[2006] UKSSCSC CIS_1887_2002 (03 January 2006)
PLH Commissioner's File: CIS 1887/02
SOCIAL SECURITY ACTS 1992-1998
APPEAL FROM DECISION OF APPEAL TRIBUNAL
ON A QUESTION OF LAW
DECISION OF THE SOCIAL SECURITY COMMISSIONER
Claim for: Income Support (Overpayment)
Appeal Tribunal: Leeds
Tribunal Case Ref:
Tribunal date: 24 January 2002
Reasons issued: 30 January 2002
- The decision of the Leeds appeal tribunal on 24 January 2002 (Mr D W Adams, chairman, sitting alone) that the sum of £2,100.42 income support overpaid to the claimant from 15 July 1998 to 6 April 1999 was legally recoverable from him on the ground of his failure to disclose a material fact was in my judgment erroneous in law and I set it aside. Since this case has, for the reasons explained below, been extensively delayed already and there is no suggestion that the relevant facts are now materially disputed, I exercise the power in section 14(8)(a) Social Security Act 1998 to substitute my own decision based on the tribunal's findings and the material before me. That decision is that it has not been shown on the evidence that the Secretary of State has discharged the burden on him of proving that the overpaid benefit in question is recoverable from the claimant under section 71 Social Security Administration Act 1992 by reason of the "failure to disclose" alleged. The original decision of the Secretary of State made on 28 December 2000 is accordingly varied to the extent that although that amount of income support for that period was overpaid to the claimant, it is not recoverable from him on the single ground stated.
- This appeal along with a large number of other cases has had to be delayed because of uncertainties that have arisen in the last few years in the previously well settled law of recoverable overpayments of social security benefit, pending what was hoped to be a final resolution of such uncertainties by the decision of the House of Lords given earlier this year in Hinchy v Secretary of State [2005] 1 WLR 967. In the great majority of those cases it has fortunately now been possible to give a final decision which automatically follows from the principles now laid down or reaffirmed by their Lordships, but in a small number (of which this is one) additional questions arose on which separate consideration has been necessary. I am grateful for the supplemental submissions provided on the additional questions in this case by the claimant's representative Mrs C Greenwood of the Calderdale CAB, and by Ms S Bruce on behalf of the Secretary of State. I am now giving the final decision based on the material before me which I do not understand to be significantly disputed, as I can see no advantage in sending the case back to another tribunal for rehearing after so long a time. Even if the exact details of what happened at the relevant time some seven years ago are less than perfectly known, there seems no real chance of this now being improved on: some of the most material letters and documents had already been destroyed by the Department even at the time of the original tribunal hearing in January 2002.
- The material facts were that in the summer of 1998 the claimant, a man then aged 51, was trying to claim income support as a person unable to work through incapacity. On 3 June 1998 he signed and submitted at his local social security office in Halifax a standard income support claim form filled in for him in a different handwriting (probably by a member of the staff of that office at an interview) which contained the statement "I am sick and am putting in a claim for ICB": pages 5 to 10. At or about the same time, he was required by the same office to put in a concurrent claim for incapacity benefit, and did so.
- It was a requirement of his obtaining income support that such a claim should be made since as well as any entitlement to incapacity benefit for which he might separately qualify, entitlement to income support on the ground of being a person incapable of work (as distinct from a person able to work and looking for it, who would have had to claim jobseekers allowance instead) depended on a determination of whether he met the prescribed conditions of incapacity under Part XIIA Social Security Contributions and Benefits Act 1992 (the main incapacity benefit provisions). Such determinations fell to be made under the Social Security (Incapacity for Work) (General) Regulations 1995 SI No. 311 (especially regulations 19 to 21). They were in practice handled within the local office by staff working on incapacity cases.
- The claimant's incapacity benefit form, which does not appear to have been preserved, was submitted to the same local office which dealt with both benefits. Correspondence and documents relating to each were issued from the same office at the same address, not identified as coming from different offices bearing different addresses. Within the office itself, the work of dealing with the two interconnected benefits was handled in separate "sections", but there was no evidence about how staff were allocated from time to time to work on one or the other, or a combination of the two.
