[2004] UKSSCSC CIS_3228_2003 (17 June 2004)
CIS/3228/2003

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.  My decision is that the decision of the tribunal is erroneous in point of law.  I set aside the tribunal’s decision and, since I can do so without making any fresh or further findings of fact, I make the decision which I consider the tribunal should have given, namely, that no valid overpayment recoverability decision has been made in respect of  overpaid income support amounting to £6,018.53.

2.  This is an appeal, brought with the leave of the chairman, from the decision of the tribunal dismissing the  claimant’s appeal against a decision made on 9 December 2002 that income support amounting to £6,018.53 paid in respect of the period from 4 January 1996 to 28 November 2001 had been overpaid and was recoverable from the claimant under section 71 of the Social Security Administration Act 1992.  The Secretary of State has supported the appeal in a submission dated 10 November 2003, but has submitted that I should refer the case for rehearing to a new tribunal.

3.  On 4 January 1996 the claimant made a claim for income support for himself, his wife and three children, one of whom was the claimant’s step daughter.  The other two children were described as step grandchildren. One step grandchild, whom I shall call ‘S’, was born on 12 October 1993.  The claimant stated that his partner was in receipt of child benefit and ticked the “No” box in answer to the  question: “Do you or your partner, or anyone else have any other money coming in?”  On the basis of that information income support was paid from 4 January 1996 to 9 May 1996.  The claimant re-claimed on 23 June 1996, resulting in an award for the day of 19 June 1996 only, and made a third claim on 26 December 1996.  He again listed S as one of the children for whom he wished to claim and declared his only income to be child benefit, incapacity benefit and disability living allowance.  Income support was awarded on that basis from 2 January 1997.

4.  On 30 November 2001 the claimant’s wife contacted her benefits office, stating that she had been told by her solicitors that she should have declared that she had been receiving a fostering allowance in respect of S.  The claimant’s wife was very distressed and said that she had passed on the information previously, but that it had been ignored.  In a letter dated 10 December 2001 the local authority confirmed that the claimant’s wife had been in receipt of a residence order allowance in respect of S under section 15 of the Children Act 1989, calculated on the basis of the minimum fostering rate less child benefit.  In a further letter, dated 14 December 2001, the authority set out the amounts of residence order allowance which had been paid in respect of S since 4 August 1994.

5.  Section 15(1) and paragraph 15(1) of Schedule 1 of the Children Act 1989 empower a local authority to make contributions towards the cost of the accommodation and maintenance of a child to a person with whom the child is living as the result of a residence order (that is, an order made in family proceedings settling the arrangements to be made as to the person with whom a child is to live).  By regulation 40(2) and paragraph 25(1)(c) and (2(b) of Schedule 9 to the Income Support (General) Regulations 1987, payments to a claimant under paragraph 15(1) of the 1989 Act are disregarded only to the extent that they exceed the applicable amount in respect of the child, including any disabled child premium.  Accordingly, the residence order allowance paid to the claimant (or to his wife), in respect of S fell to be treated as income for income support purposes up to the level of  the child’s applicable amount. 

6. On 9 December 2002 an overpayment decision was made which, so far as material, was in the following terms:

“As a result of the decision dated 11 December 2001, an overpayment of income support has been made from 04 January 1996 to 28 November 2001 (both dates included) amounting to £6018.53 as shown on the schedule.

On 04 August 1994, or as soon as possible afterwards, (the claimant) failed to disclose the material fact that he was in receipt of a Residence Order.

As a consequence, Income Support amounting to £6018.53 from 04 January 1996 to 28 November 2001 (both dates included) as detailed on the schedule.

Accordingly, that amount is recoverable from (the claimant)”

Although no details were given of the way in which the residence order payments had been taken into account, it appears that the overpayment was in fact correctly calculated in accordance with paragraph 25 of Schedule 1 to the 1987 Regulations.

