MR-v-Department for Social Development (CA) [2012] NICom 271

 

 

                                                                          Decision No:  C2/11-12(CA)

 

 

 

 

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

 

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

 

 

CARER’S ALLOWANCE

 

 

Application by the claimant for leave to appeal

and appeal to a Social Security Commissioner

on a question of law from a Tribunal’s decision

dated 3 March 2011

 

 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

 

 

1.    Having considered the circumstances of the case, I am satisfied that the application can properly be determined without a hearing.  I grant leave to appeal and proceed to determine all questions arising thereon as though they arose on appeal.  The decision of the appeal tribunal dated 3 March 2011 is in error of law.  The error of law identified will be explained in more detail below.  Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

 

2.    For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.  This is because there is detailed evidence relevant to the issues arising in the appeal to which I have not had access.  Further, there may be further findings of fact which require to be made and I do not consider it expedient to make such findings, at this stage of the proceedings.  Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination.

 

3.    In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the appeal tribunal takes into account the guidance set out below.

 

4.    It is imperative that the appellant notes that while the decision of the appeal tribunal has been set aside, the issue of whether there has been an overpayment of carer’s allowance (CA), the amount of such an overpayment, the period over which it was paid and whether it is recoverable from her, remains to be determined by another appeal tribunal.  In accordance with the guidance set out below, the newly constituted appeal tribunal will be undertaking its own determination of the legal and factual issues which arise in the appeal.

 

Background

 

5.    On 29 March 2001 a decision-maker of the Department decided that the appellant was entitled to CA from and including 15 December 2000.

 

6.    On 14 April 2010 a decision-maker made a decision, which is described in paragraph 12 of section 4 of the original appeal submission as a supersession of the decision dated 29 March 2001 and which, in turn, disallowed entitlement to CA from and including 7 June 2004.

 

7.    On 27 May 2010 another decision-maker of the Department decided that as a result of the decision dated 14 April 2010, an overpayment of CA had occurred for the period from 7 June 2004 to 25 April 2010 amounting to £14,849.70.  The decision went on to say that of the £14,849.70 overpaid, £14,157.80 for the period 7 June 2004 to 24 January 2010 was recoverable from the appellant because she had failed to disclose the material fact that she was gainfully employed but the remaining £691.90 was not recoverable as it did not arise as a consequence of a failure to disclose.

 

8.    A letter of appeal against the decision dated 27 May 2010 was received in the Department on 7 July 2010.  As the appeal was received outside the prescribed time for appealing it was referred to the decision-maker who decided to admit the appeal in the circumstances.

 

9.    Following an earlier adjournment, the substantive oral hearing of the appeal took place on 3 March 2011.  The appellant was present but was not represented.  The Department was represented.  The appeal tribunal disallowed the appeal and confirmed the decision dated 27 May 2010.  On 8 July 2011 an application for leave to appeal to the Social Security Commissioner was received in the Appeals Service.  On 12 August 2011 the application for leave to appeal was refused by the legally qualified panel member (LQPM).

 

Proceedings before the Social Security Commissioner

 

10.   On 16 September 2011 a further application for leave to appeal was received in the Office of the Social Security Commissioners.  On 26 October 2011 written observations on the application for leave to appeal were requested from Decision Making Services (DMS) and these were received on 24 November 2011.  In these written observations, Mr Smith, for DMS, opposed the application on the grounds cited by the appellant but supported the application on two other submitted grounds.  The written observations were shared with the appellant on 12 January 2012.  On 6 January 2012 consent was received from the appellant to the Commissioner treating the application as an appeal and determining any question on the application as though it were a question arising on an appeal.

 

Errors of law

 

11.   A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.

 

12.   In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals.  As set out at paragraph 30 of R(I) 2/06 these are:

 

“(i)      making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);

 

(ii)      failing to give reasons or any adequate reasons for findings on material matters;

 

(iii)      failing to take into account and/or resolve conflicts of fact or opinion on material matters;

 

(iv)      giving weight to immaterial matters;

 

(v)      making a material misdirection of law on any material matter;

 

(vi)      committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

 

               Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’).  Errors of law of which it can be said that they would have made no difference to the outcome do not matter.”

 

Why was the decision of the appeal tribunal in the instant case in error of law?

