[2008] UKSSCSC CIS_3611_2007 (23 April 2008) 

	DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The claimant's appeal to the Commissioner is allowed. The decision of the Brighton appeal tribunal dated 22 June 2007 is erroneous in point of law, for the reason given below, and I set it aside. It is expedient for me to substitute a decision on the claimant's appeal against the Secretary of State's decisions dated 14 December 2006 and 9 January 2007 (Social Security Act 1998, section 14(8)(a)(ii)). My decision is that:
 (a)	the decision awarding the claimant income support at the weekly rate of £115.75 prior to 1 April 2003 falls to be superseded with effect from 1 April 2003, and further superseded with effect from 19 April 2004, on the ground of relevant change of circumstances and the superseding decision is that the claimant is entitled to income support at the rates shown on the A14 forms at pages 64 to 73 of the papers for the period from 1 April 2003 to 4 January 2006 (both dates included), with the consequence that an overpayment of income support of £9,833.53 was made by the Secretary of State in that period;
 (b)	of that overpayment, the amount of £1,048.51 is recoverable from the claimant under section 71(1) of the Social Security Administration Act 1992 as resulting from the failures to disclose a material fact on 1 April 2003 and 19 April 2004, after the application of regulation 14 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988.

If either party considers that I have made any arithmetical or factual mistake in the calculation of the amount of the recoverable overpayment, they may apply to me in writing within a month of the date of issue of this decision for a further decision, in addition to their rights under regulation 30 of the Social Security Commissioners (Procedure) Regulations 1999.

The background and the relevant legislation
2.	This case is about the recoverability of an overpayment that has arisen is somewhat unusual circumstances: where the capital possessed by the income support claimant's children drifted above the £3,000 limit in force so long as personal allowances for children remained part of the income support applicable amount (ie before the "migration" of such cases to child tax credits).

3.	The main income support provision, about the application of which there is no real dispute, is regulation 17(b) of the Income Support (General) Regulations 1987, as still in force at the relevant dates:

	"17. Subject to [irrelevant provisions], a claimant's applicable amount shall be the aggregate of such of the following amounts as may apply in his case:
	...
	 (b)	an amount determined in accordance with paragraph 2 of Schedule 2 in respect of any child or young person who is a member of his family, except a child or young person whose capital, if calculated in accordance with Part V in like manner as for the claimant, except as provided in regulation 44(1) (modifications in respect of children and young persons), would exceed £3,000;"

Regulation 44(1) deals only with capital payable in instalments and is not relevant in the present case. The other main elements of the scheme for children with capital are that the capital of a child or young person who is a member of the claimant's family is not to be treated as the claimant's capital (regulation 47, specifically confirming what I think would otherwise have resulted from regulation 23(1)) and that where a child's capital exceeds £3,000 any income of that child is not to be treated as the claimant's income. Regulation 47 is a prescribed exception to the general rule in section 136(1) of the Social Security Contributions and Benefits Act 1992 that, except in prescribed circumstances, the income and capital of any member of the family of a person claiming an income-related benefit is to be treated as the income and capital of that person.

4.	The terms of regulation 23(1), in Part V of the Income Support Regulations and as still in force for this case at the relevant dates, are also important:

	"(1) Subject to paragraphs (2) and (4) and to regulation 44 (modifications in respect of children and young persons), the income and capital of a claimant's partner and the income of a child or young person which by virtue of [section 136(1) of the Social Security Contributions and Benefits Act 1992] is to be treated as income and capital of the claimant, shall be calculated in accordance with the following provisions of this Part in like manner as for the claimant; and any reference to "the claimant" shall, except where the context otherwise requires, be construed, for the purposes of this Part, as if it were a reference to his partner or that child or young person."

5.	Of the "ordinary" rules on capital, regulation 48(4), as in force at the relevant dates, is also relevant:

	"(4) Except any income derived from capital disregarded under paragraph 1, 2, 4, 6, 12 or 25 to 28 of Schedule 10, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the claimant's account."

