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[2001] UKSSCSC CIB_6777_1999 (03 October 2001)

 
DECISION OF THE SOCIAL SECURITY COMMISSIONER

Summary of decision

1. This appeal succeeds. The decision of the appeal tribunal sitting at Leeds on 6 September 1999, against the adjudication officer's decision dated 22 September 1998, is wrong in law and thus I set it aside. For the reasons explained below, I am unable to make my own findings of fact and/or to substitute my own decision for that of the tribunal. Accordingly, I have regrettably no option but to direct that this case should be reheard before a fresh tribunal, which should take into account my directions in paragraph 30 below. The fact that this appeal succeeds should not be taken as any indication as to the likely outcome of the rehearing of the appeal on the substantive matter itself.

Background to the appeal

2. The claimant was awarded incapacity benefit with effect from 16 February 1997. By definition, one of the preconditions for entitlement to incapacity benefit is that the claimant is incapable of work, subject to certain exceptions provided for in the legislation. Regulations also provide that a person shall be treated as capable of work on each day of any week in which he or she works. It subsequently came to light that the claimant was undertaking a small amount of part-time domestic cleaning work for a friend. The adjudication officer decided that the claimant had been working and that the work in question did not fall into an exempt category. The adjudication officer went on to decide that there was an overpayment of incapacity benefit amounting to £4,394.09, of which £4,042.86 was recoverable from the claimant on the basis that she had failed to disclose the material fact that she was working. The reason for the difference between the total overpayment and the recoverable overpayment lay in the timing of the effective disclosure. The adjudication officer concluded that the claimant had been overpaid incapacity benefit from 16 February 1997 until 23 August 1998 (the reference to 23 August 1997 in the original decision is evidently a misprint). However, the claimant had attended an "all work test" assessment on 17 July 1998, at which she mentioned that she was working as a cleaner. The adjudication officer accordingly limited the recoverable overpayment to the period up until that date.

The appeal tribunal's decision

3. The appeal tribunal purported to confirm the decision of the adjudication officer (whose functions had, by this time, been taken over by the Secretary of State as a result of changes to the statutory decision making arrangements). In fact the appeal tribunal concluded that the Secretary of State was entitled to recover an overpayment of £4,394.09, so neglecting to make the crucial distinction between the total overpayment and the recoverable overpayment referred to in the preceding paragraph. (However, the full statement does refer to the correct period in question, although it repeats the error in terms of the quantification of that liability in cash terms). This in itself amounts to an error of law which requires me to set aside the tribunal's decision.
4. There is a further error of law in the tribunal's decision. The tribunal also proceeded on the assumption that the part-time cleaning which the claimant undertook for a friend was "work" of such a nature as to mean that she necessarily had no entitlement to incapacity benefit. In my view the tribunal was required to consider whether this "work" was of such an insignificant nature as to be de minimis in legal terms, i.e. of so trifling a nature that it should in fact be ignored. I return further to this question below.

The claimant's grounds of appeal

5. The de minimis issue was not raised by the claimant's representative in her original grounds of appeal. Instead, her representative challenged the tribunal's decision on four grounds. In view of my conclusions above, I can deal with these four points relatively swiftly. First, it is said that the tribunal failed to make a specific finding as regards the review required as a precondition for recovery of any overpayment (Social Security Administration Act 1992, s.71(5)(a)). I agree with the submission of the Secretary of State that this ground of appeal fails; in the circumstances it was sufficient for the tribunal to refer to the adjudication officer's review by inference. Secondly, it is said that the tribunal failed to make a specific finding on causation. Again, I conclude that this point is unfounded. Whilst it might be best practice for a tribunal to make a specific finding on this point, it did not appear to be in issue before the tribunal and the confirmation of the adjudication officer's decision is sufficient to incorporate the point by implication. The third point is that the tribunal erred by relying on the instructions in the order book as a basis for establishing the claimant's liability for the overpayment. This ground of appeal is made out, as the order book was issued only after the claim form (where the claimant's answers were treated as a failure to disclose) had been completed.
6. The final ground of appeal is that the claimant's original claim form was incomplete (she had omitted to answer the question whether or not she was working for an employer) and so should not have been treated as a valid claim. Instead, it should have been referred back for proper completion. Thus, it is argued, any overpayment was caused not by the claimant's failure to disclose but by the Department's failure to follow proper decision making practices. I am not convinced that this argument holds good; in particular, I am not satisfied that the Court of Appeal's decision in Duggan v Chief Adjudication Officer (The Times, December 19, 1988) can be distinguished.
7. I also note in passing that the claimant was found to be capable of work following the all work test in question, a decision which she also challenged on appeal. A Commissioner refused leave to appeal in that matter (CIB/6782/1999) and so that issue is of no further relevance.

