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[2004] UKSSCSC CSIS_345_2004 (28 July 2004)

THE SOCIAL SECURITY COMMISSIONERS

Commissioner's Case No: CSIS/345/04

SOCIAL SECURITY ACT 1998

APPEAL FROM THE APPEAL TRIBUNAL UPON A QUESTION OF LAW

COMMISSIONER: L T PARKER

Appellant: Respondent: Secretary of State

Tribunal: Stirling Tribunal Case No:

DECISION OF SOCIAL SECURITY COMMISSIONER

Decision

1. I find no error of law in the decision of the appeal tribunal (the tribunal) sitting in Stirling on 9 March 2004. The tribunal decision therefore stands.

Background

2. The appeal concerns an overpayment of income support. On 24 February 2000 the appellant made a claim for income support (IS).
3. The IS form asked various questions relating to the appellant's income resources including the following:-

"Are you or your partner

Getting a pension, or

Expecting to get a pension in the next 3 years?

This could be an occupational pension, a personal pension or a retirement annuity contract.

Do not tell us about state pensions here.

Tick Yes if you get

regular pension payments

an annual compensation payment from a previous job

lump sum payments from an occupational or personal pension. These could be paid yearly.

	We need to know if you, your partner, or anyone else you are claiming Income Support for, have any other money coming in. Money coming in includes • maintenance paid because of a court order or an arrangement made by the Child Support Agency • money from a trust fund • any training allowance • Statutory Sick Pay • Statutory Maternity Pay • other benefits, allowances and pensions that are not from social security Do you, your partner, or anyone else you are claiming Income Support for, have any of the money coming in that we have listed above?	• Working Families' Tax Credit • Disabled Person's Tax Credit • fostering fees or loans • student grants or loans – including Career Development loans • money from a charity or benevolent fund • payments made in lieu of Concessionary Coal.
	……….. Do you or your partner get any payments from a creditor insurance policy? For example, to help you keep up with your repayments on a credit card, loan or hire purchase agreement. Do not tell us here about policies that cover mortgages or home improvement loans.

The appellant ticked the box marked "no" with respect to each of these three questions.

4. In due course, an investigation revealed that the appellant had been in receipt of sick pay from her employer through a private health insurance scheme from the outset of her IS claim until 15 December 2002. On behalf of the Secretary of State on 4 September 2003, the decision maker (DM) revised the award of IS as a decision given in ignorance of, or based on a mistake as to a material fact; the overpayment of IS which resulted was determined to be recoverable because the appellant had misrepresented that she had no income from sick pay and as a consequence IS amounting to £8,364.98 from 16 February 2000 to 14 January 2003 (both dates included) would not have been paid but for the misrepresentation.

Before the tribunal

5. The appellant has at no stage disputed lack of entitlement or the calculation of the overpayment.
6. The appellant was represented at the hearing, as she has been throughout these proceedings, by a member of the local social work department (the representative). The representative lodged on the appellant's behalf a written submission for the benefit of the tribunal in which the following argument was put:-

"[The appellant] suffers from depression and anxiety and has not worked since 1998. When completing her A2 form (22.02.00) she was unclear as to how to record her 'sick pay' and sought advice from the Income Support Section, Department of (sic) Work and Pensions. In the course of a telephone conversation she was advised that whilst there was no requirement to list her 'sick pay' payments, she should however, inform the Inland Revenue as this may have implications for her tax code and tax liability. [The appellant] followed this advice and duly contacted the Inland Revenue. A letter confirming her enquiry is attached.

Whilst accepting that Income Support has no record of the telephone conversation or advice given, [the appellant] is adamant that this is an accurate account of the events at the time. At no time did she misrepresent her situation and in this respect feels the overpayment is non recoverable. [The appellant] has never made any effort to hide this payment and sought advice as to whether or how it should be recorded on her A2 form. Furthermore she feels that the Decision Maker has failed on the "balance of probabilities" to show that there would be a record of the conversation at the relevant office if it had taken place. No information is available as to the instructions that should have been applied for recording and attaching information to the claimant's file. Whether there were the appropriate administrative arrangements to enable these instructions to be carried out and to what extent in practice these instructions are, or are not, carried out. As there is no record of what happened, other than her own statement, [the appellant] feels that the Decision Maker is unable to prove that this is a recoverable overpayment."

