[2007] UKSSCSC CSIS_534_2007 (18 December 2007)

DECISION OF SOCIAL SECURITY COMMISSIONER

1.	My decision is that the decision of the tribunal given at Stirling on 21 June 2007 is not erroneous upon a point of law.  The appeal fails.  I dismiss it.  

2.	The claimant has appealed to the Commissioner against the decision of the tribunal which disallowed the claimant’s appeal to them and confirmed the decision of the Secretary of State issued on 5 February 2007.  That decision was that the claimant was not entitled to the social fund funeral payment because a contribution from the family was greater than the amount payable.  

3.	The tribunal made the following findings in fact:

	“Findings of fact

1.	On 12.1.07 a claim for help with the funeral expenses was received on behalf of [the claimant].

2.	The appellant’s partner, [Mr AAP] had died on 19.12.06 and his funeral was held on 20.12.06.

3.	The total funeral account amounted to £1,825.

4.	This was due for payment on 10.2.07.

5.	On 2.2.07 the appellant telephoned the Department and said that the account had been paid in full with money borrowed from her brother and cousin.

6.	The decision maker on 5.2.07 decided that [the claimant] was entitled to a Social Fund Funeral Payment of £1,085 less the contribution of £1,825 paid by the family so that nothing was in fact payable.

7.	[The claimant] was told of the decision on 5.2.07.

8.	On 22.2.07 an appeal was received in which [the claimant] said that the money had been lent to her by her son and cousin.

9.	There was a reconsideration of the decision on 12.2.07 but this did not result in the decision being changed.

10.	No satisfactory confirmatory evidence regarding the existence of any legally enforceable loan from any member of the family had been received be that member of the family brother, son or cousin.”

4.	In giving reasons for their decision, the tribunal said:

	“Reasons for decision

This was an unfortunate situation because the appellant would have been entitled to the Funeral Payment of £1,085 had the account not already been paid by family contribution prior to the decision being made.

There were some matters in the evidence which were unusual and somewhat ambivalent in that [the claimant] had originally said that the money had been received from her cousin and brother but later said that payment was made by her son and cousin.  She had also stated that she was under pressure by the funeral directors to pay the account.  However, it was noted that the funeral account was not due for payment until 20.2.07 and it would be unusual for a funeral director to press for payment early.  In any event, the Department had arrived at a decision on 5.2.07 before payment was due.  There was no satisfactory evidence to show the existence of any legally enforceable loan from either son, brother or cousin whoever may have provided the money.  The tribunal concluded that on the evidence available to it and the facts found that payment made in respect of the funeral account was a contribution from the family towards the cost.  The appellant was therefore not assisted by Decision CIS 450/1995 in that there was no legally enforceable loan in force.  As regrettable as the situation was, the decision maker had correctly applied the law and no funeral payment was payable.  The appeal was therefore dismissed.”

5.	The grounds of appeal are within a short compass.  They are on the following terms:

	“I believe that the decision is erroneous in law.

The tribunal relied on my statement that there was no “charge or legally enforceable document” yet there was a verbal contract between myself, brother and cousin that they would lend me the money to pay for the funeral.  The Tribunal therefore failed to decide whether or not the payment from my brother and cousin was a loan and if so on what conditions, if any, it was made (CIS/450/1994).  The tribunal also failed to determine if the payment was actually made directly to the Funeral Director or if it was “received by” me being the responsible person (The Social Fund Maternity and Funeral Expenses (General) Regs 2005 Reg. 10(c)).

Merrit v Merrit [1970] 1WCR 1211 demonstrates that although domestic arrangements are assumed not to create legally binding obligations (Balfour v Balfour 1919 referred to in CIS/450/1994 where parties were living together in amity) in some cases that may be overruled by the facts.”

The Secretary of State has supported the appeal.  In his submission, the Secretary of State said:

“7.  I submit that the tribunal erred in law by failing to give adequate consideration to existing case law.  The tribunal found that there has to be evidence to show the existence of a legally enforceable loan.  I submit that there is nothing in the legislation that stipulates that there has to be such evidence in order for a payment to be accepted as a loan.  In Commissioner’s Decision CIS/450/94, paragraph 8, the Commissioner addresses whether a loan can be a contribution.  This is further developed in Paragraph 10 of CIS/2470/2003.

“In my judgement the key issue is whether the person or people who gave the money to the claimant did so as an outright gift, not expecting to get the money back, or whether they expected it to be repaid.  If the Tribunal conclude that the provider(s) of the money expected to get it back, then I do not consider that the Tribunal should be too ready to conclude that the loan as not intended to be legally recoverable …. Though some arrangements between relatives may not be intended to create legal relations, that is less likely to be the case as regards a loan of money, and the fact that the lender might be unwilling to sue is not the same as intending the obligation to be binding in honour only””

8.  I submit that in this case although there was no documentary evidence of a legally enforceable loan this does not mean that money provided by the claimant’s brother and cousin should automatically be considered to be a contribution.  I submit that a verbal agreement between parties can be considered as a loan if there is sufficient supporting evidence.

