IN THE UPPER TRIBUNAL Case No: CH/4490/2014

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE KNOWLES QC

 

 

Decision:  The Appellant’s appeal is allowed.

 

The decision of the First-tier Tribunal sitting in East London dated 2 June 2014 under file reference SC102/14/00052 involves an error on a point of law and is set aside. The Upper Tribunal remakes that decision in the following terms:

 

“The Appellant’s appeal is allowed. The amount of the recoverable overpayment of both housing and council tax benefit as calculated by Respondent is incorrect because the Respondent has not deducted the entitlement of the Appellant’s wife to housing benefit and council tax benefit during the period of the overpayment. This matter is remitted to the Respondent who shall calculate the Appellant’s wife’s entitlement to both housing and council tax benefit and deduct the same from the recoverable amount of the overpayment.

In default of agreement between the parties as to the new calculation of the recoverable overpayment, this matter may be restored by either party to the Upper Tribunal within 28 days of the written notification to the Appellant of the new calculation.”

 

 

 

REASONS FOR DECISION

 

 

The Issue in this Appeal

 

 

1.        The issue in this appeal concerns the calculation of a recoverable overpayment of housing and council tax benefit from the Appellant. It was argued by the Respondent local authority that the amount of a recoverable overpayment could not be reduced by offsetting any entitlement of the Appellant’s wife to benefit in respect of the whole or part of the overpayment period. The First-tier Tribunal [“the tribunal”] accepted this argument and dismissed the Appellant’s appeal.

 

2.        I have allowed this appeal as the tribunal made a material error of law in that it failed to apply regulation 104(1) of the Housing Benefit Regulations 2006 correctly. This regulation concerns the sums which are to be deducted by local authorities when calculating recoverable overpayments. I have set aside the tribunal’s decision and remade it as set out above.

 

3.        Reference in this ruling to housing benefit should also be taken to include council tax benefit. Both these benefits were the subject of a recoverable overpayment and the legislation pertaining to each is, for that purpose, exactly the same. The arguments made by each of the parties apply to both benefits as does the substance of my ruling.

 

Factual Background

 

4.        The Appellant was in receipt of housing and council tax benefit for a property in which he resided with his wife and four children. Both his claim and the award for housing and council tax benefit were in his name alone. He was in receipt of Employment and Support Allowance which passported him to these local authority benefits.

 

5.        The Appellant went abroad on 25 June 2012 and returned to the UK on 7 November 2012. During this time his wife and four children remained resident in the family home.  On 24 October 2012 the Department for Work and Pensions notified the local authority that the Appellant’s award of Employment and Support Allowance had been terminated with effect from 25 September 2012. On 26 October 2012 the Respondent suspended the Appellant’s entitlement to benefits from 22 October 2012 and requested information from him. He did not respond and thus his award of housing and council tax benefit was terminated from 30 September 2012.

 

6.        Following the receipt of further information about the Appellant’s absence, the Respondent determined on 7 May 2013 that the Appellant was not entitled to housing and council tax benefit from 2 July 2012 to 30 September 2012. This was because he was absent for a period which exceeded 13 weeks. As a result, housing benefit of £4,790.50 and council tax benefit of £264.22 had been overpaid for this period and was recoverable from the Appellant as he had failed to notify the Respondent of his absence.

 

7.        The Appellant initially appealed on the basis that he had been advised to go abroad on medical advice but this ground was not pursued at the tribunal hearing. Instead he argued through his representative that the Respondent had a duty pursuant to regulation 104(1) of the Housing Benefit Regulations 2006 [“the HB Regulations”] to calculate the underlying entitlement to benefit of the Appellant’s wife when calculating the amount of the recoverable overpayment. He did not dispute that a recoverable overpayment for the period from 2 July 2012 to 30 September 2012 had been correctly made in his case.

