Decision of the Upper Tribunal
(Administrative Appeals Chamber)
This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007:
The decision of the Bristol appeal tribunal under reference 186/07/00985, held on 16 November 2007, did not involve the making of an error on a point of law. 

Reasons for Decision
A.	The issue
1.	This is one of a number of cases raising the same issue that have come before the Social Security Commissioners and, now, the Upper Tribunal. The issue is this. A claimant was wrongly receiving tax credit. The payment led to a reduction of an income-related benefit. Subsequently, the overpaid tax credit was recovered. Can the claimant then be paid the income-related benefit that would have been paid if the tax credit had not (wrongly) been in payment at the time? My answer is: no. I accept that that result may be perceived as unfair. The effect is that the State both avoids paying the income-related benefit and recovers the tax credit that was overpaid. The claimant, on the other hand, loses both the income-related benefit and the tax credit. However, in the circumstances of this case, I can see no way to avoid those effects.
B.	The parties
2.	The claimant is the appellant in this case. The other parties are the Secretary of State for Work and Pensions and the Commissioners for Her Majesty's Revenue and Customs. The Commissioners have taken no part in the proceedings and adopted the arguments of the Secretary of State. For convenience, I will just refer to the claimant and the Secretary of State. 
C.	The three appeals
3.	This is one of three linked appeals. All three concerned the effect of a retrospective termination of an award of working tax credit on a claimant’s entitlement to jobseeker's allowance or income support. The others were CIS/1564/2008 and CIS/1853/2008. I have today given a separate decision in 1564. The parties agreed that 1853 should be allowed on the ground that it was governed by the decision of Mr deputy Commissioner Mark in CIS/1813/2007. I gave a decision embodying their agreement on the day of the hearing and need say no more about that case. 
D.	The oral hearing 
4.	The three appeals came before me at an oral hearing on 16 September 2009. The claimant was represented by Ms Daphne Hall, of the Bristol Welfare Rights and Money Advice Service. The Secretary of State was represented by Mr David Blundell, of counsel, instructed by the solicitor to the Department for Work and Pensions. I am grateful to them for their submissions both at the hearing and in writing. 
E.	Two preliminary points
5.	I can deal briefly with two matters that were discussed, but which in the end took the case no further.
A restitutionary duty
6.	Upper Tribunal Judge Bano had previously issued directions to the parties to make submissions on the possibility that the claimant had been under a duty in the law of restitution to repay the working tax credit. If the claimant were under this duty, the decision of the Court of Appeal in Leeves v Chief Adjudication Officer, reported as [1999] ELR 90 and R(IS) 5/99 would have applied. In that case, the claimant had been a student and had received a grant for the summer term of his course. Shortly after the start of that term, he abandoned his course and applied for a review of his entitlement to income support. That review was carried out on 9 May and the adjudication officer decided that the weekly amount of the grant was attributable to the claimant as income despite (i) the fact that he had abandoned the course and (ii) he would have to repay any overpaid element of the grant. On 24 May, the local authority invoiced the claimant for repayment. The Court of Appeal decided that money received was the claimant’s income unless and until he was under an undisputed and immediate obligation to repay. The key passage, for the purposes of this case, is the following paragraph from the judgment of Lord Justice Potter:
‘On the other hand, it seems plain to me that, following demand made by Hampshire County Council in its letter of 24 May, at which point the claimant became under an obligation of immediate repayment in respect of his grant, that part of the claimant’s grant required to be taken into account over the weeks which followed under regulation 29 thereby lost its character as “income” on any ordinary understanding of the word.’
If that reasoning applied, the overpaid tax credit would not have formed part of the claimant’s income from the moment it was paid. 
7.	Mr Blundell made detailed submissions on this issue, arguing that no such duty arose. At the hearing, Ms Hall accepted that this line of argument would not assist the claimant. I need, therefore, say no more about it. 