- On 22 June 1998 the Halifax local office issued an award of income support to the claimant on the ground of his incapacity for work, which meant that the question of that incapacity had by then been determined in his favour by staff within that office working on incapacity questions. At that stage however, no separate determination on his entitlement to incapacity benefit itself had yet been given: that depended also on other questions, such as whether he had the required level of contributions. They were no doubt still having to be worked on, by yet other staff within the same office dealing with such claims.
- Accordingly the initial award of income support made to him for his immediate needs was calculated (entirely correctly) without any reduction to allow for any possible concurrent benefit entitlement he might turn out to have. Income support is of course an emergency benefit to provide for people in immediate need, so the entirely commendable practice in such circumstances is to make such awards as quickly as possible and adjust things later. If a later award of another relevant benefit is in due course made for the same period it can be abated under express offsetting provisions in section 74 Social Security Administration Act 1992, and the income support reduced from then on.
- What happened in this case was that an award of incapacity benefit was indeed made to the claimant and issued to him from the same local office on or about 15 July 1998; but for some reason (now impossible to discover) whichever staff within the office were responsible for detecting this as an offset case and operating the provisions to avoid his being given double benefit for the same period failed to do so. The claimant therefore went on getting his unreduced income support, as well as his full incapacity benefit, from 15 July 1998.
- That state of affairs went on until 6 April the following year. At that time the claimant returned a routine review form quite properly disclosing the fact that he was getting incapacity benefit, and the mistake was discovered. By then the net amount of extra benefit overpaid to him in excess of his true entitlement amounted to £2,142. The question is whether that amount was legally recoverable from him under section 71 cited above, on the ground of his having "failed to disclose" to the Secretary of State at "the appropriate office" until that time the material fact that from 15 July 1998 onwards he had been awarded and was being paid his incapacity benefit.
- The tribunal chairman found as a fact after considering the evidence that the claimant had not made any report or given any notification to his local office of the incapacity benefit award. It was accepted that this was due to confusion on the claimant's part over his responsibility to do so, and not to any dishonesty. Applying the established test of whether disclosure was reasonably to be expected of the claimant in all the circumstances, the tribunal chairman held that there had been a "failure" on his part in not having given a notification to "the Income Support Section of the Benefits Office of his receipt of the Incapacity Benefit". The overpayment was therefore recoverable from him under section 71 because he had failed to disclose a material fact: see the chairman's very clear and well set out statement of reasons at pages 31 to 32, issued to the parties on 30 January 2002.
- Against that decision the claimant appeals on the grounds consistently argued by Mrs Greenwood on his behalf, that on the authority of the Tribunal of Commissioners decision in R(SB) 15/87, specifically referred to and approved by the House of Lords in the recent decision in Hinchy, the tribunal chairman had erred in holding there had been a "failure of disclosure" in terms of section 71 when the relevant benefit award which affected entitlement was made by the identical office to which the claimant was otherwise required to make disclosure. Unlike the position in Hinchy where two completely different benefit offices were involved, no question of any further "disclosure" to the same office of the fact of its own act could be meaningful or required, and there could be no "failure" in this respect to bring the claimant within section 71.
- Reliance was placed on the formulation of the duty of disclosure as expressly approved by the House of Lords and restated by Lord Hoffmann at [2005] 1 WLR 974 paragraph 22:
"… the claimant must do what a person in his position would reasonably regard as sufficient to communicate the information to 'the proper person' in the relevant office."
As Lord Hoffmann went on to say in the following paragraph:
"It is not for the claimant to form views about what may go on behind the scenes in the social security or other benefit offices. His duty is to comply with the instructions in the order book. A disclosure which would be thought necessary only by a literal-minded pedant (see, for example, decision CSB/1246/1986 [which related to annual increases of benefit]) need not be made, but the safest course is to resolve doubts in favour of disclosure."
