[2006] NISSCSC C24_02_03((IS) (7 February 2006)

Decision No:  C24/02-03(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Appeal to a Social Security Commissioner
on a question of law from a tribunal's decision
dated 22 October 2002

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the Department with the leave of the legally qualified member, against the unanimous decision of the tribunal, allowing an appeal in part from a decision of a decision-maker.  The respondent in this appeal is the original claimant who claimed income support (IS) and, although strictly speaking he is a person from whom overpayment is being sought, he is referred to as “the claimant” in this decision. The tribunal decided that an overpayment of IS for the period from 30 June 1999 to 23 October 2001 amounting to £12,023.31 had been overpaid but that only £2,725.42 in respect of the period from 30 June 1999 to 26 January 2000 was paid in consequence of the respondent’s failure to disclose and, accordingly, only the latter amount is recoverable.

2.	Leave to appeal to a Commissioner was granted by the legally qualified member of the tribunal on 5 January 2003.  By a determination dated 10 July 2003 a Commissioner accepted a late notice of appeal under regulation 13(2) of the Social Security (Procedure) Regulations (Northern Ireland) 1999.

3.	I arranged a hearing of the appeal at which the claimant, who was not present, was represented by Mr Brady, Welfare Rights Centre, Newry while the Department was represented by Mr O’Connor of Decision Making Services.

4.	The appeal was not dealt with in the usual expeditious way because a decision of the Judicial Committee of the House of Lords, namely, Hinchy  v Secretary of State for Work and Pensions [2005] UKHL16, was awaited as being potentially relevant to the decision in the present case.

5.	The relevant factual background in relation to this case can be set out as follows.  The claimant is a 56 year old man living with his partner and children at an address in Kilkeel.  He claimed IS on form A1 received on 8 January 1999 as he was claiming incapacity benefit (IB).  He completed and returned a review form on 26 January 2000 stating that he was in receipt of IB and child benefit (CB).  The Department accepted there was no change in circumstances reported and IS continued in payment.  The claimant’s IS order form was recalled on 17 April 2000, 19 May 2000 and 30 May 2001 to implement changes to a Social Fund declaration.  No other change of circumstances were reported.  A further review form was completed on 23 October 2001 on which the claimant stated that he was on IB at weekly rate of nil.  The officer noted on the IB computer screen that the claimant’s IB had ended on 27 June 1999.  The claimant had been issued two letters on 29 June 1999 by Incapacity Benefit Branch.  Form IB65A had explained that he had failed the All Work Test (now known as the Personal Capability Assessment).  The claimant had also been issued Form 1B65B for referral to his doctor which informs the doctor that no further medical evidence is required.  The claimant had not notified the Income Support Section that he had received these letters.  The claimant had been issued Form BF220C on 30 June 1999 by Incapacity Benefit Branch.  This form had told him that his entitlement to incapacity credits had terminated and explained what to do if he were to fall sick within the next eight weeks.  As the claimant had not informed Kilkeel Social Security Office that he had failed the Personal Capability Assessment, the Department decided that he had been overpaid IS for the period from 30 June 1999 to 23 October 2001 amounting to £12,023.31 and determined that this was recoverable from the claimant as he failed to disclose the material fact that his claim to IB had ended when he failed the Personal Capability Assessment.  The decision was notified to the claimant on 4 January 2002.  The claimant appealed this decision on 22 January 2002.  On 22 October 2002 the appeal tribunal decided that the overpayment of IS for the period 27 January 2000 until 23 October 2001 was not paid in consequence of his failure to disclose.  

