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[2006] UKSSCSC CH_3083_2005 (01 November 2006)

CH/3083/2005

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. This is an appeal by the Claimant, brought with my permission, against a decision of the Wolverhampton Appeal Tribunal made on 9 June 2005. For the reasons set out below the Tribunal's decision was in my judgment erroneous in law and I set it aside. In exercise of the power in paragraph 8(5)(b) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000 I make the additional findings of fact set out below and substitute the following decision for that of the Tribunal:

The Claimant's appeal against the decision of Wolverhampton City Council ("the Council") made on 16 October 2004 is allowed to the extent that the overpayments of housing benefit are recoverable from the Claimant only in respect of the period from 1 May 2004 to 12 September 2004 and the excess council tax benefit is recoverable from the Claimant only in respect of the period from 1 May 2004 to 19 September 2004. The calculation of the recoverable benefit is remitted to the Council. Any dispute about that recalculation may be referred to me within one month of such dispute arising.

The facts

2. The Claimant is a single woman now aged 36. She was in receipt of jobseekers allowance from 31 December 2002 (pages 13, 34). On 14 February 2003 she started renting a flat from a housing association. The rent was £59.81 per week as at January 2004 (p.28). It appears that the Claimant claimed housing and council tax benefit, which would have been awarded on the basis that the Claimant was in receipt of jobseekers allowance.
3. On 11 January 2004 the Claimant signed a renewal claim form for housing and council tax benefit. She stated on the form, quite correctly, that she was still in receipt of jobseekers' allowance. The Council confirmed, via a remote access terminal check (pp. 34, 129) that that was the case. By letter dated 30 January 2004 the Claimant was notified by the Council that housing and council tax benefit were re-awarded from 9 February 2004 to 6 February 2005 (p.35). The housing benefit was paid direct to the landlord, as the Claimant had requested. The council tax benefit was paid by crediting the amounts to the Claimant's council tax account – i.e. in effect by cancelling the liability for council tax which would otherwise have arisen.
4. The Claimant's JSA award ceased with effect from 22 February 2004 because she found employment as a customer service adviser at a salary of £1250 per month (pages 49 to 51). The Claimant says that, on the advice of an official at the JobCentre, at the time of notifying the JobCentre that she had found employment she ticked a box on a form which indicated that she was in receipt of housing and council tax benefit and wished to claim a one month extension of that entitlement. However, it has been the contention of the Council throughout that it did not receive any notification from the DWP that the Claimant's entitlement to JSA had ceased.
5. The Claimant says that, in order to be sure that she obtained the one month extension, she wrote to the Council specifically notifying them that her JSA award had ceased and requesting the one month's extension. The Council denies having received any such letter.
6. The fact that the Claimant had obtained employment at the salary in question and had ceased to be in receipt of JSA should have resulted in her award of housing and council tax benefit being terminated, albeit after (as it would appear – see below) a one month extension. Had the Council known the position entitlement to those benefits would therefore have been terminated. However, those benefits continued to be paid.
7. There is in the papers (p.39) a copy of a letter from the Council to the Claimant dated 8 March 2004 notifying her that her council tax benefit would be increased from 1 April 2004 by reason of annual uprating. The Claimant says that she did not receive that letter.
8. The Claimant says (see especially pages 59, 65) that at about the beginning of April 2004 she telephoned her landlord to ask whether the Council had paid the rent for March (as she had been expecting they would by virtue of the one month's extension) and was told that they had. She says that she made a payment of £250 by way of rent at that time, but did not make any further rent payments. She says that she did not do so because she fell ill with depression and got into financial difficulties She says that she assumed that the Council had ceased paying the rent to the landlord, and that the landlord would therefore pursue her for arrears, and owing to her depressed state simply waited for this to happen. She says that she did not therefore make any inquiries after the beginning of April as to the state of her rent account, and did not know that the Council was continuing to pay rent to the landlord.
9. There is in the papers (p.41) a copy of a letter from the Council to the Claimant dated 12 June 2004 notifying the Claimant that the amount of her entitlement to housing benefit had changed with effect from 12 April 2004, I assume by reason of an increase in the rent to £61.60 per week. The Claimant says that she did not receive that letter either.
10. In August 2004 the Council discovered, by means of a computer data match exercise, that the Claimant was no longer in receipt of JSA. That was confirmed via the remote access terminal on 13 August 2004 (p.43).
11. The Claimant was notified by letter dated 17 September 2004 that her entitlement to housing and council tax benefit had been suspended with effect from 12 and 19 September 2004 respectively.
12. By letters dated 16 October 2004 (p.1 onwards) the Claimant was notified of decisions superseding and removing her awards of housing and council tax benefit with effect from 1 March 2004, and that overpayments of housing benefit totalling £1675.56 in respect of the period from 1 March 2004 to 12 September 2004 and of council tax benefit totalling £432.60 in respect of the period from 1 March 2004 to 19 September 2004 were recoverable from the Claimant.
13. On 19 October 2004 (p.53) the Claimant wrote objecting to the overpayment having been treated as recoverable.
14. On 5 November 2004 the Claimant was interviewed at length by two officers of the Council.
15. The decisions of 16 October 2004 were reconsidered but not revised, and on 16 November 2004 the Claimant appealed. On 23 December 2004 she completed the Appeals Service enquiry form stating that she wished an oral hearing of the appeal.
16. On 12 April 2005 the parties were notified that the appeal was listed for hearing on 4 May 2005. The Claimant contends that the hearing had previously been rescheduled twice by the Appeals Service. The Claimant did not appear on 4 May 2005, and the Council was represented. The hearing was adjourned by the chairman because he wished the Council to obtain from the DWP (a) information as to whether the Claimant had indicated on her claim(s) for JSA that she had claimed housing/council tax benefit and (b) a copy of her signing off card in February 2004.
17. On hearing (she said from the Council) of the adjournment the Claimant wrote to the Appeals Service on 24 May 2005 complaining that two previous hearing dates had been cancelled, and stating that her health was now such that she would be unable to attend a hearing. She said that she would have been able to attend a hearing if it had taken only a few months to get a date.
18. On 3 June 2005 the Appeals Service wrote to the Claimant enclosing a further submission from the Council which stated that the DWP were unable to supply the further information requested because the Claimant's records had been destroyed after 14 months. The Claimant responded to that by letter dated 7 June 2005.
19. The final hearing took place on 9 June 2005. The Claimant was not present. The Tribunal dismissed the appeal.
20. The Claimant had contended at her interview and in her various letters that the overpayment was caused by one or more of the following official errors:

