[2007] UKSSCSC CIS_647_2007 (10 July 2007)

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1.	My decision is given under section 14(8)(a)(i) of the Social Security Act 1998:
I SET ASIDE the decision of the Wrexham appeal tribunal, held on 9 August 2006 under reference U/03/209/2006/00460, because it is erroneous in point of law.
I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.
My DECISION is that the decision on the claimant’s claim for income support made on 8 August 2005 was correct in fact and law. The decision-maker dealt correctly with the claimant’s payments of tax credit received before 24 October 2005.

REASONS
The issue and how it arises
2.	This is an appeal by the Secretary of State brought with the leave of the district chairman who decided the appeal in the appeal tribunal.
3.	The claimant was working and receiving working tax credit. She ceased full-time work on 19 July 2005 and claimed income support on 8 August 2005. At that stage she was still receiving her tax credit. On 23 October 2005, a tax credit decision-maker (for Her Majesty's Revenue and Customs) decided that the claimant had to repay tax credit. On 9 November 2005, an income support decision-maker (for the Department for Work and Pensions) decided that the claimant was not entitled to income support from 8 August 2005, because her tax credit exceeded her applicable amount, but was entitled from 24 October 2005.
4.	The issue for me to decide is whether tax credit actually paid to the claimant between 8 August and 23 October was her income for the purposes of income support despite the fact that it was later subject to recovery. The income support decision-maker decided that it was. The tribunal reversed this decision on the ground that before the income support decision-maker decided the claim, the tax credit decision-maker had decided that the claimant was required to repay.
The law 
5.	The issue turns on the correct interpretation and application of the decision of the Court of Appeal in Leeves v Chief Adjudication Officer, which is reported as R(IS) 5/99. There is no doubt that I am bound by that decision, but: (i) what did it decide and (ii) is it distinguishable?
6.	In Leeves, the claimant had been a student and had received a grant for the summer term of his course. Shortly after the start of that term, he abandoned his course and applied for a review of his entitlement to income support. That review was carried out on 9 May and the adjudication officer decided that the weekly amount of the grant was attributable to the claimant as income despite (i) the fact that he had abandoned the course and (ii) he would have to repay any overpaid element of the grant. On 24 May, the local authority invoiced the claimant for repayment. The Court of Appeal decided that money received was the claimant’s income unless and until he was under an undisputed and immediate obligation to repay. The key passage, for the purposes of this case, is the following paragraph from the judgment of Lord Justice Potter:
‘On the other hand, it seems plain to me that, following demand made by Hampshire County Council in its letter of 24 May, at which point the claimant became under an obligation of immediate repayment in respect of his grant, that part of the claimant’s grant required to be taken into account over the weeks which followed under regulation 29 thereby lost its character as “income” on any ordinary understanding of the word.’
The words that I have put into bold are determinative of this case. They make it clear that the effect of a demand for repayment is only effective as regards income to be attributed to the future. The demand and the obligation that arises as a result do not have retrospective effect to remove the quality of income from the payments that have already been made and attributed. It follows that the tribunal was wrong to distinguish the case. The key date is the date of the demand for repayment. It is irrelevant whether that date is before or after the decision-maker’s decision on the income support claim. 
Disposal
7.	I have every sympathy for the circumstances in which the claimant found herself. They were not of her making and the law makes no provision for to deal with repayments of tax credit that have to be made. However, I am bound by the decision of the Court of Appeal in Leeves and I am unable to distinguish it as the tribunal did. I must, therefore, allow the Secretary of State’s appeal and substitute the decision that the tribunal should have given. That decision is to confirm the Secretary of State’s decision on the claimant’s entitlement to income support. 

Signed on original
on 10 July 2007	Edward Jacobs
Commissioner