R(IS) 5/96

Mr. M. J. Goodman	CIS/659/1994
13.3.95
Housing costs - interest on loan taken out in order to improve a former home - whether to be met
The claimant took out a bank loan to order to install central heating in his home. The interest on that loan was included in his income support award in accordance with paragraph 8(1)(a) of Schedule 3 to the Income Support (General) Regulations 1987. The claimant then sold that home and moved to a new one. The adjudication officer decided that he was no longer entitled to interest on the loan. The social security appeal tribunal allowed his appeal on the grounds that there was nothing to state that the benefit of paragraph 8 should cease if the client moved from the home in respect of which the loan had been taken out. The adjudication officer appealed to the social security Commissioner.
Held that:
for the interest to be payable under paragraph 8 of Schedule 3 the loan had to be for repairs and improvements “to the dwelling occupied as the house”. It was no longer payable if the claimant ceased to occupy that dwelling as his home.	

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. 	I allow the adjudication officer’s appeal against the decision of the social security appeal tribunal dated 29 June 1994 as that decision is erroneous in law and I set it aside. My decision is as follows:
(a)	The decision of the adjudication officer dated 17 August 1992 awarding income support to the claimant was properly reviewed by the adjudication officer on 30 December 1993 because there had been a relevant change of circumstances since the award decision was given, namely that the claimant had on 26 November 1993 changed his home from 54 SG to 19 RR: Social Security Administration Act 1992, section 25;
(b) 	The award was properly revised on such review so as no longer to allow as housing costs the interest payable by the claimant on a home improvement loan borrowed by the claimant on 31 March 1992 for improvements to his former home, 54 SG.
2. 	This is an appeal to the Commissioner by the adjudication officer against the unanimous decision of a social security appeal tribunal dated 29 June 1994, which allowed the claimant’s appeal against a decision of the local adjudication officer issued on 30 December 1993 as follows:
“I have reviewed the decision of the adjudication officer dated 17 August 1992 on the claim for income support. I am satisfied that there has been a relevant change of circumstances since that decision was given. That being because of his change of address [the claimant] no longer had a home improvement loan taken out for the purpose of carrying out repairs to the dwelling occupied as his home. My revised decision is that [the claimant] is no longer entitled to interest on his home improvement loan.”