(a) The failure of the DWP to notify the Council, pursuant to the box which the Claimant had ticked on the signing off form indicating that she wished to claim an additional month's housing benefit, that her JSA had ceased.

(b) The Council's failure to act on the letter which she sent in February 2004 notifying them that JSA had ceased.

(c) The failure by the Council to act on the results of data matching before August 2004. (One of the Council's officers stated at the Claimant's interview that at the relevant time data matches were carried out three times a year).

The Tribunal's decision

21. The Tribunal held that the overpayment was not caused by official error and therefore was recoverable from the Claimant because:

(i) The fact that the DWP did not notify the Council that JSA entitlement had ceased was not a mistake because the DWP were not aware that the Claimant was in receipt of housing or council tax benefit;

(ii) The Claimant did not write to the Council in February 2004 notifying it that JSA entitlement had ceased, and the Council therefore was not in error in failing to act on any such letter. The Tribunal found that it was "improbable in the extreme" that the following events had all occurred: (a) such a letter had been posted but had been either lost in the post or not acted on by the Council (b) the Claimant had not received either the letter of 8 March 2004 or that of 12 June 2004. The Tribunal said that "taking this improbability into account, coupled with [the Claimant's] obvious interest in making the assertions she does, I reject as improbable her assertion that she made a separate report to the respondent authority whether in February 2004 or at any other time of the fact that she had commenced work."