The disposal of this appeal to the Commissioner

8. The question which I now have to resolve is whether or not, having set aside the tribunal's decision on the overpayment appeal, I am in a position to substitute my own decision (with or without finding further facts as appropriate). If that is not possible, I have no option but to send the matter back to another appeal tribunal for the case to be reheard (Social Security Act 1998, s.14(8)).
9. In determining which course of action to take, I bear in mind that at the tribunal there was no issue as to there having indeed been an overpayment of benefit. The case for the claimant was put in terms of a denial of recoverability. The original grounds for appeal and the Secretary of State's submission also proceed on this basis. However, in a direction to the parties I raised the issue as to whether the claimant had in fact been involved in "work" so as to disentitle her from incapacity benefit. Both the claimant's representative and the Secretary of State made submissions on this point. The fact that this issue had not been identified at the tribunal level would suggest that the matter should be referred back to a new tribunal with appropriate directions. But, given the passage of time since the original hearing and the matters in question, there is obviously a strong case for me seeking to resolve this appeal now and at this stage, if at all possible. On balance, however, I am not satisfied that there is sufficient evidence before me on the papers to make the necessary findings of fact and so substitute my own decision for that of the tribunal. Accordingly in the following paragraphs I proceed to consider the relevant law and provide some guidance for the new tribunal in terms of directions for the rehearing.

