[2007] NISSCSC C4_07_08(IS) (20 November 2007)

Decision No:  C4/07-08(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Application by the claimant for leave to appeal
and appeal to a Social Security Commissioner
on a question of law from a Tribunal’s decision
dated 25 August 2005

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	In this case the claimant seeks leave to appeal against the decision of the appeal tribunal, whereby it was held that the decision of the decision-maker to average the claimant’s wife’s income over a twelve month cycle, with income of £89.67 taken into account, was correct.  Accordingly the claimant’s appeal was disallowed.

2.	I grant leave to appeal and, with the consent of the parties, I treat this application as if it were an appeal.

3.	The claimant claimed income support (IS) on 20 July 2004.  His claim covered himself and his wife.  The claimant is presently incapable of work and claimed IS on the basis of incapacity.  This claim of 20 July 2004 was a new claim but followed a number of previous claims, interrupted by short breaks due to his wife’s earnings.  The claimant’s wife is a classroom assistant working with children with special needs.  She has worked as a part-time teaching assistant since 2 November 1993.  Her hours were initially 15 hours per week but these increased to 23 hours at least five years ago.  Accordingly she now works 23 hours per week during school term-time (18 hours per week as a general teaching assistant and five hours per week in a supervisory role).  The current arrangements are that during holiday periods she does not work but is paid a retainer fee (ie, a nominal payment considerably below her normal remuneration).  This arrangement came into effect some years ago following negotiations between trade unions and education authorities.  Her contract with the Education and Library Board is a continuing contract, subject to either party being able to terminate the contract with appropriate notice.  Accordingly the claimant’s wife’s employment was not a series of fixed-term contracts.  She worked originally at a primary school until moving to a boys’ high school in September 2006.  However the change in school did not entail any change in the number of hours worked.  

4.	The claimant’s claim for IS followed a temporary break in a previous claim because the claimant’s wife’s earnings for the previous four weeks left the couple exceeding their applicable amount.  Up until this point the couple’s income had always been assessed on a four weekly basis with an appropriate deduction made from IS, subject to the rules on earnings/income disregards.

5.	On 3 August 2004 the claimant was awarded IS from 22 July 2004 onwards.  However, on 5 August 2004 the claimant sought a review of this decision on the basis that he was not entitled to IS until 29 July 2004 due to his wife’s earnings covering the period 1 July to 28 July 2004.  Nevertheless, on 6 August 2004 the local social security office replied confirming that the original decision was correct. 

6.	On 3 September 2004 a home visit was conducted by the Social Security Agency.  The claimant continued to provide a regular update of his wife’s earnings payable every four weeks.  Also, on a number of occasions in November 2004 the Social Security Agency sought information from the Education and Library Board on the claimant’s wife’s earnings.  

7.	On 7 December 2004 a decision was made by a decision-maker to take the average of the claimant’s wife’s earnings into account over the period 11 December 2003 to 11 November 2004.  The normal life cycle was based on a 52 week period.  However, the life cycle period was reduced by five weeks to take into account periods in which the claimant’s wife was off work due to sickness.  As a result entitlement to IS was based on the couple having an income of £5154.67 for the period 11 December 2003 until 11 November 2004.  This was divided by 47, as the number of weeks she actually worked, resulting in a weekly figure of £109.67.  When the £20 disregard was applied a figure of £89.67 was the relevant figure to be taken into account.

8.	Close examination has revealed that the five week period was not the exact period that the claimant’s wife was off work as she was off work for 20 working days, then two more days and, finally, another two days.  The total of 24 days therefore actually amounts to 4.8 weeks.

9.	On 11 January 2005 an explanation of the Department’s decision was given by the Social Security Agency.  On 3 February 2005 an appeal by the claimant against the decision of 7 December 2004 was received by the Social Security Agency.  A late appeal was granted and on 25 August 2005 the appeal was heard at an appeal tribunal.  The decision of the tribunal was that set out at paragraph one herein.  

