Decision No:  C10/99(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Appeal to the Social Security Commissioner
on a question of law from the decision of
Belfast Social Security Appeal Tribunal
dated 10 March 1999

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant against the decision of a Tribunal to the effect that an overpayment of Income Support amounting to £1,320 had been made over the period from 3 June 1997 to 6 April 1998 and is recoverable from the claimant.

2.	The claimant has been receiving Income Support since 18 May 1992 as a lone parent. On review an Adjudication Officer on 4 November 1998 revised the decision for the period from 3 June 1997 to 6 April 1998 to the effect that the claimant was entitled to a reduced amount of Income Support.  As a consequence Income Support amounting to £1,980 was paid for that period and this sum would not have been paid but for failure to disclose and misrepresentation.  Accordingly the Adjudication Officer decided that that amount is recoverable from the claimant.  The other relevant facts are set out in the findings of fact material to the Tribunal's decision.  The claimant appealed to a Tribunal.

3.	On appeal the Tribunal found the following findings of fact material to its decision:-

		"1.	In June 1997, whilst Appellant was in receipt of Income Support, Appellant started working in Glenard Post Office for Mrs E McC, the manager/owner of the shop.  Appellant's job was 
			that of counter assistant and she sold mostly stationery, 
			confectionery and lottery tickets and scratch cards.  All these 
			facts are accepted by [the claimant] and her solicitor.

		2.	Although she was working since June 1997 Appellant did not 
			disclose this as required to, under changes you MUST report 
			if you are receiving Income Support.  These changes are clearly 
			listed in the back of each Income Support booklet.

		3.	Due to certain information received, the Department observed Appellant working on several days in February 1998 and 
			eventually interviewed Appellant in Department in April 1998.  
			[The claimant] admitted working 15 hours per week in the shop 
			and receiving a pound an hour payment for her work.  Her sister 
			[...] who also worked in the same shop also received £15 for a 
			15 hour week; the other members of staff received about £4.00 
			per hour pay.

		4.	The panel find that the Adjudication Officer had the right to 
			review Appellant's Income Support claim on the grounds that it 
			had information that Appellant was working.

		5.	The Appellant has told us she received £15 for 15 hours 
			work, likewise her employer Mrs McCartan also confirmed this.

			The panel have no hesitation in not accepting this statement 
			from both the Appellant and [her sister].  To be blunt, we do 
			not believe this to be the entire truth and do not accept that 
			any adult in Northern Ireland with (then) one dependent child 
			would work for such insulting pay as £1 per hour.

			The circumstances are such that the panel accept that the 
			Adjudication Officer was right to accept that the Appellant 
			was to be treated as possessing earnings as is reasonable for 
			that employment, and the issue of notional income is therefore 
			applicable to the Appellant.

		6.	It is hard to decide exactly what the earnings should be.  Most 
			of the other employees were receiving £4 per hour; but several 
			of those worked on the Post Office counter, and then [the 
			claimant] did not.  [The claimant] now says she earns £3 
			per hour (with Post Office responsibility), but the panel 
			felt that a reasonable rate for a shop assistant with 
			light duties such as [the claimant's] would be approximately 
			£3 per hour.

			We appreciate that the Adjudication Officer has found £4 
			per hour to be the notional earnings but we find that to 
			be rather high.

		7.	This will mean that:

			1.	The Appellant failed to disclose the material fact 
				that she was in paid employment since early June 
				1997 and thereby received an overpayment of Income 
				Support which now must be returned to the Department.

			2.	On finding out that Appellant was in fact working 
				the Adjudication Officer had the grounds to review 
				his earlier decision granting Income Support to 
				Appellant.  Having found out the facts that 
				Appellant claimed to be paid £15 for a 15 hour week, 
				the Adjudication Officer was entitled not to accept 
				this fact about the money paid to Appellant on the 
				grounds that such pay is well below the going rate 
				for shop assistants in the area who are generally 
				paid between £3-£4 per hour.

			3.	A notional income has been applied to the Appellant 
				of £45 per week by the panel, that is a rate of £3 
				per hour.  We find that the rate of £4 per hour 
				applied by the Adjudication Officer as notional 
				income to be on the high side especially as the 
				Adjudication Officer's survey found £3-£4 to be the 
				going rate in the area (although the notional 
				average is just above £4).

			4.	The overpayment attributed to Appellant is to be 
				worked out as follows:  assuming notional earnings 
				of £45 per week (and not £60 as attributed by 
				Adjudication Officer).

				Incorrect Amount Paid   Correct Amount   Payable Excess
				      £64.70			£34.70	    £30

				From 3 June 1997 to 6 April 1998, 44 weeks @ £30=£1,320."

4.	The Tribunal gave the following reasons for its decision:-

		"The Appellant failed to disclose the material fact that she started 
		work in June 1997 and thereby received an overpayment in Income 
		Support which now must be repaid to the Department.