7. The letter of confirmation referred to is one from the Inland Revenue and not the IS section. That letter is dated 2 December 2003 and merely agrees that the appellant telephoned on 9 March 2000 regarding her tax code and was advised to forward her form P60 from the Benefit Agency, when received, so that any underpayment could be calculated.
8. The appellant attended the hearing with her representative and a friend. The representative accepted that the asserted advice from the IS section was wrong and that the section had no record of the call.
9. The appellant's evidence at the hearing is noted as follows:-

"I did not know which page of the form to declare the sick pay, so I phoned for advice. I knew it was income – £400 odd per month. I telephoned to Blackpool about incapacity benefit. I had previously phoned IS at Falkirk. The IS asked what type of income it was. She said that I was still entitled to benefit. I then asked what page to declare it and she said "neither". I did not think it was strange – I just relied on the advice. I did not seek further advice elsewhere.

The tribunal decision

10. The tribunal dismissed the appeal.
11. The tribunal's statement of reasons for its decision include the following:-

"Material Facts:

…….

On 22.2.00 she claimed Income Support and in the claim form she answered "No" to a question asking about money coming in from other benefits, allowances or pensions that are not from Social Security.

When interviewed on 21.5.03 she made a statement admitting receipt of health insurance payments until October or November 2002. She did not in that statement give any explanation for her failure to declare the health insurance payments.

She was not advised by a departmental official not to declare the health insurance payments. The Department have no record of any such enquiry. The necessity to declare income of this kind can be expected to be well known to all officers dealing with Income Support.

…….

Reasons:

The factual matter I have to decide is whether [the appellant] was, as she claims, advised by an official not to disclose her private health insurance payments when she claimed Income Support. …… I find it impossible to believe that any officer of the DSS should give any such advice on such a basic and well known point and that [the appellant] should act upon such advice without further enquiry. Nor do I accept that she did not know which page of the form to use. The relevant page of the form is perfectly clear and she had firmly ticked the "No" box. I find it significant that when interviewed on the matter on 21.5.03 she did not then say anything about her failure to declare or her claimed reasons for that failure. …..

I have also considered whether, even if she had been wrongly advised, she should be absolved from responsibility. The authorities are firmly to the effect that the responsibility for completion of the form rests with the claimant. As Commissioner Rice said in R(SB)18/85, the "fact that he may have relied on the guidance of the relevant officer of the Department does not lift the responsibility from him".

Grounds of Appeal to the Commissioner

12. These are as follows:-

"…I cannot have misrepresented the fact that I was in receipt of Private health insurance payments when signing the declaration on the claim form as I had been told by the DWP that this was irrelevant. However unlikely this may appear to the DWP and Chairperson is irrelevant. I had no case to answer until the decision-maker proved otherwise on the balance of probabilities. The burden of proof lies with the department to prove that I failed to disclose or misrepresent a material fact. The decision maker says there is no record of my telephone conversation. In order to support this statement the decision-maker must give info (sic) on:

The instructions which should have applied for recording such telephone conversations

Whether there were the appropriate administrative arrangements to enable these instructions to be carried out

To what extent, in practice, these instructions are or are not carried out

…."

13. The district chairman granted leave to appeal.
14. The submission from the Secretary of State, who does not support the appeal, is in the following terms:-

"…. in CIS/12032/96 … the Commissioner held that while the claimant needs to know that their evidence has been recorded and taken into account, if the tribunal does not find the witness to be credible, it is entitled to say so without more. The Commissioner held it difficult to understand what reasons a tribunal is supposed to give other than simply that it does not believe the claimant, and could not see how that belief can be corroborated. In this case the tribunal did say that they did not believe the claimant. I submit that the tribunal carefully considered if it was likely that the claimant had been advised by an officer of the department and concluded that it was not. I submit that this is a matter of fact but would submit that all officers of the Department are fully trained."

15. In response, the representative now states:-

"[The appellant] sought advice from local DWP and spoke with a member of staff. She explained that she was in receipt of private health insurance and was advised that there was no requirement to list "health insurance" but that this might have implications for her tax code and tax liability. …..

Very few employers offer sick pay via a private health insurance scheme. In comparison a greater number of private sector employers offer health insurance to enable their employees to access private health care. It is not unreasonable to assume, in the absence of any record of the telephone call, that the DWP member of staff assumed the insurance was the latter and not sick pay.

