribunal’s decision

1. I allow the Appellant’s appeal. The First-tier Tribunal’s decision involves an error on a point of law. That tribunal’s decision is set aside. There is no recoverable overpayment of state pension credit, at least on the basis that the Secretary of State argued before the tribunal. The appeal needs to be reheard, at least as regards the entitlement issue, by a new tribunal. It will be for the new tribunal to decide what the true facts are as regards entitlement to state pension credit.

 

The issues in this appeal

2. This case relates to an alleged overpayment of state pension credit (SPC). However, it also raises an important issue, often misunderstood, relating to immigrants who are sponsored to enter the UK and their benefit status. The appeal to the Upper Tribunal is supported by the Secretary of State. The Appellant is content for me to issue a decision without reasons, at my discretion. However, I am giving detailed reasons for the guidance of the new tribunal which has to re-hear part of the case. The sponsorship issue may also have relevance to other appeals heard by the First-tier Tribunal (FTT).

 

The background to the appeal to the First-tier Tribunal

3. This is a factually complex case and a summary will suffice for present purposes. The Appellant, who retired in 2001, came to the UK many years ago from Nigeria. In June 2004 his wife, also Nigerian, entered the UK. She subsequently obtained work with a local authority. In 2006 the Appellant claimed SPC. He was initially paid on the basis that he was a member of a couple. However, on 8 November 2006 a decision maker concluded that the Appellant’s wife was in the UK under a sponsorship agreement, and had no entitlement to means-tested benefits, and so she was removed from the SPC claim and he was paid thereafter as a single person. I should add that this was not his first SPC claim, as there is correspondence on file from 2003 in which the Pension Service was seeking information about his mortgage.

 

4. Meanwhile in late 2006 the Appellant also made a claim for council tax benefit (CTB). The local authority subsequently carried out a fraud investigation. Following this inquiry, the local authority informed the DWP Pension Service in May 2009 that the Appellant’s wife was working. The Pension Service then made various further and at times confused enquiries, leading to two decisions in February 2010.

 

5. On 9 February 2010 a decision maker made an “entitlement decision”. This was (apparently) a revision of the 8 November 2006 award of SPC. The new decision was that the Appellant’s wife was not residing under a sponsorship agreement and so his wife’s earnings should have been taken into account from the outset of the claim. Consequently his SPC entitlement was revised down from £85.25 a week to £0.00 a week.

 

6. On 23 February 2010 a different decision maker made an “overpayment decision”. This was to the effect that a sum of nearly £14,000 was recoverable from the Appellant for the period from 10 September 2006 to 9 August 2009. This decision was made on the basis that the Appellant had failed to disclose the material fact that his wife had earnings.

 

7. On 15 November 2010, following further correspondence, the Appellant wrote a letter of appeal, headed “Appeal against overpayment”. However, he referred in that letter to the decision of 9 February 2010, and it was clear that he was also disputing the entitlement decision. Indeed, his grounds of appeal were essentially about his wife’s earnings, and so were mostly directed at the entitlement decision.

 

8. The Pension Service, when it prepared its written submission to the FTT, shifted its position somewhat. It now argued that the overpayment was recoverable on the basis of a misrepresentation rather than a failure to disclose. The Appellant’s SPC claim form had now been located, on which it was stated that he “has got his wife living with him. She is sponsored to be in this country, and she is also working.” The Department’s case now was that the Appellant had misrepresented a material fact, namely by stating that his wife was living in the UK under a sponsorship agreement when actually she was not.

 

The proceedings before the First-tier Tribunal

9. There were two hearings before the FTT. The first hearing on 18 November 2011 was adjourned. The tribunal judge issued careful directions on the appeal.  First, he directed the Pension Service to provide copies of the evidence which it had relied on in calculating the wife’s earnings. Second, he directed the Appellant to provide copy payslips or other evidence of his wife’s earnings for the relevant period. The Appellant did as he was asked. The Pension Service did not.

 

10. The second FTT hearing was on 23 January 2012. This hearing does not appear to have taken very long, judging from the short record of proceedings. The appeal was dismissed. The FTT’s decision notice confirmed the Pension Service’s decision of 9 February 2010. It also confirmed that an overpayment of £13,801.82 was recoverable on the new misrepresentation ground.

