R(IS) 15/93

Mr. J. J. Skinner	CIS/303/1992
10.12.92 	
Housing costs - restriction of housing costs - whether restriction may be reviewed when interest rates decrease
The claimant, who had been receiving supplementary benefit followed by income support since 1986, bought a house for £70,000 in 1989. On 29 August 1990, a tribunal (the first tribunal) decided that the amount allowed in the claimant’s income support for housing costs should be restricted to the amount she would have had to borrow if she had bought a property for £55,000. Her housing costs were assessed at £126 per week.
On 14 November 1990, an adjudication officer reviewed the tribunal’s decision on a relevant change of circumstances, that is, the reduction in interest rates. The revised decision allowed housing costs at £119.73 per week. The claimant appealed against this decision to a second tribunal. The claimant’s representative argued that this tribunal should review the decision of the first tribunal on the ground that it was no longer reasonable to expect the claimant to seek cheaper alternative accommodation. The second tribunal decided that the change in the interest rate was a relevant change of circumstances entitling the adjudication officer to review the decision of the first tribunal. But they refused to revise the decision of that tribunal relating to allowable housing costs. The claimant appealed to the Commissioner.
Held that:
1.	the reduction in the mortgage interest rate is a relevant change of circumstances giving grounds for review under section 25(l)(b) of the Social Security Administration Act. Neither the provisions in paragraph 7(8) of Schedule 3 to the Income Support (General) Regulations 1987 nor regulation 69(2) of the Social Security (Adjudication) Regulations 1986 applied in this case (para. 6);
2.	if a claimant can establish grounds for review of a decision relating to the restriction of housing costs for the first time at the tribunal hearing, it is open to the tribunal to deal with the matter as a question first arising under section 36 of the Social Security Administration Act 1992. The duty of a tribunal is to consider whether they should exercise their discretion under this section. In the present case, the tribunal erred in law in not considering whether or not to use their discretion to deal with the wider change of circumstances that was before them. But this does not mean that when there are grounds for review the whole determination is thrown open for consideration (paras. 7 and 8).
The appeal was allowed. The Commissioner remitted the case to another tribunal for rehearing.

