Commissioner's File: CIS/543/93

SOCIAL SECURITY ACT 1986 
SOCIAL SECURITY ADMINISTRATION ACT 1992 
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW 
DECISION OF THE SOCIAL SECURITY COMMISSIONER 

Social Security Appeal Tribunal: Blackpool
[ORAL HEARING] 
  
1. The claimant's appeal is allowed. The decision of the Blackpool social security appeal tribunal dated 11 June 1993 is erroneous in point of law, for the reasons given below, and I set it aside. The appeal is referred to a differently constituted social security appeal tribunal for determination in accordance with the directions given in paragraphs 19 to 28 below (Social Security Administration Act 1992, section 23(7)(b)). 

2. The appeal tribunal was concerned with the claim for income support made on 11 November 1992. On that date the claimant was unexpectedly released on parole from prison, where he was serving a sentence following his conviction of conspiracy to murder in September 1990. He had been a detective sergeant in the West Midlands police force, doing undercover work. His case was that arising out of enquiries into corruption in that force, the Home Secretary ordered his immediate release on 11 November 1992. 

3. On his release the claimant went to live with his wife in a rented flat in Blackpool. They also owned a house ("          ") in Birmingham. The house had been let to tenants on an assured shorthold tenancy while the claimant was in prison. The tenancy had apparently first been granted in February 1991, but there had been several renewals for six month periods, the latest having been on 18 August 1992. The rent from              was £600 per month. 

4. The adjudication officer on 22 December 1992 decided that the claimant was not 
entitled to income support from 11 November 1992. He regarded the claimant as having no housing costs in respect of the accommodation in which he was living. He calculated the claimant's outgoings on               (mortgage and loan interest, ground rent, service charge and insurance premiums) and deducted them from the gross rent to give a figure of net income of £13.09 per week from 11 November 1992 and £22.94 per week from January 1993. When added to the claimant's wife's unemployment benefit the income exceeded the claimant's applicable amount. 

5. The claimant appealed on the ground that his expenditure on mortgage and loan interest on             should be included in his applicable amount as housing costs. He attended the hearing before the appeal tribunal on 11 June 1993 and was represented by Mr Anthony Lingard of the            Probation Service. There was only one wing-member present in addition to the chairman, but the claimant consented to proceed with an incomplete tribunal. The case made for the claimant was that he could not return to            because of fear of violence from gangsters and that therefore he should under paragraph 4(6)(a) of Schedule 3 to the Income Support (General) Regulations 1987 ("the Income Support Regulations") be treated as occupying           as his home. 

6. Paragraph 4(6)(a) provides: 
"(6) Where a person is liable to make payments in respect of two (but not more than two) dwellings, he shall be treated as occupying both dwellings as his home only-- 
(a) where he has left and remains absent from the former dwelling occupied as the home through fear of violence in that dwelling or by a former member of his family and it is reasonable that housing costs should be met in respect of both his former dwelling and his present dwelling occupied as the home; or" 
[sub-paragraphs (b) and (c) concern students and changes of home] 

7. The appeal tribunal by a majority, on the chairman's casting vote, disallowed the appeal. The appeal tribunal accepted that the claimant was in genuine fear of violence in the West Midlands area and found that it was a condition of his parole that he did not return to the area for his own safety. Mr Lingard has since submitted that that was a misunderstanding of his evidence and that there was no such condition on the claimant's parole licence, although the Probation Service would have resisted any move by the claimant to return to the West Midlands area. The appeal tribunal took the view that the crucial issue was what amounts could be disregarded from the rental income received from          and that regulation 40 of the Income Support Regulations had the effect that the gross amount of income other than earnings had to be taken into account except in so far as disregarded under Schedule 9. It determined that, whether or not          was the claimant's home, no items other than those allowed by the adjudication officer could be disregarded under paragraph 30 of Schedule 9. It considered that paragraph 19 of Schedule 9 could apply if the claimant was treated as occupying          as his home. 