6.	The tribunal gave the following reasons for its decision:

	“The Tribunal found the following facts: -

	The claimant, who was in receipt of Incapacity Benefit claimed and was awarded Income Support on 8.1.99.  He was no longer entitled to Incapacity Benefit from 27.6.99 as he failed the Personal Capability Assessment.  It is accepted by the Tribunal that letter IB651 (now as per specimen letter IB65) and letter IB65AB (now as per specimen letter IB65B) the latter being for transmission to his doctor, were issued by the Department to the claimant on 29.6.99, their contents being as described in Mrs Campbell’s evidence.  He did not receive both letters on the same day.  We accept claimant’s evidence that after receiving letter IB65I, he went to Kilkeel Social Security Office and obtained an A1 claim form for Income Support on 15.7.99.  His evidence of his attendance at the office on this date, however, is not clear enough to allow a finding that he reported that he had been disallowed Incapacity Benefit.  It is unlikely that had he done so, he would have been given a claim pack for Income Support rather than advice and/or forms for claiming Job Seekers Allowance.

	The Tribunal finds that the claimant did not disclose the fact that his entitlement to Incapacity Benefit had ceased.  It appears that he and his partner, [Ms C], who assisted him with his benefits claims, were confused about the matter.

	The fact that Department’s procedures may not have been followed is not relevant.  It is accepted that benefit was overpaid and the Tribunal finds that the cause of overpayment was the claimant’s failure to disclose a material fact (his no longer being in receipt of Incapacity Benefit) of which he was aware and it was reasonable to expect him to disclose the fact, this being stated in his Income Support book.

	On 26.1.00 the claimant signed a Review Form (A2) which had been completed on his behalf by [Ms C], stating that he was in receipt of Incapacity Benefit of £171.92 fortnightly.  In the Tribunal’s view, this statement, whilst not amounting to a disclosure of material fact, nevertheless broke the chain of causation.  Had this statement been correct, the claimant would not have been entitled to Income Support at all (or at the rate paid to him) and put the Departmental Officer on notice to investigate the position, which he failed to do (CIS/222/1991 followed).  Thereafter, the overpayment of benefit did not arise from his failure to disclose a material fact. Only part of the amount overpaid is therefore recoverable.

	The date of the decision superseding the decision awarding Income Support appears to be 17.12.01 and not 28.10.01 as stated at Part 2 of the submission, but the Tribunal accepts that a valid supersession occurred.”

7.	On 31 January 2003 the Department sought leave from the legally qualified member to appeal to the Commissioner.  As stated in paragraph 2 herein, leave to appeal was granted on 6 February 2003 and a Commissioner, on 10 July 2003, held that the notice of appeal could be accepted for special reasons, even though it had not been sent to a Commissioner within one month of the date on which the Department was sent written notice that leave to appeal had been granted.

8.	The relevant part of regulation 32 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 at the time of the present case was in the following terms: 

	“(1) Except in the case of jobseeker’s allowance, 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 Department may determine, such certificates and other documents and such information or facts affecting the right to benefit or to its receipt as the Department may require (either as a condition on which any sum or sums shall be receivable or otherwise), and in particular shall notify the Department 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 Department determines in any particular case to accept notice given otherwise than in writing) of any such change to the appropriate office.”

9.	The relevant part of section 69 of the Social Security Administration (Northern Ireland) Act 1992 is in the following terms: 

	“69.-(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 this section applies; or
(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.

	(3)  An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it.”

10.	The Department’s contention is that the claimant was required, by virtue of regulation 32, to tell the Social Security Office (at Kilkeel) that he was no longer entitled to IB from 27 June 1999 as he had failed the Personal Capability Assessment, and that, by virtue of section 69, his failure to do so entitled the Department to recover the amount consequently overpaid.  It is unfortunate that this basic proposition was not made clearly to the tribunal as I note that the papers before the tribunal did not refer to regulation 32.

11.	The claimant throughout has made the case that he should not have to repay the sums overpaid because in his view the overpayment was caused by departmental error.

12.	The Department’s answer to this has been straightforward in that it has submitted that -

(i)	the claimant knew that he had failed the Personal Capability Assessment;

(ii)	it was reasonable to expect the claimant to disclose this fact as at note D on the back of his IS order book he was clearly informed that he must notify IS section in writing if there were any changes in circumstances which would affect his IS claim;

(iii)	the claimant did not report the fact that he had failed the Personal Capability Assessment;

(iv)	as a result of the failure to disclose the relevant information, an overpayment has occurred that is recoverable from the claimant.