 

11. The FTT’s entire statement of reasons read as follows:

 

“1. Mr O has appealed against a decision that he has been overpaid State Pension Credit in the sum of £13,899.27. It is the Department’s case that Mr O’s original claim was made on the basis that his wife was living in the United Kingdom under a Sponsorship Agreement. Mrs O’s earnings were accordingly not taken into account in calculating State Pension Credit. However on subsequently making enquiries on 30^th October 2009 it became apparent that there was no such Sponsorship Agreement.

 

2. Mr O’s appeal is on the basis that whilst he accepts that his wife’s earnings should be taken into account they have not been correctly assessed.

 

3. However, it is clear from the figures supplied in relation to Mrs O’s earnings, which Mr O did not dispute, that his wife’s earnings meant that there is no entitlement.

 

4. In addition Mr O claims that his mortgage has not been taken into account. However, it would appear that he did not live at the property during the period of the claim and furthermore he remortgaged the property and so it is difficult to assess any underlying entitlement. It is also relevant that he had never disclosed the property to the Revenue during the period of the claim.

 

5. Accordingly, the sum of £13,899.27 has been overpaid and is recoverable from Mr O as he misrepresented the fact that his wife was in the United Kingdom under a Sponsorship Scheme whereas she was not.”

 

 

 

The proceedings before the Upper Tribunal

12. I gave the Appellant permission to appeal, highlighting certain problematic issues in the FTT’s decision and noting that the statement of reasons was “somewhat cursory”, given the complexity of the case. Indeed, regrettably there is so much wrong with the tribunal’s decision and reasoning that it is difficult to know where to start. In a helpful submission, Mrs Frances Gigg for the Secretary of State supports the appeal to the Upper Tribunal on the basis of “several errors of law”. I shall try to deal with the principal ones in a logical order.

 

The errors of law in the First-tier Tribunal’s decision

The failure to distinguish between the entitlement and the overpayment decisions

13. The Pension Service’s submission to the FTT was written on the basis that this was an appeal against the overpayment decision of 23 February 2010, not the entitlement decision of 9 February 2010. The first FTT seems to have realised that there was more to the case than this, given its careful directions. Unfortunately the second FTT failed to explore this point properly. The decision notice only referred expressly to the entitlement decision, but the summary reasons also attempted to deal with the overpayment issue. As can be seen, the statement of reasons did not really distinguish between the two decisions at all. So the first error of law was to fail to distinguish between the two decisions under appeal, and so to identify the legally relevant issues on each. If this distinction had been property drawn, then the tribunal might not have fallen into further error as explained below. There was also an inconsistency between the decision notice and the statement of reasons as to the total amount of the alleged overpayment. The actual figure alleged by the Pension Service was as stated on the decision notice.

 

The failure to identify the true immigration status of the Appellant’s wife

14. Unfortunately both the decision maker and the FTT have misunderstood the law relating to sponsored immigrants and how that interacts with social security law. In outline, there are essentially two routes by which relatives can join a person resident in the UK with settled status (“a settled person”).

 

15. First, a settled person’s spouse will typically enter the UK under section 33(1) of the Immigration Act 1971 on the basis that they have limited leave to remain and have no recourse to public funds for two years. Although certain checks are carried out, the immigration authorities do not require the settled person to sign an undertaking that the spouse will be maintained. This is for the simple reason that the settled person is under a legal duty to maintain his or her spouse.

 

16. Second, a settled person’s other dependant relative (typically, but not exclusively, a parent) will usually enter the UK with indefinite leave to remain from the start and so no (immigration law) limitation on access to public funds. As the settled person has no legal duty to maintain such a relative, the immigration authorities usually require a written maintenance undertaking to that effect under rule 35 of the Immigration Rules.

 

17. Immigration law regards both types of situation as “sponsorship” in the broadest sense. Thus the definition of “sponsor” in rule 6 of the Immigration Rules is as follows:

 

‘"sponsor" means the person in relation to whom an applicant is seeking leave to enter or remain as their spouse, fiancé, civil partner, proposed civil partner, unmarried partner, same-sex partner or dependent relative, as the case may be, under paragraphs 277 to 295O or 317 to 319 or the person in relation to whom an applicant is seeking entry clearance or leave as their partner or dependent relative under Appendix FM.’