8. On that issue, the reasons of the majority of the appeal tribunal were that the claimant: 
"was not absent from the home by reason of a fear of violence in the home. He was absent by reason of a fear of violence in the West Midlands area. The paragraph was clearly directed to issues of domestic violence. The fear 
that [the claimant] had was only incidentally related to his home. Even if this decision is wrong then the Tribunal decided, again by a majority, that it was not reasonable to meet the housing costs of the former dwelling and his present dwelling occupied as his home. The reason for this decision was that [the claimant] came out of prison in November 1992. The assured shorthold tenancy had been granted for 6 months from August 1992. Notice could have been served to expire in February 1992 so that the house could be sold with vacant possession shortly thereafter. It was not reasonable to treat [the claimant] as still occupying a house which was let at a substantial rent and was itself, on [the claimant's] own estimate, worth about £100,000, with a mortgage of £43,000 owing. It was considered that para 4(6) was directed to help for a "battered" wife who had to leave her former home as a short term expedient because of the violence of her partner. The circumstances of this case were wholly outside the intention of the sub-paragraph." 
The reasons of the minority were as follows: 
"It was reasonable in the unique circumstances of this case to allow the expenses of the house in Birmingham. Fear of violence in the home extends to fear of violence in the whole area surrounding the home." 

9. The chairman in the record of decision granted the claimant leave to appeal to the Commissioners. The grounds of appeal concentrated on the chairman's approach to the meaning of paragraph 4(6)(a) and on the question of reasonableness. It is now entirely clear, in the light of the decisions of the Tribunal of Commissioners in CIS/85/1992 and, on appeal, of the Court of Appeal in Chief Adjudication Officer v McDonnell (8 February 1995, in the group of appeals generally known under the name of Palfrey), that the appeal tribunal erred in its approach to the income from          . Those decisions hold that a freehold interest subject to a tenancy is to be disregarded as capital under paragraph 5 of Schedule 10 to the Income Support Regulations because it is a "reversionary interest" .The consequence is that the gross income derived from that disregarded capital is to be disregarded as income (paragraph 22(1) of Schedule 9) and is to be treated as capital from the date it is normally due to be credited to the claimant's account (regulation 48(4)). That error of law would normally require me to set aside the appeal tribunal's decision. However, the error was not material to its decision, for the reason explained in the next paragraph. 

10. If in the-present case the monthly amount of £600 derived from          were treated as capital, it appears almost certain that that would have no effect on his entitlement to income support, since the claimant declared on his claim form that he and his wife had no savings. The deeming of regulation 48(4) would only last for a month in respect of each monthly payment (paragraph 24 of Commissioner's decision CIS/563/1991) and in the light of the claimant's necessary expenditure the sum of his actual and notional capital in any week would be very unlikely to reach anything near £3,000. However, if from 11 November 1992 the claimant's only income was his wife's unemployment benefit, he would still not be entitled to income support if his applicable amount was constituted only by the personal allowance for a couple. For that personal allowance was £66.60 and the amount of the unemployment benefit was £69.70. Therefore the claimant could only be entitled to income support from 11 November 1992 if he were allowed some housing costs (since no premium appears potentially applicable as at that date). Thus the crucial question for the appeal tribunal was whether the claimant could be treated as occupying               as his home and should therefore be allowed housing costs in respect of that property. 

11. Because of the difficulties of interpretation of paragraph 4(6)(a) of Schedule 3 to the Income Support Regulations, I granted the claimant's request for an oral hearing of the appeal. At the oral hearing the claimant was represented by Mr Lingard, who is now employed by the         County Council Welfare Rights Service. The adjudication officer was represented by Mr. Leo Scoon of the Office of the Solicitor to the Department of Social Security. I am grateful to both representatives, and to the claimant, for their assistance. 