13.	In the Department’s view four issues arise in this case, namely:

1.	Whether the tribunal has erred in law in coming to the conclusion that the overpayment for the period 27 January 2000 to 23 October 2001 was not recoverable in that CIS 222/1991 is distinguishable from the case under appeal in that the circumstances were not such as to “put the Department Officer on notice to investigate the position”.

2.	Whether the tribunal should have applied the principles of the Court of appeal decision in Duggan v Chief Adjudication Officer (appendix to R(SB) 13/89).

3.	That, following on from the judgment by the House of Lords in Hinchy v Secretary Of State for Work and Pensions [2005] UKHL 16, the claimant is not entitled to make any assumptions about administrative arrangements within the Department but has a duty to make disclosure to the appropriate office.

4.	That the tribunal failed to satisfy itself regarding the evidential requirements set out in C2/02-03(ICA)(T).

14.	In my view these are the relevant issues.

15.	In relation to the first issue, it is noteworthy that in the Great Britain Commissioner’s decision CIS 222/1991 Mr Commissioner Johnson held that, if the claimant’s answers on the relevant claim form were plainly inconsistent and ambiguous, the adjudication officer, the predecessor of the decision-maker is put on notice to investigate the position.  Also he held that, if this is not done, any overpayment was not recoverable, as it was due to an error on the part of the Department, rather than a misrepresentation by the claimant.

16.	CIS 222/1991 is a case concerning misrepresentation, not a failure to disclose.  However, as Mr O’Connor has pointed out, the significant difference between the present case and CIS 222/1991 is that in the present case the claimant’s answers on the claim form could not be said to be “so plainly inconsistent and ambiguous as to put the adjudication officer on notice” – to use the words of the Commissioner at paragraph 7 of his decision.

17.	In my view it is relevant that the Department, on receipt of the renewal claim form stating that the claimant was in receipt of IS, had checked the relevant Income Support Computer System to note that the claimant was in receipt of IB, at nil, IS and CB in circumstances where previously the claimant had only been entitled to incapacity credits.  This is not a case where it could be said that the decision-maker, the successor to the adjudication officer, was obviously put on notice.

18.	In relation to the second issue, Mr O’Connor has emphasised that since the English Court of Appeal case, Duggan v Chief Adjudication Officer (reported in the appendix to R(SB) 13/89), the law is that, even if there were two causes of an overpayment – namely, an administrative error and non-disclosure by the claimant – that did not and could not prevent the lack of disclosure by the claimant from having been one of the causes of the overpayment.

19.	Applying this principle to the present case, it is clear that one of the causes of the overpayment was the failure on the part of the claimant to comply with his continuing obligation to disclose a material fact.  Accordingly the overpayment is recoverable.

20.	The tribunal found that there was no disclosure by the claimant in relation to the failure of the Personal Capability Assessment and that this was a cause of overpayment.  It is also clear that there was a breakdown in Departmental procedures.  However, in light of Duggan, I come to the conclusion that the tribunal has erred in law in deciding that the chain of causation was broken and that the overpayment was not recoverable.

21.	In relation to the third issue, Mr O’Connor has relied on Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16.  Lord Hoffman, when commenting on the Great Britain equivalent to regulation 32 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 (both subsequently amended but in the same terms for the Hinchy case and the present appeal), stated as follows: 

	“20.	The Commissioners have treated these regulations as placing upon the claimant the primary duty to inform the relevant decision maker of the material facts, including if appropriate the amount of the other benefits which he is receiving.  As the Tribunal said in R(SB) 15/87, at para 13:

“It is well settled that responsibility for keeping the Department informed of any change in a claimant’s circumstances rests and remains upon the claimant …”
	