 

18. However, a settled person’s spouse cannot be a sponsored immigrant in the sense of a person subject to a maintenance undertaking. As Mrs Gigg points out, sponsored immigrants are defined by rule 317 as parents, grandparents and dependant relatives of the settled person. Thus sponsorship agreements cannot apply to spouses.

 

19. The starting point in social security law for determining entitlement to benefit for immigrants is the notion of a “person subject to immigration control”, as defined by section 115(9) of the Immigration and Asylum Act 1999. This defines four different categories of such person. A settled person’s spouse falls within section 115(9)(b) as a person with leave to enter (or remain) “subject to a condition that he does not have recourse to public funds”. However, a non-spouse dependant relative falls within section 115(9)(c) as a person with leave to enter (or remain) “given as a result of a maintenance undertaking”.

 

20. Furthermore, the term “sponsorship” itself does not seem to appear in social security legislation. However, all too often Departmental staff fail to grasp the distinction set out above. In the present case the FTT fell into the same trap. The result of this failure to identify the true immigration status of the Appellant’s wife was to undermine the entitlement decision but also more fundamentally the overpayment decision, so I shall deal with that first.

 

The failure to find sufficient facts and give reasons on the overpayment appeal

21. As revised, the Pension Service’s case before the FTT was that the Appellant had misrepresented his wife’s immigration status on the original SPC claim form. Mrs Gigg rightly accepts that there is simply no evidence of any such misrepresentation. She also concedes that “any overpayment of benefit has been caused by a failure to follow the proper procedures and is therefore due to official error.” Again, in my judgment, that concession was rightly made.

 

22. As noted at paragraph 8 above, the Appellant had stated in a free text box on the SPC claim form that his wife was sponsored to be in the UK (and that she was working). In so declaring, he was reporting accurately her immigration status. He was her sponsor for the purposes of rule 6 of the Immigration Rules. He did not say that he had entered into a sponsorship agreement or maintenance undertaking, for the simple reason that he had not. True, he had also ticked the “Yes” box in answer to this question on the form: “Have you or your partner been sponsored to come to the UK in the last five years?” The purpose of this question is presumably to identify those dependant relatives who, in principle, remain persons subject to immigration control indefinitely, but who can in fact now claim benefits after five years (see Social Security (Immigration and Asylum) Consequential Amendments Regulations 2000 (SI 2000/636), Schedule, paragraph 3). However, the Appellant can hardly be expected to realise this nuance, and cannot be criticised for answering the question in the broader sense of “sponsored” as correctly used in immigration law.

 

23. What appears to have happened in this case is that the Pension Service staff dealing with the original claim in November 2006 read the Appellant’s statement that “she is sponsored to be in this country”, and his affirmative tick to the specific question, to read as “she is sponsored to be in this country under a maintenance undertaking”. The next step that took place was that in October 2009 the Pension Service staff telephoned the relevant team in Leeds to find out when this sponsorship agreement would end, only to find (unsurprisingly) that there was no record of any such sponsorship agreement. Eventually, in January 2010, the Pension Service sent the Home Office a DCI100 Form; the Home Office response was that the Appellant’s wife had been given indefinite leave to remain on 10 June 2006 (i.e. about two years after entry and several months before the SPC claim) and had attended a naturalisation ceremony on 4 October 2007. The Home Office repeated this information in April 2011, following a further DCI100 enquiry, and added for good measure “no sponsorship agreement”.

 

24. According to the decision maker’s written submission to the FTT, when the Appellant made his SPC claim “he stated that his wife was living in the UK under a sponsorship agreement. It appeared that the Department accepted this information without checking the facts; however, the Department would have had no reason to doubt [Mr O] and accepted it as fact when assessing his entitlement to State Pension Credit.” The FTT erred in law in accepting that submission.

