[2008] UKSSCSC CH_2943_2007 (22 February 2008)

CH/2943/2007

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant against the decision of the Birmingham Appeal Tribunal given on 16th March 2007.  By that decision the tribunal dismissed the claimant’s appeal against the decision of Birmingham City Council made on 14th September 2006 that the claimant had been overpaid housing benefit and council tax benefit and that the amount of the overpayment was to be recovered from the claimant.  The appeal is not supported by the local authority.  Nevertheless, for the reasons given below, I have concluded that the decision of the tribunal was erroneous in point of law and must be set aside.  Also as explained below, the matter must be remitted for hearing before a fresh tribunal.

2.	The material facts are as follows.  The claimant claimed housing benefit and council tax benefit by a claim form received on 27th September 2005.  She had not previously claimed benefits.  She stated in the claim form that she was paid £210 weekly for a 40 hour week.  She made her claim through the local Neighbourhood Office, where she produced all the relevant documentation.  By a notice dated 21st October 2005 she was informed that she would receive housing benefit of £86.54 a week from 27th September 2005 and council tax benefit of £10.92 a week from the same date.

3.	Unfortunately, the calculations which produced those figures were done on the basis that the claimant’s weekly earnings were £46.95.  There is no doubt that that was an error on the part of the local authority to which the claimant did not contribute in any way.

4.	On 6th March 2006 the local authority sent the claimant a postal check form which stated that it would be used to check that she was getting the right amount of benefit.  She returned the form showing that she was receiving weekly earnings of £218.34.  The local authority received the form on 13th March 2006.  It is said in the local authority’s submission to the tribunal in section 3 and section 5 that on receiving the postal check the local authority discovered the error I have mentioned.

5.	On 20th March 2006 the local authority sent the claimant a further benefit decision notice, stated to be issued because of annual uprating, informing her that from 1st April 2006 she would receive housing benefit of £86.78 a week and council tax benefit of £11.16 a week.  This notice proceeded on the same mistaken basis as to the claimant’s weekly earnings.

6.	The local authority eventually corrected its mistake by the decision of 14th September 2006 mentioned in paragraph 1 above.  That decision contained four elements:

(1)	the claimant had been overpaid council tax benefit for the period 1st April 2006 to 17th September 2006 in the sum of £270.98;

(2)	the claimant had been overpaid housing benefit for the same period in the sum of £1,990.46;

(3)	the claimant had been overpaid council tax benefit for the period 27th September 2005 to 31st March 2006 in the sum of £290.09;

(4)	the claimant had been overpaid housing benefit for the same period in the sum of £2,206.23.

7.	On receiving notice of that decision, the claimant expressed her wish to appeal, stating that she had supplied the documents asked for, it was the local authority who awarded her benefits, she had not claimed benefits before and she did not know what she was entitled to.  That has been her stance ever since.  The local authority in return has maintained that the decision notices which she received showed her weekly income as £46.95 and it was reasonable for the claimant to have realised that a mistake had been made.

8.	The claimant does not dispute that as a matter of fact housing benefit and council tax benefit were overpaid.  The question before the tribunal was whether the overpayment was recoverable in accordance with the statutory provisions governing recoverability.  In relation to housing benefit, the relevant provision is regulation 100 of the Housing Benefit Regulations 2006, S.I. 2006 No. 213, which provides:

“(1)	Any overpayment, except one to which paragraph (2) applies, shall be recoverable.

(2)	Subject to paragraph (4) this paragraph applies to an overpayment which arose in consequence of an official error where the claimant or a person acting on his behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.

(3)	In paragraph (2), “overpayment which arose in consequence of an official error” means an overpayment caused by a mistake made whether in the form of an act or omission by – 

(a)	the relevant authority; …

acting as such; …

where the claimant, a person acting on his behalf or any other person to whom the payment is made, did not cause or materially contribute to that  mistake, act or omission.

(4)	[This relates to awards of rent rebate.]”

Regulation 83 of the Council Tax Benefit Regulations 2006, S.I. 2006 No. 215, is in the same terms so far as material.  Both sets of Regulations replace earlier regulations which were in force for part of the time while the claimant was receiving overpayments and which were in the same terms as far as material.  The issues are therefore the same in relation to both benefits and throughout the relevant period.

9.	It is accepted by the local authority that the overpayments of benefit arose in consequence of an official error for the purposes of the Regulations.  The point which was in issue was whether the claimant, at the time of receipt of each of the payments (or allowances in the case of council tax benefit), or of notices relating to the payments or allowances, could reasonably have been expected to realise that there was an overpayment.  Essentially this turns on the significance the claimant ought reasonably to have attached to the terms of the notices of 21st October 2005 and 20th March 2006.