	21.	The practicalities of administration to which I have referred mean that such a policy would be seriously undermined by treating the person to whom disclosure must be made as the Secretary of State, as a constitutional entity, and then deeming the Secretary of State to know everything known to all officials of the department or even, more modestly, all decisions taken in his name by officials of the department.  The Commissioners have therefore consistently rejected attempts to introduce a theoretical or constitutional dimension into the question of whether disclosure has been made for the purposes of section 71.  They have accepted that that the notion of a failure to disclose connotes an obligation to disclose.  They have found this obligation either in regulation 32 or, by implication, in section 71 itself.  But they have rejected the submission that disclosure must be to “the Secretary of State”, whatever that may involve.  Instead, they have concentrated upon what the claimant has done to convey the information to the official who makes the actual decision about the amount of his benefit.  In R(SB) 15/87 the Tribunal said, at paras 26-28:

“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 ….But … there can be other occasions when the duty can be fulfilled by disclosure elsewhere.  This can happen, for instance, if an officer in another office of the Department of Health and Social Security or local unemployment benefit office accepts information in circumstances which make it reasonable for the claimant to think the matters disclosed will be passed on to the local office in question.”

	22.	The theme which runs through this and similar passages is that 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.  If one regards the obligation as arising by implication from section 71 itself, then this is the kind of disclosure implied.  If one regards it as arising from regulation 32, the matter is even clearer.  The first part of the regulation imposes a duty to furnish “in such manner … as the Secretary of State may determine … such information or facts affecting the right to benefit or to its receipt as the Secretary of State may require”.  The Secretary of State has specified by the notes in the order book what information (including changes in other benefits) must be furnished and that it must be done by sending it to the office named on the cover of the book.  The second part of the regulation imposes a duty “in particular” to give notice in writing of a change in circumstances to “the appropriate office”.

	23.	Disclosure, then, must be made to the relevant official and not to the Secretary of State as an abstract entity.  What assumptions can be made about what the relevant official already knows?  The Commissioners have on the whole resisted arguments that the relevant official must be assumed to know, or that the claimant is entitled to assume that he knows, anything about his other benefit entitlements which cannot be described as common knowledge.  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, CSB/1246/1986) need not be made, but the safest course is to resolve doubts in favour of disclosure.”

22.	The appropriate office is defined in regulation 2(1) of the Social Security (Claims and Payments) Regulations (Northern Ireland) as “an office of the Department”, and, under the Departments (Transfer and Assignment of Functions) Order (Northern Ireland) 1999, the relevant department is the Department for Social Development.

23.	In the present case the claimant has failed in his duty under regulation 32(1) of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 to make disclosure to the “appropriate office” of the fact that he had failed the Personal Capability Assessment and was no longer entitled to incapacity credits.  As Mr O’Connor submitted, in light of Hinchy, the claimant is not able to rely on any communication that may or may not go on behind the scenes but must make disclosure to the “appropriate office” – the office identified in the IS order book, namely the Kilkeel Social Security Office.  This is made clear by Lord Hoffman at paragraph 32 of Hinchy where he stated:

	“The claimant is not concerned or entitled to make any assumptions about the internal administrative arrangements of the department.  In particular, she is not entitled to assume the existence of infallible channels of communication between one office and another.  Her duty is to comply with what the Tribunal called the “simple instruction” in the order book ….. For my part, I would approve the principles stated by the Commissioners in R(SB) 15/87 and CG/4494/99.  The duty of the claimant is the duty imposed by regulation 32 or implied by section 71 to make disclosure to the person or office identified to the claimant as the decision maker.  The latter is not deemed to know anything which he did not actually know.”

	Accordingly, in light of the facts found by the tribunal, the claimant had a duty to make disclosure to Kilkeel Social Security Office and failed to do so.