 

25. As Mrs Gigg notes, the decision maker in November 2006 in effect jumped to the conclusion that the Appellant was saying that his wife was a sponsored immigrant subject to a maintenance undertaking, when (a) she was not and (b) he had not said that she was. Mrs Gigg observes that the Pension Service should have checked the wife’s immigration status with the UK Border Agency by sending a Form DCI100 at that stage (not four years later), which would have revealed then that she had been given indefinite leave to remain in June 2006. Had that been done, the Department would have realised that she could stay as long as she liked and could claim benefit, so she should have been included on the Appellant’s SPC claim. Accordingly, the overpayment was the result of official error. The FTT had also erred by ignoring one of the Appellant’s letters in which he expressly took issue with the allegation that he had made such a misrepresentation. The second FTT also disregarded the Appellant’s clear evidence at the first adjourned hearing. In answer to the first FTT judge’s question “How can you say you didn’t tell Dept [your] wife [was] sponsored?”, the Appellant answered: “What I understand by that, is that she came on my status”. Exactly so.

 

The failure to find sufficient facts and give reasons on the entitlement appeal

26. The immigration status of the Appellant’s wife was relevant to the SPC entitlement appeal as well. The usual rule for means-tested benefits is that, where the claimant’s partner is a person subject to immigration control, then she is taken out of the applicable amount on the claim but any income is taken into account on the means-testing assessment. The position with SPC is different. If the Appellant’s spouse was a person subject to immigration control, then she had to be completely taken out of the equation altogether. Such a partner is not treated as part of the household, either for calculating the claimant’s applicable amount or income (see State Pension Credit Regulations 2002 (SI 2002/1792), regulation 5(1)(h)).

 

27. The Pension Service had treated the Appellant’s wife as a person subject to immigration control in its November 2006 decision and excluded her from the SPC assessment. In fact, as we now know, she had been given indefinite leave to remain several months earlier, and so no longer fell within the relevant definition in section 115(9)(b) of the Immigration and Asylum Act 1999. Accordingly she should have been included on the SPC assessment.

 

28. However, the nub of the Appellant’s appeal against the entitlement decision concerned the assessment of his wife’s earnings. It is plain from the documentary evidence that for at least part of the period his wife was employed by the council on a sessional term-time only basis. It was also clear from the start that the Appellant was disputing the way that the Pension Service had averaged out her earnings. This was why the first FTT had made the directions it had. Unfortunately the second FTT seems to have completely disregarded the Department’s failure to comply with the direction made by the first FTT. The Appellant certainly did not dispute that his wife had earnings, but he dispute the amount of those earnings. Quite simply, the FTT’s treatment of this issue in paragraph 3 of its statement of reasons was wholly inadequate.

 

29. I must therefore agree with Mrs Gigg’s very frank submission that “it is difficult to understand how [the FTT] could say that it was clear ‘from the figures supplied’ that the earnings meant that there was no entitlement when the DWP had not supplied any figures showing how they had calculated the earnings by the hearing date, despite having been directed to do so.” This amounts to a further error of law.

 

The Upper Tribunal’s conclusions on the appeal

The First-tier Tribunal’s decision is set aside as in error of law

30. The FTT in this case went wrong in law for all the reasons set out above. I must therefore allow the Appellant’s appeal and set aside the decision of the tribunal (Tribunals Courts and Enforcement Act (TCEA) 2007, section 12(2)(a)). The FTT’s decision is of no effect.

 

31. The question then is how to dispose of the underlying appeal, or strictly appeals. For the reason explained at paragraph 7 above, the Appellant’s underlying appeal was against two decisions, the entitlement decision and the overpayment decision. Mrs Gigg invites me to remit the appeal against the entitlement decision and to re-make the overpayment decision. I agree for the following reasons, taking the two decisions in reverse order.

 

The overpayment decision is re-made

32. So far as the appeal against the overpayment decision of 23 February 2010 is concerned, the position is straightforward. I re-make that decision under section 12(2)(b)(ii) of TCEA 2007 in the following terms :

 

The Appellant’s appeal against the Secretary of State’s decision of 23 February 2010 is allowed. The Appellant did not make any misrepresentation about his wife’s immigration status on his SPC claim form. It follows that the Secretary of State has failed to prove that the conditions for recoverability of an overpayment under section 71 of the Social Security Administration Act 1992 have been met. The Secretary of State’s decision of 23 February 2010 is revised accordingly.