 

Section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992

 

13.   Section 69(5A) of the Act provides that:

 

       (5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above or under regulations under subsection (4) above unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under Article 10 or superseded under Article 11 of the Social Security (Northern Ireland) Order 1998

 

14.   In summary, this paragraph says that there can be no recoverable overpayment of social security benefit, unless the original decision which gave rise to the award of benefit, now deemed to have been overpaid, is revised or superseded.  Without an alteration or change in the decision giving rise to the entitlement to the particular benefit, there can be no recovery of it.

 

15.   The importance of the proper identification of a section 69(5A) decision was emphasised by Deputy Commissioner Powell in C10/07-08(IS).  At paragraph 4 he stated:

 

‘ … the relevant statutory provision, which is section 69(5A) of the Social Security Administration (NI) Act 1992, expressly provides that a decision which seeks to recover an amount of overpaid benefit cannot be made unless the determination in pursuance of which the amount was overpaid has been revised or superseded by a separate decision.  In other words, the decision which awarded benefit must be abrogated or corrected in one of the ways permitted by the legislation before a decision can be made as to how much has been overpaid and what is now recoverable.  Put like that, the sequence of decisions is logical.  The two decisions can be contained in a single document provided that the sequence is apparent.  Section 69(5A) is an important safeguard.  Tribunals, rightly, are alert to see that it has been complied with.  Nothing I am going to say casts doubt on their vigilance.  A tribunal must allow an appeal against a decision seeking to recover overpaid benefit once it becomes clear that the decision which awarded benefit has not been revised or superseded in the appropriate manner.  Further, a tribunal should also allow an appeal where not only is there no copy of the revision or supersession decision before it but such evidence as is relied upon leaves the tribunal uncertain as to whether the necessary decision was taken.’

 

16.   In essence, the appeal tribunal will have to identify two decisions.  The first is a decision which alters previous decision(s) awarding entitlement to benefit – that can be described as the entitlement or section 69(5A) decision.  The second is a decision that overpaid benefit is recoverable – that can be described as the recovery or section 69(1) decision.  At paragraph 10 of C10/07-08(IS), Commissioner Powell stated:

 

‘It is now settled law, and section 69(5A) so provides, that the recovery of an overpayment of benefit requires two distinct decisions which are often called the “entitlement decision”, which changes the entitlement to benefit for a past period through the process of revision or supersession, and the “recoverability decision”.  The latter being based on the former.  I use the word “distinct” deliberately.  Since the recoverability decision is based on the entitlement decision it must be proceeded by it.  Subject to that, the two decisions can be given on the same date or even in the same document – provided that they are distinct and that it is clear that the entitlement decision comes first.’

 

17.   Deputy Commissioner Powell also emphasised the importance of ensuring that there has been a proper notification of a decision, including a section 69(5A) decision, to a claimant, and set out the consequences where no such proper notification had been made.

 

18.   In the present case, the Department has submitted that the decision dated 14 April 2010 is the decision which could be classified as a section 69(5A) entitlement decision.  There are two ways in which the decision dated 14 April 2010 could be said to be problematic.

 

19.   The first is identified by Mr Smith in the written observations on the application for leave to appeal.  After setting out the legislative background relevant to entitlement to CA, including the legislative provisions relevant to prescribed earnings limits for the purposes of entitlement to CA, Mr Smith submitted that:

 

‘In this case the decision maker became aware of (the claimant’s) earnings in the form of annual returns for the period April 2004 to March 2009 when the relevant information was retrieved from NIRS.  In its submission the Department stated that the decision maker estimated (the claimant’s) average weekly earnings by dividing the gross annual earnings by 52 (para 22 of Section 5 on page 10).  However, it would appear from the calculations shown at tab 11A that the decision maker did deduct the prescribed allowances in accordance with regulation 10 of the Computation of Earnings regulations prior to calculating the average weekly earnings.

 

In saying that, it would appear from the papers before me that the only evidence that was before the tribunal that the Department had calculated (the claimant’s) average weekly earnings during the period of the overpayment was the aforementioned calculations shown at Tab 11A but these were only for the period 27/04/09 to 02/05/10.  The average earnings relevant to the period 07/06/04 to 26/04/09 still need to be investigated.

 

I submit that the tribunal failed in its inquisitorial role to examine (the claimant’s) earnings during the whole of the overpayment period and therefore could not have satisfied itself that her earnings in each of the weeks during the entire relevant period were in excess of the prescribed limit.

