Upper Tribunal (Administrative Appeals Chamber)

 

 

 

 

 

 

IN THE UPPER TRIBUNAL Appeal No. CH/48/2014

(ADMINISTRATIVE APPEALS CHAMBER)

 

BEFORE JUDGE WEST

 

 

DECISION

 

 

The decision of the appeal tribunal sitting at Sutton dated 13 February 2013 under file reference SC154/12/01447 does not involve an error on a point of law. The appeal against that decision is dismissed.

 

This decision is made under section 11 of the Tribunals, Courts and Enforcement Act 2007.

 

 

REASONS

 

 

1. This is an appeal, with the permission of District Tribunal Judge Poynter, against the decision of the appeal tribunal sitting at Sutton on 13 February 2013.

 

2. The appellant is Reigate & Banstead Borough Council. I shall refer to it hereafter as “the Council”. I shall refer to the respondent hereafter as “the claimant”. I shall refer to the tribunal which sat on 13 February 2013 as “the appeal tribunal”.

 

The Facts

3. The Council appeals against the decision of appeal tribunal dated 13 February 2013 that

 

(1) the claimant’s housing benefit and council tax benefit appeal was allowed

 

(2) the Council’s decision dated 26 July 2011 - that there had been an overpayment of housing benefit of £611.24 for the period from 6 June 2011 to 24 July 2011 and an overpayment of council tax benefit of £137.59 for the period from 6 June 2011 to 24 July 2011 (making a total of £748.83) and that the overpayment was recoverable from the claimant (pages 11 to 12) - was set aside

 

(3) the Council should recalculate the claimant’s entitlement to housing benefit and council tax benefit from and including Monday 16 May 2011 on the following basis:

 

(i) for the period from the period from Monday 16 May 2011 to Sunday 5 June 2011 her weekly earned income was nil

 

(ii) for the period from Monday 6 June 2011 to Sunday 3 July 2011 her weekly earned income was £93.54

 

(iii) for the period from and including Monday 4 July 2011 her net monthly income was £976.38

 

(4) the Council should notify the claimant of her revised entitlement, if any, to housing benefit and council tax benefit for that period

 

(5) any overpayment of housing benefit or payment of excess council tax benefit shown to exist by virtue of the recalculation was recoverable from the claimant.

 

4. The claimant’s appeal, which was made, out of time, on 26 October 2011 (at pages 13 to 14), but nonetheless accepted by the Council, first came before the appeal tribunal on 14 May 2012, when neither party attended, but Tribunal Judge Wood made detailed directions (at pages 42 to 44), to which I refer below. The appeal was ultimately relisted for hearing before her on 13 February 2013. She was away on that date and her list was taken at short notice by District Tribunal Judge Poynter, who had had the advantage of reading her detailed directions. Again neither party attended the hearing, but Judge Poynter considered rule 31 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (“the Procedure Rules”) and considered that it was appropriate to proceed in the parties’ absence and determine the appeal. The appeal was allowed. The record of the proceedings appears at page 49. The decision notice appears at pages 51 and incorporates a summary of reasons. There is no full statement of reasons for the reasons which I will explain below.

 

5. The Council initially sought what it described as “clarification” of the decision on 26 February 2013 (pages 52 to 53), but Judge Poynter rightly considered that the letter was not in fact a request for clarification, but in reality was saying that his decision was wrong; the Council must, he said, either implement the decision or appeal against it (page 54). The Council then sought on 9 April 2013 to have the decision set aside (page 55), but the application was almost a month out of time and was in any event rejected by Judge Poynter on 1 July 2013 as being without merit (pages 56 to 57).

 

6. The Council then sought permission to appeal on 1 August 2013 (page 58). In granting permission to appeal Judge Poynter stated that

 

“2. I have extended Reigate’s time for appealing because the letter that was sent to them with my decision notice … and which appears to be a standard letter – does not comply with regulation 33(2)(b) and (c) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (“the Procedure Rules”) in that it does not advise Reigate of their right to apply for a written statement of reasons under rule 34(3) or contain the prescribed information about their right of appeal.