The passage from the Tribunal of Commissioners' decision in R(SB)15/87 quoted and approved immediately before those observations included the following:
"26.… To whom is there this obligation to disclose? We are concerned here with breaches of the obligation which have the consequence that expenditure is incurred by the Secretary of State; and in our view, the obligation is to disclose to a member or members of the staff of an office of the department handling the transaction giving rise to the expenditure …
28. 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 …"
- Mrs Greenwood accordingly submits that the principle of Hinchy, that the required disclosure includes a separate notification to one's local office of the actions of a different office elsewhere in the country in making or terminating some different award of benefit, does not apply, because the office to which it is said the disclosure should have been made was of course itself already aware of the fact of its own award. As stated in R(SB) 15/87 paragraph 25:
"Disclosure consists in 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."
Here the claimant fell outside any principle requiring additional notification on his part. He knew that the award of incapacity benefit was known to the local benefit office in Halifax because they had written to tell him of the award.
- Ms Bruce on the other hand submits on behalf of the Secretary of State that this case is covered by Hinchy, citing paragraph 32 of Lord Hoffmann's judgment where the principles of R(SB) 15/87 were approved, and arguing:
"i.e. that the claimant's duty of disclosure is best fulfilled by disclosure to the local office where the claim was being handled.
15. In this case, there is no evidence in the bundle that the claimant has disclosed to the income support office that he had been awarded incapacity benefit. I therefore submit that under the decision by the House of Lords under Hinchy, approving R(SB) 15/87, the claimant's duty was to make full disclosure to the Income Support Office.
… the claimant, by not reporting his change of circumstances did not fulfil the secondary duty imposed on him by the provisions of regulation 32 of the Social Security (Claims and Payments) Regulations 1987 and, by not doing so, prevented the Income Support Office from making a decision concerning his entitlement to Income Support."
- The Secretary of State's ability to recover overpaid benefit on the ground put forward in this case is governed by the terms of section 71 Social Security Administration Act 1992 which requires him to show a failure to disclose a material fact, not merely failure to send or give any specific written or other notification that may be stipulated in subordinate legislation, or in literature the department itself may put out: for example the detailed instructions or advice given to claimants contained in or accompanying their benefit order books.
- In the present case, the established formulation in R(SB) 15/87 in terms of the claimant's obligation to make disclosure to "the local office where his claim is being handled" was in no way contradicted or called in question by the terms of the notification stipulated by regulation 32 of the Claims and Payments Regulations as at that time in force (1987 SI No 1968) which so far as material stated the requirement on him as follows:
"Information to be given when obtaining payment of benefit.
32. (1) … every beneficiary and every person by whom or on whose behalf sums payable by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such certificates and other documents and such information or facts affecting the right to benefit or to its receipt as the Secretary of State may require (either as a condition on which any sum or sums shall be receivable or otherwise), and in particular shall notify the Secretary of State of any change of circumstances which he might reasonably be expected to know might affect the right to benefit, or to its receipt, as soon as reasonably practicable after its occurrence, by giving notice in writing (unless the Secretary of State determines in any particular case to accept notice given otherwise than in writing) of any such change to the appropriate office."
For this purpose the expression "appropriate office" is defined by regulation 2(1) of the same regulations, as meaning simply "an office of the Department of Social Security or the Department for Education and Employment".
- Taken at face value that definition appears to mean that any disclosure to the Secretary of State can be effectively made either at any office of his own department or at any office of the Department of Employment; but at all events there is certainly no requirement of any separate notification to individual staff within a single office, or warrant for the idea of a single office of the department having to be notionally subdivided and treated artificially and contrary to the fact as more than one "office", by virtue of the particular tasks the individuals within it happen from time to time to be engaged on, or otherwise.
- Nor in my judgment is the position materially altered by the actual instructions shown by the evidence to have been given to the claimant in this case, which were those in the copy extracts from the relevant departmental leaflets and benefit order books in evidence before the tribunal at pages 17 to 22. The "Income Support and Jobeseekers Allowance Information Sheet" leaflet sent out as a matter of course to all such claimants advised him as follows:
"Income Support and Jobseeker's Allowance
Tell your local social security office or Jobcentre about any changes as soon as you can. You can telephone or tell them when you attend. …
Tell your social security office or Jobcentre if you or anyone you are claiming for …
- apply for other benefits …
- get money from somewhere else ...
