IN THE UPPER TRIBUNAL	Case No.  CG/2739/2009
ADMINISTRATIVE APPEALS CHAMBER

Before:	Upper Tribunal Judge Rowland

Attendances:

     For the Appellant:	Mr Robert Finnigan of Kirklees Benefits Advice

     For the Respondent:	Mr Huw James, solicitor, agent for the Solicitor to the Department for Work and Pensions

Decision:  The claimant’s appeal is allowed.  The decision of the First-tier Tribunal (Social Entitlement Chamber) sitting at Leeds on 10 August 2009 is set aside and I substitute a decision that the claimant has been overpaid carer’s allowance amounting to £808.80 in respect of the period from 1 December 2008 to 22 March 2009 and that £404.40 in respect of the period from 26 January 2009 to 22 March 2009 is recoverable from her. 

REASONS FOR DECISION

1.	The Appellant was in receipt of income support and carer’s allowance on the basis that she cared for her mother.  Her mother was in receipt of a retirement pension, attendance allowance and possibly state pension credit.  On 14 November 2008, her mother went into a care home and, on 28 November 2008, that arrangement became permanent.

2.	The precise sequence of events after that is not entirely clear and has been in dispute.  However, it has always been the Secretary of State’s case that the Appellant did not inform the Carer’s Allowance Unit in Preston that her mother had been admitted to the care home until she telephoned them on 19 March 2009.  Payment of carer’s allowance appears to have been suspended from the following Monday.

3.	On 2 April 2009, the Secretary of State superseded the original decision awarding carer’s allowance, which had been made on 13 January 1996 (when the benefit was known as invalid care allowance), and decided that the Appellant had ceased to be entitled to carer’s allowance from 29 November 2008 because she had ceased caring for her mother for at least 35 hours a week.  On 10 April 2009, the Secretary of State decided that there had been an overpayment of carer’s allowance at the rate of £50.55 pw for 16 weeks from 1 December 2008 (the first Monday after 29 November 2008) until 22 March 2009, amounting to £808.80 in total, which was recoverable from the Appellant under section 71 of the Social Security Administration Act 1992 because she had “failed to disclose” to the Carer’s Allowance Unit the “material fact” that she was no longer caring for her mother for at least 35 hours a week.

4.	The Appellant appealed against the decision of 10 April 2009, stating that she had written “to DWP” on 15 November 2008 to say that her mother had been admitted to the care home and that she had confirmed that to a liaison manager on 8 January 2009.  She attached a copy of the letter from the Pensions Service arranging a meeting with the liaison manager (which has been annotated, suggesting that the meeting might have been put off to 16 January 2009, although nothing turns on that).  She also attached a photocopy of a letter dated 15 November 2008, addressed “To DWP” saying –

“I wish to inform you that my mother … has been admitted to a care home trial, which will become permanent.  If it doesn’t, I will let you know.”

5.	The Secretary of State declined to revise the decision, making the point that it was unclear to whom the letter had been sent and stating that it had not been received by the Carer’s Allowance Unit.

6.	The Appellant replied, saying that she did not dispute that she had been overpaid but that she had written “to DWP in Preston”.  She also queried the fact that the carer’s allowance had been stopped from 29 November 2008, whereas her mother’s attendance allowance had been stopped from 16 December 2008, and stated that she had made no gain because her income support had been reduced by the amount of the carer’s allowance and that the liaison manager had told her she would remain “entitled to benefit for 8 weeks”.  However, she asked that her appeal be decided on the papers, rather than at a hearing, which was unwise if she was telling the truth.

7.	The First-tier Tribunal simply did not accept that the letter dated 15 November 2008 had ever been “sent and or received by the Department”, pointing out that, not only did it not bear the address to which it was said to have been sent but it also did not include the address of either the Appellant or her mother.  It dismissed the appeal.

8.	The Appellant now appeals with permission granted by Upper Tribunal Judge Lloyd-Davies.  I held an oral hearing in Doncaster, at the Appellant’s request.  I am grateful to both Mr Finnigan and Mr James for their helpful submissions.

