[2006] UKSSCSC CIS_1867_2006 (14 November 2006)

CIS/1867/2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.	This appeal is ultimately unsuccessful.  I set aside the decision of the Bexleyheath appeal tribunal dated 24 January 2006 but I substitute a decision to the same effect.  The claimant was overpaid income support from 17 February 2000 to 27 October 2004 and £2,786 is recoverable from her.

REASONS

2.	I held an oral hearing of this appeal.  The claimant appeared in person and the Secretary of State was represented by Mr Sean Wilson of the Office of the Solicitor to the Department of Health and the Department for Work and Pensions.  I am grateful to both the claimant and Mr Wilson for their clear submissions.

3.	The claimant has been entitled to income support since 1986, on the ground of her incapacity for work.  On 15 April 2005, the Secretary of State decided that she had been overpaid in respect of 17 February 2000 to 27 October 2004 because capital she possessed had not been taken into account and he also decided that £2,786 was recoverable from her because she had failed to disclose the capital.  She asked for the decision to be reconsidered and when it was not revised she appealed, pointing out that form INF1 said that a claimant might be able to get income support if she had savings of £8,000 and that she had also been advised by her local office that the maximum amount of savings she could have was £8,000.  The capital taken into account by the Secretary of State, which was money inherited from her parents, was less than that.  The tribunal dismissed her appeal, accepting that the claimant had received the advice she claimed but pointing out that capital between £3,000 and £8,000 reduced the amount of income support payable and that she had not disclosed to her local office the amount of money in her bank.  The claimant now appeals against the tribunal’s decision with my leave.

4.	The claimant accepts that she has been overpaid income support and there is no dispute as to the amount of the overpayment.  She merely challenges the decision that the overpayment is recoverable from her.  The Secretary of State concedes that the tribunal’s decision is erroneous in point of law but, having supplied further evidence, invites me to substitute a decision to the same effect as the tribunal’s.

5.	The Secretary of State submits that the overpayment in this case is recoverable under section 71 of the Social Security Administration Act 1992 on the ground that the claimant failed to disclose the material fact that she possessed capital.  In B v. Secretary of State for Work and Pensions [2005] EWCA Civ 929; [2005] 1 W.L.R. 3796 (also reported as R(IS) 9/06), the Court of Appeal has held that there cannot be a failure to disclose except where there is a duty to disclose.  In this case (as in B), the Secretary of State submits that the duty to disclose arises under regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (S.I. 1987/1968) under which a claimant is obliged to provide information asked for by the Secretary of State and, in any event, to disclose any change of circumstances which he or she might reasonably be expected to know might affect entitlement to benefit.  The precise wording changed during the period material to this case but nothing turns on the change.

6.	The principal cause of the tribunal’s decision beings erroneous in point of law is that there was no evidence before the tribunal that the Secretary of State had ever asked the claimant to inform him if she came into possession of capital amounting to less than £8,000 and there was no evidence to support a finding that the claimant might reasonably be expected to know that possession of such capital might affect her entitlement.  The tribunal might, subject to giving the claimant the opportunity to comment, have made use of its own knowledge of benefit administration to remedy the defect in the Secretary of State’s case but it did not do so and the consequence was that there was nothing in the statement of reasons to explain why the claimant was under any duty to inform the Secretary of State that she had come into possession of capital.  It was that lack of reasoning that renders the tribunal’s decision erroneous in point of law.

7.	It is very easy for the Secretary of State to provide to a tribunal a copy of the instructions given to a claimant and it should be done in every case where it is said that an overpayment is recoverable on the ground of a failure disclose.  The Secretary of State should be able to point to the instruction that made the relevant disclosure obligatory.  If he can do that, the claimant’s appeal is likely to be dismissed.

8.	It is also very easy for the Secretary of State to show that the diminishing capital rule (see regulation 14(1) of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 (S.I. 1988/664)) has been applied in the calculation of a recoverable overpayment.  The papers before the tribunal in this case gave no indication that the rule had been applied and the tribunal did not query the calculation.

9.	On the appeal before me, the Secretary of State has remedied the defects that existed in the papers before the tribunal.  He has provided a form INF4 and also a copy of the standard instructions in an order book, together with a computer record showing that the claimant was paid by order book until 2004 and that forms INF4 were issued to her from time to time.  He has also provided a document showing that the diminishing capital rule had been applied in calculating the recoverable overpayment.

10.	Mr Wilson concedes that form INF1 did not require a claimant to disclose capital of less than £8,000.  However, he submits that both form INF4 and the instructions in an order book clearly stated that a claimant should disclose capital exceeding £2,500 in the case of INF4 or £3,000 in the case of the order book.  I note that those documents actually use the word “savings”, which may be more easily understood than “capital” but may have a narrower meaning.  However, nothing turns on that in the present case because the order book also says that a claimant should disclose receipt of “any new cash or money” and, in any event, the claimant accepted that, had she read that part of the order book, she would have known that she had to disclose the capital she held.

11.	The claimant does not recall receiving forms INF4, which Mr Wilson told me are issued automatically with notices of new awards of benefit and also notices of up-ratings, but she does accept that she was paid by order book until 2004.  However, she says that she had had no reason to look in the back of her order books because, after she had been told by the local office that she was allowed £8,000 in a bank, she had no reason to suppose that there was anything about her circumstances that could possibly raise any question about her entitlement to income support.

12.	I have considerable sympathy for the claimant.  Having read her letters and heard her in person, I have no doubt at all that she has acted entirely honestly.  It does seem to me that one of the drawbacks of telephone advice is that it may mislead by being incomplete because the adviser does not fully understand the context in which a question is being asked.  There is then a risk that the claimant will rely too heavily on that advice and will not read more detailed written instructions, which often look forbidding because they need to cover all eventualities.  Nonetheless, I consider that claimants do not act reasonably if they rely on telephone advice as a substitute for reading written instructions, precisely because they can see that the written instructions are more detailed.  Had the claimant in this case read the instructions in her order book she would immediately have seen that her understanding of the implication of the telephone advice was contradicted by the written instructions, which implied that any savings in excess of £3,000 could affect entitlement.  This is not a case where the claimant actually told the telephone adviser that she was in receipt of income support and had capital exceeding £3,000 so that the advice she was given would clearly have been inadequate and could be taken to have qualified the instructions.  In this case, the claimant had an insufficiently firm basis for her mistaken assumption that, because she could remain entitled to income support as long as her capital was below £8,000, capital below £8,000 could have no effect at all on the amount of benefit to which she was entitled.  Had she followed the instructions in her order book, she would have been made aware of the true position.  

13.	Therefore, although the claimant’s mistake was an honest one, I am satisfied that she did “fail” to disclose her capital because the instructions in her order book gave rise to a legal duty to disclose the capital by virtue of regulation 32 of the 1987 Regulations.  The overpayment is therefore recoverable from the claimant by virtue of section 71 of the 1992 Act.

	(signed on the original)	MARK ROWLAND
		Commissioner
		14 November 2006