Thus signing the declaration on the A2 form cannot be misrepresentation as the DWP had advised [the appellant] that the health insurance was irrelevant.

….."

The statutory provisions

16. The applicable criteria are set out in s.71(1) of the Social Security Administration Act 1992 (the Administration Act). The sub-section reads as follows:-

"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 Secretary of State in connection with any such payment has not been recovered,

The Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose."

My conclusion and reasons

Proof of a reliable system for recording information

17. In CSB/347/83 a claimant maintained that disclosure had been made and the Commissioner took the view that it was not enough for the (then) adjudication officer merely to state that there was no record of the relevant disclosure. Firstly, it was necessary for the adjudication officer to lodge details of the administrative arrangements whereby information from claimants was recorded and attached to their case files and later retrieved; secondly, the officer concerned with the claimant's case should confirm that such instructions had been carried out yet there was no record of the relevant disclosure.
18. I agree with the above comments. However, they specifically relate to a recoverable overpayment based on failure to disclose where the DM bears the burden of proof to establish that there has been no relevant disclosure. It is not enough for a DM to regard it as conclusive that there is no record of the same. It will be necessary for the DM to produce some evidence that the system employed is sufficiently sound such that, if there is no disclosure recorded, it is an appropriate inference that the claimant never in fact disclosed. If no such evidence as to an efficient system is produced, the tribunal is likely to conclude that the claimant's evidence is to be believed although this is not inevitable. At the end of the day, it is a matter of analysis of all the evidence, having regard to the legal and evidential burdens of proof.
19. Thus, even if the DM produces satisfactory evidence of the type required, it is still not conclusive that no disclosure has been made. It is merely evidence from which such an inference may properly be drawn. As Mr Commissioner Jacobs put it at paragraph 24 of CH/0609/2004:-

"I have not so far referred to the local authority's evidence. It produced evidence of the computer record of all telephone calls logged on its system. I was told how the system worked and how it was impossible for a call to be made without a computer record being made. I take a slightly more realistic, some might say cynical, view. Operators do make mistakes. Records are lost rather than saved. Systems crash or are not available. I do not regard the local authority's evidence as conclusive that no call was made. It is evidence going to show that there would have been a record of a call if one had been made. But it remains possible that some calls could be made that do not appear in the record. The claimant's evidence still has to be considered. The issue is whether, on the evidence as a whole, the call was made."

20. In the present case, the DM relies on misrepresentation. The DM has clearly established a prima facie misrepresentation: the appellant ticked that she had no other money coming in, when in fact she had income from sick pay. The appellant's case is that she made a disclosure which qualified that representation so that there is no longer an inaccurate meaning. She therefore bears the evidential burden of going forward with evidence to establish such circumstances and she has done so by giving her version of the telephone call.
21. But in either of the above situations, the issue remains, as set out by Mr Jacobs, whether the call was in fact made and in the terms asserted. The tribunal could have adjourned to seek clarification of the recording system in operation had it wished. However, to do so would have meant further delay in a case where the point could have made earlier and coupled with a postponement request. Nevertheless, the critical question is whether the tribunal could make a rational determination without it, in accordance with evidence that is capable of supporting the conclusion arrived at, and on a reasoned basis sufficiently explained for the parties and their advisers to understand. This the tribunal did in its clear rejection of the truth of the evidence of the appellant that she had been advised by a departmental official not to declare the health insurance payments.
22. It is now stated on appeal to the Commissioner that the appellant had been advised there was no requirement to list "health insurance" and it may well have been assumed by the member of staff concerned that the query related to access to private health care rather than to the relatively rare occurrences where employers offer sick pay via a private health insurance scheme. However, this was not the evidence given to the tribunal. The written submission to the tribunal states quite plainly the assertion that the appellant was advised that there was no requirement to list her "sick pay"; and the appellant's evidence at the hearing is recorded in similar terms. On this basis, and without any evidence of the Department's system (which even if it was perfect, could still have gone wrong), there was no error of law in the tribunal's assessment that the appellant's evidence was not credible.