 

As a consequence, the tribunal could not have been satisfied that the Department had grounds to supersede the decision awarding CA from 07/06/04 in order to comply with the conditions of section 69(5A) of the Social Security Administration (NI) Act 1992 that would permit recovery of the overpayment.  For this reason I submit that the tribunal has erred in law.’

 

20.   I am of the view that the appeal tribunal was misled by the contents of the appeal submission prepared for the appeal tribunal hearing or, more properly, what was not in the written submission.  Nonetheless, the appeal tribunal was under a duty to determine whether the Department, on 14 April 2010, had grounds to supersede the decision dated 29 March 2001.  The purported ground was that there had been a relevant change of circumstances since the decision dated 29 March 2001 had been given.  This was that the appellant was gainfully employed and did not, therefore, satisfy the conditions of entitlement to CA, set out in section 70(1)(b) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as amended.  Her employment was purported to be ‘gainful’ in that after proper calculation of her earnings in accordance with section 3 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, and the relevant provisions of the Social Security (Computation of Earnings) Regulations (Northern Ireland) 1996, as amended, and comparison with the prescribed earnings limits, her earnings during the whole of the relevant period were in excess of those prescribed earnings limits.

 

21.   There is no doubt that the appeal tribunal lacked the figures relevant to the calculation and comparison of the relevant earnings for the entirety of the period.  Accordingly, the appeal tribunal could not have been satisfied as to whether the appellant had any entitlement during the period of the overpayment and could not have been satisfied that the Department had grounds to supersede the decision awarding CA from 7 June 2004 in order to comply with the conditions of section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992 that would permit recovery of the overpayment.

 

22.   It seems to me, in addition, that there is a second way in which the decision dated 14 April 2010, purported to satisfy the requirements of section 69(5A), is problematic.  There is reference to the decision dated 14 April 2010 at paragraph 12 of section 4 of the original appeal submission.  There is a cross-reference to Tab No 9 of the appeal submission.  At Tab No 9 there is a copy of a ‘decision’.  Perusal of its contents reveals that it was made on 14 April; there is a reference to a ‘supersession’; to a ‘change of circumstances’ and to a date of disallowance from 7 June 2004.  The latter date would be the effective date of supersession for the purposes of Article 11(5) of the Social Security (Northern Ireland) Order 1998 and regulation 7 of the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999, as amended.

 

23.   It might be possible to construct from the narrative of the appeal submission and the contents of Tab No 9 that the decision dated 14 April 2010 was a supersession decision and that the ground for supersession was on the basis of a relevant change of circumstances.  What is missing, in addition to what is set out above in relation to calculation of entitlement, is a reason why the effective date of supersession was submitted to be 7 June 2004.  In this regard, I have noted that Mr Smith, in his written observations on the application for leave to appeal, has submitted that:

 

‘On 04/11/10 the decision on entitlement was reconsidered but not changed despite the fact that the Department had become aware that (the claimant) commenced work on 20/11/03.

 

From the papers before me I am unable to determine if a reconsideration of the overpayment decision was ever carried out.’

 

24.   It is difficult, therefore, to ascertain what the proper effective date of supersession should be.

 

Failure to disclose

 

25.   I have indicated in a number of decisions that there is in place a legislative mechanism for the recovery of all social security benefits which have been overpaid.  Section 69(1) of the Social Security Administration (Northern Ireland) Act 1992, as amended provides that:

 

‘(1)     where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure –

 

          (a) a payment has been made in respect of a benefit to which the section applies;

 

          (b) any sum recoverable by or on behalf of the Department in connection with any such payment has not been recovered,

 

the Department shall be entitled to recover the amount of any payment which the Department would not have made or any sum which the Department would have received but for the misrepresentation or failure to disclose.’

 

26.   In B v Secretary of State for Work & Pensions (reported as R(IS)9/06), the Court of Appeal for England & Wales upheld the decision of the Tribunal of Commissioners in Great Britain in R(IS)9/06.  In that latter decision, the Tribunal of Commissioners had considered, in depth, the nature of the legal test in respect of failure to disclose, by analysing the relationship between section 71 of the Social Security Administration Act 1992 (the Great Britain equivalent to section 69 of the Social Security Administration (Northern Ireland) Act 1992) and regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (which has an equivalence in regulation 32 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987).