The meaning of "any work" in the context of incapacity benefit

10. The relevant law is set out in Chapter IV of the Social Security (Incapacity for Work) (General) Regulations 1995 (S.I. 1995 No. 311). The starting point is that a person is treated as capable of work (and so not eligible for incapacity benefit) "on each day of any week …. during which he does work to which this regulation applies" (reg. 16(1)). This in turn is defined as "any work which a person does…. whether or not in expectation of payment, apart from care of a … relative or domestic tasks carried out in his own home" (reg. 16(2)). The purpose of this rule is clear; as the authors of Bonner et al. note, "this regulation deploys the preclusive device of treating someone as capable of work in order to penalise those who work inappropriately while claiming" (Social Security: Legislation 2000, Vol. III, p.561).
11. There are, however, a number of exceptions to this principle, primarily set out in regulation 17. Certain types of work are regarded as exempt, subject to various conditions. These exemptions include the so-called "therapeutic earnings rule" (reg. 17(1)(a)), where work within certain limits is undertaken on a doctor's advice. This exemption does not avail the claimant in this case, as her doctor's advice on the point was obtained only retrospectively. (I note, however, that the cleaning work she undertakes has been accepted as therapeutic within these provisions for a subsequent claim for incapacity benefit dated 16 March 2000, according to her representative's further submission). In addition, caring for a relative or domestic work in one's own home do not count as "work" for these purposes (reg. 16(2)). There are also specific exemptions for councillors and for claimants undertaking approved work on a trial basis (reg. 16(2)). Certain work undertaken by a claimant in an emergency is also disregarded (reg. 16(4)). Again, these specific provisions do not apply to the claimant in this case.
12. Previous decisions of the Social Security Commissioners (and their predecessors, the National Insurance Commissioners) have established that the common law maxim de minimis non curat lex ("the law does not concern itself with trifling matters") also applies to the construction of these provisions. In other words, trivial or insignificant amounts of work may properly be disregarded in deciding whether a claimant was actually involved in "work" within the sense of regulation 16. The crucial question is, therefore, what is actually meant by de minimis work in this context.
13. The Secretary of State's representative observes that most of the case law, and the Secretary of State's own guidance to decision makers, is couched in terms of whether or not self-employed earners are engaged in work so negligible as to be de minimis (incorrectly referred to in the Decision Maker's Guide (DMG) as the "de minimus" principle: DMG Vol 3 para 13867). Whilst this is undoubtedly so, the DMG merely reflects the preponderance of the early case law. In my view there is no special rule which applies to self-employed earners; to hold so would be inequitable as regards those involved in other types of activity.
14. Decisions of the National Insurance Commissioners provide some guidance on what is meant by the de minimis principle in this context (the cases concern entitlement to what was then sickness benefit, but the underlying principles remain similar). In Commissioner's decision R(S) 24/52 it was noted that "The exact line is difficult to draw, but there may be some trivial matters to which [the self-employed claimant] attends while incapable of work that may be properly disregarded" (para. 4). In that case the claimant, a farmer, while claiming sickness benefit, was in the habit of "walking round the farm for perhaps two hours a day and that he might do some small job like ordering cattle cake or arranging a sale". However, the farmer continued to employ a manager to supervise the farm as he had done from the outset of his illness. The Commissioner concluded that the tribunal was entitled to conclude that such work as the farmer did undertake was negligible and so could be disregarded.
15. Subsequent decisions of the National Insurance Commissioners confirmed that this question was "a matter of degree". Thus a self-employed chartered accountant who went into his office for normal office hours, dictated letters and answered the telephone (but was unable to write owing to a fractured wrist) was doing work which was not of a negligible character (R(S) 33/52). A farmer who could no longer do manual work but supervised the farm and kept the farm's accounts was likewise doing more than negligible work (R(S) 34/52; see also R(S) 5/51). However, the owner of a small business who did no more than sign cheques, but left the supervision of the business to a salaried manager, was not working and so was incapable of work (R(S) 37/52).
16. In R(S) 2/74 the claimant had been a coach operator. At the time in question, he had just one vehicle (a taxi) and one contract, to transport a child to and from school on behalf of a local education authority. The claimant fell ill and initially his father undertook the driving for him, while the claimant undertook any necessary administration. Later the claimant's father also fell ill, and the claimant resumed the twice-daily taxi driving. The Commissioner held that the claimant's deskwork could properly be disregarded as insignificant. However, once he regularly resumed driving the taxi, he could no longer be seen as incapable of work.
17. The de minimis issue has also been considered in some detail by two more recent decisions of the Social Security Commissioners. In CIB/14656/1996 (erroneously referred to as CIB/4656/1996 in Bonner et al, p.562) the claimant had a lodger who paid £40 a week for whom she did certain household tasks (some washing and ironing, done along with her own laundry, and cleaning of the lodger's room). The adjudication officer decided that as the claimant was involved in non-exempt work there had been a recoverable overpayment of invalidity/incapacity benefit. The majority of the appeal tribunal, allowing the appeal, concluded that the work in question constituted domestic tasks carried out in the claimant's own home and were minimal and so there was no recoverable overpayment.
18. In CIB/14656/1996 Commissioner Goodman held that the tribunal was entitled to conclude, on the special facts of the case, that the claimant fell within the "domestic tasks" exception. On the de minimis point, Commissioner Goodman noted that the early case law had to be read with some caution, as at that time there was an assumption that the term "work" implied work which would normally be remunerated. In contrast, reg. 16(2) makes it clear that the rule applies to any non-exempt work whether or not undertaken in the expectation of payment (see further paragraphs 22-23 below). Commissioner Goodman concluded:

"It would, I think, still theoretically be possible for an activity to be so trivial or negligible in extent that it did not constitute the popular notion of "work" at all, but on the facts of the present case that cannot be said. There were additional duties that the claimant was performing for the lodger, even though they may have taken less than an hour a day, and moreover they were performed in return for at least part of the £40 per week paid" (para. 8).