24.	In relation to the fourth submission, Mr O’Connor submitted as follows (and I quote from his succinct and relevant submission on this point set out in writing and dated 6 April 2005):

	“20.	I would also submit that the decision of the tribunal was erroneous for the following reason.  In decision C2/02-03(ICA)(T) the Tribunal of Commissioners set out the evidential basis that is required in overpayment cases.  The Commissioners held that submissions to tribunals should set out clearly what is the evidential basis of the alleged misrepresentation.  This involves laying an adequate basis as to the form of declaration that was signed and evidence as to the information supplied to the claimant.

	21.	Although the overpayment in the above case (C2/02-03(ICA)(T)) centred on misrepresentation I would submit that the principle of the evidential basis would equally apply to overpayments based on failure to disclose.  In this case while the declarations on the order book were not necessary the tribunal should have ensured that the relevant notes from the order book used in the Departments submission were the ones in use at the relevant time.  In view of this I would submit the tribunal has erred in law in failing to satisfy itself that there was sufficient evidence to determine whether [the claimant] failed to disclose a material fact.  One further point in relation to the order book instruction in force at that time was that prior to March 2000 there was no actual instruction in relation to failing the All Work Test.  This may have an affect on the recoverability of the overpayment prior to the insertion of this instruction.”

25.	In my view Mr O’Connor’s submission on this point is correct.

26.	Recently there have been significant decisions in Great Britain relating to non-disclosure – especially a decision of a Tribunal of Commissioners (CIS 4348/2003) which went on appeal to the English Court of Appeal in B v Secretary of State for Work and Pensions [2005 EWCA Civ 929].  Pending any further appeal to the Judicial Committee of the House of Lords, it conclusively rejected that the previous line of authority derived from Great Britain decision R(SB) 21/82.  This had held that the power of the Secretary of State (in Northern Ireland, the Department) to recover overpaid benefit where the payment arose from a failure to disclose new personal circumstances was subject to a condition that, in the particular circumstances, disclosure was reasonably expected as a moral or legal obligation on the part of the claimant.  Accordingly, the Court of Appeal in England and Wales has now made clear that the proper test is simply that the claimant must know of the material fact and have failed to inform the Department of it in breach of the requirements set out in regulation 32.

27.	However, Mr O’Connor has convinced me that it is not appropriate for me to delay the decision in this case further to await any possible appeal in B v Secretary of State for Work and Pensions to the House of Lords as, in the present appeal, the issue of whether there might have been not only an active breach of duty to disclose but also a breach of some moral or legal obligation to disclose, does not actually arise.  This is because the tribunal, in its reasons, found that it was reasonable to expect the claimant to disclose the fact that he was no longer in receipt of IB.

28.	Accordingly I conclude that the tribunal has (1) erred in law in relying on CIS 221/1991 in coming to its decision, and (2) erred in law by not taking into account the decision of the English Court of Appeal in Duggan v Chief Adjudication Officer, in coming to the conclusion that the overpayment for the period 27 January 2000 to 23 October 2001 was not recoverable.  I also conclude that, in accordance with all principles of law as set out by the House of Lords in Hinchy v Secretary of State for Work and Pensions, the claimant did not fulfil his duty to make disclosure to the appropriate office of the failure of the Personal Capability Assessment.

29.	Therefore I allow the Department’s appeal, set aside the tribunal’s decision and remit the case to a differently constituted tribunal for reconsideration.  In light of the substance of Mr O’Connor’s submissions set out at paragraph 24 and my conclusions set out at paragraph 25, I direct the Department to produce to the new tribunal evidence of the order book instructions that were in force at the time of the overpayment.

30.	Depending on the outcome of the rehearing before another tribunal, it may be important for the Department at the appropriate time to consider those points made by Sedley LJ at paragraphs 41 to 43 of B v Secretary of State for Work and Pensions, where it has been pointed out that there is always an executive discretion, after any decision whether an overpayment is recoverable, to decide whether or not to enforce recovery.

(Signed):  John A H Martin QC

Chief Commissioner

7 February 2006