9.	The Secretary of State concedes that the First-tier Tribunal erred in law in failing to address the Appellant’s contention that she had not gained anything because she was in receipt of income support.  The Secretary of State had not had time to deal with that contention before the First-tier Tribunal made its decision, although I am not sure why, before a decision that there has been a recoverable overpayment is issued, it is not always checked whether the claimant was entitled to income support at the material time.  It is common ground that the amount of the recoverable overpayment should have been nil in respect of the period from 1 December 2008 to 25 January 2009.  The calculation is not explained in the documents before me but I presume that the explanation is simply that the Appellant would have continued to be entitled to income support as a carer for eight weeks following the loss of entitlement to carer’s allowance (see paragraph 5 of Schedule IB and paragraph 14ZA(3)(b) of Schedule 2 to the Income Support (General) Regulations 1987 (SI 1987/1967)) and that the amount of income support would therefore have been increased by an amount equal to the carer’s allowance for the first eight weeks after carer’s allowance ceased to be paid.

10.	As to the other point the Appellant raised, the explanation for her entitlement to carer’s allowance ending two weeks before her mother’s entitlement to attendance allowance is that her mother’s entitlement to attendance allowance could continue for four weeks after she entered the care home (regulation 8(1) of the Social Security (Attendance Allowance) Regulations 1991 (SI 1991/2740)), irrespective of whether her stay was temporary or permanent, whereas the Appellant could be treated as continuing to care for her mother for at least 35 hours a week when she was not actually doing so only during a temporary cessation of such care (see regulation 4(2)(a) of the Social Security (Invalid Care Allowance) Regulations 1976 (SI 1976/409)), so that entitlement ended when the stay in the care home became permanent.

11.	I can deal with two of Mr Finnigan’s other grounds of appeal briefly.  First, he argues that it had not been established that the Appellant had not continued to provide care when her mother moved into the home, which, he told me, she had done.  He submits that the First-tier Tribunal should have adjourned so that the point could be investigated.   I do not accept that submission.  The decision against which the Appellant had appealed had clearly stated that the reason she had ceased to be entitled to carer’s allowance was because she had ceased to provide care for at least 35 hours a week and, not only did the Appellant not challenge that finding, she expressly said that she accepted that she had been overpaid carer’s allowance.  It is not an error of law not to deal with a point that has not been raised unless it is reasonably clear that the point really arises.  

12.	Secondly, Mr Finnigan argues that the First-tier Tribunal should have adjourned and offered the Appellant an opportunity to explain her position in more detail at an oral hearing if it was not minded to accept that she had written to Preston as she claimed.  It certainly could have done that.  On the other hand, the Appellant having already been offered a hearing and having declined it, I do not consider that it was bound to do so, particularly as the letter would have been an inadequate notification anyway if it had been sent by itself in the form that has been photocopied, because there were insufficient details to enable the Department to link it to any particular case.

13.	The form of the copy letter is of some importance in this regard.  What I think lies behind Mr Finnigan’s submission is that it would have been implicit in the First-tier Tribunal finding that the Appellant had not sent the letter that she was being thoroughly dishonest with the tribunal, since the copy letter would have been a fake, and that, if the Appellant was in fact being honest, she could not have realised that the First-tier Tribunal might take that view and for that reason should have been given an opportunity to explain how the copy letter came to be produced in the form that it was.  However, while it appears clear that the First-tier Tribunal had serious doubts about the authenticity of the copy letter, its finding that the letter was not “sent and or received” shows that it did not form a concluded view on that issue.  It was sufficient for it to find that the letter was not received and, in the circumstances of this case, finding that it was not received was not inconsistent with the letter having been sent.  Although, it can generally be presumed that a letter that has been posted has been delivered to the place to which it was addressed, not only can that presumption be displaced but it was also necessary in this case for the letter to reach a person capable of acting upon it if the claimant was to satisfy her duty to make disclosure.  