10.	On 8 November 2005 the tribunal gave reasons for its decision in the following terms:

“The facts were that the Department decided that, as the claimant’s wife’s income was fluctuating, her income should be averaged.  The Department concluded that there was an annual cycle and that accordingly, her income should be averaged over 1 year.  The claimant did not dispute the fluctuation, or the fact that there was an annual cycle.  It appeared from the evidence that during the course of the year examined the Department disregarded a period of 5 weeks during which the claimant’s wife was in receipt of statutory sick pay.  These 5 weeks they disregarded on the basis that Regulation 32(6)(a) General Regulation provides for the inclusion of periods in which no work is done (in this case school holidays) but the disregarding of other periods of absence.  The Tribunal considers that absence due to sickness falls within this definition and the disregard was correct.  The Tribunal is reinforced in this view by the inclusion of statutory sick pay in Schedule 9 which deals with disregards.

The claimant’s contention was that there should have been a further disregard of a period of 4 weeks during the year when he was not in receipt of any benefit whatsoever.  He quite clearly was out of the system for such a period.  That fact was accepted by the Department.  The question for the Tribunal is whether the period should be excluded both as to earnings and as to time.  In the Tribunal’s view it cannot be disregarded.  There is no reference in Regulation 32 to such a disregard, nor is there any such reference in Schedule 9.  In any event the exercise being conducted is to determine the claimant’s wife’s average earnings and the Tribunal cannot see that the claimant’s own benefit status is in any way relevant to that calculation.  While the Social Security Act may regard the claimant was being outside the system for that period, that has no effect on the reality of his wife’s average earnings which do not depend on or have any relationship with the claimant’s benefit status.  Average earnings are a freestanding mathematical exercise governed by the Regulation which make no provision for the disregard of periods when the claimant is outside the system.

It follows that the period of 47 weeks for which the earnings were averaged was correct.  The claimant accepted that the total payments on which the calculations were based were correct and accordingly the average figure was correct also.”

11.	A hearing of the application for leave was arranged.  The appeal was adjourned for the first time on 28 March 2007 at the request of the claimant’s counsel.  However, on 21 May 2007 the application was again  adjourned.  The primary reason was that the claimant’s then solicitor and counsel were endeavouring to get legal aid.  This was a fruitless exercise.  

12.	To cut a long story short, Mr Allamby, solicitor, of the Law Centre has now taken over representation in this case and at the hearing before me on 25 September 2007 he represented the claimant, while Mr Toner of Decision Making Services represented the Department. 

13.	In the paper documentation made available in this case many legal points have been raised.  However, Mr Allamby in his submissions before me has very properly defined the two relevant remaining issues in question form. They are as follows:

1.	Did the decision-maker have any grounds for altering the original decision of 3 August 2004 to change the assessment of the claimant’s wife’s earnings from a four-weekly to a 52 week basis?

2.	If either grounds for supersession or revision are established, should the recognisable cycle of work of 52 weeks have been reduced to 47 weeks by taking out periods of absence due to sickness from the calculation of weekly earnings?

14.	Mr Allamby specifically made it clear that he was accepting two points that were in issue at an earlier stage in the case, namely:

(1)	it is now accepted that the income of both the claimant and his wife should be taken into account together when assessing entitlement subject to earnings and income disregards that apply in the Income Support (General) Regulations (Northern Ireland) 1987 (the IS Regulations);

(2)	it is now accepted that the four week period in which the claimant was not on IS does not materially affect the length of the claimant’s wife’s recognisable cycle of work; as a result, that four week period should not be discounted from any assessment of income over the 52 week period, ie, the payment received during that four week period should be taken into account, as should the four weeks themselves.

