R(IS) 19/95

Mr. M. J. Goodman	CIS/743/1993
1.7.94
Housing costs - joint mortgage - whether claimant entitled to housing costs in relation to the proportion of expenditure for which she was liable but not in fact paying
The claimant and her ex-husband were jointly and severally liable to a building society on the mortgage on her home. In calculating the housing costs element of the claimant’s income support the adjudication officer allowed only one half of the interest payable on the mortgage on the footing that the other half was being paid by one or both of the claimant’s daughters together with the claimant’s ex- husband.  The daughters were guarantors of the mortgage debt. 
On appeal, a social security appeal tribunal held that the claimant was entitled to have the entirety of the mortgage interest taken into account on the basis that, being jointly and severally liable, the claimant was legally liable for the entirety of the sums due to the building society. The adjudication officer appealed to the Commissioner.
Held, allowing the appeal, that:
1. 	the claimant was responsible for the entirety of the mortgage interest under paragraphs 2 and 3 of Schedule 3 to the Income Support (General) Regulations 1987 because she was jointly and severally liable with her ex-husband on the covenant in the mortgage to pay the repayments (para. 10);
2. 	however, responsibility for the expenditure was shared. This brought the case within paragraph 6(2) of Schedule 3 to the 1987 Regulations. That paragraph requires the claimant’s housing costs to be calculated by reference to the appropriate proportion of the expenditure for which she was in fact responsible (para. 11);
3. 	as the claimant was throughout paying only one half of the mortgage repayments she was entitled to income support only in respect of one half of the interest element of those repayments. 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. 	I allow the adjudication officer’s appeal against the decision of the social security appeal tribunal dated 15 July 1993, as that decision is erroneous in law and I set it aside. I give the decision which the tribunal should have given, namely that, in assessing the amount of the claimant’s income support, her housing costs shall include only one half (and not the whole) of the interest payable to the building society on a mortgage of her home: Social Security Administration Act 1992, section 23.
2. 	This is an appeal by the adjudication officer from the unanimous decision of a social security appeal tribunal dated 15 July 1993, which allowed the claimant’s appeal from a decision of the local adjudication officer issued on 19 October 1992. That officer had allowed the claimant only half of the interest on a mortgage of her home to a building society on the footing that the other half of the interest was being paid at all times by one or both of the claimant’s daughters (guarantors of the mortgage debt) together with the claimant’s divorced husband. He had originally entered jointly into the mortgage with the claimant.
3.	The tribunal’s decision was as follows:
“The decision of the adjudication officer is not confirmed. The appellant is entitled to have taken into account in the calculation of income support the entirety of the mortgage interest payable in respect of the mortgage on her house.”
4.	The tribunal made the following findings of fact:
“The appellant and her ex‑husband own a house subject to a mortgage to ... Building Society. The appellant’s daughters guaranteed the mortgage payments. The tribunal took judicial notice of the fact that on a normal ... Building Society mortgage in joint names, liability for the mortgage repayments is joint and several. The presenting officer accepted that the mortgage of the appellant’s house is nothing other than a normal mortgage.”
5. 	I should add that there was evidence that in practice the claimant was paying only one half of the mortgage repayments, the other half being variously paid by one or both of her daughters and, to the extent of £10 a week, (for part of the relevant period at least), by her former husband. Certainly it was not contended that at any time the claimant was paying any more than one half of the mortgage repayments.
6.	The tribunal gave as its reasons for decision:
“The tribunal carefully considered the provisions of,	 in particular paragraphs 3(1) and 6(2) of Schedule III to the Income Support (General) Regulations 1987, SI 1987 No. 1967, and to which its attention had been directed by the presenting officer. In the opinion of the tribunal, the appellant is liable to the building society to which the house in which she lives is mortgaged for the entirety of the mortgage payment to be made. Liability is joint and several. This being so, on any default, the building society would [be] entitled to come to either the appellant or her ex‑husband for the entirety of arrears and sums due. In the opinion of the tribunal the view of the Department was not saved by the provisions of paragraph 6(2) of Schedule III of those same regulations. The responsibility for the entirety of the sums due to the building society as well as the legal liability is that of the appellant. In the circumstances the appellant was entitled to have taken into account the entirety of the mortgage repayments which were due to be paid to ... Building Society, in the calculation of her entitlement to income support. The tribunal did accept that this could result in a situation where two  joint owners of a property might both be entitled to income support and might both accordingly be entitled to the full allowances in respect of mortgage interest, but nevertheless the view of the tribunal was that its interpretation of the regulations was a proper one and that if the result was other than that which might have been intended by the regulations, nevertheless it had no alternative than to interpret the regulations as they presently appeared”.