Other money coming in
Tell us if you or anyone you have claimed for
- claim any benefits, pensions or allowances
- start getting a different amount of benefit
- stop getting a benefit or other money. …
Remember to include things like
- social security benefits …
How to tell us about changes
Get in touch with your Benefits Agency Office or Jobcentre. The phone number and address are at the top of any letters they have sent you. You can phone or write or call into the office to tell us about changes."
On the relevant pages of his income support order book the claimant was told:
"10. How to tell us about changes: You must get in touch with the Social Security Office as soon as you can. The address is on the front cover of this order book. …
14. Any new benefits: You must send us a letter or Form A9 if you or your partner or your dependants start to get a new benefit."
- There is again no whisper in any of that of any subdivision or pluralisation of "the office" to which events have to be notified, beyond that of the single benefits office whose address is given to the claimant on the front of his order book or in any relevant correspondence sent to him. The required notification is to "us" or "the office" at a particular address as an entity, reflecting that as a matter of obvious common sense accepted by the Tribunal of Commissioners and endorsed by the House of Lords, a claimant cannot be expected to identify the precise person or persons who have the handling of his claim (or, I would add, concerned at any particular moment with some particular aspect or determination relevant to his claim: it may often be the case as here that more than one or even several officials are involved in the overall claim process).
- It is also in my judgment a principle established beyond question that for the purposes of section 71 there is no "failure to disclose" where the material fact in question is already known to the person or office to whom, under the principle laid down by the House of Lords in Hinchy, notification would otherwise have to be made. This too I take to be axiomatic and not called in question by anything said in the recent decision of their Lordships. It may be the kind of point Lord Hoffmann had in mind when he said "a disclosure which would be thought necessary only by a literal-minded pedant … need not be made", though perhaps a true pedant would be the least likely to think disclosure necessary in such circumstances, taking the (accurate) view that there can be no question of "disclosure" to a person or entity of something that he or it knows already.
- In my judgment the question of liability under section 71 is concluded in favour of the claimant, and against the department's view as accepted by the tribunal, by the facts that all questions affecting both of the interconnected benefits involved in this case were being dealt with by the single local benefits office at the same address; and there was nothing in any of the correspondence, literature or other evidence put before the tribunal to show that the staff from time to time dealing with the relevant incapacity benefit and income support questions were separately identified to the claimant or anyone else as different "offices"; or that the need to track down and notify any separate individual or section of individuals within that same office at the same address was either reasonably to be expected of the claimant or in any way brought to his attention. On the contrary, all the material before the tribunal pointed to the opposite conclusion, and that has been reinforced by the further submissions and explanations of the system in such an office provided to me for the purposes of this appeal.
- The reasons for this conclusion cannot in my judgment be better put than they were in a very similar case nearly twenty years ago now by a most experienced Commissioner in decision CSB 0677/86, a case also involving a single office in which the work was divided up between different sections, where in the characteristically lively and robust language in which that Commissioner's sound learning and formidable intellectual qualities were wont to be presented he said:
"2. … I am indebted to both Miss Wheat [the claimant's representative] and Mrs Saxon [for the Department] for lucid and entertaining submissions which managed to wring a few more drops of juice from a lemon which might have thought to have been already squeezed dry.
3. The lemon is section 20 of the Supplementary Benefits Act 1976 [the predecessor provision to section 71 in issue before me]. … The claimant … has been almost continuously in receipt of supplementary benefit. He was unemployed … but he then fell sick and was awarded sickness benefit. …
4. But the claimant's sickness was protracted. On 31 October 1984 he was notified by the local office of the Department of Health and Social Security that he had progressed to invalidity benefit. That, of course, reduced the supplementary benefit to which the assessment unit was entitled. But the person or section in the aforesaid local office of the Department who or which was responsible for calculating the relevant supplementary benefit was not – apparently – aware of the claimant's progress from sickness benefit to invalidity benefit; and that situation continued down to 25 September 1985. In consequence, there was an overpayment of supplementary benefit in the sum of £684.17 in respect of the inclusive period 5 November 1984 to 23 September 1985. The local adjudication officer so found – and determined that that sum was recoverable by the Secretary of State. The claimant appealed to the appeal tribunal. His appeal was disallowed.