 

33. There is, therefore, no question of any overpayment of SPC being recoverable on the basis of an alleged misrepresentation about the immigration status of the Appellant’s wife, as there simply was no such misrepresentation. It is possible, however, that in future the Secretary of State may be able to make a fresh overpayment recoverability decision (see the decision of Mr Commissioner (now Judge) Mesher in R(IS) 13/05, at paragraph 15). However, any such fresh overpayment decision will need the condition precedent of a valid entitlement decision, revising or superseding the original award of SPC (see section 71(5A) of the Social Security Administration Act 1992). I therefore turn to consider the underlying appeal against the entitlement decision.

 

The entitlement decision is remitted to a new First-tier Tribunal

Introduction

34. So far as the appeal against the entitlement decision of 9 February 2010 is concerned, the position is more complex. The decision of 9 February 2010 appears to be a revision of the awarding decision of 8 November 2006. That decision was based on the premise that the Appellant’s wife was, at that date, a person subject to immigration control and so not a member of his household for SPC purposes. That assumption was plainly wrong. There were therefore clearly grounds for revising the decision of 8 November 2006 with effect from the start date of the SPC award (10 September 2006).

 

35. What is by no means clear is what the Appellant’s proper level of SPC entitlement (if any) was from that date in 2006. There is insufficient material before me to make that assessment. It follows that the Appellant’s appeal against the entitlement decision of 9 February 2010 must be remitted for rehearing by a new FTT subject to the directions listed above and the further guidance below (TCEA 2007, section 12(2)(b)(i)).

 

36. There are at least three discrete issues on which there is insufficient information currently available. They relate to the Appellant’s wife’s earnings, the capital value of a property (referred to here as No 28 C Close) and the Appellant’s claim for assistance with mortgage interest payments as regards that property.

 

The Appellant’s wife’s earnings

37. As noted above, the Appellant has disputed the Department’s assessment of his wife’s income all along. He has provided a considerable amount of documentary evidence in the form of payslips etc. In summary, in his original letter of appeal he stated that her average weekly earnings were roughly £138 during the 2006/07 school year, £168 in 2007/08 and (having moved from part-time to full-time) £305 in 2008/09. In a subsequent letter he recalculated her earnings as £127.54 (2006/07), £160.63 (2007/08) and £281.53 (2008/09).

 

38. The Pension Service, on the other hand, has to date failed to explain how it had averaged her earnings. True, in May 2009 the local authority’s council tax benefit department informed the Pension Service that the Appellant’s wife earned “£1000.00 per month”. This faxed notification was accompanied by (i) a payroll report from one council, confirming the Appellant’s wife had been employed on a sessional basis between November 2005 and December 2007, which detailed her hours but not her earnings; and (ii) a payslip from a different council for March 2009, confirming her basic pay as £1,051.49 a month.

 

39. It is not clear what other information was before the Pension Service. The September 2006 SPC claim form included a handwritten note to the effect that “earnings same as prev claim £869.41 pcm”. That would work out at just over £200 a week.

 

40. The reconsideration decision of 19 October 2010, which looked again at the 23 February overpayment decision, included some SPC calculation schedules for 2006, 2007, 2008 and 2009. The earnings for the Appellant’s wife were stated to be various figures rising from £228 a week (2006) to £265.81 a week (2009). On this basis the assessment was that there was no entitlement to SPC for any part of this period.

 

41. The papers include no explanation as to how the figures referred to in the previous paragraph were arrived at. The information on the original claim form would indicate weekly earnings of about £200 (see paragraph 39 above). The information provided by the council in 2009 would suggest weekly earnings of £242.65. The averaging process is, quite simply, a mystery.

 

42. The Appellant has, as requested, provided a large number of his wife’s payslips. They may well suggest, once all the relevant calculations are carried out, that there was indeed no entitlement to SPC. However, that cannot simply be assumed without more. The answer is that the Secretary of State must produce a supplementary submission for the remitted hearing showing how the Appellant’s wife’s earnings have been averaged and attributed over the whole period in question, and their impact on SPC entitlement at all relevant dates.