 

3. No written statement of reasons has been requested or issued in this case. Normally, that would mean that under rule 38(7), I would have been obliged to treat the application as being for such a statement. However, I have decided that this is one of the rare cases in which it is appropriate to proceed under rule 38(7)(b) and grant permission to appeal even though there is no statement. In this case I took over the hearing of the appeal at very short notice because District Tribunal Judge Wood was indisposed. She had previously given directions containing a detailed analysis of the applicable regulations. I considered that analysis and formed my own judgment that it was correct. The facts of the case are not substantially in dispute. The issue is a legal one and, as my decision notice makes clear, that I decided that issue as I did because I accepted Judge Wood’s analysis. No purpose would be served by issuing a full statement to that effect.

 

…

 

5. I have granted permission to appeal because whether, for the purposes of housing benefit, earned income payable in arrears is attributed forward from the date of receipt (i.e. as would be the case for income support) or backwards over the period in respect of which it was earned is an issue which would benefit from a decision of the Upper Tribunal. For the reasons given by Judge Wood, I am firmly of the view that the former is the case. I am aware that many, if not most, local authorities administer the housing benefit scheme on the basis that the latter is correct. 

 

6. The Upper Tribunal may also wish to comment on what, if any, consequences flow from a failure to provide a local authority or other first-tier agency [with] the information required by rule 33(2)(b) or (c).”

 

 

7.  The Council also sent notice of the appeal to the Upper Tribunal on 16 December 2013 (pages 61 to 65). Given that permission to appeal had already been granted, on 3 February 2014 Judge Lloyd-Davies made directions for the claimant to submit her observations on the merits of the appeal within one month of the date on which the notice was sent to the parties and for the Council to provide a response within one month thereafter (page 66).

 

8. The claimant has not submitted any observations and accordingly there are no further submissions in response by the Council.

 

9. Neither party has requested an oral hearing and I do not consider that it is necessary to hold one in order to determine this appeal.

 

 

 

 

 

Judge Wood’s Directions

 

10. In order to understand the factual background  to the appeal, it is necessary to set out Judge Wood’s directions (as supplemented in italicised square brackets by the further submissions made by the Council in accordance with her directions on 6 June 2012 (pages 46 to 47)).

 

 

11. Judge Wood stated that

 

“(i) According to the Council’s submission [the claimant] rang the Council on 6/5/2011 to state that she may be starting work on 10/5/2011. It is not clear from the information in the papers when [she] actually started work. [That was confirmed by the Department of Work and Pensions’ computer records to the effect that she had stated work on 10 May 2011. As a result her jobseeker’s allowance ended on 9 May 2011.] However, according to her payslip dated 31/5/2011 she was paid £294 for 49 hours’ work in May.

 

(ii) [She] rang the Council on 6/6/2011 to inform the Council that £285.00 had been paid into her account. The Council [incorrectly] decided that she was not entitled to housing benefit and council tax benefit on the basis of an income of £285 per week.

 

(iii) On 17/6/2011 [the claimant] telephoned the Council and confirmed that her income was £295.00 per month. This was in fact correct in relation to the amount that she was paid on 31/5/2011 (or almost correct – she was paid £294.00) [see the second payslip on page 9]. [She] was asked to bring in her payslip and said that she would do so next week. It seems that [she] did not bring in the payslip at that time but if she had done so, the only one that she would have been able to provide would have been the May payslip. The Council re-instated [her] housing benefit and council tax benefit claim from 21/6/2011 on the basis of the information given by [her]. [She was advised that she must provide her June payslip as soon as she received it so a more accurate assessment could be made.]

 

(iv) [The claimant] took two payslips, the first dated 31/5/2011 and the second dated 30/6/2011, into the Council’s Help Shop on 15/7/2011. The payslip dated 30/6/2011 showed that [she] had earned £976.38 for the month of June (her first full month of work) for 164.75 hours’ work plus 6.50 hours on a bank holiday [see the first payslip on page 9].

 

(v) The Council has attributed the pay that [she] received at the end of June to the period from the beginning of June. But by the beginning of June the only pay that [the claimant] had received was the pay that she received for the work she did in May. What provision in the Housing Benefit Regulations authorises the attribution that the Council has adopted?

 

(vi) The only relevant provisions that I have found are regulation 29(3) (as [she] was in receipt of housing benefit when she started work) and regulation 79(1) and (8) of the Housing Benefit Regulations.

