[2007] UKSSCSC CH_1384_2007 (04 September 2007)

CH/1384/2007

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The local authority’s appeal succeeds in part.  The decision of the Stoke on Trent Tribunal sitting on 7 December 2006 was erroneous in point of law and therefore I set its decision aside.  In accordance with paragraph 8(5)(a) Schedule 7, Child Support Pensions and Social Security Act 2000 I substitute my decision that the local authority is entitled to recover an overpayment of £131.43 in respect of the period 12 June 2006 to 31 March 2007.  I adopt the tribunal’s finding that there was official error in respect of the period 10 April 2003 to 11 June 2006 (both dates inclusive) as that was a conclusion it was entitled to reach on the evidence before it, as was its conclusion that the claimant could not reasonably be expected to realise that the payments made were overpayments. This means, and the Authority accepts this to be the case, that the overpayment for the period 10.4.2003 – 11.6.2006 is not recoverable.

2.	The claimant had been in receipt of council tax benefit for some years.  Though claimants are under a duty to report changes in circumstances to the local authority, the abolition of benefit periods in 2004 has meant that local authorities who wish to satisfy themselves as to the accuracy of ongoing awards resort to random periodic checks described as “interventions” in which the authority sends out a claim form and requests that it be returned  with verification of income and capital.  In the claimant’s case, when this evidence was received, a Pensions Service award notice dated February 2006 showed that the claimant’s income received by way of retirement pension and lowest rate DLA care component came to £135.36 per week, of which only £120.36 per week was being paid: £15 a week was being taken off as “an adjustment” to his benefit.  This was in fact  because of a previous overpayment of income support which was being recovered.  The disability living allowance (DLA), of course,  was not taken into account as income, as can be seen from the decision notices produced by the local authority showing disregarded income of  £58.15 per week, this being the claimant’s £16.50 per week lowest rate DLA care component, and his wife’s £41.65 per week DLA middle rate care component.  However the local authority was taking into account only £104.46 per week income instead of  the £119.46 per week  which should have been taken into account.  This was the amount which was set out on the 2003 claim form. It did not show that the State retirement pension received had been reduced from that which would otherwise have been payable.  I note that the claim form was accompanied by photocopies of benefit order book covers for the claimant and his wife. In respect of the claimant this contained on the cover the word “adjusted”.  It does not appear that the local authority at any point made any query as to what was meant by “adjusted”.  However, I note that had an award notice been produced to the local authority, as it was when the intervention was made, this would have shown that the payment that was made by way of state retirement pension and DLA care component was £15 per week less than the total amount to which the claimant would otherwise have been entitled.

3.	Sight of the retirement pension award letter triggered an inquiry by the local authority and it obtained confirmation that the £15 per week deduction had been in place since at least April 2003. The local authority superseded the claimant’s award of council tax benefit as the award made was in ignorance of a material fact that the claimant’s income exceeded that taken into account by £15 per week throughout this period.  The local authority contended that the claimant had been overpaid council tax benefit for the period 10 April 2003 to 31 March 2007 and that excess council tax benefit in the sum of £640.52 was recoverable.  The local authority submitted there was no official error, and that the overpayment was caused by the claimant’s inaccurate account of his income in the 2003 claim form.

4.	The claimant appealed against that decision and with the assistance of the Citizens Advice Bureau argued that there was official error.   The sole ground argued initially was that a local authority officer completed the claim form received on 20 June 2003, that that local authority officer had been shown all the relevant documentation, and then entered the wrong information. This, it was argued, was therefore an overpayment  caused by official error to which the claimant did not contribute.  The second argument, advanced late in the day, was that the claim form itself constituted an official error because the question asked of the claimant is the ‘weekly amount the claimant gets’ and where it asks for proof, it says “this could be a letter showing how much you get …”.  The representative argues that as the claimant showed exactly what he received, he gave the right answer to what the representative describes as the “wrong” question.

5.	It was not disputed on the claimant’s behalf that he was overpaid.  The only question is whether the overpayment is recoverable.  Regulation 23 and Schedule 3 of the Council Tax Benefit (Persons who have attained the qualifying age for State Pension Credit) Regulations (hereinafter ‘the Regulations’) contains no provision which would enable the £15 per week deducted not to be taken into account as income.  Nor is it disputed that if there were no official error, all excess benefit would be recoverable.  Regulation 68(1) of the Regulations provides that any excess benefit, except benefit to which paragraph (2) applies, shall be recoverable.  Regulation 68(2) refers to excess benefit allowed in consequence of an official error, where the claimant or a person acting on his behalf or any other person to whom the excess benefit is allowed could not, at the time the benefit was allowed or upon the receipt of any notice relating to the allowance of that benefit, reasonably have been expected to realise that it was excess benefit.

6.	The tribunal on 7 December 2006 heard evidence which it found credible to the effect that the error in completing the form had been that of a local authority officer.  Whether that is correct or not, I have no way of knowing, and neither does the local authority as it was unable to send a presenting officer and therefore did not hear the evidence advanced. An officer recording information at a claimant’s dictation is not making an official error if that information is incorrect.  However the tribunal heard evidence, which it accepted, that it was a local authority officer who completed the 2003 claim form and that that officer completed the form in the erroneous way described despite being given evidence from which it was clear that £15 per week was being deducted from the claimant’s DWP income.  This is a decision which the tribunal was entitled to reach and in challenging its decision on another point, the local authority does not suggest otherwise.