(iii) In any event the fact that the Claimant had not notified the Council that her JSA entitlement had ceased meant that she had contributed to any mistake which had been made, which meant that the overpayment could not have been caused by official error (see the concluding words of regulation 99(3) of the Housing Benefit (General) Regulations 1987).

22. The Tribunal further held that even if there was an official error on the part of either the DWP or the Council, the overpayments were still recoverable because the Claimant could reasonably have been expected to realise that she was being overpaid. The Tribunal said that it found it "improbable in the extreme that for the duration of the overpayment period she took no action to establish the state of her rent account, particularly as her landlord's silence about rent arrears would have been inexplicable. I do not believe her assertions that she was not aware that she continued to receive benefit."

The appeal to a Commissioner

23. The Claimant requested an oral hearing of her application for permission to appeal to a Commissioner, permission having been refused by a legally qualified panel member. I granted that request. However, the Claimant then moved to Cardiff, and it appeared that if the hearing were to be held in Cardiff there would be substantial delay owing to the absence of other cases due to be heard in Cardiff, whereas a hearing in London would entail substantial inconvenience for the Claimant. In order to attempt to avoid the delay and/or inconvenience to the Claimant which an oral hearing of the application appeared likely to involve, on 30 November 2005 I therefore granted permission to appeal without a hearing, so that the Council could make submissions in relation to the Claimant's grounds of appeal. The Council's submissions in this appeal were sent to the Claimant's then representative on 14 March 2006, and then (on the representative notifying this Office that he had ceased to act) to the Claimant on 25 July 2006. The Claimant has not made any further submission in the appeal, nor has she completed the form indicating whether she wishes an oral hearing of the appeal. I therefore propose to decide the appeal on the information before me.
24. I can only allow the appeal if the Tribunal's decision was wrong in law.
25. The Claimant's grounds of appeal are contained in her letter dated 26 July 2005 to the Appeals Service seeking permission to appeal, and in her OSSC 1 Form.
26. First, the Claimant contends that a postponement of the Tribunal hearing on 9 June 2005 owing to her inability to attend due to illness should have been granted. However, the Claimant did not request a postponement. In her letter of 24 May 2005 she had simply indicated that she would be unable to attend a hearing owing to illness. In my judgment the Tribunal therefore did not err in not adjourning the hearing. It may be that the Claimant is also contending, as a separate point under this ground of appeal, that there was also an error of law in that if the hearing before the Tribunal had been held sooner, she would have been able to appear, and the hearing was therefore unfair because she was in the event unable to appear. I do not accept that there was any breach of natural justice or other error of law in that respect. On the footing (which may be the case) that the hearing had (presumably for administrative reasons) been rescheduled on two occasions before the hearing which was adjourned on 4 May 2005, the Appeals Service had no reason to believe, at the time when those rearrangements were made, that this would mean that the Claimant would be unable to appear. The total time which elapsed between receipt of the Claimant's enquiry form at the end of December 2004 and the first hearing on 4 May 2005 was not excessive.
27. Secondly, it is contended that there was an error of law in that it was only shortly before the hearing (i.e. on receipt of the Council's further submission enclosed with the letter from the Appeals Service dated 3 June 2006) that the Claimant became aware that the DWP had destroyed some potentially relevant documents, and that if she had known that earlier she could have sought legal advice. However, it was open to the Claimant, in the letter which she wrote on 7 June, to request a postponement on this ground, but she did not. There was therefore no unfairness in the Tribunal proceeding with the hearing. The Claimant also contends that the Appeals Service substantially delayed sending the Claimant the Council's further submission. There is no evidence before me that it was not sent as soon as it was received by the Appeals Service. Even if there was delay, however, in my judgment that did not of itself result in unfairness because the Claimant had the opportunity to ask for a postponement.
28. Thirdly, it is contended that the Claimant has been substantially prejudiced by the destruction of documents, and in particular the destruction of the signing off card, by the DWP. (Some of the Claimant's submissions proceed on the footing that the destruction was by the Council. It is clear that the relevant documents were destroyed by the DWP, not the Council). The fact that documents have been destroyed cannot of itself result in an error of law by an appeal tribunal. An error of law will only result if the Tribunal fails to take the fact of that destruction into account in weighing the evidence. I hold below that there was an error of law by the Tribunal in relation to the question whether the payments were caused by official error. In view of the fact that I substitute my own findings on this question, I think that the issue whether the Tribunal sufficiently took into account the destruction of documents is academic.
29. Next, it is contended that the Tribunal erred in law in finding that there was no official error on the part of either the DWP or the Council.
30. By regulation 99(1) of the Housing Benefit (General) Regulations 1987 (the provisions of the Council Tax Benefit (General) 1992 Regulations are in materially similar form) any overpayment, other than one to which para. (2) applies, is recoverable. By reg. 99(2):