15.	Mr Allamby directed my attention to the basic question – was there a basis for either revising or superseding the original decision to assess earnings on a four weekly basis?  He made the uncontroversial but important submission that decision-making is governed by the Social Security (Northern Ireland) Order 1998, in particular Articles 9 to 11.  Article 9 provides the power for the Department to decide an original claim for benefit.  Article 10(1) sets out that any decision of the Department may be revised by the Department either within the prescribed period or in a prescribed set of circumstances.   It also provides that an application may be made on the Department’s own initiative or on an application made for the purpose.  Regulations may prescribe the procedure by which a decision may be so revised.  Article 11 provides that any decision of the Department made under Article 9 or Article 11 or as revised under Article 10 may be superseded by the Department either on the Department’s own initiative or on an application made for the purpose.  The Regulations governing the grounds on which a decision can be revised or superseded are contained in the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999 (the D&A Regulations).

16.	Regulation 3(1) provides that any decision may be revised within one month of the date of notification of the decision.  Regulation 3(5) allows any decision of the Department to be revised at any time where the decision arose from an official error, or was made in ignorance of or based on a mistake as to some material fact (and the result of the ignorance or mistake of fact was that the decision was more advantageous than it might otherwise have been).  

17.	Mr Allamby submitted that in the present case there was no official error or mistake or ignorance of material facts.  The reason for this was that the Department was well aware of the circumstances surrounding the claim as previous awards had entailed the Department receiving regular information from the claimant about the claimant’s wife’s earnings.  As a result, in Mr Allamby’s submission, there has been no mistake or lack of awareness of the material facts.  

18.	The claimant’s wife’s earnings in previous claims and also the claim the subject matter of this appeal were dealt with in accordance with regulation 32(1)(b)(iv) of the Income Support (General) Regulations (Northern Ireland) 1987 and, accordingly, her earnings were reviewed on a four weekly basis.  Under regulation 32(6) the Department has the discretion to modify this approach where a claimant’s income fluctuates.  The Department can, where there is a recognisable cycle of work, assess average income over that recognisable cycle.  However, the failure to utilise the discretion before the decision taken on 7 December 2004, in Mr Allamby’s submission, does not amount to an official error as defined in regulation 1 of the D&A Regulations.  An official error, according to regulation, 1(2), means an error made by:

“(a)	an officer of the Department acting as such which no person outside the Department caused or to which no person outside the Department materially contributed;

 (b) 	a person employed by a designated authority acting on behalf of the authority, which no person outside that authority caused or to which no person outside that authority materially contributed,

but excludes any error of law which is only shown to have been an error by virtue of a subsequent decision of a Commissioner or the court;”

19.	Mr Allamby also drew my attention to regulation 6 of the D&A Regulations which sets out the cases and circumstances in which a decision may be superseded.  The grounds for supersession potentially relevant in this case are:

(1)	a relevant change of circumstances since the decision had effect;

(2)	an error in law;

(3)	the decision was based on a mistake or ignorance of a material fact.

20.	Mr Allamby submitted that there were no grounds for supersession in the present case in that the claimant’s circumstances had not changed, the Department was fully aware of the facts surrounding the claim and subsequent events and, in addition, no mistakes were made with regard to the facts.

21.	Accordingly Mr Allamby submitted not only that there was no basis to revise the decision to award IS on 3 August 2004 but there was also no basis to supersede the decision.  Therefore, the tribunal’s failure to consider whether legitimate grounds existed for revising or superseding the original decision is, in his submission, an error of law.  

22.	Mr Toner submitted that in this particular case we are concerned with its supersession, not revision.  He accepted that there is no mention of supersession in the tribunal’s decision but submitted that, implicitly, it is clear that the tribunal was dealing with this issue.  He also submitted that the Department could have applied regulation 32(6) of the IS Regulations back in July 2004 but was entitled, as it did, to apply regulation 32(1)(b)(iv); it was a matter of discretion for the Department.

23.	While Mr Toner accepted that there was no mention of supersession in the reasons for the tribunal’s decision, he did rely on the fact that the short form decision given on the day specifically states that the decision-maker’s decision was correct and therefore, the tribunal can be taken to have specifically endorsed the decision-maker’s decision which was one of supersession.