 

27.   In summary, the Tribunal of Commissioners found that:

 

‘1.       Section 71 does not purport to impose a duty to disclose, but rather presupposes such a duty, the actual duty in this case being in regulation 32 of the Social Security (Claims and Payments) Regulations 1987, which provides for (a) a duty to furnish information and evidence pursuant to a request from the Secretary of State, and (b) a duty to notify the Secretary of State of any change of circumstance which the claimant might reasonably be expected to know might affect the right to benefit.

 

2.       In relation to the duty to furnish information and evidence pursuant to a request, whilst there is no duty to disclose that which one does not know, if a claimant was aware of a matter which he was required to disclose, there was a breach of that duty even if, because of mental incapacity, he was unaware of the materiality or relevance of the matter to his entitlement to benefit, and did not understand an unambiguous request for information, and a failure to respond to such a request triggered an entitlement to recovery under section 71 of any resulting overpayment.

 

3.       Insofar as R(SB) 21/82 imported words from regulation 32 into the construction of section 71 in stating that the non-disclosure must have occurred in circumstances in which, at lowest, disclosure by the person in question was reasonably to be expected, that decision and subsequent decisions that have relied on it were wrongly decided.

 

4.       The form INF4 supplied to claimants contained an unambiguous request by the Secretary of State to be informed if a claimant’s children went into care and by not disclosing the fact to the Department, the claimant was in breach of her obligation under regulation 32, so that the Secretary of State was entitled under section 71 to recover the overpayment resulting.’

 

28.   In C6/08-09(IB), I said the following, at paragraphs 40 to 42:

 

‘40.     Firstly, as was noted above, the practical outcome of the cases referred to above is that an appeal tribunal, when determining whether an overpayment of a social security benefit is recoverable on the basis of a failure to disclose, will have to consider where the requirement to provide the relevant information came from.  This will necessitate identifying whether the case comes within the first or second duty in regulation 32.

 

41.     In the case of the first duty, it will also require the provision of proof by the Department that the requirement to provide information was made to the claimant.  That proof may be in the form of receipt of an information leaflet such as Form INF4 or instructions in an order book.  It will not be enough, however, for the information leaflet or order book to be produced.  The wording of the relevant instructions will have to be looked at in close detail to ensure that the instructions to disclose were clear and unambiguous.

 

42.     In the case of the second duty, the requirement is that the change of circumstances is which the claimant might reasonably be expected to know would affect his entitlement to benefit.’

 

29.   In the instant case, the appeal submission sets out in commendable detail, at paragraphs 27 to 49, the legal and evidential basis upon which the Department decided that an overpayment of CA had occurred for the period from 7 June 2004 to 25 April 2010 amounting to £14,849.70 of which £14,157.80 for the period 7 June 2004 to 24 January 2010 was recoverable from the appellant.

 

30.   In the decision notice for the appeal tribunal’s decision, the LQPM has recorded that:

 

‘Appeal disallowed.

 

An overpayment of Carer’s Allowance amounting to £14157.80 received by the appellant in respect of the period 7.6.04 to 24.1.10 is recoverable from her’

 

31.   The statement of reasons for the appeal tribunal’s decision makes no other reference to the legal and evidential source of the duty on the appellant to disclose a change of circumstances.  Rather it is taken up with an analysis of why the appellant’s evidence that she did make a relevant disclosure was rejected.  The appeal tribunal does make reference to the fact that ‘Benefit Review Forms were issued to her every two years’ and that ’She did not return these forms.’  In connection with this issue, Mr Smith has submitted that:

 

‘Social Security benefits are increased in April of each year.  Prior to the implementation of the annual increases, claimants are informed of their new entitlement to benefit by way of notices detailing the breakdown of the benefit from the prescribed date in April.  These notifications also include information on the changes in circumstances a claimant must report to the Department.  (The claimant) would have been issued with such notices each year.

 

(The claimant) was initially paid CA from 15/12/00 on a weekly basis by order book.  On 17/05/04 the way in which she received her CA changed to credit transfer and benefit was paid direct into her bank account.  At the time (the claimant) would have been supplied with a form advising her that payment of CA was to be made into her bank account.  This form would have also contained information detailing changes in circumstances which she must report to the Department.

 

However, due to the limitations of the Disability and Carer’s Service computer system the Department was unable to provide copies of the actual forms that were sent to (the claimant).  In their place the Department adduced a proforma of the notification that would have been sent to (the claimant) prior to each uprating advising her of the increase in CA and a proforma of the document that would have been sent to (the claimant) when her method of payment changed from order book to credit transfer into a bank account – (see tabs 26 and 27).