 

The capital value of No 28 C Close

43. The entitlement decision may also be affected by an entirely separate issue concerning the capital value of No 28 C Close. According to his CTB claim form, the Appellant had first moved to No 28 C Close in 1988. At some point in 2004 or 2005 he moved away to a flat at No 147 M Road, from which address he made the claim for SPC. The answer to the question on the SPC claim form “Apart from the place where you live, do you or your partner own any other property?” was ticked “No”, as the FTT noted (the tribunal’s reference to “Revenue” presumably should have read “DWP”). At some point No 28 C Close was tenanted, but there seem to have been problems with the tenants leading to court action. In May 2007 the Appellant had moved to a third address, No 77A L Walk. By Spring 2008 he had returned to live at No 28 C Close (quite when is not clear; the written submission to the FTT refers to a letter to the DWP actioned on 5 March 2008, but no copy of the letter itself has been provided in the file).

 

44. What is the effect of the Appellant’s ownership of No 28 C Close on the SPC claim? The alleged overpayment covered the period from 10 September 2006 to 16 August 2009. It therefore covers periods when he was first not living, and then later living, at that address. This also highlights a further error of law by the tribunal, which had concluded that it appeared that the Appellant “did not live at the property during the period of the claim”, so making a finding of fact for which there was no evidence. Rather, the undisputed evidence was that he had certainly lived there (again) from a date in early 2008.

 

45. That said, however, for the period up until some date in 2008, it seems he was not living at No 28 C Close. For that period, therefore, that property could not be disregarded as his home (regardless of, e.g. where he was registered to vote). However, this did not necessarily automatically disentitle him from SPC. The reason for this is that there is no maximum capital limit for SPC. It may be that the capital value of No 28 C Close might generate sufficient deemed or tariff income to disallow the claim (State Pension Credit Act 2002, section 15(2) and State Pension Credit Regulations 2002, regulation 15(6)). However, the valuation of that property would have to take into account the mortgage secured on the property (a tricky issue which is considered further below – the value of the equity might have been minimal as a result of remortgaging). Leaving aside difficulties with tenants, any income which the Appellant received from subletting should arguably be disregarded as actual (as opposed to tariff) income from capital (see State Pension Credit Regulations 2002, Schedule IV, paragraph 18).

 

46. Thus although the September 2006 SPC claim form may have included a misrepresentation about his ownership of other property, it is unclear whether that would actually have affected his entitlement to SPC. The fact that the property may have been disclosed on a previous claim for SPC would not be a defence (see e.g. Commissioner’s decision R(SB) 3/90 at paragraph 11). However, the Secretary of State might face other difficulties in seeking to make a further overpayment recovery decision, but this time on the basis of such an alleged misrepresentation. In the light of the analysis above, it may be difficult to prove causation, as it seems that official error was the fundamental cause of the overpayment.

 

47. For the period from the date when he returned to No 28 C Close in 2008, that property would have been his home again and the capital issues raised by the previous paragraph would no longer be relevant. There might, however, be an entitlement to assistance with housing costs from the date of his return.

 

The claim for assistance with mortgage interest payments on No 28 C Close

48. The SPC assessments for the years from 2006 to 2009, referred to at paragraph 40 above, included no allowance for housing costs. The Appellant, however, was in principle entitled to housing costs as part of his SPC claim “in respect of the dwelling occupied as his home” (State Pension Credit Regulations 2002, Schedule II, paragraph 1(1)(a)), i.e. from some date in 2008.

 

49. The amount allowable is by no means clear, not least as the facts are unusual. In March 2004 the Appellant remortgaged No 28 C Close for a new advance of £208,000. He paid off existing mortgages amounting to some £74,000 and transferred the balance of £132,514.26 (after disbursements) to his church. It seems that this was done to raise capital funds for the church, and it appears that the church then took on responsibility for paying the mortgage and making any repairs. There was a further remortgage in 2007, although the circumstances of, and reasons for, this transaction are unclear.