10.	At the tribunal hearing, the presenting officer drew attention to the figure of £46.95 which appears in the first notice at p.70 (where it is under the heading “Income – earnings”) and in the second notice at p.84 (where it is under the heading “Financial details – your weekly earned income”).  The claimant, who was not represented, was asked about the decision notice dated 21st October 2005 and said she had received it.  The note of evidence in the record of proceedings as I read it then says:

“Referred to – I did not understand it.
I went back to Acocks Green [the Neighbourhood Office] – went through forms with me.  I went through it.  Went back.
I did not seek any advice until I [?] the letter.
It did not occur to me to [?].”

From the statement of reasons it seems that the claimant’s evidence was in fact that she did not seek advice until she got the letter telling her that there was an overpayment and that it did not occur to her to do so.  There is no reference in the claimant’s evidence to the notice dated 20th March 2006 and no finding relating to it or consideration of its possible significance in the statement of reasons.

11.	Two points emerge from this:

(1)	as far as appears from the record and the statement of reasons, the claimant was not specifically asked questions such as whether she had observed the figure of £46.95 in the notice dated 21st October 2005, whether she had understood it to be a statement of her weekly earnings or why she thought the figures were accurate given the difference between that figure and her actual weekly earnings of about £210.  In other words, the claimant, who was unrepresented, was not given the opportunity through direct questions to explain why, in spite of the difference in the figures, she could not reasonably have been expected to realise that the calculation had been done on a basis which was mistakenly favourable to her and which therefore gave rise to an overpayment;

(2)	the claimant was not asked separately anything about the notice dated 20th March 2006 and no account appears to have been taken of the possible relevance of the fact that she received it (if at all) in all probability very shortly after having supplied the correct information a second time in response to a request for information to check that the right amount of benefit was being paid.

12.	For the purposes of seeking leave to appeal and pursuing her appeal, the claimant has had the benefit of legal representation.  It is said on her behalf that the tribunal erred in law in that:

(1)	if it  had acted reasonably and interpreted the law correctly it could not have made the decision which it did;

(2)	it failed to take relevant matters into account.

In support of the latter argument, reference is made to the fact that the claimant had never previously claimed housing benefit or council tax benefit and had no knowledge of the relevant legislation and that her educational attainments are limited.  It is also said that she believed that the figure of £46.95 was a correct statement of her weekly earnings for benefit purposes, given that she had supplied all the correct information.  In effect, she assumed that the actual figure had been reduced deliberately.  (In the application for leave dated 26th June 2007, the basis of the assumption is said to be because the notice referred in the adjacent column to the applicable amount, while in the letter dated 4th February 2008 in answer to the local authority’s submission on the appeal it is said that the claimant thought that the income figure was “a special benefit way” of doing the calculation after allowing for expenses, which was done by the experts and which she had no reason to query.)  

13.	The district chairman refused leave to appeal on the ground that the difference between the claimant’s actual income and that taken into account was so marked that the claimant could reasonably have been expected to realise she was being overpaid.  Mr. Commissioner Jacobs, in giving leave to appeal, described that comment as “persuasive”, but raised the query whether that reasoning could apply from and after 20th March 2006, when the claimant had again provided the correct information and the local authority repeated its mistake.

14.	It is accepted by both parties that the correct approach to cases such as the present is to follow the three stage approach described in CH/2554/2002, namely:

(1)	to identify the correct legal test, which is whether the claimant (in a case like the present) could reasonably have been expected to realise that there was an overpayment;

(2)	to identify the information the claimant had about the housing benefit scheme;

(3)	to determine what the claimant could reasonably  have been expected to realise from that information.

It is not clear to me, however, that either party has quite correctly applied that case.  As I understand it, the first stage involves no more than the tribunal reminding itself of the legal test to be applied.  The second stage is really laying the groundwork for the application of the test by identifying as a matter of fact what relevant information was known to the claimant and so might cast light on what was reasonably to be expected of the claimant.  The third stage is to make findings of fact about the question raised by the legal test, namely, what the claimant could reasonably have been expected to realise.

15.	In this case, it seems to me clear that in substance the local authority is relying on the facts that both decision notices told the claimant that the benefits were being calculated on the basis of weekly earnings of £46.95 and that she knew that her weekly earnings were in fact about £210.  It is said that she could therefore reasonably have been expected to realise that benefit calculated on that basis would include an element of overpayment.  The claimant resists that conclusion by contending that given her general lack of familiarity with the benefits system by contrast with the local authority’s expertise and her educational position she could not reasonably be expected to have realised that the local authority had made a mistake and were therefore overpaying her instead of using a special benefits method of calculating income.