7. 	The adjudication officer appeals against that decision to the Commissioner on the ground that the tribunal’s conclusion was erroneous on law on a proper construction of paragraphs 3 and 6(2) of Schedule 3 to the Income Support (General) Regulations 1987, SI 1987 No. 1967.
8. 	I therefore set those provisions out. Schedule 3 to the 1987 Regulations relates to “housing costs” as a requirement to be taken into account in assessing a claimant’s income support. As well as paragraphs 3 and 6(2) of that Schedule, paragraph 2 is also relevant. I therefore set paragraphs 2, 3 and 6(2) out, as follows:
“Basic condition of entitlement to housing costs:
2.	Subject to the following provisions of this Schedule, the housing costs shall  be met where the claimant, or if he is one of a family, he or any member of his family is treated as responsible for the expenditure to which that cost relates in respect of the dwelling occupied as the home which he or any member of his family is treated as occupying.”
[As the claimant and her husband are divorced she and her husband cannot be treated as members of the same family and the daughters cannot either, see section 137(1) of the Social Security Contributions & Benefits Act 1992].
“Circumstances in which a person is to be treated as responsible for housing costs
3–	(1)	A person is to be treated as responsible for the expenditure which relates to housing costs where-
(a)	he or his partner is liable to meet those costs other than to a member of the same household;
(b)	because the person liable to meet those costs is not doing so, he has to meet those costs in order to continue to live in the dwelling occupied as the home and either he was formally the partner of the person liable, or he is some other person whom it is reasonable to treat as liable to meet the cost; 
[It is not suggested that this paragraph is applicable on the facts of this case];
(c)	he in practice shares those costs with other members of his household, other than close relatives of his or his partner, at least one of whom is responsible under the preceding provisions of this paragraph or has an equivalent responsibility for housing benefit expenditure and for which it is reasonable in the circumstances to treat him as sharing responsibility.
	(2)	... [relates to trade disputes]
	(4‑5) ...
	6–	(1)	...
	(2)	Where responsibility for expenditure which relates to housing costs met under this schedule is shared, the amounts applicable shall be calculated by reference to the appropriate proportion of that expenditure for which the claimant is responsible.”
9. 	There will be seen from the tribunal’s reasons set out in paragraph 6 above that they did not consider that paragraph 6(2) was applicable to the present case in the sense of rendering the claimant able to claim income support on only half of the mortgage interest. I consider that that conclusion was erroneous in law and hold otherwise for the reasons given below.
10. 	It is first clear that the claimant is to be treated as “responsible for the expenditure” under paragraphs 2 and 3 of Schedule 3 to the 1987 Regulations because she was jointly and severally liable with her ex‑husband on the covenant in the mortgage to pay the mortgage repayments. It was in other words a straightforward case of liability under sub‑paragraph (a) of paragraph 3(1). Had the matter remained there she would, as the tribunal found, have been able to claim income support in respect of the entirety of the mortgage interest. But, in my judgment, the matter is altered by paragraph 6(2) of Schedule III. It is clear that the opening words of paragraph 6(2) “Where responsibility for expenditure which relates to housing costs met under this schedule is shared..” is fulfilled here, since the claimant shared legal responsibility with her ex‑husband and continued to do so despite the divorce.
11. 	What then is meant by the succeeding part of paragraph 6(2) “... the amounts applicable shall be calculated by reference to the appropriate proportion of that expenditure for which the claimant is responsible”? Presumably the tribunal must have regarded the word “responsible” at the end of that sentence as having the same meaning as elsewhere in the Schedule, namely legal responsibility to a third person, here the building society. I do not think that the word “responsible” at the end of paragraph 6(2) has this meaning. If it did have that meaning, it would in fact render paragraph 6(2) nugatory, in my judgment. What is meant by “shall be calculated by reference to the appropriate proportion of that expenditure for which the claimant is responsible” is that the actual facts of the case must be looked at. If in fact the claimant is paying only a proportion of the shared responsibility for expenditure, it is only on that proportion being paid that income support can be claimed. As it is in fact the case that the claimant was throughout paying only half of the mortgage repayments she can claim income support only in respect of one half of the interest element of those repayments. Paragraph 6(2) applies because, not only did the claimant share legal responsibility for the expenditure with her ex‑husband, she in fact also shared it with the daughters who were guarantors of the mortgage. They therefore also had legal liability to the building society for the mortgage repayments. As between all the persons therefore who were legally responsible for this expenditure to the building society, the claimant only ever spent money on (note the word “expenditure” in paragraph 6(2)) one half of the mortgage repayments. Consequently she is entitled to income support only in respect of that half. As the claimant is aged over 60, she would therefore be entitled to actual reimbursement of one half of the mortgage interest as income support. She would not be subject to the further reduction of 50% under paragraph 7 of Schedule III to the 1987 Regulations.

Date: 1 July 1994 
	(signed) Mr. M. J. Goodman
	Commissioner