 

(vii) Regulation 29(3) refers to a local authority estimating a claimant’s likely earnings where her earnings change during an award. As the Council was aware that [the claimant] had only started work part-way through May, was it an error to take her earnings for the month of May as her likely earnings?

 

(viii) Regulation 79(1) and (8) concern the date from which change of circumstances are to be taken into account. There would appear to be two changes of circumstance in this case: (i) the wages that she received at the end of May, which altered the amount of housing benefit she was entitled to, and (ii) the increased wages that she received at the end of June which were sufficient to end her entitlement to housing benefit. Why were these changes of circumstances not taken into account from the first day of the benefit week following the date on which that change occurred (i.e. Monday 6/6/2011 and Monday 4/7/2011 respectively)?

 

(ix) But none of the provisions referred to above deal directly with the period for which earnings are to be attributed. In this connection the Council is referred to R(PC) 3/08, in particular paragraphs 20-27. That decision concerns that state pension credit scheme, which like the housing benefit scheme, does not have provisions which state that payments are to be treated as paid on any particular date or be taken into account for any particular period. However, Judge Mesher stated that the state pension credit legislation must operate on “an assumed notion of a period of attribution of income”. So must the housing benefit scheme in my view. The issue in R(PC) 3/08 was the date that income metamorphosed into capital but it seems to me that the general principle applied by Judge Mesher in that case was that where income is paid in respect of  a period it should be taken into account for a length of time equal to that period. On that basis, it seems to me that the wages paid to [the claimant] at the end of May should be taken into account from 6/6/2011 and the wages paid at the end of June should be taken into account from 4/7/2011.”

 

 

 

12.  Although the Council did comply with the directions, the claimant did not (despite two reminders) and the telephone number which she had provided was not in use (indeed it seems that she has moved from the premises and her current whereabouts are not clear).

 

 

The Appeal Tribunal’s Decision Notice & Summary of Reasons

13. In the material paragraphs of its decision notice the appeal tribunal made the determination to which I have referred in paragraph 3 above and in the summary of reasons Judge Poynter said that:

 

 

“I agree with Judge Wood’s analysis on pages 42-43 of the appeal papers. Income falls to be attributed forward, rather than back. So [the claimant] had no earned income until she was actually paid at the end of May 2011. Her income during June 2011 was the £294 she had earned between 10 May and 31 May (apportioned as £93.54 on a weekly basis (£294 ÷ 22 x 7) and from the first benefit week in July it was the weekly equivalent figure of the monthly figure that she was paid at the end of June.”

 

14.   In essence what Judge Poynter did was to accept the correctness of Judge Wood’s analysis and to adopt it by reference into his decision. As he rightly said, the facts of the case were not substantially in dispute and the germane issue was one of law. There would have been no point in him laboriously copying out her directions with her analysis and turning them into a full statements of reasons when his summary of reasons incorporated her original text by reference. I therefore consider that he was correct to dispense with the requirements of rule 38(7)(b) of the Procedure Rules on 1 August 2013 when granting permission to appeal.

 

 

Attribution of Income

15.   In my judgment Judge Wood was correct (and Judge Poynter was therefore correct in following her) in determining that earned income payable in arrears falls, for housing benefit purposes, to be attributed forward from the date of receipt rather than backwards over the period in respect of which it was earned. On the facts of this case the result was that the claimant had no earned income until she was actually paid at the end of May 2011. Her income during June 2011 was the sum of £294 which she had earned in the 22 days between 10 May and 31 May (apportioned on a weekly basis as £93.54) and from the first benefit week in July it was the weekly equivalent figure of the monthly figure which she was paid at the end of June. In other words, the wages paid to the claimant at the end of May should have been taken into account from 6 June 2011 and the wages paid to her at the end of June should have been taken into account from 4 July 2011.