 

50. The principles set out in Schedule II of the State Pension Credit Regulations 2002 would imply that the Appellant’s entitlement to help with housing costs would be limited to whatever his liability was on the original loan, and not on the further advance for the church obtained by way of the remortgage. The onus is on the Appellant to show what that underlying original liability was. The onus is also on the Appellant to obtain evidence from the church detailing whether or not they have made payments under the mortgage and, if so, for how long and in what amounts.

 

51. However, if the church was indeed meeting some or all of the mortgage for the period when the Appellant was living at No 28 C Close, what effect would that have on his SPC entitlement? The Secretary of State’s further submission should address this issue. On the face of it, and subject to any other special rules, the mortgage was still in the Appellant’s name and secured on his property, and so the liability for housing costs should have been included in his SPC assessment so long as it was his home. In the context of other means-tested benefits, any payments by the church would then be brought into the other side of the equation as income. However, SPC works on a different basis, in that only named categories of income are taken into account. It is by no means clear that payments of mortgage interest by a third party fall to be taken into consideration as income under regulation 15 of the State Pension Credit Regulations 2002.

 

Directions for the hearing of the remitted appeal against the entitlement decision

52. I make various directions for the re-hearing of the remitted appeal against the entitlement decision at the head of these reasons. I also make the following more specific directions.

 

53. First, the Appellant is directed to write to the regional tribunal office of Her Majesty’s Courts and Tribunals Service (HMCTS) in Sutton (“the FTT Office”) within one month of the issue of this decision. He is asked to provide answers to the following four questions:

 

·        Which addresses did he live at and for which periods between September 2006 and September 2009?

·        How much was the outstanding loan and how much was his monthly mortgage liability on No 28 C Close before the re-mortgage in March 2004?

·        What is his estimate of the valuation of No 28 C Close as at September 2006? (While it may not be realistic to expect an estate agent’s valuation, a rough figure for that period can be arrived at by using one of the house price tools on the internet, extrapolating from current values or known values at other dates).

·        After September 2006, for which periods and in what amounts did his church pay part or all of the mortgage on No 28 C Close?

 

54. Second, the Secretary of State’s representative is directed to send a supplementary submission to the FTT Office in Sutton, again within one month of the issue of this decision, dealing with the following five issues:

 

·        The Appellant’s entitlement, if any, to SPC, for the period between 2006 and 2009, explaining in particular how the earnings of the Appellant’s wife have been assessed and for which periods they have been attributed.

·        A copy of the letter from the Appellant reporting his return to No 28 C Close, and auctioned on 5 March 2008, should be produced.

·        The Secretary of State’s representative should obtain from the London Borough of Merton a copy of a transcript of the Appellant’s interview under caution on 1 April 2008 and produce it to the FTT.

·        The Pension Service’s original submission to the FTT refers to two letters sent to the Appellant on 7 August 2009, but only one is produced (asking for employment details). The Secretary of State’s representative should produce a copy of the other letter (stating there was no entitlement to SPC from 16 March 2009).

·        If the church was contributing to the mortgage payments on No 28 C Close while the Appellant was living there, how should such payments be treated for the purposes of the Appellant’s claim to SPC?

 

Conclusion

55. The Appellant’s appeal is allowed. The FTT’s decision is set aside; it now has no effect.

 

56. The Upper Tribunal re-makes the decision on the underlying appeal against the overpayment decision of 23 February 2010 in the terms set out at paragraph 32 above.

 

57. The Upper Tribunal remits for re-hearing the underlying appeal against the entitlement decision of 9 February 2010. The Appellant is directed to answer the questions at paragraph 53 above. The Secretary of State’s representative should prepare the supplementary submission as directed in paragraph 54 above. The new FTT should find the necessary facts, apply the relevant law and decide the Appellant’s appeal against the entitlement decision.

 

Postscript

58. The present status of the Appellant’s SPC claim is unclear from the file. In his earlier application to have the FTT decision set aside, he asked for his award to be reinstated. The FTT, of course, can only consider circumstances as they were up to the date of the relevant decisions in February 2010. Once the remitted appeal on entitlement is dealt with by the FTT, the Secretary of State may well need to examine the question of the Appellant’s subsequent entitlement to SPC.

 

 

 

 

 

 

Signed on the original Nicholas Wikeley

on 15 July 2013 Judge of the Upper Tribunal