6.	Of the legislation on the recoverability of overpayments, regulation 14 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 (the Payments Regulations) (quarterly diminution of capital resources) is central:

	"14.-(1) For the purposes of [section 71(1) of the Social Security Administration Act 1992] or regulation 11, where income support, or state pension credit, or income-based jobseeker's allowance, working families' tax credit or disabled person's tax credit has been overpaid in consequence of a misrepresentation as to the capital a claimant possesses or a failure to disclose its existence, the adjudicating authority shall treat that capital as having been reduced at the end of each quarter from the start of the overpayment period by the amount overpaid by way of income support, or state pension credit, or income-based jobseeker's allowance, working families' tax credit or disabled person's tax credit within that quarter.
	 (2) Capital shall not be treated as reduced over any period other than a quarter or in circumstances other than those for which paragraph (1) provides.
	 (3) In this regulation--
		"a quarter" means a period of 13 weeks starting with the first day on which the overpayment period began and ending on the 90th consecutive day thereafter.
		"overpayment period" is a period during which income support or an income-based jobseeker's allowance, working families' tax credit or disabled person's tax credit is overpaid in consequence of a misrepresentation as to capital or a failure to disclose its existence."

7.	The claimant has two daughters, H (date of birth 9 March 1991) and C (date of birth 28 September 1993). She was apparently awarded income support from 23 May 1994 on the basis that she was a lone parent. The calculation of the amount included personal allowances for the children under regulation 17(b) of the Income Support Regulations. A copy of the original claim form does not survive, but there is in the papers a copy of an A2 review form signed on 18 November 1999 in which the claimant declared that she had £1,012.51 in a bank or building society account. She answered no to the question "Do any of the children you are claiming Income Support for have savings of £2,500 or more". That was perfectly correct at the time. There were two building society accounts in existence in the claimant's name as trustee for H and C respectively. The balance at that date in H's account was £1,375.75 and in C's account £1,275.22. Interest was credited annually, on 1 April. The balance in H's account first exceeded £3,000 on 19 April 2004 when the deposit of a cheque for £100 took it to £3,044.53. Gross interest of £122.50 had been credited on 1 April 2004. The balance remained above £3,000 until 5 January 2006, when a withdrawal of £1354.70 took it to £1,997.83. The balance in C's account first exceeded £3,000 on 1 April 2003, when gross interest of £118.62 was credited, taking it to £3.079.92. The balance also remained above £3,000 until 5 January 2006, when a withdrawal of £1,349.40 took it to £2,245.09.

8.	The claimant did not inform the office dealing with her income support of the increases in the balances in her daughters' accounts. A computer screen print of letters issued shows the sending of a leaflet INF4 to the claimant on 19 January 2004, 8 November 2005, 17 January 2005 and on later dates. No argument has been made for the claimant that she did not receive an equivalent leaflet at earlier dates. The leaflet instructs a claimant to tell the social security office if anything changes for the claimant, partner, children or anyone else who lives with the claimant and includes in the income support instruction changes in the amount of savings of anyone being claimed for. In the section on savings, the instruction is to tell the social security office if savings reach £2,500 or more or savings of more than £3,000 go up or down at all, but the section on the family says nothing about children's savings.

9.	By some process that has not been disclosed the claimant was invited to an interview on 2 June 2006 at the Jobcentre Plus office about her daughters' capital. She signed a statement saying that the money put into the accounts had been from grandparents and relatives and that she did not realise that she needed to notify the DWP when the amounts reached £3,000. She also stated that the withdrawals bringing the amounts below £3,000 were enable H and C to remain at their school. She expressed agreement to repaying any overpayment by small manageable amounts. Copies of the passbooks were taken.

10.	The following decision was then given on 14 December 2006 (I have left in the mistakes):

	"I have superseded the decision awarding Income Support from 1st April 2003 at £115.75 weekly, on the grounds that there has been a relevant change of circumstances namely that [the claimant's] daughter [C] and [H] had over £3,000 capital and therefore no dependants allowance was payable and as a consequence Income Support is payable at a reduced rate in respect of [the claimant].

	My revised decision is that [the claimant] is entitled to Income Support at a reduced rate from and including 1st April 2003 to 4th January 2006."

11.	On 9 January 2007, the following decision was given (I have left the mistakes in here as well):

	"As a result of the decision(s) dated 14/12/2006 an overpayment of Income Support has been made from 01/04/2003 to 04/01/2006 (both dates included) amounting to £9,833.53 as shown on the attached schedule.
	On 01/04/1903, or as soon as practicable after, [the claimant] failed to disclose the material fact that her daughter [C] had over £3,000 from 01.04.03 to 04.01.06 and her other daughter [H] had over £3,000 from 19.04.04 to 04.01.06 so not due dependents allowance for them.
	As a consequence, Income Support amounting to £9,833.53 from 01/04/2003 to 04/01/2006 (both date included) was paid which would not have been paid but for the failure to disclose.
	Accordingly that amount is recoverable from [the claimant]."