 

16. In R(PC)3/08 Mr Commissioner Mesher (as he then was) stated, in the context of state pension credit:

 

“Further, the SPC legislation must operate on an assumed notion of a period of attribution of income, to use the Secretary of State’s term. It seems to me that there is a hole in the legislative scheme. The conditions of entitlement are in terms of whether a claimant “has” income. That test must be applied primarily as at the first day from which SPC could be awarded, but it is left unstated just what having income at that date means. There are no general provisions that payments are to be treated as paid on any particular date or to be taken into account for any particular period (although regulation 13B of the SPC Regulations provides, for purposes that I currently do not understand, for the day of a week on which various benefits are to be treated as paid and with effect from 5 April 2004 regulation 17ZA deals with final payments of income). Yet the scheme must work on the basis that someone like the claimant, who received a payment of retirement benefit before the first day of potential entitlement to SPC (6 October 2003) and was due to receive the next payment after that date and the benefit week containing that date, had that income at that date. An unstated principle of attribution must operate. Although the express purpose of regulation 17 of the SPC Regulations is merely the conversion of amounts into weekly income, it both supports the taking into account of actual payments of income (as opposed to the existence of sources of income) and having regard to the period in respect of which a payment of income is made. Accordingly, even if I were wrong in the previous paragraph, I would still reject the Secretary of State’s submission against applying the principles of R(IS) 3/93.”

 

 

17. It is true that R(PC) 3/08 was concerned with the state pension credit scheme rather than the housing benefit scheme, but the two benefits are alike in this material respect, namely that neither has any provisions which state that payments are to be treated as paid on any particular date or to be taken into account for any particular period. If, as Mr Commissioner Mesher determined, the state pension credit legislation must operate on “an assumed notion of a period of attribution of income”, I do not see that housing benefit can or should in principle be any different. Whilst the precise issue before Mr Commissioner Mesher in R(PC) 3/08 was the date on which income metamorphosed into capital and the principle in R(IS) 3/93 (see paragraphs 23 and 25), the applicable issue of general principle in the case was that where income is paid in respect of a period it should be taken into account for a length of time equal to that period.

 

18. Regulation 79 of the Housing Benefit Regulations, which deals with the date on which a change of circumstances takes effect, provides so far as material:

 

“(1)  … a change of circumstances which affects entitlement to, or the amount of, housing benefit (“change of circumstances”) shall take effect from the first day of the benefit week following the date on which the change of circumstances actually occurs, and where that change is cessation of entitlement to any benefit under the benefit Acts, the date on which the change actually occurs shall be the day immediately following the last day of entitlement to that benefit.

 

…

 

(8) … where a change of circumstances occurs which has the effect of bringing entitlement to an end it shall take effect on the first day of the benefit week following the benefit week in which that change actually occurs except in a case where a person is liable to make payments, which fall due on a daily basis, in which case that change shall take effect on the day on which it actually occurs”.

 

 

19.  On the facts of this case there were two changes of circumstance:

 

(i) the wages which the claimant received at the end of May, which altered the amount of housing benefit to she was entitled 

 

(ii) the increased wages which she received at the end of June which were sufficient to end her entitlement to housing benefit.

 

On the construction of regulation 79(1) and 79(8) respectively, those changes of circumstances should have been taken into account from the first day of the benefit week following the date on which the relevant change occurred: in the former case on the following Monday, 6 June 2011, in the latter on the following Monday, 4 July 2011, respectively.

 

20.  Regulation 79(7), on which the Council apparently sought to rely in its letter of 26 February 2013 (pages 52 to 53) does not apply to this case. What the regulation provides is that

 

“(7) Without prejudice to paragraph (6), where the change of circumstances is the payment of income, or arrears of income, in respect of a past period, the change of circumstances shall take effect from the first day on which such income, had it been timeously paid in that period at intervals appropriate to that income, would have fallen to be taken into account for the purposes of these Regulations”.

 

 

21. In other words, regulation 79(7) applies to payments of income or arrears of income (including benefit income) for a past period which were due earlier but paid late (i.e. not timeously). It does not apply to receipt of earned income which is paid in arrears, but nevertheless paid on the contractually stipulated date.

 

22. Regulation 29 of the Housing Benefit Regulations, which deals with the average weekly earnings of employed earners, provides so far as material:

 

 

“(1)  Where a claimant’s income consists of earnings from employment as an employed earner his average weekly earnings shall be estimated by reference to his earnings from that employment—

 

(a) over a period immediately preceding the benefit week in which the claim is made or treated as made and being a period of—

 

(i) 5 weeks, if he is paid weekly; or

 

(ii) 2 months, if he is paid monthly; or

 

(b) whether or not sub-paragraph (a)(i) or (ii) applies, where a claimant’s earnings fluctuate, over such other period preceding the benefit week in which the claim is made or treated as made as may, in any particular case, enable his average weekly earnings to be estimated more accurately.