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1.	My decision is that the decision of the social security appeal tribunal is erroneous in point of law and accordingly I set it aside; I remit the case for determination to a new social security appeal tribunal who should have regard to what I have said in the course of this decision.
2.	I held an oral hearing of this appeal. Mr. V. Willson of the Devon Welfare Rights Unit represented the claimant and Mr. M. Jenking‑Rees from the Solicitor’s Office in the Department of Social Security was for the adjudication officer.
3.	This is a claimant’s appeal against the decision of the Torbay social security appeal tribunal given on 26 June 1991 which upheld a decision of the adjudication officer that the claimant was entitled to housing costs of £119.73 per week from 30 October 1990 and to no more. The decision of the tribunal dealt only with a change in the rate of interest on the claimant’s mortgage and they refused to review a decision of an earlier tribunal which decided that a restriction on the amount of allowable housing costs was to be imposed. Leave to appeal to the Commissioner was given by the chairman of the tribunal.
4.	The claimant is a single parent, aged 28 years, with a little boy, aged two years. Her only income is child benefit and income support. She has been in receipt of supplementary benefit followed by income support since 1986. On 21 October 1989 she moved from London and went into rented accommodation in a small village. On 18 May 1990 her tenancy came to an end and at that time she purchased for £70,000 (the asking price being £75,000) a house in the same village. The deposit of £2,870 was provided by her parents and she obtained a mortgage for the whole of the balance of the purchase price of £67,130 from the Abbey National Building Society. On 29 August 1990 a tribunal (I shall refer to it as the first tribunal) decided that the amount allowed in the claimant’s income support applicable amount for housing costs was to be restricted to the mortgage interest on the amount she would have had to borrow if she had purchased a property for £55,000 i.e. £55,000 less deposit of £2,870 = £52,130. The first tribunal dealt with all the issues which were relevant and before them. Their decision could not be faulted. The claimant sought leave to appeal but it was refused.
5.	On 14 November 1990 an adjudication officer decided that the claimant was entitled to housing costs of £119.73 per week from 30 October 1990. He did so on the ground that the interest rate on her mortgage had been reduced from 1 November 1990. The claimant appealed against the reduction in income support on the grounds that her housing costs had been allowed earlier at £126.60 and that it was unfair for them to be reduced as a result of the change in interest rate. A written submission was made to the tribunal on behalf of the claimant by her representative arguing that the tribunal should review the decision of the first tribunal regarding the allowable housing costs. He submitted to the tribunal material relating to the relevant factors (provided for in para. 10(7) of Schedule 3 to the Income Support (General) Regulations 1987), and submitted that the decision of the first tribunal should be revised because it was no longer reasonable to expect the claimant to seek alternative cheaper accommodation. Such documentary evidence related to the amount which would be advanced to her by way of mortgage and also to the value of her equity of redemption in the home. The members of the tribunal held that the alteration in the amount of interest, which the appellant was liable to pay on her mortgage, was a relevant change of circumstances entitling the adjudication officer to review the decision of the first tribunal. They refused, however, to revise the decision of the earlier tribunal relating to the amount of allowable housing costs. They gave as their reason for so refusing that they would be usurping the functions of the Commissioner. They noted that the legislation contained provisions for appeal from a tribunal decision and said that a decision was not to be altered by an adjudicating authority of equal status.
6.	The first question which arises is whether the adjudication officer’s decision of 14 November 1990 was made by way of review. The tribunal found that there had been a relevant change of circumstances entitling him to review the first tribunal’s decision. The actual decision of the adjudication officer does not expressly state that it is made by way of review. However it appears to me that it was a review decision. The adjudication officer made it because of the decrease in interest rates. That was the only reason for his making the decision. The reduction in interest rates was clearly a change of circumstances. It would be pedantic to hold it was not a review decision and in my judgment the tribunal were right to regard it as such. I am satisfied that the adjudication officer’s decision relating to the alteration of housing costs had to be made by way of review. I have had regard to paragraph 7(8) of Schedule 3 to the Income Support (General) Regulations 1987 which deals with a reduction in interest rates. It is not suggested that this is a case which comes within the special circumstances of that sub‑paragraph. However it is significant that the sub‑paragraph envisages a review under section 25(1)(b) of the Social Security Administration Act. I have also had regard to regulation 69(2) of the Social Security (Adjudication) Regulations 1986 which again envisages that there is to be review, except in cases where the amount of the instalments payable remain constant despite the reduction in interest rates and in those circumstances there is deemed not to be a change of circumstances. I am satisfied that there were grounds for review.
7.	I now turn to the question of whether the tribunal were correct in law in refusing to revise the decision of the first tribunal as to the amount which should be restricted having regard to regulation 10(5) of Schedule 3 to the Income Support (General) Regulations. I have to ask myself whether the tribunal could, in the circumstances of this case, deal with the relevant factors and decide whether or not the decision of the first tribunal was to be revised on the grounds that it was not reasonable to expect the claimant to seek alternative cheaper accommodation. It seems to me that if the claimant were able to establish grounds for review relating to that aspect of the restriction of her housing costs then it was open to the tribunal under section 36 of the Administration Act to deal with the question as a matter first arising and they erred in law in not doing so. The question had clearly been raised before them. The adjudication officer could not be said to have been in error in failing to extend his consideration of review to the relevant factors, there was nothing before him to show that there had been any relevant change of circumstances other than a reduction in interest rates. However the question of the wider review was put before the members of the tribunal. There was evidence of a relevant change of circumstances since the first decision was given, the letters produced on behalf of the claimant. Clearly the claimant had identified the decision which she wished to have reviewed and had pointed to a change of circumstances. While it was legitimate for the adjudication officer to confine his review to the one element upon which he actually revised, the tribunal were wrong in confining their review to that element because of the further ground justifying review which emerged before them. Section 36 of the Social Security Administration Act 1992 allows a tribunal to deal with questions which first arise in the course of an appeal. The issue of the wider change of circumstances was such a question. The tribunal should have considered section 36 and decided whether or not they would exercise the discretion allowed to them by the section. I am in agreement with what was said by the Commissioner in CSSB/238/1989 as to the scope of review. The Commissioner doubted whether “in principle the grant of review can be the warrant for a revisal beyond the scope of the material fact or relevant change of circumstances raised”, but went on to say “although I appreciate that on consideration of a determination in such a review a further ground may emerge and be acted upon”. I respectfully adopt that approach to the problem. It is applicable to the circumstances of the appeal before me. I am not to be taken to say that when there are grounds for a review the whole determination of an earlier tribunal is thrown open. No doubt that is the position in attendance allowance cases, see R(A) 2/90, but the considerations in such cases are very different from those in income support appeals. I have had regard to the Commissioner’s decision on Commissioner’s file number CIS/77/1992 in which it was held that a review of a later decision because of mistake of fact in calculating the increased interest did not open up an earlier decision dealing with the relevant factors. I distinguish that case from the case at present before me on the grounds that in CIS/77/1992 the claimant did not put forward before the tribunal a further change of circumstances which would bring into play section 25(1)(b) of the Social Security Administration Act 1992.
8.	The grounds for review provided by the claimant before the tribunal in the present appeal had not been before the adjudication officer at the time of the review by him, but that does not matter. Such grounds were before the tribunal, and properly before the members, and it was their duty to consider whether the discretion under section 36 should be exercised. In the circumstances of this case it would be odd if a tribunal were to exercise the discretion in such a way as to not deal with the question arising from the change of circumstances relating to the relevant factors. I am satisfied that the decision of the tribunal is erroneous in point of law for the reasons which I have given. I set it aside.
9.	It is common case before me that the appeal should be returned to a new social security appeal tribunal for determination by them. This is desirable because the members of the tribunal will have local knowledge which I do not have. I direct the new tribunal to consider the discretion allowed to them by section 36 of the Social Security Administration Act 1992 and to decide whether, in the light of the evidence placed before them by the claimant relating to the change of circumstances concerning the relevant factors, such discretion should be exercised in favour of the claimant. If they exercise the discretion in her favour, then it will be necessary for them to deal with the review on the broader ground. I invite their attention to CIS/375/1992 which contains guidance on the question of the restriction to be imposed on housing costs where the claimant is unable to sell the home and purchase a new house.

Date: 10 December 1992	(signed) Mr. J. J. Skinner
Commissioner