The schedule showed a weekly overpayment equal to the amount of one personal allowance for a child for the period when only C's capital exceeded £3,000 and equal to the amount of two personal allowances for the period when both C and H had more than £3,000.

12.	There is nothing in the papers specifically to show that the decision of 14 December 2006 was notified to the claimant or, if it was, whether there was a separate notification from that of the decision of 9 January 2007. In the Secretary of State's written submission to the appeal tribunal the decision under appeal was set out as an amalgamation of the two and said to have been notified on 9 January 2007. I therefore proceed on the basis that both decisions were notified on that day. The claimant's appeal mentioned the decision on the alleged overpayment and her solicitors' letter dated 21 January 2007 referred to a letter of 9 January 2007 and challenged the claim for overpayment, but on the basis that the amount of the children's capital should not have affected the claimant's entitlement in the period in question. I am satisfied that the appeal is properly to be treated as having been made against both decisions.

The appeal tribunal's decision
13.	The claimant attended the hearing on 22 June 2007 and gave evidence. The appeal tribunal disallowed the appeal. It concluded that the claimant had not been entitled to the personal allowances for the weeks identified (still calling them dependants' allowances) and that the overpayment of £9,833.53 was the consequence of a failure to disclose material facts, although an innocent failure with no fraudulent intent, and was therefore recoverable from the claimant.

The appeal to the Commissioner
14.	The claimant now appeals against the appeal tribunal's decision with my leave. The claimant's application made good points about the effect of annual interest not coming to the surface until the passbooks were made up and about the disproportionate level of the overpayment found to be recoverable.

15.	When granting leave to appeal I said this:

	"I have not granted leave to appeal because I have already concluded that an appeal is likely to succeed, but because an issue arises that deserves consideration on appeal after a submission has been obtained from the Secretary of State.

	The issue arises in this way. The amount by which each child's capital exceeded £3,000, for two years and nine months in one case and for one year and nine months in the other, was not very large. In an `ordinary' case of an overpayment of income support incurred because a claimant's own capital has exceeded the limit, regulation 14(1) of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 must be applied in calculating how much of the overpayment is legally recoverable under section 71 of the Social Security Administration Act 1992. Regulation 14 requires, for the purposes of that calculation, the amount of capital taken into account to be reduced at the end of each 13 weeks by the amount of income support overpaid in those 13 weeks. That recognises the fact that if the claimant had been paid the correct amount of income support at the time, either nil or some amount less than was actually paid, he or she would in practice have had to dip into the capital in order to live at income support level. Regulation 14(1) does not apply to cases where it is the capital possessed by a claimant's children which has resulted in the overpayment because there should not have been an entitlement to the personal allowance for the children. And regulation 14(2) provides that capital shall not be treated as reduced in circumstances other than those covered in regulation 14(1).

	Questions that could then be asked include the following. Is regulation 14(2) restricted to cases concerning a misrepresentation or failure to disclose the amount of a claimant's (and partner's) capital or does it also prohibit any reduction of capital for the purposes of calculating the amount of a recoverable overpayment in cases concerning misrepresentation or failure to disclose the amount of children's capital? If that second situation falls entirely outside regulation 14, including regulation 14(2), is there scope for the operation of the `diminishing capital principle' applied by the Commissioners before regulation 14 came into operation (see decisions CSB 53/81, R(SB) 6/85 and its appendix (the decision of the Court of Appeal in Chief Supplementary Benefit Officer v Leary) and R(SB) 15/85)? Do those decisions turn on the particular provisions of the supplementary benefit legislation in force at the time or do they more properly reflect the underlying principle that under section 71 the Secretary of State is only entitled to recover the amount of income support that would not have been paid if the misrepresentation or failure to disclose in question had not occurred? It might not be realistic to argue that, if the claimant in the present case had reported that the amount in each child's account had gone over £3,000 as soon as that happened, so that the relevant personal allowance was lost, she would (or could in accordance with the law of trusts) have dipped into that capital to meet ordinary living expenses. However, legitimate expenditure out of the account, that would not have fallen foul of the rule about depriving oneself of capital in order to secure or increase the amount of entitlement, might well quickly have the reduced the amount below £3,000. How far should that be taken into account in working out what income support would not have been paid but for the claimant's failure to disclose? And does regulation 51(1) of the Income Support (General) Regulations 1987 on deprivation of capital apply to capital possessed by a claimant's children?"