5. Put thus baldly, the claimant's case looks unpromising. The precedents are well stocked with cases in which claimants have sought to justify their non-disclosure by arguing that the Department's files must already have contained the relevant information. For example, a supplementary benefit claimant who has not disclosed the child benefit received by the relevant assessment unit is wont to contend that the Department – which pays the very child benefit in question – could be taken to know of that child benefit when computing the claimant's entitlement to supplementary allowance. And that type of argument is normally doomed to failure. ... In this case the appeal tribunal dealt with the claimant's argument thus:
'The claimant's appeal was based on the failure of the Supplementary Benefit and Sickness Benefit sections to liaise, preventing an internal adjustment of the supplementary benefit paid to claimant's wife when claimant went from sickness benefit to invalidity benefit on 1.11.84. Tribunal rejected such argument. An obligation to disclose is personal to the claimant and it is he alone who must disclose any change of circumstances to the Department (as the notes in his order book require him to). It is insufficient to place absolute reliance on some inter-departmental procedure which may or may not exist. Even if such liaison did exist, this did not absolve a claimant from his obligation to disclose.'
6. That is all very well – so far as it goes. But – in the particular circumstances of this case – I do not consider that it goes far enough. Somewhat surprisingly, the papers do not contain any specimen of the order book note or notes to which the appeal tribunal was referring. But Miss Wheat told me that, to the best of her recollection, the relevant notes instructed the claimant to make the required disclosure to 'the issuing office' – and Mrs Saxon agreed that that was very likely. And it further appears that the 'issuing office' in the context of the claimant's supplementary benefit was precisely the same office as dealt with his sickness and invalidity benefit. It is well settled law that the disclosure contemplated by section 20 is such disclosure as can be reasonably expected of the person in question.
7. So where does that leave the matter? On 31 October 1984 the 'issuing office' wrote to the claimant notifying him that his sickness benefit would – with effect from 1 November 1984 – be replaced by invalidity benefit. Is it seriously to be urged that the reasonable man would thereupon have written to the manager of the 'issuing office' in the following, or similar, terms:
'Dear Sir,
I thank you for your letter of 31 October last and wish to inform you of its contents.'
I do not think that anyone would expect such a suggestion to be taken seriously. I need hardly say that Mrs Saxon did not.
8. I stress that I do not regard this as a case where the point in issue is whether the claimant was or was not reasonable in assuming that there would be internal liaison between different offices of the Department. Only one office was involved – and that was the office to which the claimant had been instructed to make disclosure. Those of us who are sophisticated in social security matters know that in one office there may be a number of sections, each relatively self-contained. Whether that can be assumed to be within the knowledge of the reasonable man, I do not know – but I do not have to decide that here. It was not to any particular section that the claimant was instructed to make disclosure. It was to the 'issuing office' – the very office which communicated to him the information which he is alleged not to have disclosed.
9. As I have indicated in paragraph 5 above, there have been many, many cases of this general type – some more meritorious than others. I cannot think that it is beyond the wit of those who draft the relevant instructions to claimants to devise a form of words which will make abundantly clear to claimants the precise officer or section to whom disclosure is required. If the Department should answer that this is too difficult, the obvious riposte will be: Why should a claimant be expected to appreciate a situation which the Department itself cannot explain clearly?"
- It seems to me that the principles so clearly explained by the Commissioner in that case are equally applicable to this one and show why the result on such facts as these is different from that in Hinchy where two separate benefit offices were involved, and why the overpaid benefit is not recoverable by the Secretary of State under section 71 on the ground of the only "failure to disclose" alleged and relied on. I therefore follow it, and for the reasons already indicated give the final decision in the case that the claim to make the benefit legally recoverable from the claimant on that ground does not succeed. It has not been suggested by the Secretary of State at any stage in his original decision or before the tribunal or in the present appeal before me that he is able to rely in the alternative on any different basis for establishing a "failure to disclose" from a later date than 19 July 1998, on the basis of a "continuing duty" or otherwise, and I do not therefore comment on whether that might have been a possible alternative route to at any rate some recovery in this case apart from the basis alleged.
- The appeal is allowed and my decision substituted accordingly.
(Signed)
P L Howell
Commissioner
3 January 2006