Innocent misrepresentation

23. It is settled law that a wholly innocent misrepresentation founds a recoverable overpayment. That a claimant was unaware (and could not have been aware), of the true situation is irrelevant if he or she makes a false statement. It is the untruth which counts and it is irrelevant what led to the giving of mistaken information and even if the claimant acted entirely reasonably.
24. The tribunal correctly relied on the decision of Mr Commissioner Rice in R(SB) 18/85. There too, the claimant wrongly said that he had no earnings or other income although in fact he was in receipt of an army pension. At paragraph 9 the Commissioner said:-

"…. However, in my judgment, responsibility for the completion of the form rests with the claimant and the claimant alone. The fact that he may have relied on the guidance of the relevant officer of the Department does not lift the responsibility from him. Of course, it may be that if he can establish to the satisfaction of the Secretary of State that it was through no fault of his whatsoever that the form came to be completed inaccurately, he may be able to persuade the Secretary of State not to require repayment. However, that is not a matter for me and I express no view thereon."

25. A claimant who, for example, states that her partner has no capital when, entirely unknown to her and it is not a fact which she could with due diligence have discovered, the partner owns property, nevertheless misrepresents under section 71 of the Administration Act; negligence has no relevance. It therefore cannot, in principle, be different because the claimant's reasonable belief springs from inaccurate departmental advice. There is no relevant analogy with an overpayment based on "failure to disclose"; for that concept, the accuracy of the information available to the claimant and on which he or she acted is pertinent to whether disclosure is reasonably to be expected in all the circumstances. To the contrary, however, misrepresentation is founded on an untrue statement made and the reasons why that has arisen do not alter the nature of the falsehood. Therefore, the tribunal was absolutely right in stating that even if the appellant was wrongly advised, this does not absolve her from responsibility for a misrepresentation which leads to an overpayment of benefit.

A disclosure which qualifies as statement so that it does not amount to a misrepresentation

26. In R(SB) 18/85 the claimant argued that at the time he incorrectly signed the claim form stating that he had no other income, he actually produced his army pension book and showed it to the officer. At paragraph 10, the Commissioner accepted that the tribunal had to consider:-

"…. not merely the written documents, but any oral observations made by the claimant which accompanied them… If the claimant without using express words nevertheless by his actions e.g. by producing his army pension book, indicated that the legal effect of the pension should be taken into account, then, in my judgement, the written document should be regarded as qualified accordingly."

27. In R(SB) 18/85, the Commissioner referred to the oral observations accompanying the written representation to the contrary. However, in CS/130/1992, the Commissioner took the view that it was not essential that the disclosure and the representation which it modified were contemporaneous. In that case, the claimant was in receipt of invalidity benefit. The tribunal found as a fact that, before he started work as a cleaner, he had telephoned his local social security office and asked the person to whom he was put through whether he could do the work he had been offered. He claimed he was then given misleading advice upon which he relied in continuing to work and therefore this qualified the declarations that he thereafter made that "….I have not worked since the date of my last claim."
28. The Commissioner accepted that, in some limited circumstances only, a representation could be read as having been qualified by an earlier disclosure. At paragraph 16 the Commissioner said:-

"In particular, it seems to me that a claimant can only rely on a prior qualification of a misrepresentation if the earlier disclosure was in sufficiently clear terms that the claimant could reasonably have believed that it had not been overlooked. A disclosure made in the course of a general enquiry by telephone is unlikely to fall into that category unless, perhaps, the claimant knew that the officer answering the telephone had already had dealings with his or her case and so could be expected to be familiar with it and to act on that disclosure."

29. The disparity which has now arisen concerning how in her asserted phone call the appellant categorised the payments made to her only underscores that reliance on a prior qualification is inappropriate in the present case. Moreover, even if, as originally stated, the disclosure was clearly made in terms of "sick pay", the connection between such a prior general enquiry and the later determination made on the claim once the form was actually submitted, was much too remote for there to be any reasonable expectation that a link would be made and the disclosure taken into account. The concept of a prior disclosure qualifying a later written representation, so that the latter is no longer to be regarded as an incorrect one, must be restricted to very special circumstances; otherwise, the rationale behind recoverability based even on innocent misrepresentation, that it was positive and deliberate action upon which a decision maker must be entitled to rely, would be subverted.

Summary

30. As I have discerned no error of law in the tribunal's approach, my decision is as set out at paragraph 1 above.

(Signed)

L T PARKER

Commissioner

Date: 28 July 2004