7.  The claimant appealed on 22 January 2003 and, although the overpayment decision was reconsidered, it was not revised, and the appeal therefore proceeded to a hearing.  The over payment recoverability decision refers to a decision taken on 11 December 2001, in consequence of which the overpayment was said to be recoverable, but there was no other record of any such decision in the appeal documents or any reference to it in the original submission to the tribunal.  At the hearing of the appeal on 17 April 2003, which was attended by a presenting officer, the claimant’s representative put in issue whether there had been compliance with section 71(5A) of the Social Security Administration Act 1992.  The chairman adjourned the hearing to enable the presenting officer to deal with that question and directed the decision maker to produce within 21 days evidence that a letter had been sent to the claimant in December 2001 notifying him that his income support entitlement had been adjusted.  The chairman also directed a further submission dealing with the issue of the validity of the superseding decision.

8.  The presenting officer responded to that direction on 13 May 2003 with a further submission, stating that on 11 December 2001 a decision maker had superseded all income decisions awarding benefit from 4 January 1996 to 28 November 2001, and that that decision reduced benefit from a weekly rate of £160.56 to £127.61.   The submission also stated that a computer generated letter advising the claimant of the decision had been issued with his giro cheque.  Enclosed with the submission were print-outs of the income support computer system records and extracts from the guidance manual setting out the text of the computer generated letters, together with a document headed “Record of Decision”.  It is necessary to set out that  document in full:

RECORD OF DECISION

(Claimant’s name and National Insurance number)

SECRETARY OF STATE’S DECISION GIVEN 9.12.01

The decision of 29.02.96 awarding Income Support from 04.01.96 is superseded.

This decision was made in ignorance of a material fact.

The material fact is that (the claimant’s wife) was in receipt of a Residence Order Allowance in respect of (S).  This was in payment at a rate exceeding the personal allowance for that child.  This allowance was not disclosed on the Income Support Claim form dated 04.01.96 or on subsequent claim forms.

Therefore on supersession (the claimant’s) Income Support shall be revised with effect from 04.01.96.

Law used
The Social Security Administration Act 1992 Sections 71(1), (2), (3) (5A), (6) and (11)

The Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 Regulation 5(1) and (2) and 13

Certificate

I being an officer authorised in that behalf by the Secretary of State, certify that this document, apart from this certificate, is a record of a decision of an officer of the Secretary of State.

(Signature of Presenting Officer)

(Name of Presenting Officer

(Date)

Note:  Under the provisions of paragraph 13 of Schedule 1 to the SSA 98, this document is conclusive evidence of this decision.

9.  At the adjourned hearing on 2 July 2003 the tribunal, consisting of a legally qualified chairman, held that there had been a valid supersession of the decisions awarding benefit for the following reasons:

“In a further submission the Decision Maker has produced printouts which seek to show that the decision awarding Income Support from 2 January 1997 has been superseded.  The Presenting Officer attended today and explained that page 2 of the further submission shows how the applicable amount and premium amounts were calculated prior to the supersession and page 3 shows the deductions resulting in a net payment of £160.56.  Page 5 shows that the net amount of the award had been adjusted to £127.61.  Page 7 refers to “COCs uprating (INF1, 4) at 11 December 2001.  This the Presenting Officer explains is a record of a letter which would have been sent to the appellant notifying him of the change in his benefit by way of supersession.  The reference to uprating arises out of the fact that coincidentally in November 2001 there was an uprating of benefit.

In the light of that evidence I find that, on the balance of probabilities, the awarding decisions were properly superseded under section 10 of the Social Security Act 1998 and Regulation 6(2)(a) of the Social Security and Child Support (Decisions and Appeals Regulations 1999 and that Section 71(5A) is satisfied.”

The chairman then proceeded to uphold the recoverability decision, although it appears from the statement of reasons that he was under the impression that the decision maker’s decision had been on the basis of misrepresentation, rather than failure to disclose.

10.  The claimant appealed on the grounds, among others, that the evidence did not establish that a decision had been made which  satisfied the requirements of section 71(5A) of the Administration Act, and that the tribunal had been wrong to base recovery on misrepresentation when the original recovery decision had been on the basis of a failure to disclose.  The chairman granted leave to appeal, observing that guidance is needed on what constitutes sufficient evidence of a superseding decision.