I have set those comments out in full because they embody an assumption that I now consider wrong in law and that set the submissions off down a path that did not need to be explored.

16.	The written submission for the Secretary of State dated 19 January 2008 did not support the appeal to the advantage of the claimant. It was submitted that the appeal tribunal had erred in law by referring to the claimant's capital (which I cannot see that it did), but had made the only decision legally open to it, which I should substitute. It was said that there was no provision in the legislation for a reduction of a child's capital in calculating the amount of a recoverable overpayment, that regulation 14(1) applied only to a claimant's capital, not a child's, yet the existence of the specific provision in the regulation prevented the operation of a rule analogous to the "diminishing capital principle", as mentioned above. In reply,
the claimant stressed the very serious financial position she would be put in if forced to repay the £9,833.53 and re-argued her case that the children's capital derived from other members of the family should not affect her entitlement.

17.	Where I went wrong in my comments when granting leave to appeal was in stating that regulation 14(1) of the Payments Regulations did not apply to cases where it was misrepresentation of or failure to disclose capital possessed by a claimant's children that led to an overpayment of income.

18.	The word "claimant" is not defined in the Payments Regulations themselves. In regulation 14(1) it must in my judgment be given the same meaning as it has for the purposes of the treatment of capital resources for the particular income-related benefit that has been found to have been overpaid. Although the general definition of "claimant" in regulation 2(1) of the Income Support Regulations is simply "a person claiming income support", the final part of regulation 23(1) supplies a more extensive meaning for the whole of Part V of the Regulations, dealing with income and capital. Although the first part of regulation 23(1) only aggregates the income of children with that of the person claiming income support, not their capital, the second part applies by its precise words to any child or young person whose income or capital would under section 136(1) of the Contributions and Benefits Act be aggregated with that of the person claiming benefit if regulations did not prescribe otherwise. That covers all children and young persons who are members of the family of the person claiming income support as defined in and under section 137(1) of the Contributions and Benefits Act. The second part of regulation 23(1) is separate from the first part, separated by a semi-colon, and is not restricted, so far as capital is concerned, to those covered by the first part. The meaning applies only where the context does not otherwise require. The context of regulation 14(1) of the Payments Regulations does not otherwise require. Indeed, for purposes of consistency between different categories of overpayments the context points positively towards adoption of the meaning in the second part of regulation 23(1). The reference to "this Part", ie Part V of the Income Support Regulations, does not in any way restrict the adoption of the definition by necessary implication in regulation 14(1).

19.	Adopting that meaning, the result is that when regulation 14(1) of the Payments Regulations refers to cases where income support has been overpaid in consequence of a misrepresentation of or failure to disclose "the capital a claimant possesses" the reference includes cases where the capital concerned was possessed by a child or young person who was a member of the family of the person claiming income support. Accordingly, regulation 14(1) should have been applied in the present case and the appeal tribunal erred in law by failing to do so.

20.	That result appears to me to reach a satisfactorily consistent outcome. I can see no adequate reason of principle to apply the regulation 14 rule to a claimant's own capital, but not to capital possessed by a claimant's children. The factors that led to the Commissioners' development of the "diminishing capital principle" and to its later encapsulation in regulation 15 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1987 apply to both cases. It is true that, if the capital is beneficially owned by a child, the claimant cannot dip into it as readily for day to day living expenses as into her own money, but the reality is that the child will have many expenses on which a trustee could legitimately use the money if there is a significant (nearly £40 a week in 2003) reduction in the income support coming in. And there is a consistency with the 1987 Payments Regulations. The form of that regulation, set out in the Secretary of State's submission of 19 January 2008, applied for the purposes of overpayments of supplementary benefit whoever possessed the capital in question. There seems no reason why there should have been a radically different approach when the 1988 Regulations replaced the 1987 Regulations and dealt with income support and no indication of an intention to make such a change.