 

8.        Neither party requested an oral hearing and the tribunal dealt with the matter on the basis of the bundle of evidence and submissions from both parties. On 4 March 2014 the tribunal upheld the decision of the Respondent that the Appellant was not entitled to housing and council tax benefit between 2 July 2012 and 30 September 2012 because he was absent for longer than the permitted period. It also decided that there was no underlying entitlement by reason of his absence since his claim was terminated. His wife might have been entitled to claim these benefits but had not submitted a valid claim to the Respondent. The overpayments as calculated were recoverable in full.

 

9.        The Appellant sought permission to appeal the tribunal’s decision on the basis that the tribunal had made an error of law in failing to determine the Appellant’s wife’s underlying entitlement to benefit when calculating the amount of the recoverable overpayment. On 31 July 2014 the First-tier Tribunal granted permission to appeal on the basis that it was appropriate for the Upper Tribunal to consider whether the tribunal applied the relevant law correctly to this issue.

 

10.     I gave case management directions on 20 October 2014. However the Respondent failed to provide a written submission as directed. On 18 May 2015 I indicated that, unless I received a response from the Respondent within a fortnight, I would consider issuing a witness summons pursuant to rule 16(1)(b) of the Tribunal Procedure (Upper Tribunal) Rules 2008 requiring a senior officer of the Respondent to attend before me in order to explain why the Respondent had not complied with my case management orders.

 

11.     The Respondent duly submitted a response within the time allowed which did not support the appeal. The Appellant replied to that submission and confirmed, as had the Respondent, that an oral hearing of this appeal was not necessary.

 

12.     I have read all the evidence and the submissions in the bundle very carefully. Given the narrow basis on which permission was granted, this decision focuses on the tribunal’s attention to and treatment of the law relating to the calculation of recoverable overpayments of housing and council tax benefit.

 

The Tribunal’s Decision

 

13.     The tribunal received submissions from both parties on the applicable law. The Appellant submitted that his wife’s entitlement to benefit should have been considered and deducted from the recoverable amount. He relied on regulation 104(1) of the HB Regulations and drew the tribunal’s attention to guidance produced by both Shelter and the Department for Work and Pensions which emphasised that, before overpayments can be recovered, underlying entitlement must be calculated and deducted.

 

14.     The Respondent submitted that, as the Appellant’s claim had ceased, any entitlement of his wife to benefit would have to have been the subject of a separate claim since there is no concept in the HB Regulations of a joint claim for housing benefit.

 

15.     The tribunal accepted that the Appellant’s wife together with their four children had continued to occupy the relevant property throughout the time that the Appellant was abroad. It also accepted that her details and those of the Appellant’s children had been provided to the Respondent for the purposes of calculating benefit.

 

16.     However the tribunal found that, while the Appellant’s wife may have had her own potential entitlement to housing and council tax benefit, this was not part of his claim which ceased to be valid after 2 July 2012. It agreed with the Respondent’s submission that unlike, for example, claims for Jobseeker’s Allowance, housing benefit claims were made in the name of and in respect of one person alone. The Appellant had no underlying entitlement to benefit whilst out of the country for an extended period and thus the overpaid amounts of housing and council tax benefit had been correctly calculated. It stated that it had no jurisdiction over any matters pertaining to her separate claim and entitlement to benefit.

 

The Relevant Law

 

17.     Regulation 82(1) of the HB Regulations states that: “In the case of a couple or members of a polygamous marriage a claim shall be made by whichever one of them they agree should so claim or, in default of agreement, by such one of them as the relevant authority shall determine”. The effect of this paragraph is that only one partner in a couple or polygamous marriage may claim housing benefit in respect of the same dwelling. There is thus no such thing as a joint claim for housing benefit. In the circumstances of this case, regulation 2(1) defines “couple” as meaning either (a) man and a woman who are married to each other and are members of the same household or (b) a man and woman who are not married to each other but are living together as husband and wife. There is no dispute that the Appellant and his wife were married and living in the same household and were thus a couple within the meaning of the HB Regulations.