11.  In relation to the section 71(5A) issue, the Secretary of State’s representative has submitted that, for the purposes of that provision, what has to be established is the existence of a supersession decision (rather than a decision which was superseded), and that the tribunal in this case was entitled to be satisfied of the existence of such a decision on the basis of the evidence of the computer records.  The representative further submits that the Secretary of State has “constructed a narrative” to provide to the tribunal as evidence of the decision, but concedes that the decision recorded in the document which was certified under paragraph 13 of Schedule 1 of the Social Security Act 1998 was defective:

“The decision maker did construct a narrative…however I submit that this is incorrect and needs to be corrected by the Secretary of State.  A narrative should have been constructed for the Secretary of State’s decision given 11/12/01.  The decisions given on or about 29/02/96, 23/06/96 and 26/12/96 should have been revised under regulation 5(b) (sic.) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 for ignorance of a material fact namely that the claimant was receiving a Residence Order.”

 12.  Section 71(5A) of the Social Security Administration Act 1992 (the “Administration Act”) provides that an amount shall not be recoverable under section 71(1) “unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under section 9 or superseded under section 10 of the Social Security Act 1998.”  As the Secretary of State’s representative has accepted, it was necessary in this case for the Secretary of State to revise the decisions awarding benefit with effect from the date on which each decision was made on the ground of  ignorance of a material fact under regulation 3(5)(b) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 in order to make a valid overpayment recovery decision covering the whole period of each award.  (The reference to regulation “5(b)” in the submission must be a typing error).  Under section 10(5) of the 1998 Social Security Act, a supersession decision under regulation 6(2)(b)(i) of the Decisions and Appeals Regulations on the ground of ignorance of a material fact only takes effect from the date of the supersession decision, and could not therefore cover the whole overpayment period.  (See generally the discussion of the differences between revision and supersession in the recent Tribunal of Commissioners decision CIB/4751/2002 and others).

13.  By paragraph 1 of Schedule 13 of the Social Security Act 1998, a certified record of a decision signed by an authorised person is conclusive evidence of the decision.  I therefore propose to deal with the section 71(5A) issues on the basis that the certified record of the decision signed by the presenting officer correctly records a decision made on 11 December 2001 altering the rate of benefit payable to the claimant as from the date of the first decision awarding benefit, even though, for the reasons given below, I consider it most unlikely that such a decision was in fact made. 

14.  The certified record of the decision makes no reference to section 9 of the 1998 Act and purports to record the making of a supersession decision, rather than a revision decision.     In CIB/4751/2002 and others the Tribunal of Commissioners held  that a tribunal has power to make a revision decision if the Secretary of State has superseded, or refused to supersede, a previous decision, (paragraph 55), but in each of the cases before it the Tribunal of Commissioners held that there had been a valid supersession decision which was under appeal to the appeal tribunal.  The Tribunal of Commissioners considered that a tribunal must have power to give a decision under section 9 of the Social Security Act 1998 when the decision under appeal was made under section 10 (and vice versa) because of the need for a tribunal to have the same power to give an “outcome decision” in the case of a decision involving a change in entitlement to benefit as it has on an appeal against an initial decision-see paragraph 55(3).  However, in this case the claimant’s representative put the Secretary of State to proof that a decision had been made in accordance with the requirements of section 71(5A) of the Administration Act, but did not raise any entitlement issues and appealed only the recoverability decision.  There was therefore no issue before the tribunal with regard to the ‘outcome’ of the decision made on 9 December, and I therefore consider that the tribunal had no power to substitute any decision which they considered ought to have been made for the decision which was in fact made by the decision maker.

15.  In my view, however, that did not prevent the tribunal from ignoring errors in the 9 December 2001 decision which were merely defects of form if they found that a decision had been made on that date which changed the decision awarding benefit from the date on which the awarding decision was made.  In CIB/4751/2002 and others the Tribunal of Commissioners said (at paragraph 76):

“In our judgment a decision should generally be regarded as having been made under Section 10, regardless of the form in which it may be expressed, if it has the effect of terminating an existing entitlement from the date of the decision (or from some later date than the effective date of the original decision).  That is simply because there is no other general power which enables an existing entitlement to be terminated in that manner.  In particular, where a decision is made, following a determination under the personal capability assessment, that there is no entitlement to incapacity benefit from the date of the decision, the only possible inference is that the decision maker intended to supersede the previous decision under Section 10.  There is no other power which enables the Secretary of State to change a previous decision as from the date of the new one, and it would in our judgment be wholly unrealistic to infer that the second decision, however, inadequately expressed was made either wholly in ignorance or without reference to the power in section 10.  Similarly, a decision should generally be regarded as having been made under Section 9 if it changes the original decision with effect from the effective date of that decision.”