21.	I add that, if I am wrong about the interpretation of regulation 14 and it does not apply at all where the capital in question is possessed by a child or young person, I would find that the existence of that regulation did not exclude the operation of a diminishing capital principle. I would base such a principle, as did the Commissioner in R(SB) 15/85, on the recoverability of overpayments under section 71 of the Administration Act being restricted to payments made in consequence of a misrepresentation or failure to disclose a material fact and to payments that the Secretary of State would not have made but for the misrepresentation or failure to disclose. Here, if the increases in the children's capital over £3,000 had been reported immediately, so that there was no longer entitlement to the relevant personal allowance, that allowance would have become payable again very shortly because the amount of capital would have reduced through legitimate expenditure.

The Commissioner's decision
22.	For the reason given above, the appeal tribunal's decision must be set aside as erroneous in point of law. It is expedient for me to substitute a decision on the claimant's appeals against the decisions of 14 December 2006 and 9 January 2007, having made the necessary additional findings of fact. The essential matters of fact are not in dispute. On the view that I have taken on the law, there are only a few minor questions on which further evidence could possibly be forthcoming, but as will be seen in paragraph 30 below they make little or no difference to the practical outcome. It is therefore better to bring this case to an end, rather than imposing the delay of a rehearing by a new appeal tribunal.

23.	In relation to the decision of 14 December 2006, this in my judgment was defective and incomplete because it did not decide what amount of income support the claimant was entitled to from 1 April 2003 to 4 January 2006 or even provide a determination of principle from which the weekly amounts could be calculated. In some future decision where there is an appeal only against a subsequent overpayment recoverability decision a Commissioner is going to have to determine authoritatively whether such a decision is sufficient to satisfy section 71(5A) of the Administration Act. In the present case, since the decision of 14 December 2006 was under appeal to the appeal tribunal, in giving the decision on that appeal I can give a complete decision.

24.	There is no doubt that, from 1 April 2003 in C's case and from 19 April 2004 in H's case, the amount of their capital exceeded £3,000 and remained above that level until 5 January 2006. Although in C's case it was a payment of income in the form of interest that took her over the limit, the effect of regulation 48(4) of the Income Support Regulations is that that income, being derived from capital, was to be treated as capital from the date that it was due to be credited to her account, 1 April 2003. A building society account is not in any of the categories excluded from the operation of regulation 48(4). The same of course applies to all the other annual credits of interest to both accounts. Those changes were relevant changes of circumstances, not to the claimant's advantage, that justified supersession, which would then take effect from the date of the change. That is because the effect of regulation 17(b) of the Income Support Regulations is that a claimant's income support applicable amount cannot include the personal allowance for a child or young person if the child or young person's capital exceeds £3,000. The correct weekly rates of income support as superseded were set out on A14 forms at pages 64 to 73 of the papers, taking away one personal allowance for the weeks when only C's capital exceeded £3,000 and two personal allowances for the weeks when both C's and H's capital exceeded £3,000. The superseding decision is that for the period from 1 April 2003 to 4 January 2006 the claimant is entitled to income support at the rates set out on those A14 forms. The formal decision to that effect is set out in paragraph 1(a) above.

25.	As a result of that decision, an overpayment of £9,833.53 was made to the claimant for that period. In order to decide whether all or some of that overpayment is legally recoverable from the claimant under section 71 of the Administration Act and to identify the beginning of the "overpayment period" for the purposes of regulation 14 of the Payments Regulations, it must be decided whether the claimant misrepresented or failed to disclose a material fact and was overpaid as a consequence.

26.	There are two problems in the Secretary of State's case that the first such failure to disclose occurred on 1 April 2003. The first is that no evidence was put forward of the claimant having been required to provide information on increases in the amounts of the children's capital, through an INF4 leaflet or otherwise, before 19 January 2004. It was submitted for the Secretary of State that the claimant would have received such leaflets on numerous occasions and the claimant has not argued that she did not receive them before 1 April 2003 (merely that she did not realise from the documents she was sent that she was being instructed to provide the information). I therefore conclude that the claimant was by 1 April 2003 subject to the duty under the predecessor of regulation 32(1A) of the Social Security (Claims and Payments) Regulations 1987 to provide information about increases in the balances of her daughters' accounts above £2,500. A failure to do so was a failure for the purposes of section 71 and a failure to disclose a material fact when the increase would have made a difference to the amount of income support entitlement, as when it took a balance over £3,000.