14.	In R(SB) 15/87, the Tribunal of Commissioners said –

“25.	…  disclosure consists of the statement of a fact so as to reveal that which so far as the discloser knows was previously unknown to the person to whom the statement was made.  …

26.	… in our view, the obligation is to disclose to a member or members of staff of an office of the Department handling the transaction giving rise to the expenditure.  …

27.	We accept that a claimant cannot be expected to identify the precise person or persons who have the handling of his claim.  His duty is best fulfilled by disclosure to the local office where his claim is being handled either in the claim form or otherwise in terms that make sufficient reference to his claim to enable the matter disclosed to be referred to the proper person.   …  But, as was pointed out in R(SB) 54/83, there can be other occasions when a duty can be fulfilled by disclosure elsewhere.  This can happen, for instance, if an officer in another office of the Department of Health and Social Security or local unemployment benefit office accepts information in circumstances which make it reasonable for the claimant to think the matters disclosed will be passed on to the local office in question.  …”  (My emphasis)

Although the copy letter in this case contained the Appellant’s mother’s name and her own initial and surname, it did not contain any addresses or reference number so that, even if it had reached the Preston office, if the letter sent had been in the same terms, it would not have been surprising if it had not been linked to the Appellant’s case.

15.	In any event, a letter in the form of the copy letter would not have been adequate disclosure to prevent the overpayment in respect of the period from 1 December 2008 to 14 December 2008 (which I accept is not in fact recoverable) because it did not purport to disclose when the Appellant’s mother’s stay in the care home would become permanent.

16.	In my judgment the First-tier Tribunal was for these reasons plainly entitled to find that any letter sent by the Appellant to the Carer’s Allowance Unit was not received by an appropriate member of staff and so was not effective as disclosure of the material fact that her mother was living in a care home and that she only disclosed that fact when she telephoned on 19 March 2008.  I must determine this appeal on that basis.

17.	I ought perhaps to add that accepting that the Appellant did not make adequate disclosure until 19 March 2008 does not necessarily imply any dishonesty on her part at the time, or even any unreasonable delay.  First, it is abundantly clear that the Appellant was open with the Pensions Service and had informed the Pensions Service that her mother has been admitted to the care home long before the Carer’s Allowance Unit says it became aware of that fact.  It was arranged on 22 December 2008 that the Appellant should see the liaison officer at the care home to discuss being appointed to act on behalf of her mother and that shows that the Pensions Service already knew before then that that was where her mother was residing.  Secondly, it seems likely that what the liaison officer advised the Appellant was not that carer’s allowance would remain in payment for eight weeks but that her income would remain the same for that period because her entitlement to income support as a carer would continue for eight weeks and be increased to offset the loss of carer’s allowance.  At any rate, that should have been the advice, but it is understandable that the Appellant might have misunderstood it even if that is what was said.  Thirdly, the Appellant was being paid carer’s allowance by payments made direct to her bank account so that, if she wrongly believed that entitlement to the carer’s allowance did not end until eight weeks after her mother ceased to be entitled to attendance allowance in mid-December and that the Carer’s Allowance Unit knew of her changed circumstances, she might not have realised she was being overpaid until she received a bank statement in March which might well explain why she contacted the Carer’s Allowance Unit then.

18.	I turn, then, to Mr Finnegan’s principal argument.  He submits that the overpayment is not recoverable because a person cannot fail to disclose a material fact for the purposes of section 71 if the person to whom disclosure is to be made already knows that fact and that, in this case, the Carer’s Allowance Unit must have known of the cessation of payments of attendance allowance due to the electronic link that exists between the Attendance Allowance Unit and the Carer’s Allowance Unit. 

19.	He relies on the unreported decision of a Tribunal of Commissioners in CG/5631/1999, in which the Tribunal accepted a concession of the Secretary of State that part of an overpayment of invalid care allowance was not recoverable.  The concession was made in the light of evidence that there had been “a manual reconciliation of … material followed by the establishment of an interface between the computers dealing with these benefits so as … there would be an automatic notification of changes sufficient to provide, in our view, knowledge in the Secretary of State for invalid care allowance purposes that, where it mattered, a change in the award of attendance allowance or disability living allowance had occurred.”  The Tribunal of Commissioners also said that it was “well established that there can be no failure to disclose something which is already known to the person to whom disclosure might otherwise be owed”.