12. Mr Lingard submitted that the appeal tribunal chairman misinterpreted paragraph 4(6)(a) in holding that it was restricted to domestic violence cases and did not cover the claimant's circumstances. He submitted that if there was a fear of violence in the home, a claimant was not deprived of the protection of paragraph 4(6)(a) if there was a fear of violence in other places as well.           was the most likely place for anyone seeking to harm the claimant to find him, especially as his full address had been published in the local press. Mr Lingard submitted that the claimant had left             through fear of violence when he was on bail after his arrest and pending trial. On the question of reasonableness, Mr Lingard submitted that it would have been unreasonable for the claimant to have sold             , because that would have required giving notice to the tenants and foregoing the rental income while mortgage arrears might have built up. He could afford the outgoings when the property was bought and it was reasonable to allow housing costs when he had been wrongfully imprisoned and was absent from the house through fear of violence. Mr Lingard disclosed that the claimant had moved back to              in August 1994, most of the people who sought to harm him now being in prison or facing charges. The claimant said that he had received unemployment benefit from November 1992 until January 1994, followed by income support, but that he did not have any housing costs allowed until his move back to              . 
13. Mr Scoon agreed that the chairman had taken too limited a view of the scope of paragraph 4(6)(a) and that providing that there was a fear of violence in the house it did not matter that there was also a fear of violence elsewhere. He suggested that a fear of violence in the immediate vicinity of a dwelling could amount to a fear of violence in the dwelling. However, he submitted that there was doubt whether the claimant could be said to have left             through fear of violence if he left on being imprisoned. The element of choice influenced by fear would then be missing. Even if the claimant had first left              through fear of violence while he was on bail, Mr Scoon submitted that the intervening period of imprisonment meant that on release the claimant had not "remained" absent through fear of violence. To come within paragraph 4(6)(a) a person must have left a dwelling and remained absent continuously because of fear of violence. Mr Scoon submitted that it was right to conclude that it was not reasonable for housing costs to be met. The claimant had a substantial equity in             and the rental income covered the outgoings. There was no warrant for paying housing costs, especially when the proper treatment of the rental income as capital was considered. Finally, Mr Scoon submitted that the period in issue before a new appeal tribunal would extend down to the date on which income support was awarded to the claimant. 

14. In reply, Mr Lingard submitted that if a person left a dwelling through fear of violence in it and was currently absent from that dwelling through the fear of violence in it, it did not matter that in some intervening period the person was absent for some other reason. Secondly, he raised the question whether reasonableness was to be judged according to the circumstances as they appeared at the relevant time (when the effect of Palfrey on rental income was not known) or as they appear at the date of adjudication. 

15. I have concluded that the chairman did err in law in his interpretation of paragraph 4(6)(a) and that his approach to reasonableness was flawed. However, I would not go as far as to endorse the approach of the dissenting member of the appeal tribunal either. I shall deal with those errors immediately below, and mention some of the broader issues in directions to the new appeal tribunal which must rehear the appeal. 

16. Paragraph 4(6)(a) is capable of applying in any case where one of the reasons for the claimant's leaving the dwelling in question was fear of violence in that dwelling. It is not restricted to cases of domestic violence. There is no warrant for reading into the plain words of paragraph 4(6)(a) any additional condition. A fear of violence in the dwelling from persons outside the family or who do not reside in the dwelling or even from unknown persons, may fall within paragraph 4(6)(a). Fear of violence from such people can constitute an equally powerful reason for leaving a dwelling as does fear of domestic violence within the dwelling. Then it does not matter that there is a fear of violence in places other than the dwelling, providing that it is established that one reason for the leaving of the dwelling is the fear of violence in that dwelling. But I do not think that a fear of violence outside the dwelling, even in the area around the dwelling, can amount to a fear of violence in the dwelling. In paragraph 4(6)(a) "dwelling" must be interpreted in accordance with the meaning given to the phrase "dwelling normally occupied as the home" in regulation 2(1) of the Income Support Regulations. Thus the dwelling may extend, for instance, to the garden of a house or the common parts of a block of flats. However, it cannot extend to adjacent roads or areas to which any member of the public has access in that capacity. If the draftsman of paragraph 4(6)(a) had wanted it to extend to a fear of violence around or in the immediate vicinity of a dwelling, that could easily have been done. Instead, the restrictive phrase "fear of violence in that dwelling" was used. 
17. The majority of the appeal tribunal, in the form of the chairman, thus applied the wrong test. The chairman dealt with the possibility that he was wrong in that respect by also finding that it was not reasonable to meet housing costs in respect or both the former dwelling and the present dwelling (the rented flat in Blackpool). That conclusion was flawed because it was primarily based on the proposition that the claimant could have given notice to end the tenancy of              in February 1993 (presuming that the reference to February 1992 was a slip) and sold the house with vacant possession shortly afterwards. If it were accepted that it was unreasonable to meet housing costs. unless steps to that end were being taken, that does not deal with the period immediately following 11 November 1992, before anything could have been done to secure the removal of the tenants. The chairman's reasoning gave insufficient consideration to the differing circumstances throughout the whole period from 11 November 1992 down to 11 June 1993. It also appeared to bring in again his view of the limited application of paragraph 4(6)(a). Thus his conclusion was reached after the consideration of some irrelevant factors and was legally flawed. 