 

18.     Section 130 of the Social Security Contributions and Benefits Act 1992 [“SSCBA”] provides that a person is entitled to housing benefit in respect of certain payments which s/he is liable to make in relation to the dwelling s/he occupies as her/his home. Regulation 7(1)(a) of the HB Regulations deals with the meaning of the phrase “occupies as his home” and provides that this shall be the dwelling normally occupied as his home by that person and members of his family. “Family” has the meaning provided for in section 137(1) SSCBA, namely and in this context, a couple and their children.

 

19.     Regulation 7(13) of the HB Regulations provides that a person shall be treated as occupying a dwelling as his home from which he is temporarily absent for a period not exceeding 13 weeks only if (a) he intends to return to occupy the dwelling as his home; (b) the part of the dwelling normally occupied by him has not been let or sub-let; and (c) the period of absence is unlikely to exceed thirteen weeks. Some exceptions to the thirteen week rule are permissible, for example in cases of sickness. However it is not in dispute that such exceptions did not apply to the Appellant’s absence from his home.

 

20.     Regulation 8(1)(b) of the HB Regulations provides that a partner of a person who is liable to make payments in respect of a dwelling shall also be treated as if they too were liable to make payments in respect of that dwelling. None of the exemptions to that regulation provided for in regulation 9 applied in this case. There was no dispute that the Appellant’s wife could have been treated as liable - for the purpose of housing and council tax benefit - to make rental and council tax payments for the property in which she continued to live whilst the Appellant was abroad.

 

21.     Regulation 104 is entitled “Sums to be deducted in calculating recoverable overpayments”. Regulation 104(1) provides that:

“Subject to paragraph (2), in calculating the amount of a recoverable overpayment, the relevant authority shall deduct any amount of housing benefit which should have been determined to be payable [to the person from whom the overpayment is recoverable or their partner] in respect of the whole or part of the overpayment period – (a) on the basis of the claim as presented to the local authority; (b) on the basis of the claim as it would have appeared had any misrepresentation or non-disclosure been remedied before the decision; or (c) on the basis of the claim as it would have appeared if any change of circumstances [except a change of the dwelling which the claimant occupies as his home] had been notified at the time that change occurred”.

 

22.     The purpose of this provision is to ensure that a recoverable overpayment is calculated with reference to the claimant’s correct circumstances and that any underlying entitlement of either the claimant or his/her partner is deducted from the sum owed. Regulation 104 was revised with effect from 2 October 2000 so that it specified more precisely the deductions to be made in calculating a recoverable overpayment [see Explanatory Note accompanying SI 2000/2331]. The new wording of regulation 104(1) was mentioned by the Court of Appeal in R(H) 5/04 when it was noted that “the amended version requires the authority to carry out the exercise of determining the amount of benefit to which the claimant would hypothetically have been entitled had he submitted a valid claim” [paragraph 21]. Though the Court of Appeal did not consider the revised wording of regulation 104(1) in detail, it commented that “the amendment seems to remove any lack of clarity in the original version” [paragraph 22].

 

23.     Though I have not given specific references to either the primary or secondary legislation applicable to council tax benefit, the relevant provisions for the purpose of this appeal have the same effect as those pertaining to housing benefit.

 

The Parties’ Respective Cases on Appeal

 

24.     The Respondent submitted that there was no concept of a joint claim for housing/council tax benefit: in the case of a couple one person is designated as the claimant. Further, when the designated claimant’s entitlement ends due to him/her leaving the household, a partner included on the original claim has no automatic entitlement to benefit and must claim in their own right.

 

25.     The Respondent acknowledged that regulation 104(1) was amended in 2002 to offset any entitlement attributable to the claimant’s partner from the amount of the recoverable overpayment. However it argued that this amendment was incompatible with the main text of the regulation because any entitlement in respect of a partner cannot be considered to be part of the claim in which the overpayment occurred.

 

26.     In stark contrast, the Appellant argued that the wording of regulation 104(1) was plain and that Parliament had made its intention clear on this issue. Thus, to interpret the regulation to exclude a partner from the calculation of underlying entitlement would be perverse and would go against the clearly stated wishes of Parliament.