		The overpayment has been calculated taking notional income of 
		Appellant as £45 per week, and the overpayment using this figure 
		amounts to £1,320 for the period 3 June 1997 to 6 April 1998.

		(See calculations, Findings of Fact Paragraph 7(3))"

5.	The unanimous decision of the Tribunal was in the following terms:-

		"Appeal is disallowed, but not (sic) amount of overpayment has 
		been changed from that stated by Adjudication Officer.

		Appellant received an overpayment of Income Support for the 
		period 3 June 1997 to 6 April 1998 amounting to £1,320 which 
		must be paid to the Department.  That is, notional income of 
		£45 per week, less £15 disregard is £30 x 44 weeks, £1,320."

6.	I have assumed that the decision of the Tribunal contains a misprint and that the word "not" should in fact read "note" and I have made my decision on this assumption. It is correct to state that no party has taken any point about this but it is unfortunate that this obvious discrepancy is on the face of the record.

7.	It is also clear that the Tribunal has purported to disallow the appeal.  However it is clear that the appeal was in fact allowed as the decision of the Tribunal is in substance different from the decision made by the Adjudication Officer.  It seems that the Tribunal has assumed because it is upholding the Adjudication Officer's decision to require a repayment that the appeal has been disallowed.  However, not only was there the issue of repayment before the Tribunal there also was the issue of the amount of that repayment.  Therefore I consider that the Tribunal should have made it clear that the appeal was allowed (if only in part) rather than disallowed.  However no point was taken by either of the parties in relation to the form of the order and, in my view, it is entirely clear what the intention of the Tribunal was, namely, that the appellant was required to make the payment of the sum of £1,320.

8.	The claimant then applied for leave from the Chairman to appeal to a Commissioner.  A Chairman granted leave to appeal on 25 August 1999.

9.	The claimant, who is represented by Bogue & McNulty, Solicitors, has submitted in the original application for leave that it is unfair to impose notional earnings upon a person as a "punishment" for failing to declare work which, if it had been originally declared, would not have affected that person's benefit entitlement.  In addition it was submitted on her behalf that, although under regulation 42 of the Income Support (General) Regulations (Northern Ireland) 1987 there is no discretion in applying notional earnings, there is a discretion in deciding how much the notional earnings applicable should be and that, in the circumstances, the Tribunal was wrong in law in assessing an unrealistically high level of notional earnings.

10.	Mr Bennett, the Adjudication Officer (now the relevant Departmental Official) and later Mrs McRory on behalf of the Department opposed the claimant's appeal but accepted that the Tribunal erred in law in two respects although submitted that these errors did not vitiate the Tribunal's decision.  (Mr Bennett's submission is contained in a letter dated 18 October 1999 and Mrs McRory's submissions, which were supplemental to Mr Bennett's, were set out in a letter dated 6 March 2000 and were made in accordance with a Commissioner's direction under regulation 20(3) of the Social Security Commissioners (Procedure) Regulations (Northern Ireland 1999.  The claimant's solicitors were given an opportunity to make submissions in reply but did not take the opportunity).

11.	Having considered the circumstances of the case I am satisfied that the appeal can properly be determined without a hearing.  In this particular appeal it is relevant that the legal position is that if a claimant helps another person by doing work of a kind which would normally command a higher wage, the claimant is deemed to receive a wage similar to that normally paid for that kind of job in that area.  The burden of proving that the kind of work a claimant does is something for which an employer would pay and what the comparable wages are lies with the Adjudication Officer.  The relevant legislation is set out in the Income Support (General) Regulations (Northern Ireland) 1987 and in particular regulation 42(6) and (8).

12.	Regulation 42(6) provides:-

		"Where -

		(a)	a claimant performs a service for another person; and

		(b)	that person makes no payment of earnings or pays less 
			than that paid for a comparable employment in the area,

		the adjudication officer shall treat the claimant as possessing 
		such earnings (if any) as is reasonable for that employment unless 
		the claimant satisfies him that the means of that person are 
		insufficient for him to pay or to pay more for the service; but 
		this paragraph shall not apply to a claimant who is engaged by a 
		charitable or voluntary organisation or is a volunteer if the 
		adjudication officer is satisfied in any of those cases that it 
		is reasonable for him to provide his services free of charge or 
		in a case where the service is performed in connection with the 
		claimant's participation in an employment or training programme 
		in accordance with regulation 19(1)(p) of the Jobseeker's 
		Allowance Regulations (Northern Ireland) 1996."