20.	A decision of a Tribunal of Commissioners that is not inconsistent with a decision of a higher court should be followed by a single judge of the Upper Tribunal even if it is unreported, but this area of law remains controversial.  In GK v Secretary of State for Work and Pensions [2009] UKUT 98 (AAC), Upper Tribunal Judge Ward referred to paragraph 25 of R(SB) 15/87 and held that the proposition that there can be no failure to disclose something which is already known to the person to whom disclosure might otherwise be owed is sound only if the person otherwise under a duty to disclose is aware that the other person has the requisite knowledge.  He also held CG/5631/1999 to have been implicitly overruled by the Court of Appeal’s decision in B v Secretary of State for Work and Pensions [2005] EWCA Civ 929; [2005] 1 WLR 3796 (also reported as R(IS) 9/06) on the basis that the existence of a computer link cannot remove the statutory duty to report certain matters imposed by regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968).  That conclusion appears to have been doubted in WH v Secretary of State for Work and Pensions [2009] UKUT 132 (AAC).  Judge Ward also held that a failure of the Secretary of State to act upon a computer prompt did not show that a breach of a duty to report material facts had not been a cause of an overpayment but, while that may have been clear on the facts of that case, it may be arguable that it may in another case depend on why the Secretary of State has failed to act.  In any event, some clarification of the law in cases where there is a computer link seemed to me to be desirable and, acting partly under powers delegated by the Chamber President, I gave two directions in the present case in March 2010.  The first was that the appeal be heard by a three-judge panel.  The second was that the Secretary of State should make a submission explaining what provision there was in February 2009 for the transfer of information about awards of attendance allowance to the Carer’s Allowance Unit and suggesting the probable explanation either for there having been no transfer of information in this case or for the information not having been acted on.

21.	The Secretary of State’s written submission following my direction had appended to it a helpful memo from an officer responsible for carer’s allowance appeals. He explains that an award of carer’s allowance is recorded on the carer’s allowance computer system (CACS) and then broadcast to the disability living alliance and attendance allowance computer system (DLA/AACS) overnight by means of an automated computer process.  The process creates a record of the carer’s personal details on the DLA/AACS.  Once that link is established, information is automatically returned to the CACS by the DLA/AACS, in the form of an overnight computer prompt, giving details of the most recent award of disability living allowance or attendance allowance.  Any change in an award of disability living allowance or attendance allowance or any change to the details of the claimant of disability living allowance or attendance allowance is the subject of a similar computer prompt.  The computer prompts, which are known as Work Available Reports, are checked on a daily basis and printed off and the system record of each one is then deleted.

22.	However, the present case reveals what seems to me to be a fairly substantial lacuna in the system.  The memo explains –

“In this case, payment of AA was combined with State Pension and paid by Dundee Pension Centre.  Pension Credit computer records show that, following a visit, the AA Unit was notified on 31/01/09 that the disabled person was admitted to a care home on a permanent basis from 28/11/08.

AA computer records show that enquiries were made on 09/02/09 to establish the funding status of the care home.  A reply was received on 16/02/09 and the Pension Centre was informed on 17/02/09 that payment of AA should have stopped on 16/12/08.  However, a decision was not input on the AA system, which still shows AA as being in payment and, therefore, a broadcast would not have been issued via the interface to the CA Unit in this case.

The AA Unit has advised that this is standard procedure for combined payment cases.  The relevant details are recorded on their notepad and the paying office is informed but a decision is not input on their system.  Therefore, in such cases, a broadcast would not be issued via the interface to the CA Unit.”

23.	Obviously, if there was in fact no computer prompt in the present case, the interesting questions as to the legal consequences of there being a prompt that might otherwise have arisen did not arise in this case and I accordingly directed that the appeal be heard by a single judge rather than a three-judge panel.  It was fortuitous that the case then came to be heard by me.  