9.  I submit that the tribunal further erred in law in that it failed to establish whether the money the claimant allegedly borrowed was paid directly to the funeral director or was received by the claimant being the responsible person in accordance with Regulation 10(1)(c).

10.  If the Chairman accepts my submission that the tribunal have erred I invite him to set aside their decision and remit the appeal for rehearing by a differently constituted tribunal with appropriate directions for its determination.”

6.	I do not consider that there is any merit in the grounds of appeal or the support for them.  The claimant was professionally represented by the CAB before the tribunal.  The evidence before the tribunal was that the bill for the funeral was invoiced by the funeral directors to the claimant and that payment of the bill had been made by 2 February 2007.  It is apparent from the reasons given by the tribunal that they had doubts about the reliability of the claimant’s evidence in respect of the sum or sums used to pay the funeral account being a loan or loans rather than a contribution or contributions.  The reasons for that were that the claimant changed her position in respect of the identity of the relatives who parted with the money.  They further did not accept her evidence that she was being pressed by the funeral director for payment for early payment of the account.  It is clear in these circumstances that the tribunal were not prepared to accept that the sums parted with by relatives were loans, particularly when no attempt was made by the claimant to identify what sums were parted with by which relatives and the inconsistencies as to whether it was her son and cousin who parted with the money or her cousin and brother.  The issue of fact as to whether there were loans as asserted by the claimant or family contributions was a matter of fact for the tribunal to determine.  This they have done and set out a reasoned basis for their view.  There are accordingly no grounds for the Commissioner to interfere with that finding.  In my view, the tribunal were correct that it was for the claimant to establish the existence of a loan or loans.  It was she who was asserting that these were loans rather than contributions.  It is contributions from relatives which fall to be deducted under regulation 10(1)(c) of the Social Fund Maternity and Funeral Expenses Regulations 2005, not loans.  There was no evidence by the purported creditors that they had in fact made a loan or loans to the claimant and as indicated, the claimant’s evidence in respect of the identity of the creditors was both inconsistent and unspecific in relation to both identity and amounts.  Thus, what was presented to the tribunal fell somewhat short of what the tribunal rightly considered was necessary to establish a loan or loans.

7.	I further do not consider that the authorities quoted by the Secretary of State and the claimant assist her.  The tribunal’s decision in CIS/2470/2003 was erroneous in law because the tribunal determined that the claimant in that case was not entitled to a funeral payment as her savings exceeded the amount of the allowable payment.  Why that was erroneous in law is set out in paragraph 8.  The relevance of that authority to the instant case is contained in the directions given to the Deputy Commissioner to the freshly constituted tribunal in that case which is quoted in paragraph 7 of the Secretary of State’s submission set out in paragraph 5 above.

8.	It is apparent from that passage that he rightly accepts that a legal obligation to repay the money is essential.  What he says in respect of that legal obligation is dependent upon the tribunal concluding that the provider or providers of the money expected to get it back.  In this case, for the reasons set out above, the tribunal were unable to find as a matter of fact that a loan or loans had been established.

9.	Further, it is to be noted that in CIS/450/1994, the Commissioner in paragraph 8 said in respect of a scheme for payments that is somewhat different to the current scheme:

“Clearly in the circumstances of urgency surrounding a funeral there is nothing wrong in a relative lending money to the responsible person to defray the funeral expenses on the understanding that when a social fund grant is received it will be used to repay the loan.  Equally, however, it is not possible to disguise as loans what are in truth absolute contributions in order to throw the burden of a funeral payment upon the State.”

The last sentence of that quotation is particularly pertinent.  A funeral payment is intended to be the last resort for the payment of funeral costs.  It is recognised that contributions are made in such cases by relatives out of a sense of family obligation and that these are not to be disguised as loans in order that the state meets the costs.  The claimant gave no evidence as to what was to be done by the relatives named in respect of the payments made in excess of the claimant’s entitlement to pay the funeral account when the claimant’s circumstances, which give rise to the claim in the first place, would suggest that she did not have the wherewithal to pay the bill and no indication is given as to how she would make repayment to her relatives.

10.	Thus, on the facts determined by the tribunal, they reached a decision they were entitled to.  

11.	I should perhaps further add that it is clear from the evidence before the tribunal that the funeral account was in fact paid.  The evidence is not clear whether it was paid directly by one or more of the claimant’s relatives to the funeral director or to the claimant herself.  I do not consider that this is a matter which is material for the application of regulation 10(1)(c).  The claimant was the debtor for the purposes of the funeral account.  Whether a payment was made directly to the funeral directors or to her for transmission to the funeral directors, in my 

view, is neither here nor there in respect that it can properly, in my view, be said to have been received by the claimant as she was the debtor.

12.	The appeal fails.

					(Signed)
					D J MAY QC
					Commissioner
					Date:  18 December 2007