19. The same issue arose in CIB/5298/1997, in which an incapacity benefit claimant worked unpaid in her sister's shop, as a result of which the Department sought to recover an overpayment of benefit. An appeal tribunal found that she was working within reg. 16(2). Commissioner Williams set aside the tribunal's decision in part on the basis that it had regarded the de minimis argument as irrelevant. It had also failed to make or record adequate findings of fact about the work the claimant actually undertook, and so he remitted the appeal to a fresh tribunal. Commissioner Williams also reviewed the case law on the de minimis question. In doing so, he approved the guidance contained in the Adjudication Officers' Guide, which has now been replicated in the DMG, as "both accurate and helpful" (paras. 8 and 11.) The Commissioner's approval was specifically directed to those parts of the guidance which referred to the general principle of disregarding negligible work and not to the passage relating to self-employed earners, which he regarded as simply illustrative in nature.
20. I conclude from the above that in exceptional circumstances a claimant may be regarded as involved in work of such a trivial nature that it should be disregarded in determining whether he or she is entitle to incapacity benefit. This de minimis rule may apply irrespective of whether the claimant's work might in any event be treated as exempt work under the specific provisions of the regulations. There is no hard and fast rule as to what constitutes negligible work for these purposes. As the case law illustrates, it is all a question of fact and degree.
21. Simply to conclude, however, that a question is one of fact and degree is less than helpful to those with the responsibility of making decisions in actual cases. Decision makers and tribunals may find it useful to have regard to the following factors. The DMG (approved in its earlier version by Commissioner Williams in CIB/5298/1997) observes that "whether work on part of a day is negligible depends on its proportion to the normal working hours, the type of work and the effort required in relation to full normal duties" (para. 13867). These factors, however, are merely illustrative and are not exhaustive. It is also important to consider the context in which the work in question is done. Thus activities undertaken on behalf of a stranger (whether remunerated or not) are perhaps more likely to be seen as "work" than identical activities carried out for a friend or family member. The extent to which the activity in question is analogous to those which are the subject of specific exemptions in regulations 16 and 17 may also be a material consideration.
22. A further relevant consideration is that of the level of remuneration (if any). In CIB/5298/1997 Commissioner Williams noted in passing that the issue of earning power was "clearly irrelevant to regulation 16(2)" given that the provision applies "whether or not [the claimant] undertakes [the work] in expectation of payment". The Secretary of State's representative makes the same point in his submission in this case, arguing that the inference is that (subject to the therapeutic earnings rule) the amount the person earns is not a relevant factor. I beg to differ. It is important not to lose sight of the underlying purpose of the rule in regulation 16 and the de minimis gloss to that rule. The rule is designed to ensure that those who are actually involved in some work are not eligible for incapacity benefit (even if, for example, they have previously been assessed as incapable of work under the scoring process used as part of the personal capability assessment (formerly the all work test)). The reason for this is that incapacity benefit is an earnings replacement benefit: it is essentially a benefit for those with the appropriate contributions record who cannot work in the labour market.
23. A hypothetical example will suffice to demonstrate the point. A university lecturer takes early retirement on grounds of stress and starts to receive incapacity benefit. One week he is asked to deliver a one hour lecture, using lecture notes prepared whilst still in employment, for a one-off fee of £100. It is certainly arguable that in general terms one hour's work a week in itself would normally be regarded as negligible and so should be disregarded. However, the size of the fee, bearing in mind the normal weekly rate of incapacity benefit, is such that I would suggest that this work should not be regarded as trivial. Accordingly, applying reg. 16, he would not be eligible for incapacity benefit for that week. Conversely, a very low level of remuneration is, in my view, a relevant (but not decisive) factor in the determination of the overall question of whether the claimant has done any "work".
24. To that extent I accordingly differ from the approach taken by Commissioner Williams in CIB/5298/1997. In my view the inclusion of the proviso "whether or not in expectation of payment" may well have been an anti-abuse provision. For example, there may well be cases (and CIB/5298/1997 may or may not have been one such case) where a claimant is working unpaid for a relative or friend in circumstances which suggest that they are in fact not incapable of employment. Equally, a claimant may be involved in work at home which arguably does not fall within the exemption accorded to "domestic tasks carried out in his own home" in reg 16.(2). On the contrary, it may likewise suggest that the claimant is indeed capable of work. For example, a motor mechanic may be claiming incapacity benefit but may be spending most of the week renovating his prize veteran car. This could hardly be designated as a "domestic task". Similarly, the time and effort involved, by comparison with his normal job, might well suggest that he is indeed working (and obviously not in expectation of payment, assuming that there was no intention to sell the car for profit) rather than merely indulging in a hobby.
25. The hypothetical examples in paragraphs 23 and 24 demonstrate the importance of bearing in mind all relevant factors and the underlying policy of the legislation when considering whether or not a claimant's activity constitutes "work" for the purposes of the legislation applying to incapacity benefit.