24.	He also submitted that regulation 32(6) of the IS Regulations should probably have been applied from the start but he also submitted that the Department was not wrong in law for not so doing.  He submitted that the fluctuating earnings in themselves are a change in circumstances and whether they fluctuated previously or merely in autumn of 2004 is immaterial as each fluctuation is in itself a change of circumstances.  He submitted that it would have been better if this had been spelt out both in the decision-maker’s decision and in the tribunal decision.  However, he accepted that there is no evidence on the papers available as to the contents of the decision-maker’s decision other than that it was made.  

25.	The present case is one where the tribunal has refused the appeal without even stating, let alone explaining or justifying, what was the ground for supersession.  In this respect it is on all fours with the recent decision of Mrs Commissioner Parker in Great Britain decision CSDLA/251/2007.  

26.	The only possible grounds for supersession in this case are (1) relevant change of circumstances, (2) error in law and (3) a decision made in ignorance of, or based upon a mistake as to, some material fact.  

27.	In my view CSDLA 251/2007 gives considerable guidance in relation to these issues.  At paragraph 10 Mrs Commissioner Parker dealt with the issue of change of circumstance in relation to supersession in a disability living allowance case.  In particular she made the following apposite statement:

“… What is required for a relevant change of circumstances is that there is an alteration in some primary relevant fact relating to the appellant’s circumstances.  A different view … is not a relevant change of circumstances. … What has to be demonstrated by the DM is that some relevant primary fact affecting entitlement at the time of the award of higher mobility has altered, providing a ground to look at the decision again; only at that stage could one move to consider entitlement on the merits as at the date of supersession.”

	I agree with Mrs Commissioner Parker that it is a two tier test.  A decision-maker (and a tribunal on appeal) must in the first place find that some relevant primary fact affecting entitlement has altered before moving on to the second stage.

28.	Applying these principles to the present case, there has been no significant change of circumstances as the situation that had pertained in July 2004 was continuing in so far as that there were fluctuations in the earnings of the claimant’s wife (on a similar basis to the fluctuations that had been occurring for a number of years).  Accordingly, in my view there was no relevant change of circumstances between July 2004 and December 2004.

29.	Was there an error in law?  Mr Toner has made it entirely clear that, in his submission, the decision-maker was entitled to calculate the weekly amount of income in accordance with regulation 32(1)(b)(iv) of the IS Regulations.  I consider that Mr Toner is correct on this point.  

30.	I take the view it cannot be argued that the decision-maker in August 2004 applied the wrong legal test or exercised a judgment in applying that test such as no reasonable decision-maker could do on the basis of the facts found and having regard to the evidence – the test set out by Mrs Commissioner Parker at paragraph 11 of CSDLA 251/2007. Accordingly it cannot be said that the August 2004 decision was erroneous in point of law.

31.	The question remains was the decision made in ignorance of, or was it based upon a mistake as to, some material fact.  However, in the present case it has not even been argued that the August 2004 decision was based on any mistake or ignorance of material facts.  

32.	In these circumstances I conclude that the tribunal has erred in law in affirming the decision of the decision-maker.  Therefore the effect of this decision is to set aside the decision of the decision-maker.  If the decision made hereafter wishes to supersede the decision of 3 August 2004, proper grounds will have to be established – see paragraph 26 herein.

33.	The other legal point in this case concerns the propriety of taking out periods of absence due to sickness from the calculation of weekly earnings.  This is no longer an issue in light of my decision in relation to supersession.  Any findings I would make would accordingly be obiter dicta.  I realize that this issue may arise in the future.  I therefore hope that any tribunal asked to deal with this issue has the assistance of a complete and reasoned submission supporting the Department’s position, if it is maintained.  Suffice to say I am far from satisfied, through no fault of the individual advocates before me, that proper consideration has been given by the Department as to whether it is entitled to exclude periods of absence due to sickness from the calculation of weekly earnings.  My comments in this paragraph are in no way indicative of support for either Mr Toner’s or Mr Allamby’s submissions on this point.

34.	I allow the appeal.

(signed):  J A H Martin QC

Chief Commissioner

20 November 2007