16.	When the matter is put like that it can be seen that the claimant’s full explanation was never really before the tribunal, because she was not asked any questions about how she could reconcile what the tribunal in its statement of reasons referred to as a clear statement that her weekly earnings were £46.95 with her undoubted knowledge of her actual earnings.  This is the point I made in paragraph 11(1) above.  It seems to me that this amounted to a failure by the tribunal to ask material questions pursuant to its duty to act inquisitorially and as such was an error of law:  see R(IS) 11/99, to which the claimant’s representative refers.  This is something to which the tribunal may need to be particularly alert where the claimant is unrepresented:  see R(IB)2/04 at paragraph 32 and Hooper v. Secretary of State (reported as R(IB)4/07) at paragraph 25, citing a substantial extract from the decision of the Court of Appeal in Northern Ireland in Mongan v. Department of Social Development [2005] NICA 16.  The present case is, in my view, an illustration of how an unrepresented claimant can fail to give an explanation that a representative would have ensured was before the tribunal.

17.	In those circumstances I conclude that the fair course is not only to set aside the decision of the tribunal as erroneous in point of law, but to remit it to be heard by a new tribunal which can hear the claimant’s evidence on the point afresh and can also consider any further submissions by the local authority.  I bear in mind here that the local authority has had some opportunity to deal with the claimant’s explanation as put in the application for leave but not to deal with the somewhat different way in which the explanation was given in the letter of 4th February 2008.

18.	As respects the overpayments occurring after 20th March 2006, there is also to be considered the point raised by Mr. Commissioner Jacobs on giving leave to appeal.  The local authority has not dealt separately with the issue whether the claimant could reasonably have been expected to realise that the local authority had made a mistake leading to an overpayment a second time just after she had again provided them with all the correct information.  I appreciate that in fact the notice dated 20th March 2006 may well have been wholly unconnected with the recent submission of information, and may have been part of a general and routine uprating exercise, but the timing is such as to raise the possibility that the claimant might have thought that the letter confirmed the correctness of the earlier calculation, even if, contrary to her case, she had previously had doubt about it.  I take the view that in failing to make any separate reference to the overpayments after 20th March 2006 the tribunal failed to give adequate reasons for its decision as respects those payments, and so again erred in law.

19.	A related question is whether, if the notice dated 20th March 2006 was unconnected to the supply of information and ought reasonably to have been appreciated by the claimant to be unconnected, she was reasonably to be expected to have realised that the continued payments of housing benefit and council tax benefit for six months after she had provided accurate information for the second time continued to include overpayments.  It is not self-evident that the claimant could reasonably have been expected to realise that the local authority would not have corrected any mistake which had been made fairly shortly after the submission of the second set of documents, and that because of its failure to do so the continued payments continued to include an element of overpayment.

20.	The matters raised in paragraphs 18 and 19 above can also conveniently be explored before a new tribunal.

21.	I draw attention to the following points:

(1)	in my view a claimant cannot reasonably be expected to seek advice about the local authority’s decision notice because she does not understand all the figures unless she has some reason to believe that the figures are wrong.  Despite what the local authority says in this case about explanations in the documents, the information given about disregards and the applicable amount does not of itself enable a claimant to know whether or not the figures used are correct; they are prescribed and, in a sense, arbitrary amounts.  A claimant who has given clear and correct information is entitled to start from the basis that the local authority has such information when stating her weekly earnings;

(2)	there appears to be the makings of an issue about the claimant’s previous experience of the benefits system.  If the local authority wishes to rely on Neighbourhood Office records, they should be produced.  The claimant should equally be ready to deal with this point as best she can;

(3)	I assume that the claimant did not receive any interim payments of either housing benefit or council tax benefit prior to the decision notice dated 21st October 2005.  If payments were received before that date, it is difficult to see how the claimant could reasonably have been expected to realise that there was an element of overpayment;

(4)	I do not understand the reference in the local authority’s submission to pp. 73 and 74 containing information about “what are earnings”.  Those pages are in different form from p.86, where there is such a heading;

(5)	for the avoidance of doubt, I should perhaps make clear that I do not regard the tribunal’s decision as being one which no reasonable tribunal could have reached.  Both decision notices did imply that the claimant’s earnings were relevant and that they amounted to a weekly figure of £46.95, which the claimant knew not to be the case.  Some explanation was therefore called for from her if the tribunal was not to find that she could reasonably have been expected to realise that the payments included overpayments.  It will be for the new tribunal to make such findings as may be appropriate as to, and to give such weight as it may think fit to, the claimant’s previous experience of the benefits system and her educational attainments.

22.	For the reasons I have given I set aside the decision of the tribunal and remit the matter to be heard by a new tribunal.  That tribunal should have regard to the points made in this decision.   

	(signed on the original)	E. Ovey
		Deputy Commissioner
							           22nd February 2008