16.  In my judgment, a tribunal’s power to overlook mere defects of form in decisions made under section 9 or section 10 of the 1998 Act is not limited to cases where a supersession decision or a decision which has been revised under section 9 is under appeal to the tribunal.   In CIS/764/2002 Mr Commissioner Mesher held that defects of substance in a decision which were not so great as to affect its validity could be corrected by a tribunal if the supersession decision and the overpayment recoverability decision were both under appeal.  Although the Commissioner reserved the position in relation to such cases where an overpayment recoverability decision is taken separately from the supersession decision and is appealed on its own, he did not suggest that it was necessary for the supersession decision to be under appeal in order for the tribunal to have power to ignore errors which did not affect the substance of the decision.

17.  If the decision in this case recorded in the certified record is taken at face value,  it changed the decision awarding income support as from the date on which the awarding decision took effect, and could therefore only have been a revision decision under section 9 of the 1998 Act.  The record of the decision gave a valid ground for the making of such a decision, namely that the decision awarding benefit was made in ignorance of a material fact.  The tribunal was not called on to exercise any jurisdiction over the decision altering entitlement to benefit, other than to determine whether a valid decision had been made which complied with the requirements of section 71(5A) of the Administration Act.  On the basis that the certified record of the decision taken on 11 December 2001 was correct in recording a decision which removed benefit from the date of the award, I do not consider that the erroneous description of the decision as a supersession decision prevented the tribunal from regarding it as a valid revision decision. As Lord Templeman observed in Street v Mountford [1985] AC 819F:

“The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.”  

18.  However, I have nevertheless come to the conclusion that the decision in the terms recorded in the certified record did not confer entitlement on the Secretary of State to recover overpaid benefit under section 71(1) of the Administration Act.  There are two reasons for that conclusion.

19.  The first reason is that for the purposes of section 71(5A) of the Administration Act, a revision decision, or decisions, must relate to each decision under which benefit was paid during the over payment period. In CIS/764/2002 Mr Commissioner Mesher held:

“Often there will not have been any review decisions for long periods after an initial decision awarding income support, as changes in the rate of income support or of other benefits already counting as income were given effect automatically without a review.  But where a new source of income arose, reducing the amount of income support entitlement, there would have to have been a review and revision to give effect to the new entitlement from the effective date.  On general principle, as confirmed by the Court of Appeal in Chief Adjudication Officer v Eggleton, reported as R(IS) 23/95, while the previous decision would remain effective down to the day before the revised decision took effect, from that date the revised decision would be effective.  It would be that decision which authorised the payment to the claimant of the new amount of income support.  Therefore, in the present case, before the overpayment for the period from 24 February 1995 onwards could be determined to be recoverable under section 71(1), the review and revision decision which must have been given would have to be revised or superseded.  The decision of 26 March 2001 did not purport to do that, so to that extent section 71(5A) was not complied with.”

As the Secretary of State’s submission in this case recognises, separate awards must have been made on or about 29 February 1996, 23 June 1996 and 26 December 1996.  Although the additional submission to the tribunal stated that all the decisions awarding income support had been superseded, according to the certified record the decision made on 9 December 2001 altered only the first decision awarding benefit.  On the basis that the certified record was correct,  the requirements of section 71(5A) were therefore not satisfied in relation to the second and third awards.

20.  The second reason why the decision in the terms recorded in the certified record did not comply with section 71(5A) is that it did not did not set out the revised amounts of benefit to which the claimant was entitled in each benefit period.  I consider that a decision awarding a claimant benefit of a stated amount can only be effectively revised if it is replaced by a new decision which also specifies the amount of benefit (if any) to which the claimant is entitled, in the light of the fact which was not taken into account when the original decision was made.  A revision decision to the effect that an earlier decision awarding benefit of a specified amount has been ‘revised’, but which does not state the amount of the revised entitlement is, in my judgment inchoate.  If a revision (or supersession) decision resulting in an overpayment is made separately  from a recovery decision, it will therefore be necessary for the claimant’s revised benefit entitlement to be calculated as part of the revision decision before a valid overpayment recoverability decision can be made under section 71(1).