"…….this paragraph applies to an overpayment caused by an official error where the claimant ……………could not, at the time of receipt of the payment or of any notice relating to the payment reasonably have been expected to realise that it was an overpayment."

By reg. 99(3):

"In paragraph (2), "overpayment caused by official error" means an overpayment caused by a mistake made whether in the form of an act or omission by:

(a) the relevant authority;

(b) an officer or person acting for that authority;

(c) an officer of the Department for Work and Pensions ……..

where the claimant ……….did not cause or materially contribute to that mistake, act or omission."

31. In my view there were two shortcomings in the Tribunal's reasons on the question of official error. First, in coming to its conclusion that the DWP did not know that the Claimant had claimed housing benefit, it did not specifically consider and take into account the Claimant's evidence that she had ticked the box on the JSA signing off card indicating that she was in receipt of housing benefit. Secondly, it did not consider the Claimant's contention that, in the light of the Council's evidence that at the material time it conducted data matching exercises three times a year, the Council was in error in not picking up sooner than it did (i.e. before August 2004) that the Claimant was no longer in receipt of JSA.
32. In my judgment the Tribunal's decision must be set aside as erroneous in law on those grounds.
33. However, I consider that I have sufficient material before me on which to make the necessary additional findings of fact, and to substitute my own decision for that of the Tribunal.
34. There is indeed statutory provision for entitlement to housing benefit for an additional 4 weeks where a claimant has been continuously entitled to income support or income based JSA for at least 26 weeks and that entitlement ceases by reason of the fact that he has commenced employment: s.62A of and Schedule 5A to the Housing Benefit (General) Regulations 1987. Similar provisions apply in relation to council tax benefit. I therefore find it entirely credible that the Claimant would have been asked by the DWP to indicate whether she was in receipt of housing or council tax benefit and to tick a box indicating whether she claimed entitlement to the extended payments. In the absence (owing to destruction) of the relevant documents, I find that that is what happened and that she did tick such a box.
35. One of the conditions of entitlement to the extended payments was that the claimant notifies either the local authority or an appropriate DWP office that he has commenced work: para. 3 of Schedule 5A. Another condition was that the Secretary of state has certified to the local authority that certain of the basic conditions of entitlement to the extended payments are satisfied: see para 2 of Schedule 5A. I am unable to find any express obligation on the Secretary of State, when notified that a claimant is in receipt of housing/council tax benefit and wishes to claim extended payments, in turn to notify the local authority and to give the necessary certificate under para. 2 of Schedule 5A. However, the legislation clearly assumed that that would be done, and in my judgment the DWP's failure to do so amounted to an "error" by the DWP. I note that at p.77 the Council's interviewing officer stated that "they should normally inform us by this tick box …."
36. The Claimant was in my judgment nevertheless probably under a separate duty, under regulation 75(1) of the 1987 Regulations, herself to report to the Council the fact that she had commenced work. The Tribunal found, and in my judgment gave cogent reasons for finding, that she did not do so, and in particular in rejecting her evidence that she wrote to the Council in February 2004. It did not err in law in so finding. The Claimant contends that the Tribunal was wrong in saying that the Claimant had not referred to any general difficulty suffered by her with regard to the delivery of post. Having read the interview transcript, I think that the Tribunal was justified in saying that. The Tribunal did not refer to the rough draft of the alleged letter to the Council, but in my judgment it did not err in law in doing so, given that the existence of such a draft could have been of little weight, in the context of the Tribunal's reasoning, in determining whether the letter was actually written and posted.
37. In my judgment, however, the Claimant's failure herself to report the change direct to the Council cannot be said to have contributed to the DWP's error in failing to notify the change to the Council.