27.	The second problem is that what happened on 1 April 2003 was the crediting of interest to an account whose balance had previously stood at £2,961.30. The claimant has said that she did not know of the amount of the interest at that date. I accept that a passbook will not be updated for interest until it is taken into a branch for some other transaction to be carried out. But the claimant obviously knew from her past administration of the accounts that interest was credited annually 1 April each year and building societies commonly send out notices of interest credited (although some have restricted that practice). It is still the case, after the decision of the Court of Appeal in B v Secretary of State for Work and Pensions [2005] EWCA Civ 929, R(IS) 9/06, that a person can only fail to disclose a fact of which she knows. However, I do not need to decide whether the claimant knew of the increase in the balance over £3,000 on 1 April 2003 or only at some later date (at the latest, I think, the date of the next transaction, 6 January 2004). I proceed on the basis that it was 1 April 2003 and explain in paragraph 30 below why adopting the date of 6 January 2004 would make the practical outcome less advantageous for the claimant. In relation to H's account, it was a payment in of a cheque that took the balance over £3,000 and I am satisfied that the claimant knew of that on 19 April 2004.

28.	On that basis, I am satisfied that the claimant failed to disclose material facts when she failed to disclose the increases over £3,000 in C's and H's accounts. I do not doubt the appeal tribunal's view that this was an innocent failure, with no fraudulent intent. An overpayment of income support resulted, as shown by my supersession decision. As regulation 14 of the Payments Regulations must then be applied in calculating the amount of the actual overpayment that is recoverable, there is no room for a more general analysis of how much income support would have been paid if there had not been the failures to disclose.

29.	On the basis that the first failure to disclose was on 1 April 2003, the overpayment period for the purposes of regulation 14 of the Payments Regulations in respect of that failure started on that date. The first quarter ended on 30 June 2003. The overpayment actually made in that period was made up of one week at £37.00 and 12 weeks at £38.50, a total of £499.00. C's capital is to be taken at its actual level for that period, so that the £499 is recoverable as an overpayment resulting from the failure to disclose. However, at the end of that 13 weeks the amount of C's capital is to be reduced by the amount of that overpayment. The actual amount of capital was still £3,079.92, so that the new amount for calculation purposes is £2,580.92. Because the claimant would have qualified for the personal allowance for C when her capital was at that level, there is no recoverable overpayment in respect of that personal allowance after 30 June 2003. Although there were later increases in the actual amount of C's capital they fall a long way short of taking the level for calculation purposes back over £3,000 after the effect of subsequent quarterly reductions are taken into account. £499 is the full extent of the overpayment in respect of C's personal allowance that is recoverable under section 71.

30.	If the overpayment period in respect of C's personal allowance had started on 6 January 2004, as the earliest date of a failure to disclose a material fact, the result would have been this. None of the overpayment incurred before that date would have been recoverable. But, as C's actual capital from that date exceeded £3,000, the amount overpaid for the 13 weeks following 6 January 2004, ending 5 April 2004, would have been recoverable. Thirteen weeks at £38.50 is £500.50, slightly above the amount recoverable for the quarter from 1 April 2003. From 6 April 2004 onwards, C's capital for calculation purposes would have been £2,916.34 (£3,416.84 actual, less £500.50) and would have reduced further by later quarterly reductions. The same effect would have been produced, of merely transposing the 13 weeks of recoverable overpayment, if the claimant was taken as not being under a duty to disclose until 19 January 2004.

31.	The calculation in relation to H's personal allowance is as follows. The overpayment period in respect of the failure to disclose the increase in her capital starts on 19 April 2004 and the first quarter ends on 18 July 2004. The personal allowance in that period had gone up to £42.27 per week, so that the total recoverable overpayment for the 13 weeks is £549.51. At the end of the quarter, H's actual capital was still £3,044.53, so that the amount for calculation purposes is reduced to £2,495.02 and there would be later reductions taking the amount even further below £3,000. £549.51 is the full extent of the overpayment recoverable in respect of H's personal allowance.

32.	For those reasons the overpayment recoverability decision must be as set out in paragraph 1(b) above. The claimant may still feel hard done by in view of the very small margin by which her daughters' capital exceeded the £3,000 limit for some periods, but regulation 14(2) of the Payments Regulations specifically prohibits any reduction of capital for calculation purposes at any interval other than a quarter.

	(Signed)    J Mesher    
	Commissioner

	Date: 23 April 2008