3. 	The tribunal’s reasons for allowing the appeal were as follows:
“Paragraph 8 [sub‑para. (1)] of Schedule 3 [to] the Income Support (General) Regulations 1987, SI 1987 No. 1967, provides that it should allow as housing costs an amount in respect of interest payable on a loan which is taken out with or without security for the purpose of (a) carrying out repairs or improvements to the dwelling occupied as the home of the claimant. There was no argument that the loan was taken out for the purposes of central heating which was an improvement allowable under the regulations. The only argument was whether this had to continue when the claimant had moved from the house for which it was taken out ... to another house. The tribunal noted that there was nothing in the regulations which said that the benefit of the paragraph should cease if the claimant moved from the original dwelling house in question for which the loan was taken out. The DSS were arguing that because the house in which the claimant was now living was not the house for which the loan for the central heating had been taken out then he could no longer have the benefit of the interest for income support purposes, but the tribunal noted that the loan had in fact been taken out at the time for a proper purpose for a house which was occupied as his home ... On ... balance therefore the tribunal believed that the section could not mean that the benefit of the interest being allowed should cease particularly as the claimant was still involved in making the repayments and they therefore felt that the appeal should be allowed.”
4. 	That decision arose out of the fact that the original award in income support to the claimant had included as an element reimbursement of interest on a home improvement loan of £3,000 taken out by the claimant on 31 March 1992 from a Bank. The improvement was to the central heating system of the claimant’s home at 54 SG. However, on 26 November 1993 the claimant moved from home 54 SG, having sold it. He moved to a new home at 19 RR, which he had purchased without needing a mortgage.
5. 	The adjudication officer appeals to the Commissioner against the tribunal’s decision on the following grounds (paras. 5 to 8 of the submission dated 23 September 1994):
“I submit that paragraph 8(1)(a) of Schedule 3 is relevant to this appeal. It allows the interest to be met on a loan which is taken out, with or without security, for the purpose of carrying out repairs or improvements to the dwelling occupied as the home. I submit that the tribunal has misapplied this paragraph when making their decision to allow the interest on the loan. Whilst it is accepted that the loan was an allowable cost, as the installation of central heating of the property [54 SG] was an improvement to the dwelling then occupied by the claimant as his home, there is no provision to allow the cost where the loan is still outstanding on a change of address to another property. I submit that the tribunal did not have regard to the definition of the ‘dwelling occupied as the home’ as given in regulation 2 of the Income Support (General) Regulations. It reads:
“dwelling occupied as the home’ means the dwelling together with any garage, garden and outbuildings, normally occupied by the claimant as his home including any premises not so occupied which it is impracticable or unreasonable to sell separately ...”
I therefore submit that the tribunal’s decision is erroneous in law, as the outstanding loan is not for improvements which have been made to the dwelling which [the claimant] now occupies as his home. Therefore, since the change of address, the loan is no longer an eligible housing cost and an amount for the interest on the loan is not payable.”
6. 	The claimant’s response to the adjudication officer’s appeal is to stress financial hardship. Moreover, he states that the local office of the Department told him that they would reimburse the interest on the improvement loan when he first applied for it and did not indicate that that reimbursement would cease if the claimant should move his home. Whatever may be the position as to that and whether there was any erroneous or deficient advice given, it does not of course alter the legal position as it is not possible for the Department by any representations or assurances to prevent themselves from applying the law as laid down in social security legislation i.e. in legal terms there can be no “estoppel”.
7. 	It seems that there had been no previous Commissioner’s decision on the point in issue in this case. It is true that there is, as the tribunal pointed out, no express provision on the point in the legislation. However, what has to be borne in mind, in my view, is the fact that income support is a weekly benefit. This is made clear by section 124 of the Social Security Contributions and Benefits Act 1992 and regulation 17 of the 1987 Regulations. The latter provides that “... a claimant’s weekly applicable amount shall be the aggregate of such of the following amounts as may apply in his case ...” (my emphasis). Regulation 17 then refers in sub‑paragraph (e) to “any amounts determined in accordance with Schedule 3 (housing costs) which may be applicable to [the claimant] in respect of mortgage interest payments or such other housing costs as are prescribed in that schedule.” It follows that the whole of Schedule 3 is subject to regulation 17, which speaks of “weekly applicable amount”.
8. 	Consequently, if there is a change in circumstances in any week, a case for review of the award of income support arises under section 25 of the Social Security Administration Act 1992, because any change in the circumstances to which the applicable amounts relate is a “relevant change of circumstances” within section 25(1)(b) of the 1992 Act. A review was in the present case therefore justified. Clearly there should be a revision on such review to remove from the claimant’s income support a housing cost for a matter which at the date of such review is no longer an eligible housing cost under paragraph 8 of Schedule 3 to the 1987 Regulations. As at the date of review the loan can no longer be said to be for repairs and improvements “to the dwelling occupied as the home” (para. 8(1)). At that date the claimant no longer occupies as the home the house to which improvements were made. Paragraph 4(1) of Schedule 3 to the 1987 Regulations reinforces the position by providing that (subject to exceptions which do not apply in this case) “A person shall be treated as occupying as his home the dwelling normally occupied as his home by himself or, if he is a member of a family, by himself and his family and he shall not be treated as occupying any other dwelling as his home.” (my emphasis)
9. 	I therefore allow the adjudication officer’s appeal. My decision is given in paragraph 1 above and is to the same effect as the local adjudication officer’s decision. The claimant, who is a pensioner, had made representations as to the financial hardship that is being caused to him. Presumably, however, when he sold the house, 54 SG, an element of the purchase price would include the value of the improvements to the central heating or, at least, the improvements would have enabled him more easily to sell the house.

Date: 13 March 1995	(signed) Mr. M. J. Goodman
	Commissioner