 

27.     The Appellant further submitted that regulation 104(1) is not incompatible with regulation 82(1) in that the latter deals with claims for housing benefit and the former deals with the calculation of a recoverable overpayment. Reduction of the overpayment by the amount of a partner’s underlying entitlement does not entitle the partner either to housing benefit or to the payment of housing benefit. Underlying entitlement only affects the amount of the recoverable overpayment.

 

Discussion

 

28.     I have no difficulty in accepting the Appellant’s case and I thus conclude that the tribunal materially erred in law in reaching its decision to dismiss the Appellant’s appeal. My reasoning is set out as follows.

 

29.     I find that there is no incompatibility between regulation 82(1) and regulation 104(1) – each of these regulations address entirely different matters. Regulation 82(1) concerns claims for housing benefit whereas regulation 104(1) concerns the sums to be deducted by local authorities when calculating recoverable overpayments.

 

30.     The Respondent acknowledges that regulation 104(1) was amended in 2002 to offset any entitlement attributable to a claimant’s partner from the calculation of a recoverable overpayment. Its submission that a partner’s entitlement cannot be considered to be part of the claim in which the overpayment occurred conflates two entirely separate matters.

 

31.     The underlying entitlement of a partner as provided for in regulation 104(1) only affects the amount of the recoverable overpayment. It does not entitle the partner to the payment of benefit – the only way that could happen in these circumstances would be for the partner to make their own claim for benefit.

 

32.     In this case there was no dispute that the original claim included details of the Appellant’s wife and four children on the basis that she was dependent on the Appellant. There was no dispute that she and the children had occupied the property throughout the Appellant’s absence and it was also accepted that she had made no claim for benefit during the Appellant’s absence [paragraphs 11 and 15, Statement of Reasons].

 

33.     The wording of regulation 104(1) is plain. Housing benefit to which either the claimant or his partner would have been entitled in respect of the whole or part of the overpayment period [my emphasis] shall be deducted from the amount of the recoverable overpayment. Application of regulation 104(1) requires a two stage process: first of all to look into the past to see what the true circumstances of a claim were had the claimant submitted a valid claim for benefit and to calculate benefit due to either the claimant or his partner on that basis. Having calculated the amount of benefit due, regulation 104(1) then requires the local authority to deduct that amount from the overpayment recoverable from the claimant. This two stage process is consistent with the comments made by the Court of Appeal in R(H) 5/04 [see paragraph 22 above].

 

34.     The tribunal found that the Appellant’s claim ended when his entitlement ended in accordance with regulations 7 and 8 of the HB Regulations and the relevant council tax regulations. He had no underlying entitlement and thus the amount of the recoverable overpayment had been correctly calculated. The tribunal said it had no jurisdiction over any matters pertaining to the “separate claim and entitlement” of the Appellant’s wife to either housing or council tax benefit.

 

35.     What the tribunal failed to exercise was its jurisdiction to determine the amount of the recoverable overpayment from the Appellant by applying regulation 104(1) correctly. The exercise of that jurisdiction required it to go through the steps I have outlined in paragraph 33 above and its failure to do so constituted a material error of law.

 

36.     For these reasons I have concluded that this appeal must succeed.

 

Conclusions

 

37.     I have found in favour of the Appellant and allow his appeal. I am satisfied that I can substitute my own decision for that of the tribunal in this case. The facts and circumstances are sufficiently recorded to allow me to do so.

 

38.     The amount of the recoverable overpayment of both housing and council tax benefit as calculated by the Respondent is incorrect because the Respondent has not deducted the entitlement of the Appellant’s wife to housing benefit and council tax during the period of the overpayment. This matter is remitted to the Respondent who shall calculate the Appellant’s wife’s entitlement to both housing and council tax benefit and deduct the same from the amount of the overpayment recoverable from the Appellant. If there is no agreement between the parties as to the new calculation of the recoverable overpayment, this matter may be restored by either party to the Upper Tribunal within 28 days of the written notification to the Appellant of the new calculation.

 

 

 

 

 

Gwynneth Knowles QC

Judge of the Upper Tribunal

18 August 2015.

 

[signed on the original as dated]