 

(2) Where the claimant has been in his employment for less than the period specified in paragraph (1)(a)(i) or (ii)—

 

(a) if he has received any earnings for the period that he has been in that employment and those earnings are likely to represent his average weekly earnings from that employment his average weekly earnings shall be estimated by reference to those earnings;

 

(b) in any other case, the relevant authority shall require the claimant’s employer to furnish an estimate of the claimant’s likely weekly earnings over such period as the relevant authority may require and the claimant’s average weekly earnings shall be estimated by reference to that estimate.

 

(3) Where the amount of a claimant’s earnings changes during an award the relevant authority shall estimate his average weekly earnings by reference to his likely earnings from the employment over such period as is appropriate in order that his average weekly earnings may be estimated accurately but the length of the period shall not in any case exceed 52 weeks”.

 

23.  Judge Wood noted that the applicable regulation was regulation 29(3), not regulation 29(2), because the claimant was in receipt of housing benefit when she started work: she had been in receipt of housing benefit from 11 May 2010 (page 1). Judge Wood was right in my view to hold that it was an error to take the claimant’s earnings for the month of May as her likely earnings given that she only started work part way through May. Sub-paragraph (3) deals with changes in a claimant’s earnings during the currency of an award of benefit i.e. a relevant change of circumstances. Regulation 79 specifies the date on which the changes will take effect. Regulation 29(3) obliges the local authority to amend the claimant’s entitlement to housing benefit when such a change becomes effective. The averaging process is not bound by sub-paragraph (1), which by contrast applies only to determination of entitlement on a claim. Sub-paragraph (2) deals with the situation where the claimant has not yet been in employment for the appropriate period under, in this case, sub-paragraph (1)(a)(i), viz. 5 weeks.

 

 

Defects in the Form of the Covering Letter

24. Rule 33 of the Procedure Rules provides that

 

“(2) … the Tribunal must provide to each party as soon as reasonably practicable after making a decision which finally disposes of all issues in the proceedings … —

 

(a) a decision notice stating the Tribunal’s decision;

 

(b) where appropriate, notification of the right to apply for a written statement of reasons under rule 34(3); and

 

(c) notification of any right of appeal against the decision and the time within which, and the manner in which, such right of appeal may be exercised”.

 

25.  The official letter under cover of which the decision notice was sent out was defective in that it did not comply with either sub-paragraph (b) or sub-paragraph (c) (although the defect seems to have been addressed since a later letter of 4 July 2013 does contain the requisite information).  On the facts of the case the right to apply for a written statement of reasons would in fact have been unnecessary given that the summary of reasons in the decision notice effectively incorporated Judge Wood’s analysis and directions by reference, but in most cases that will not be so. The covering letter ought of course to comply with rule 33(2), but if in a particular case it does not I agree with Judge Poynter that that is not a ground for impugning the validity of the underlying decision made by the appeal tribunal and is not a justification for setting the antecedent decision aside. It may, in appropriate circumstances, be a ground for extending time for seeking permission to appeal, although in ordinary circumstances one would expect a local authority or first-tier agency to know (or to have the means of ascertaining very quickly) that there was a right to apply for permission to appeal and to know that that application would have to be made expeditiously and within a defined time limit. One would therefore usually expect a local authority or first-tier agency applicant for permission to appeal out of time to explain cogently, in its grounds for seeking permission, why it had not applied in time and why it was appropriate for time to be extended in its case.

 

Conclusion

26. The Council should therefore recalculate the claimant’s entitlement to housing benefit and council tax benefit from and including Monday 16 May 2011 on the following basis:

 

(i) for the period from the period from Monday 16 May 2011 to Sunday 5 June 2011 her weekly earned income was nil

 

(ii) for the period from Monday 6 June 2011 to Sunday 3 July 2011 her weekly earned income was £93.54

 

(iii) for the period from and including Monday 4 July 2011 her net monthly income was £976.38

 

and notify the claimant accordingly.

 

27. For these reasons I dismiss the appeal.

 

 

Signed Mark West

Judge of the Upper Tribunal

 

 

 

Dated 9 May 2014