7.	The problem is, and herein lies the error of law, that the tribunal found that none of the excess benefit was recoverable.  In reaching this decision it clearly ignored the provisions of Regulation 68(5) of the  Regulations which provide:-

	“Where in consequence of an official error a person has been awarded excess benefit, upon the award being revised [or superseded] any excess benefit which remains credited to him by the relevant authority in respect of a period after the date of the revision [or supersession], shall be recoverable.”
This provision is identical to that in Regulation 83(5) of the Council Tax Benefit Regulations 2006 and its predecessor regulations.

8.	The claimant’s representative objects to the local authority raising this argument in the appeal to the Commissioner.  This objection is wholly mistaken.  Issues of fact should not be first raised on an appeal from the tribunal.  However that does not apply to questions of law.  In considering recoverability under regulation 68, the tribunal clearly was wrong not to go on to consider the applicability of regulation 68(5).  It is unsurprising that this was not argued by the local authority in its submission to the tribunal.  Regulation 68(5) only comes into play where excess benefit has been awarded in consequence of an official error, and the local authority did not admit that there was any error.  

9.	However, the claimant’s representative raises a further objection to recovery under regulation 68(5), namely that it is “irrelevant” to the circumstances of the claimant's case.  This argument is based on the necessity for the council tax account to be in credit, and by an analogy with regulation 100(4) Housing Benefit Regulations 2006, the representative argues that the conditions for recovery under regulation 68(5) have not been satisfied.  

10.	Regulation 100(4) Housing Benefit Regulations 2006 provides:

	“Where in consequence of an official error, a person has been awarded rent rebate to which he was not entitled or which exceeded the benefit to which he was entitled, upon the award being revised [or superseded] any overpayment of benefit which remains credited to him by the relevant authority in respect of the period after the date on which the revision [or supersession] took place, shall be recoverable.”

The claimant’s representative, in his submission that the excess benefit remaining credited should not be recoverable, relies on the commentary set out in the annotated “Housing Benefit and Council Tax Benefit Legislation“  being equally applicable to Regulation 68(5).

11.	For Regulation 100(4) to apply there must have been a revision or supersession of the award.  This is true also for regulation 68(5).  For both, the relevant claimant account must be in credit, and must be in credit for a date after the date of the revision or supersession.  Finally, any remaining credit must be the overpayment, and not subsequent payments of rent rebate or payments made by the claimant.  It is at this point that the factual difference between  Housing Benefit and Council Tax Benefit becomes apparent.  Housing Benefit is paid by virtue of regulations made under Section 134 of the Social Security Administration Act.  Section 134(1A) provides that housing benefit in respect of payments  which the occupier of a dwelling is liable to make to a housing authority shall take the form of a rent rebate or a rent allowance.  Regulation 92 Housing Benefit Regulations provides that payment on account of rent allowance shall be paid at intervals of two or four weeks or one month insofar as is practicable, at the end of the period in respect of which it is made. 

12.	Section 138 Social Security Administration Act 1992 deals with Council Tax Benefit and it provides in sub‑section (1)(b) for the common form of award of council tax benefit, namely a reduction in the amount the person is or becomes liable to pay to the authority in respect of the tax for the relevant or any subsequent financial year.  In short, an award of council tax is made to the end of the financial year in respect of which an award has been made.  Accordingly, instead of an award of rent rebate for a two or four week period, an award of council tax benefit will reduce the council tax liability to the end of the financial year in question.  Regulation 62 of the relevant CTB Regulations makes it clear that where a person is entitled to council tax benefit the relevant authority shall discharge his entitlement by reducing so far as possible the amount of his liability to council tax in respect of the of the relevant or any subsequent chargeable financial year. 

13.	Accordingly there is an important factual difference between the circumstances in which Regulation 100(4) Housing Benefit Regulations will operate, and the seemingly similar provisions of Regulation 68(5).  In the case of a rent rebate, the credits accrue at regular short intervals.  With council tax benefit, the credit is that for the balance of benefit which remains credited for the remainder of the financial year following the date of the supersession.  The claimant’s representative here suggests there could be an element of unjust enrichment for the local authority if, for example, the claimant had made payment of an instalment of council tax he believed to be due, and suggests that the local authority could recover this also. This is a mistaken argument. It is quite clear that the Regulation applies only to excess benefit.  Any credit on the account which consisted of anything other than excess benefit would remain credited to the council tax payer.  I should add that the argument in this case appears to be wholly hypothetical as it is not suggested that the claimant had paid any council tax in respect of the year in question.  However that does not  affect   the point being argued.

14.  Therefore, accepting there was official error (without which Regulation 68(5) would not come into play), the tribunal clearly erred in not finding that the authority was entitled to recover the excess benefit which remained credited to the claimant’s account.

15.	Accordingly, and for the reasons stated above, I allow the authority’s appeal to the extent stated in paragraph 1 of this decision.

				(Signed on the Original)	Mrs A Ramsay
								Deputy Commissioner

								4 September 2007