38. The question then arises whether, given the Claimant's failure to disclose the change to the Council direct, the overpayments were "caused" by the DWP's error, rather than by the Claimant's failure. In my judgment they were, at any rate initially. The Claimant's own evidence is that she did not rely on the procedure for claiming extended payments as a reason for not complying with her obligation to notify the Council direct. She says that she did notify the Council, but the Tribunal rejected that evidence. It would in my judgment have been very understandable if the Claimant had, in all the circumstances, assumed that the DWP would notify the Council, and had relied on that being done. As I have said, it was implicit in what appears to be the machinery for claiming extended payments that that would be done. In my judgment, for that reason the DWP's failure was substantially more potent, as a cause of the overpayment, than was the Claimant's failure herself to notify the Council direct. I do not therefore think that it can be said that, at any rate initially, the claimant was "substantially responsible for the overpayments": see the analysis of Simon Brown LJ in R(Sier) v Cambridge CC HBRB [2001] EWCA Civ 1523.
39. However, the Claimant must surmount the additional hurdle of showing that she "could not at the time of receipt of the payment …….reasonably have been expected to realise that it was an overpayment": see the concluding words of reg. 99(2) of the 1987 Regulations. The Tribunal found that the Claimant could reasonably have been expected to realise that she was being overpaid: see para. 22 above. It found that she was aware that she continued to receive benefit. The Claimant accepts that she knew that she was in receipt of benefit until about the end of March, but says that that was exactly what she expected by virtue of the entitlement to extended payments which she had been told about by the DWP: see her evidence summarised in para. 8 above. I see no basis on which I can interfere with the Tribunal's finding that the Claimant would in fact have contacted her landlord after April in order to continue to monitor the position. That was a finding which the Tribunal was entitled on the evidence to make. The Tribunal did not expressly refer to the Claimant's contention that she was too depressed to contact the landlord, but in my judgment it did not need to do so. There was evidence before the Tribunal (p.53) that the Claimant remained in employment until 12 August 2004, and was not in receipt of incapacity benefit until at least that date (p.43).
40. The result is that, although up until about the end of March 2004 the Claimant could not reasonably have been expected to realise that she was being overpaid (until that time she knew that benefit was continuing to be paid, but considered that she was entitled to be paid), she ought to have realised that she was being overpaid when she first discovered after then that payments were continuing. On the basis of the Tribunal's general finding that she did know that payments were continuing, I would find that she would first have made a further enquiry of the landlord at, say, the end of April 2004, and so first discovered then that payments were continuing. Although that knowledge would have related only to housing benefit, it ought in my judgment to have alerted her to the fact that something was going wrong, and to have contacted the Council, in which case she would have discovered the position in relation to council tax as well.
41. The result is in my judgment that the overpayments are recoverable in respect of the period from 1 May 2004 onwards (but not before), on the grounds that from that date the Claimant in fact realised that housing benefit was being overpaid and could reasonably have been expected to realise council tax benefit was being paid. I would also hold, on the facts found by the Tribunal, as supplemented by my additional findings, that from May 2004 the cause of the overpayment was not the official error by the DWP but the fact that the Claimant did not ask the Council why she was continuing to be paid, so that there was no "overpayment caused by official error" within the meaning of reg. 99(3).
42. The result would be no different if the Tribunal had found that the Council was also in error in not conducting or acting on the results of matching searches earlier than it did, or indeed if it had found that the Claimant had notified the Council in February 2004 that she had ceased work and the Council had failed to act on that notification. The reasoning in paras. 40 and 41 above would in my judgment be equally applicable in relation to any such error.
43. For the above reasons I make the decision set out in paragraph 1 above.

(signed on the original) Charles Turnbull

Commissioner

1 November 2006