The facts of this case

26. As previously noted, the appeal tribunal failed to make any findings on whether or not the claimant's cleaning work actually counted as "work" for the purposes of incapacity benefit, as this issue had not been identified at the hearing. It is with some regret that I have concluded that there is insufficient evidence in the papers for me to make my own findings of fact on this key issue. The appeal papers include a document relating to an earlier income support claim (docs 36-37) in which the claimant states that between 18/3/94 and 10/5/94 she had worked "32 hours with rests" as a cleaner and earned £35 at a fixed rate of £6 per session, inclusive of bus fares. This would suggest an average of about 4½ hours a week over this seven week period. A year later the "employer" (a friend) confirmed that the claimant undertook "some light house work for which I give her £5 and her bus fare" (doc. 38). However, these documents both refer to an earlier period than that in issue on this appeal. In August 1998 (shortly after the relevant period) the claimant confirmed that she undertook household duties for 4 hours a week for £5 a week (docs 34-35) (suggesting that the rate of "remuneration" had not changed in four years). The background to the claimant starting this work is explained by the claimant's representative in her submission to the original tribunal (doc 50).
27. In evidence to the original tribunal the claimant stated that "when I am feeling alright to go I do a short cleaning job when I am up to it. If I am not well enough they do not expect me. I would have to tell them. I would let them know" (docs 53-54). Later, however, there is a reference to "light domestic cleaning, 2 ½ days or one full day" (doc 55) which would seem to suggest a greater degree of involvement than that stated in doc 35. It is this inconsistency which effectively prevents me from finding the facts in this case myself, leaving me with no option but to send the case back to be reheard by a new tribunal.
28. The evidence quoted at the start of the previous paragraph implies that there were times (and weeks) in which the claimant undertook no cleaning duties. There are no findings of fact on this point. Unfortunately this adds to the complexity of the case. The legal structure of the relevant provisions is such that a tribunal cannot simply take a broad brush and overall view of whether the claimant was working over the months in question.
29. Regulation 16(1) of the 1995 Regulations provides that a person is to be treated as capable of work (and so not eligible for incapacity benefit) "on each day of any week …. during which he does work to which this regulation applies." Thus the inquiry must be on a week-by-week basis. It is possible, of course, that either the claimant or the couple whose house she cleaned may have meticulous records of payments received or made during the relevant period. If so, the tribunal's fact finding exercise will be that much easier. But this is unlikely in the sort of casual and effectively non-commercial arrangement as existed in this case. In those circumstances, the new tribunal must bear in mind that the onus is on the Secretary of State to demonstrate that the claimant was working in each particular week and so precluded from benefit. There is, in effect, a double burden of proof, for the Secretary of State must also establish that there has been an overpayment for each week as a result.

Directions to the new tribunal

30. I make the following directions for the re-hearing of this appeal:

(1) The appeal will be heard by a single-member tribunal under the new appeals arrangements. That legally qualified member should not be the same individual who chaired the previous tribunal.

(2) Commissioners' decisions CIB/14656/1996 and CIB/5298/1997 (included in the Commissioner's bundle at docs 116-128) should be before the new tribunal.

(3) The new tribunal must make relevant findings of fact as to the type and nature of the claimant's work and, having done so, conclude whether or not that work falls within the de minimis exception under regulation 16 of the Social Security (Incapacity for Work)(General) Regulations 1995. In doing so, the tribunal should bear in mind the guidance provided in paragraphs 10-25 above. The tribunal should also have regard to and explore the claimant's evidence that she did not undertake cleaning if she did not feel up to it. This is important as the effect of reg. 16 is to disentitle a claimant from incapacity benefit for each week in which a day of work falls. The tribunal cannot simply take a broad overall view of whether the claimant was working throughout the entire period, as there may be weeks in which she did no work at all and so could not be caught by regulation 16 (see further paragraphs 28 and 29 above).

(4) If the tribunal concludes that the work involved was so negligible as to be de minimis, it should then find that there was no overpayment and so no question of recoverability arises.

(5) If, on the other hand, the tribunal decides that the cleaning work was more than negligible, and so there was an overpayment of incapacity benefit, it must then consider whether or not the Secretary of State has made out grounds for recovery. The tribunal should bear in mind that the test of whether disclosure is reasonably to be expected is an objective one. In the event that the tribunal decides that the overpayment of benefit is recoverable, the actual decision on whether or not and on what terms to proceed with recovery is one for the Secretary of State, not for the appeal tribunal or the Commissioner. In this event, the tribunal may nonetheless feel it appropriate, depending on their findings of fact, to draw the attention of the Secretary of State's representative to any mitigating circumstances in the case.

The Deputy Commissioner's decision on this appeal.

31. I accordingly conclude that the claimant's appeal to the Commissioner succeeds. The decision of the Leeds appeal tribunal sitting on 6 September 1999 is set aside. The matter is sent back to a freshly-constituted appeal tribunal to be decided in accordance with the directions above.

(signed) N J Wikeley

Deputy Commissioner

(date) 3 October 2001