The CPAG case
8.	At the end of the hearing, I mentioned the appeal to the Court of Appeal in R (CPAG) v Secretary of State for Work and Pensions [2009] EWCA Civ 1058. I said I would wait for that decision and then give the parties the chance to make any representations they wished on its effect in this case. Their responses have now arrived. Ms Hall responded that she had no comments on this decision. Jason Westerman responded for the Secretary of State, arguing that there was nothing of relevance in the decision. I accept Mr Westerman’s argument. I can find nothing in the case that is relevant to the issue I have to decide. 
F.	Decision-making history 
9.	The claimant ceased work on 1 June 2006. He claimed an income-based jobseeker's allowance on 19 June 2006. On 30 June 2006, a decision-maker made an award from 22 June 2006 in the amount of £90.10. That award was made in ignorance of the fact that, at the time, the claimant was receiving a working tax credit. This was discovered and, on 13 July 2006, a decision-maker revised the award from its effective date, reducing the amount to £28.43. 
10.	In due course, Her Majesty's Revenue and Customs terminated the award of working tax credit. This led to a supersession of the revised decision awarding jobseeker's allowance and to an increase in the amount to £90.10 from 19 October 2006. (For completeness, I add that the claimant also had an award of child tax credit, which is disregarded. The overpaid working tax credit was recovered by reduction of the award of child tax credit.)
11.	The claimant lodged an appeal, identifying as the subject of the appeal a decision notified on 10 January 2007. That decision related to the recovery of an overpayment (not the tax credit overpayment) by deduction from the award of jobseeker's allowance. The grounds of appeal referred to the fact that the working tax credit taken into account from 22 June 2006 had been overpaid to him. His representative, not Ms Hall at that time, asked for this to be offset against the overpayment that was being recovered. The Secretary of State treated the appeal as being against the revised decision made on 13 July 2006.
12.	The appeal tribunal took the simplest and fairest approach by dealing with the appeal as if it were against both the revised decision and the supersession decision. It dismissed the appeal, regardless of which decision was in dispute. 
G.	My analysis
The revised decision
13.	I first deal with the case as if the revised decision were under appeal.
14.	At the time this decision was made, the claimant was still receiving working tax credit. He should not have been, but the fact is that he was. That was income as and when he received it. There was no disregard that would eliminate it from the calculation of his entitlement to jobseeker's allowance. The decision was, therefore, correct at the date it was made.
15.	Subsequently, there was a change of circumstances. The working tax credit was terminated retrospectively. However, the tribunal could not take that into account. It was governed by section 12(8)(b) of the Social Security Act 1998, which provides:
‘In deciding an appeal under this section, an appeal tribunal-
…
(b)	shall not take into account any circumstances not obtaining at the time when the decision appealed against was made.’
It is possible, despite that provision, to take account of evidence that was not available at the time (R(DLA) 2 and 3/01). But that is only permissible if the evidence shows what the circumstances were at the time of the decision. In this case, the circumstances at that time were that the claimant was receiving working tax credit. The removal of the award was not a circumstances obtaining at the time of the decision. 
16.	As I understood Ms Hall’s argument at the hearing, she accepted that this decision was correct as made. She was right to make that concession. 
 The supersession decision
17.	I now deal with the case as if the supersession decision were under appeal.
18.	Ms Hall relied on regulation 96(3) of the Jobseeker's Allowance Regulations 1996 (SI No 207):
‘(3)	Subject to paragraph (4), working tax credit shall be treated as paid-
(a)	where the award of that tax credit begins on the first day of a benefit week, on that day, or
(b)	on the first day of the benefit week that follows the date the award begins, or

…
until the last day of the last benefit week that coincides with or immediately follows the last day for which the award of that tax credit is made.’
The income support equivalent of that provision was the subject of detailed consideration by Mr Commissioner Mesher in CIS/1064/2004. The effect of his analysis of that provision has been reversed, as regards jobseeker's allowance, by amendments made to regulation 97. There has been an equivalent amendment to the income support legislation (regulation 32 of the Income Support (General) Regulations 1987). Those amendments only came into force on 17 November 2008 and do not affect this case. 