21.  I therefore consider that the evidence does not establish a decision satisfying section 71(5A) of the Administration Act, and that, accordingly, no valid over payment recoverability decision was made under section 71(1).  The tribunal’s decision must therefore be set aside, but the Secretary of State’s representative has asked me to refer the case for rehearing in order to give the Secretary of State a further opportunity of establishing that a valid revision decision was made in respect of each of the three awarding decisions. 

22.  As I have observed, there is an inconsistency between the presenting officer’s further submission to the tribunal and the certified record of the decision taken on 9 December 2001, in that the former document states that all income support decisions awarding benefit from 4 January 1996 to 28 November 2001 were superseded, whereas the certified record refers only to the first such decision. The computer print-outs  which have been produced indicate that the decision which was made on 11 December 2001 was in fact a supersession decision, recorded as having been made on the ground of a change of circumstances.   The presenting officer stated in the further submission that an example of the letter which would have been sent to the claimant on 11 December 2001 was included in the documents attached to the submission,  but the specimen actually provided was of a different decision letter.

23.  Although the presenting officer stated in the additional submission that all three awarding decisions had been superseded and stated in the certified record that the first decision had been superseded, there is no indication in the computer print-outs that any decision was made with regard to the claimant’s entitlement to benefit for any period prior to the making of the decision on 11 December.  The payment history shows that the claimant was paid only to 30 November, and it therefore seems very likely that the claimant’s payment book was withdrawn when the claimant’s wife called at the office on that date to report that she was in receipt of the residence order payments.  At that stage it was only necessary to decide the rate of benefit to which the claimant was currently entitled and to supersede the most recent decision so that the claimant could be paid at the correct rate in future. The payment record shows that  the rate of benefit was adjusted with effect from 6 December, which was the correct date if the claimant was paid in arrears and the decision removing entitlement was, in fact, a supersession decision taking effect from the date on which it was made.

24.  The Secretary of State has, of course, already had one opportunity of producing evidence of a decision satisfying the requirements of section 71(5A).  Under section 5 of the Perjury Act 1911, it is an offence punishable by two years imprisonment for a person knowingly and wilfully to make, otherwise than on oath, a statement which is false in a material particular in a certificate which is authorised by any statute for the time being in force.  A decision complying with section 71(5A) of the Administration Act  is a pre-condition of recovery of overpaid benefit under section 71(1) of the Administration Act, so that a false statement which has been certified as the record of a decision under paragraph 13 of Schedule 1 of the 1998 Act with regard to a decision required by section 71(5A)  in an overpayment recovery case may expose the maker of the statement to criminal sanctions.  Proof of a supersession or revision decision complying with section 71(5A) of the Administration Act is not a question of “constructing a narrative”, as the Secretary of State has submitted, but of establishing that the necessary decision was actually taken by a decision maker, or by a computer in accordance with the procedure now authorised by section 2(1) of the Social Security Act 1998.  The Secretary of State has  submitted that there was evidence to construct the narrative set out in the certified record of the decision, but for the reasons I have given, I can find no evidence that any decision was made prior to the overpayment recoverability decision with regard to the claimant’s entitlement to benefit for any period prior to 11 December 2001.  If that was the case, section 71(5A) was not satisfied and no useful purpose can be served by referring the case for re-hearing so that the narrative can be “corrected by the Secretary of State”.  I therefore decline to refer the case for rehearing, and  I make the decision which I consider that the tribunal ought to have made on the evidence before it.

25.  Since I have held that the pre-conditions for entitlement to recovery under section 71(1) have not been satisfied, it is not necessary to consider whether it was unfair for the tribunal to base the overpayment recoverability decision on misrepresentation, rather than failure to disclose, or to deal with the other points made by the claimant’s representative in support of the appeal.

26.  For those reasons, my decision is as set out in paragraph 1.

							(Signed)	E A L Bano
									Commissioner

(Dated	) 	17 June 2004