18. For those reasons, the decision of the appeal tribunal dated 11 June 1993 must be set aside as erroneous in point of law. Since the claimant attended the oral hearing before me and the adjudication officer's decision under appeal was made nearly three years ago, I had hoped to be able to give the final decision in the appeal. Three factors have emerged which in combination prevent me from doing that. One is that from some date in January 1994 the claimant was awarded income support, but the precise date (which would form the end of the running of the open-ended claim from 1 November 1992) is not known. The second is that the claimant said at the oral hearing that he received unemployment benefit from November 1992 to January 1994. Those dates seem doubtful in view of the evidence before the appeal tribunal of 11 June 1993, but at any rate there is some doubt about the claimant's other sources of income during some parts at least of the period in issue in this appeal. The third is that I do not know for how long the claimant's wife's entitlement to unemployment benefit continued. The question of the claimant's entitlement to income support will depend on the assessment of his income as against his applicable amount. I am not in a position to calculate his income throughout the period in issue even if I could determine his applicable amount. The appeal must be referred to a differently constituted social security appeal tribunal for determination in accordance with the following directions. 
Directions to the new appeal tribunal 

19. There must be a complete rehearing on the evidence produced and submissions made to the new appeal tribunal, which will not be bound in any way by any findings made or conclusions expressed by the appeal tribunal of 11 June 1993. 

20. The new appeal tribunal must first identify the period in issue before it, by identifying the date on which income Support was awarded to the claimant. That event will terminate the running of the open-ended claim from 11 November 1992 (see paragraph 11 of R(S) 1/83) and mark the end of the period in issue in the present appeal. The adjudication officer should present evidence to the new appeal tribunal to enable that identification to be made. 

21. The new appeal tribunal must consider the amount of the claimant's capital throughout the period in issue, bearing in mind the points made in paragraphs 9 and 10 above about the treatment of the rental income from          . The new appeal tribunal must also identify the amount of the claimant's income throughout the period in issue in the light of those points and evidence about the receipt of unemployment benefit by the claimant and his wife. The adjudication officer should present evidence to the new appeal tribunal about the unemployment benefit received. 

22. The main point in relation to the claimant's applicable amount will be whether any housing costs can be allowed in respect of            . It seems clear that no housing costs were incurred in respect of the rented flat in Blackpool, which it seems to have been accepted was the dwelling normally occupied as his home by the claimant during the period in issue. The general rule, under Schedule 3 to the Income Support Regulations, is that housing costs may only be met in respect of expenditure on the dwelling occupied as the home. The only provision from which the claimant could gain an advantage is paragraph 4(6) of Schedule 3 to the Income Support Regulations, and in particular paragraph 4(6)(a), which allows an exception to the rule in paragraph 4(1) that a person can only be treated as occupying as the home the dwelling currently normally occupied as the home. 

23. In addition to the points made in paragraphs 16 and 17 above, I give the following general directions about paragraph 
4(6)(a). The provision assumes circumstances where a person is currently living in one dwelling as his home ("the present dwelling"), yet is still liable to make payments in respect of a "former dwelling". It directs an adjudicating authority's attention first to the date at which the person left the former dwelling and the reasons for that leaving. It must be the last leaving of the former dwelling before the week to which paragraph 4(6)(a) might be applied which is relevant. I think that in context "leaving" does not refer simply to the last time that the person physically went out of the front door. It must I think refer to a leaving which constituted the ending of the normal occupation of the former dwelling as the home or which, if not carried out with that intention, was confirmed as such by a subsequent change of intention. Since the circumstances of leaving may well be confused and upsetting, a relatively broad and non-technical approach should be taken. The difficulties are shown by what was said about the circumstances in the present case and may be repeated in evidence to the new appeal tribunal. It was said that the claimant was arrested and charged in February 1989. He was remanded in custody for a month, but then released on bail pending trial. Although his bail address was         , he did not stay there often, because of the threats made to him, the publication of the address, and threatening telephone calls made to him there. Instead he stayed. sometimes with his wife's relatives in Blackpool and sometimes with various friends. Mr Lingard submitted that it was during that period, before the claimant's trial, conviction and imprisonment, that              ceased to be the claimant's home and that he left it through fear of violence in that dwelling. He submitted that the relevant leaving was not constituted by the claimant's imprisonment. The new appeal tribunal will have to assess all the evidence put before it and determine when as a matter of substance the claimant left           and whether at least one of the reasons for doing so was his fear of violence in that dwelling. 