19.	Despite Ms Hall’s detailed arguments, I am unable to understand how regulation 96(3) or Mr Mesher’s analysis helps her. Mr Mesher was concerned only with current payments of working tax credit. He was not concerned with retrospective changes to an award. If he had been, it is inconceivable that he would have overlooked so important a case as Leeves, to which I have referred. 
20.	The difficulty for Ms Hall, as she recognised, is the effective date of a supersession. This is governed by the Social Security and Child Support (Decisions and Appeals) Regulations 1999. It is important to distinguish between when the change occurred and when it took effect. In this case, the change occurred when Her Majesty's Revenue and Customs changed the award of tax credit retrospectively. However, it took effect from an earlier date – the date with effect from which the working tax credit was withdrawn. Regulation 7(2), which deals with change of circumstances, distinguishes between a change occurring and a change taking effect:
‘(2)	Where a decision under section 10 is made on the ground that there has been, or it is anticipated that there will be, a relevant change of circumstances since the decision had effect or, in the case of an advance award, since the decision was made, the decision under section 10 shall take effect- 
(a)	from the date the change occurred or, where the change does not have effect until a later date, from the first date on which such effect occurs where-
(i)	the decision is advantageous to the claimant; and
	(ii)	the change was notified to an appropriate office within one month of the change occurring or within such longer period as may be allowed under regulation 8 for the claimant's failure to notify the change on an earlier date; …’
In the context of that contrasting wording, I cannot read regulation 7 to mean that the change in this case occurred when it took effect. It did not occur until Her Majesty's Revenue and Customs revoked the working tax credit. 
21.	Ms Hall referred to regulation 8, which provides for late notification of a change of circumstances. In particular, she relied on regulation 8(4)(c):
‘(4)	An application under this regulation shall not be granted unless the Secretary of State is satisfied that-
(a)	it is reasonable to grant the application;
(b)	the change of circumstances notified by the applicant is relevant to the decision which is to be superseded; and
(c)	special circumstances are relevant to the application and as a result of those special circumstances it was not practicable for the applicant to notify the change of circumstances within one month of the change occurring.’
This does not help her overcome the problem I have just identified, because the change occurred when the change was made to the tax credit award, not when that change took effect. 
22.	Finally, Ms Hall referred to Schedule 3A, which makes special provision for income support and jobseeker's allowance. In particular, she relied on paragraph 10:
‘10.	Where, under the provisions of regulation 96 or 102C(3) of the Jobseeker's Allowance Regulations, income is treated as paid on a certain date and that payment gives rise, or is expected to give rise, to a relevant change of circumstance resulting in a supersession, that supersession shall take effect from that date.’
23.	I do not understand how that can apply to the circumstances of this case. Her Majesty's Revenue and Customs decided that the working tax credit should not have been paid. Paragraph 10 applies where income is treated as paid on a certain date. In contrast, this case concerns a decision that income should not have been paid on a certain date. It is outside the terms of paragraph 10.
24.	In conclusion, I can see no way to avoid the conclusion that I reached in CIS/0647/2007 on my analysis of the Court of Appeal’s decision in Leeves:
‘6.	… the effect of a demand for repayment is only effective as regards income to be attributed to the future. The demand and the obligation that arises as a result do not have retrospective effect to remove the quality of income from the payments that have already been made and attributed. … The key date is the date of the demand for repayment. It is irrelevant whether that date is before or after the decision-maker’s decision on the income support claim.’
H.	Disposal
25.	I cannot fault Ms Hall for her ingenuity and tenacity in searching for an argument that would remove the perceived unfairness in the way that retrospective changes to tax credit awards operate. However, for the reasons I have given, her arguments do not succeed and I must dismiss this appeal.

Signed on original
on 17 December 2009	Edward Jacobs
Upper Tribunal Judge