Title: SM v Amber Valley Borough Council and SSWP (HB) [2014] UKUT 37 (AAC) (24/01/2014) ~Housing and council tax benefits~recovery of overpayments~~
Author: slane
Last saved by: joe.ury
Company: Unisys

SM v Amber Valley Borough Council and Secretary of State for Work and Pensions (HB)
		[2014] UKUT 0037 (AAC)

IN THE UPPER TRIBUNAL                                      Appeal No.  CH/4085/2012
ADMINISTRATIVE APPEALS CHAMBER

Before Judge S M Lane

This decision is made under section 12(1) and (2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007.

The decision of the tribunal heard on 24 September 2012 under reference SC034/11/03949 is SET ASIDE because its making involved an error on a point of law. 

The decision is REMADE as follows:

The appellant is liable for a recoverable overpayment of Housing Benefit for the period beginning on the first day of the benefit week relating to 5 January 2011 to 14 March 2011.

The appellant is liable for recoverable excess Council Tax Benefit for the period beginning on the first day of the benefit week relating to 5 January 2011 to 4 April 2011.

The technical overpayment of Council Tax Benefit from 4 April 2011 to 1 April 2012 has not been disputed and is technically recoverable.  

The parties are at liberty to apply to the Upper Tribunal within one month of the date on which the respondent issues a final calculation of the benefit owing for the periods in question if there is disagreement on how the regulations are to be applied.  