 

On the front page of the proforma sent at the annual uprating the address of CA Branch is shown as “Disability & Carer’s Services, Castle Court, Royal Avenue, Belfast, BT1 IHR” and on the front page of the proforma sent when the method of payment changed to credit transfer the address is shown as “Disability & Carer’s Allowances Centre, Castle Court, Royal Avenue, Belfast, BT1 IHR”. There is a minor change to the name of the Branch but the address remained constant.

 

In saying that on both forms under the heading “In particular, you must tell us about any of these changes” there is a list of changes which must be reported including such changes as:

 

·                 You start work as an employed or self employed person, either full-time or part-time, temporary or casual, whatever your earnings.

 

·                 If you have already told us that you are working, you must tell us if your earnings go up or any expenses already claimed change.  You must also tell us if you work any overtime or receive a bonus.

 

I submit that (the claimant) would have been made aware of the changes that she must report and to which part of the Department the changes must be reported when she received the notifications of the increases to CA each year and when she changed her method of payment.  In view of this, the duty upon (the claimant) comes within the first duty and can be found in paragraph (1A) of Regulation 32 of the Claims and Payments Regulations.  Furthermore I submit that the instructions are clear and unambiguous and (the claimant) would have been in no doubt as to her duty to report that she had started work or when her earnings increased.

 

However, it is not recorded in the Reasons for Decision whether the tribunal considered the legal or evidential sources which imposed the duty on (the claimant) to disclose the material fact that she was working or that her earnings were in excess of the prescribed amount, namely, Regulation 32 of the Claims and Payments Regulations and the instructions provided to her by way of the notifications.’

 

32.   In the instant case, the appeal tribunal failed to address the legal and evidential source of the duty on the appellant to disclose a material fact.  It is my view, however, that the appellant was entitled to know, through the statement of reasons for the appeal tribunal’s decision, the legal and evidential basis on which it was confirmed that there had been an overpayment of IS which was recoverable from her.

 

33.   The failure to address the legal and evidential source of the duty on either the appellant or claimant to disclose a change of circumstances by the appeal tribunal renders its decision on that aspect of the appeal erroneous in law and it must, accordingly, be set aside.

 

The appellant’s grounds for appealing

 

34.   Having found that the decision of the appeal tribunal is in error of law for the reasons set out above, I do not have to consider the appellant’s grounds for appealing in detail.  I would note, however, that I would not have found the decision of the appeal tribunal to be in error of law on the basis of the grounds cited by the appellant.

 

Disposal

 

35.   The decision of the appeal tribunal dated 3 March 2011 is in error of law.  Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

 

36.   I direct that the parties to the proceedings and the newly constituted appeal tribunal take into account the following:

 

(i)         the decision under appeal is a decision of the Department dated 27 May 2010 in which a decision-maker of the Department decided that as a result of the decision dated 14 April 2010, an overpayment of CA had occurred for the period from 7 June 2004 to 25 April 2010 amounting to £14,849.70.  The decision went on to say that of the £14,849.70 overpaid, £14,157.80 for the period 7 June 2004 to 24 January 2010 was recoverable from the appellant because she had failed to disclose the material fact that she was gainfully employed but the remaining £691.90 was not recoverable as it did not arise as a consequence of a failure to disclose;

 

(ii)       the Department is directed to produce a further submission for the appeal tribunal hearing which addresses the following issues –

 

       (a)      whether there is/are in place a decision/decisions which satisfies section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992, as amended.  In addressing this issue, the Department is required to set out, in some detail, the basis upon which the appellant’s weekly earnings were calculated for the period during which it has submitted CA was overpaid;

 

       (b)      the legal and evidential basis upon which the Department submits that there has been a failure to disclose on the part of the appellant giving rise to a decision which satisfies section 69(1) of the Social Security Administration (Northern Ireland) Act 1992, as amended.

 

       In making its further submission, the Department will wish to draw on the contents of the submission made by Mr Smith for the purposes of the proceedings before the Social Security Commissioner;

 

(iii)   it will be for the appeal tribunal to consider the submissions made by the parties to the proceedings on these issues, and any evidence adduced in support of them, and then to make its determination, in light of all that is before it.

 

 

(signed):  K Mullan

 

Chief Commissioner

 

 

 

26 March 2012