24. The second matter to which paragraph 4(6)(a) directs attention is whether the person "remains" absent from the former dwelling through fear of violence in that dwelling. I direct the new appeal tribunal, contrary to Mr Scoon's submission to me, that if the person left the former dwelling through such fear and is absent in each week in question through such fear, it does not matter that in some intervening weeks the person was absent for some other reason. I consider that in the ordinary use of language such a person "remains" absent through such fear . Paragraph 4(6)(a) could easily have contained an express requirement of continuity, but does not do so. Thus in the present case if the new appeal tribunal finds that the claimant left          through fear of violence in that dwelling before his imprisonment and that in some week or weeks during the period in issue he was absent from          through such fear, paragraph 4(6)(a) may still apply although in an intervening period the claimant's absence was due to his imprisonment. 

25. If the new appeal tribunal finds that the conditions as to absence are met it must go on to consider whether it is reasonable that housing costs should be met in respect of both dwellings. I direct the new appeal tribunal that where there are no income support housing costs to be met in respect of the present dwelling occupied as the home that test must be interpreted as asking whether it is reasonable to meet housing costs in respect of the former dwelling when another dwelling is currently occupied as the person's home. I also direct the new appeal tribunal that the test is not directly what it was reasonable for the person to do at the dates in question, but whether, at the date on which the adjudicating authority is considering the application of paragraph 4(6)(a) and in the circumstances (legal and factual) as known at that date, it is reasonable to meet housing costs on the former dwelling. However, what it was reasonable at the time for the claimant to do can be considered as one of the relevant factors in determining the broader question of reasonableness. 

26. It is undesirable (and in any case probably impossible) to provide a list of factors which will be relevant to the question of reasonableness, especially in view of the wide variety of circumstances in which paragraph 4(6)(a) might apply. I can though direct the new appeal tribunal that it must consider the factual circumstances as it finds them to have been throughout the whole of the period in issue and bear in mind that the differing circumstances may lead to a differing conclusion about whether it is reasonable to meet housing costs in relation to different weeks within the period in issue. It will also always be the case that an adjudicating authority will only reach the stage of considering reasonableness in respect of weeks in which it accepts that the person was absent from the former dwelling through fear of violence in it. Thus a need for other accommodation is part of the accepted context. 

27. I can merely suggest some factors which may, depending on the precise circumstances, be relevant to the question of reasonableness, without suggesting that other factors are not relevant. One factor may be how long the absence has lasted and whether the person could reasonably have been expected to have taken steps to end the liability to make payments in respect of the former dwelling. What steps it would be reasonable to expect a person to take would obviously vary according to the person's overall circumstances and intentions (for instance, whether there was a hope or expectation of resuming occupation of the former dwelling, how realistic any such hope or expectation was, what the person's overall financial situation was and whether the person was in receipt of income support or some other form of public support, and whether it was possible or practicable to end the liability). Another factor might be the extent to which the person's liability in respect of the former dwelling is in practice met otherwise than through income support, or is otherwise taken into account within the provisions on income support or some other social security benefit. Thus in the present case the new appeal tribunal may consider it relevant that during the period in issue             was let to tenants and producing a rent of £600 per month. It is now known that the proper legal treatment of that income for income support purposes is to treat the gross amount of each monthly payment not as income, but as capital for a month from the date of each payment. The overwhelming likelihood is that the receipt of that rent will have no effect whatsoever on the amount of the claimant's entitlement to income support during the period in issue, so that the £600 per month was available to meet the claimant's liabilities in respect of          . The new appeal tribunal will need to weigh up whether, in the light of that legal treatment of the rent from               and of all the other relevant factors, it is now reasonable to pay housing costs in respect of that dwelling during the period in issue. The weight to be given to the various relevant factors will be entirely a matter for the judgment of the members of the new appeal tribunal. 

28. If the new appeal tribunal concludes that it is reasonable to meet housing costs in respect of             for any week or weeks during the period in issue, the housing costs are to be calculated in the ordinary way under Schedule 3 to the Income Support Regulations. It will then be possible to calculate whether the claimant's applicable amount exceeds his income and, if so, by how much, throughout the period in issue. 
 
(Signed) J Mesher
Commissioner

(Date) 4 October 1995