REASONS FOR DECISION

1	The appellant, Housing Benefit Authority and the Secretary of State (whom I joined as a party to the appeal to the Upper Tribunal) agree that the decision should be set aside.  I thank them for their helpful submissions in which they unravel the factual riddles in the case and pinpoint the remaining issues between the parties.
2	The Housing Benefit Authority’s original decision dated 29 March 2011 related to an overpayment of Housing Benefit of £803.14 for the period 13 December 2010 – 14 March 2011 and excess Council Tax Benefit of £1290.83 for the period 13 December 2010 to 4 April 2011.  I shall refer to both as ‘overpayments’.  A further technical CTB overpayment occurred for the period 4 April 2011 to 1 April 2012.  The overpayment arose through the appellant’s receipt of a payment of arrears of Widowed Parent’s Allowance followed by a number of periodic payments of that Allowance.  
3	Following the receipt of better particulars about the payment of Widowed Parent's Allowance the appellant received, the Housing Benefit Authority revised the decision and increased the overpayment of Housing Benefit to £5502.08 for the period 23 September 2009 - 13 December 2010 and the overpayment of Council Tax Benefit to £1564.88 for the period 23 March 2009 to 13 December 2010.  This was because the appellant had received a payment of arrears of Widowed Parent's Allowance of £15,323.14 which the Housing Benefit Authority then factored into her previous entitlement, as required by regulation thereby reducing it.  
4	The appellant appealed.  She stated that, following receipt of a letter from the Department of Work and Pensions (DWP) in December 2010 telling her she might be entitled to a back payment of Widowed Parent's Allowance, she had a telephoned call from the relevant office to discuss the back payment.  The DWP sent her a letter dated 5 January 2011 relating to the Widowed Parent's Allowance and on 8 January 2011, she received a back payment of £15,323.14.  She also began to receive further weekly payments of the Allowance for a few months.  These payments suddenly stopped in May 2011, and it appears that this was a further error on the part of the DWP.  The Housing Benefit Authority then raised an overpayment which, she then learned, could affect her benefit going back several years.  She says she might not have accepted the back payment, had she known how it would affect her Housing Benefit.  It is worth drawing to the appellant’s attention that, had she had refused the back payment, it would have been taken into account as notional income in any event under regulation 42 of the Housing Benefit Regulations 2006 and regulation 32 of the Council Tax Benefit Regulations 2006.  
5	The Tribunal determined the appeal on the papers.  It seems to have overlooked the significance of the very large amount of arrears of Widowed Parent's Allowance that the appellant received.  As I pointed out when giving permission to appeal, Pensions Appeals Tribunals Act 1943 can only be backdated for 3 months and was worth about £100 per week, yet the appellant received some £15,000.  
6	The appellant’s representative realised after the decision was given that the amount paid might be a result of an official error by the Secretary of State relating to entitlement or payment of the Allowance.  This was important because, if the overpayments arose because of an official error, the Housing Benefit Regulations 2006 and Council Tax Benefit Regulations 2006 provide claimants with an exception to the Housing Benefit Authority’s strict right of recovery.  
7	Regulation 100(2) and (3) of the Housing Benefit Regulations 2006 (and its equivalent provision, regulation 83 of the Council Tax Benefit Regulations 2006) provide that, where an official error causes an overpayment, and the claimant could not reasonably have been expected to realise that an overpayment was occurring at a material time, the overpayment is not recoverable. However, an error is only an official error, if the claimant did not materially contribute to the mistake. 
8	The precise wording of regulation 100, as relevant, is as follows:
	100(1)	Any overpayment, except one to which paragraph (2) applies, shall be recoverable.   
	100(2)	 Subject to paragraph (4) 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 of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.  
	100(3) In paragraph (2), overpayment which arose in consequence of an official error means an overpayment caused by a mistake made whether in the form of an act or omission by 
		(a) a relevant authority; 
		(b) an officer or person acting for that authority; 
		(c) an officer of – 
			(i) the Department for Work and Pensions; or 
			(ii) Revenue and customs, 
	acting as such; or 
		(d)... 
	where the claimant, a person acting on his behalf or any other person to whom the payment is made, did not cause or materially contribute to that mistake, act or omission. 
9	Regulation 31(2) of the Housing Benefit Regulations 2006 provides for payments of benefit under the benefit Acts to be taken into account for the period in respect of which that benefit is payable.  Regulation 79(7) of the same Regulations provides that, where a 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 the Regulations.  The equivalent provisions for Council Tax Benefit are regulation 21(2) and 67(9).  
10	In order to sort out how the appellant puzzlingly large backdating of Widowed Parent's Allowance arrears, I joined the Secretary of State as a party to the appeal.  In his submission dated 2/10/13, he tells us that the appellant was in receipt of Widowed Parent’s Allowance from 27 March 2007 by an award dated 4 June 2007.  The DWP programmed the details of the award into its computer, in its usual way, to end on 6 April 2008, the day before the appellant’s son turned 16.  It is of assistance here to know that a child’s 16^th birthday is significant to Widowed Parent's Allowance because of the interaction of Widowed Parent's Allowance and Child Benefit:  a parent only remains entitled to Widowed Parent's Allowance whilst she remains entitled to Child Benefit.  Once a child turns 16, entitlement to Child Benefit ends unless the child remains in education.  As a general rule, the DWP makes enquiries about the child’s educational plans to avoid terminating Pensions Appeals Tribunals Act 1943 prematurely.  In this case, however, the DWP did not make its usual enquiries and the Allowance was stopped even though the appellant continued to receive Child Benefit because her son remained in qualifying education.  The Secretary of State says that the information issued to the appellant at the time would not have alerted her to the possibility that the allowance could continue because she remained entitled to Child Benefit.  
11	The Department discovered its error in or around December 2010 and wrote to the appellant, as she herself confirms.  On 5 January 2011 the Secretary of State made a payment of arrears of the Allowance to the appellant amounting to £15,323.14 for the period 8 April 2008 – 3 January 2011.  On 14 December 2011, the Secretary of State made an ex gratia payment to the appellant as compensation for the late payment of benefit.  This is a clear acknowledgment of their mistake.  The Secretary of State then made 4 further payments of the Allowance, but these stopped again after 23/05/11, though the Secretary of State does not know why.  On 3 September 2011, the Secretary of State made a further payment of £1723.65 for the period 24 May 2011 to 5 September 2011.  From 6 September 2011, the Allowance ceased because her son was no longer a qualifying child for Child Benefit.  

12	The Secretary of State accepts that he was at fault.  In his view, the appellant did not contribute to his error and could not reasonably have been expected to realise what was happening and that the termination of Widowed Parent's Allowance was wrong.  I accept that this view is right.  There was, accordingly, an official error though the extent to which it was operative to relieve the appellant of liability for the overpayment must still be determined.