24.	At the hearing, Mr Finnigan drew my attention to a discrepancy between the Secretary of State’s submission and the documentary evidence.  The Secretary of State’s representative had said that the decision that the Appellant’s mother’s attendance allowance was no longer payable was made by the Pension Centre, but Mr Finnigan pointed out that the letter notifying the Appellant of that decision bore the Attendance Allowance Unit’s address. Mr James was unable to explain the discrepancy and so I asked for a written explanation.  The Secretary of State’s representative now accepts that his submission was inaccurate.  The true position is that the payability decision was made at the Attendance Allowance Unit, as one might expect, but it was for the Pension Centre to implement the decision because payment had been combined with payment of retirement pension.  Presumably, the explanation for the Attendance Allowance Unit not inputting the decision on its system is that the system is intended to record payments being made rather than decisions as to entitlement or payability.  Otherwise, the lacuna appears inexplicable.

25.	Mr Finnigan had also raised in his written reply the question whether there was a computer interface between the Pension Centre and either the Attendance Allowance Unit or the Carer’s Allowance Unit and, if not, whether there should be a link of some sort so that material information is passed back to the Carer’s Allowance Unit.

26.	By the time of the hearing, it was plain that the answer to the first part of that question was that there is in fact no computer link material to this case.  

27.	I am inclined to think it equally plain that the answer to the second part of the question is that there should be a link of some sort, whether it is automatic or manual.  It seems extraordinary that, if the DLA/AACS is intended to hold a record of payments, action taken by a Pension Centre to implement a decision of the Attendance Allowance Unit that attendance allowance is no longer payable should not lead to the DLA/AACS being updated.  The consequences in this case have been first that the DLA/AACS inaccurately shows that payments are still being made to the Appellant’s mother and secondly that an avoidable overpayment has been made.  Systematic inaccuracies in computer records do not inspire confidence in the records and avoidable overpayments cause unnecessary administrative expense even if they are eventually recovered.

28.	However, it is clear from Secretary of State for Work and Pensions v Hinchy [2005] UKHL 16; [2005] 1 W.L.R. 967 (also reported as R(IS) 7/05)  that any failure of the Secretary of State to establish a link between the Pensions Centre and DLA/AACS or CACS could not remove a claimant’s statutory duty to report to the Carer’s Allowance Unit material facts that might affect his or her entitlement to carer’s allowance.  It is also clear from Duggan v Chief Adjudication Officer (reported as an appendix to R(SB) 13/89) that, even if a failure by the Secretary of State to establish an appropriate link, or to operate such a link properly, could be said to have been a cause of an overpayment, it would not prevent a claimant’s failure to disclose material facts from also being an effective cause of the overpayment in a case such as this.  Accordingly, it is unnecessary for me actually to decide whether or not there should be a system in place to ensure that the fact that a Pension Centre has implemented a decision made at the Attendance Allowance Unit is fed back to the Attendance Allowance Unit and the Carer’s Allowance Unit.  That is a matter for the Secretary of State and those who exercise oversight over the way he discharges his administrative functions.

29.	Mr Finnigan’s submission based on CG/5631/1999 falls simply because there was in fact no relevant computer link in the present case.

30.	For the above reasons, I allow this appeal only to the extent of reducing the amount of the recoverable overpayment to the agreed figure.

31.	However, I observe that the agreed amount of the recoverable overpayment appears to have been calculated on the basis that the Appellant was not entitled to income support after she ceased to be entitled to be treated as a carer.  If he has not already done so, Mr Finnigan may wish to check with the Appellant whether that was so and, indeed, whether or not she would have been entitled to any other income-related benefit.  Mere withdrawal of the carer’s premium for eight weeks would, I think, have resulted in an overpayment of only £222.00 (assuming no other premium would at least partially have replaced it).  Even if the recoverable overpayment has been correctly calculated at £404.40 on a technical basis, the Secretary of State might be persuaded to recover only £222.00 if satisfied that the lower amount would better represent the true loss to the public purse.

MARK ROWLAND
14 March 2011