13	The Housing Benefit Authority also agrees that an official error had occurred and say that, had they known the true facts, their decision would have been different, but only for the period up to 20 December 2010.  

14	Finding an error of law by the Tribunal is more difficult since the Tribunal was working with limited evidence and neither the appellant nor her representative attended.  I have come to the conclusion, however, that the Tribunal did err by failing to exercise its inquisitorial function adequately in finding the facts.  I do note that the appellant did not help her case by not sending the DWP’s notification about Widowed Parent's Allowance and its future payment, to the Housing Benefit Authority, despite their request. 

15	, Despite the efforts of the appellant’s representative to persuade me otherwise, I have come to the conclusion that the official error did not relieve the appellant of her liability to repay the overpayment in its entirety.  I set out the two sides of the case.

16	The Local Authority submit that the official error ceased to be an official error under the definition in regulation 100(3) when the appellant failed to report her changed finances, as she was required to do under the relevant Regulations, as soon as reasonably possible after the change occurred.  Had she told the Housing Benefit Authority, they would have been able to reduce her benefit accordingly.  By her failure, therefore, she materially contributed to the overpayment.
 
17	 The appellant’s representative, on the other hand, submits that the appellant could not realistically report the change until she had either received details of it from the DWP or until she could check whether it had gone into her account.  She was away from home over Christmas until 9 January 2011.  He then seeks to avoid liability altogether by saying that the appellant did telephone the Housing Benefit Authority and disclose the payment during the week following her return home but was not advised to confirm this in writing.  He submits that the appellant’s statement that she did not realise that she had to report this change should not be taken at face value.  

18	It seems to me that neither of these approaches is correct.  All overpayments are overpayment unless there is an official error and the requirements of the regulation are fulfilled. The first question to be answered is was there a mistake at all?

19	 On 5 January 2011, the DWP decided to award the appellant arrears and resume payment of Widowed Parent's Allowance.  This decision corrected their previous error in stopping the appellant’s Allowance.  From and including 5 January 2011, there was no error at all and the general rule in regulation 100(1) applied:  the overpayment was recoverable from the appellant.

20	If I am wrong about this, I would not accept the Housing Benefit Authority’s submission that from 22 December 2010 the appellant materially contributed to the overpayment by failing to tell the Housing Benefit Authority about the change relating to Widowed Parent's Allowance.  I do not see that the appellant can be said materially to contribute to an overpayment before she has been properly notified of the award.  

21	I would equally reject the appellant’s representative’s submission that the appellant never became liable for the overpayment because she had telephoned the Housing Benefit Authority in the second week of January (after she returned home following time away at Christmas) to tell them that Widowed Parent's Allowance had been paid.  None of her letters say anything about having disclosed the information to the Housing Benefit Authority.  Indeed, as I mention in the above paragraph, her letter of 15 August 2011 in which she says ‘I did not notify a Widowed Parent's Allowance award as I simply did not realise I had to’ is completely inconsistent with this submission.  

22	The Housing Benefit Authority also draws attention to the number of documents in which claimants are told that they must report changes of circumstances, and to (i) the appellant’s claim form, where she signed a declaration saying she would inform the authority of any change of circumstances which might affect her claim, (ii) the further notifications about her benefits over the course of her claim which included reminders to report changes of circumstance; (iii) that this is a means tested benefit; and (iv) the form itself specifically asks about Widowed Parent's Allowance, which casts considerable doubt on the appellant’s statement that she did simply not know the relevance of receipt of Widowed Parent's Allowance (p105/106).

23	The outcome is that the appellant is liable for a recoverable overpayment of both benefits, with the effective date to be calculated using regulation 79(1) and (7) of the Housing Benefit Regulations 2006 and the equivalent in the Council Tax Benefit Regulations 2006.  The table in the Housing Benefit Authority’s submission dated 7 November 2013 (received 11 November 2013) must be adjusted to reflect this.  The technical overpayment remains recoverable.  The parties may apply to the Upper Tribunal for a ruling if there is a disagreement about the calculations made under the Regulations.

[Signed on original]		S M Lane
		Judge of the Upper Tribunal 
[Date]		24 January 2014

CH/4085/2012