13.	Regulation 42(8) provides:-

		"Where a claimant is treated as possessing any earnings under 
		paragraph (5) or (6) the foregoing provisions of this Part shall 
		apply for the purposes of calculating the amount of those earnings 
		as if a payment had actually been made and as if they were actual 
		earnings which he does possess except that regulation 36(3) 
		(calculation of net earnings of employed earners) shall not apply 
		and his net earnings shall be calculated by taking into account 
		the earnings which he is treated as possessing, less -

		(a)	an amount in respect of income tax equivalent to an amount 
			calculated by applying to those earnings the lower rate or, 
			as the case may be, the lower rate and the basic rate of 
			tax in the year of assessment less only the personal relief 
			to which the claimant is entitled under sections 8(1) and 
			(2) and 14(1)(a) and (2) of the Income and Corporation 
			Taxes Act 1970 (personal relief) as is appropriate to his 
			circumstances; but, if the period over which those earnings 
			are to be taken into account is less than a year, the 
			earnings to which the lower rate of tax is to be applied 
			and the amount of the personal relief deductible under this 
			paragraph shall be calculated on a pro rata basis;

		(b)	where the weekly amount of those earnings equals or exceeds 
			the lower earnings limit, an amount representing primary 
			Class 1 contributions under the Contributions and Benefits 
			Act, calculated by applying to those earnings the initial 
			and main primary percentages in accordance with section 
			8(1)(a) and (b) of that Act, and

		(c)	............. (not relevant)"

14.	It is important to appreciate that whilst under earlier legislation applicable to Supplementary Benefit the adjudicating authorities had a discretion in similar circumstances to treat notional earnings as if they were actually paid (see the now repealed regulation 4(3) of the Supplementary Benefit (Resources) Regulations (Northern Ireland) 1981)) there is no such discretion in the Income Support (General) Regulations (Northern Ireland) 1987 (see regulation 42(6) where it states, inter alia, that "the Adjudication Officer shall (my emphasis) treat the claimant as possessing such earnings ...").

15.	The question for me is whether the Tribunal has correctly addressed the legal issues in this case.  Mr Bennett has drawn my attention to decision R(SB)13/86 ( a decision of a Great Britain Commissioner) concerning the application of the Supplementary Benefit Regulations.  In that case it was established that it was necessary for the application of regulation 4(3) of the Supplementary Benefit (Resources) Regulations 1991 to establish:-

	(i)	the identity of the employer;

	(ii)	the particulars of the service provided by (a claimant) for that employer;

	(iii)	the actual payment made for the services (including payment in kind); and

	(iv)	the amount which would be paid for comparable employment.

	In my view the adjudicating authorities must take a similar approach when dealing with cases under the Income Support (General) Regulations (Northern Ireland) 1987.
	
16.	It is clear from the Chairman's record of proceedings that the Tribunal took particular care in dealing with this case.  In these circumstances the Tribunal has rejected the statement from both the claimant and her employer that she received £15 for 15 hours work.  The Tribunal also did not accept that any adult in Northern Ireland with (then) one dependent child would work for £1 per hour.  In the circumstances the Tribunal was entitled to come to this conclusion.  The Tribunal went on to consider what the relevant earnings should have been and, in doing so, took into account both the rates of pay available to the claimant's fellow employees and survey rates of pay established by the Adjudication Officer.  The Tribunal then determined that a reasonable rate of pay for the claimant was £3 per hour, taking account of the lighter nature of her duties compared to her fellow employees.  In my view this conclusion was entirely reasonable and not erroneous in law.  The Tribunal, as I have stated earlier, had no discretion but was required to treat the claimant as possessing the relevant earnings.

17.	The claimant has basically submitted that the decision to require the repayment of the notional amount of money is unfair as she has never received the amount in the first place.  However she is only entitled to Income Support if she fulfils certain conditions.  She was in a position, as the Tribunal has found, to work and, as the Tribunal has also found, to earn money.  She did work but she was paid a totally unrealistic wage.  She continued to receive benefits whilst she was paid this lower wage.  The employer appears to have been a beneficiary of this arrangement but it is wrong, in my view, to conclude that the claimant has not gained.  She was paid benefit plus her wage.  The employer's responsibilities as regards the State are not a matter for the adjudicating authorities but are dealt with before an entirely different forum.  A Commissioner is in the same position as the adjudicating authorities and has to deal with the position of the claimant in light of the relevant legislation and is not able to take an overall view of the circumstances.  Accordingly a Commissioner cannot assess the relative responsibilities of the claimant and the employer in this case and vary any repayments due to the State in light of their relative responsibilities. 

18.	Mr Bennett in his letter dated 18 October 1999 drew my attention to two possible errors in the Tribunal's decision.

19.	He submitted that the Tribunal has failed to take into account the provisions of regulation 42(8).  In substance this regulation requires that any notional income must be calculated as though it was actual income.  Therefore notional deductions have to be made from earnings to obtain a net figure.

20.	In my view Mr Bennett is correct in his submission.  However, as he has pointed out, in the present case the amount of earnings established is below the minimum levels at which liability for income tax and social security contributions start.  Accordingly whilst it was technically incumbent on the Tribunal to make findings in this respect, in the present case it would be mere surplusage, as the gross and net figures would be identical.  Therefore I conclude, in the special circumstances, that the Tribunal's oversight has no part to play in the decision making process in this case and therefore the Tribunal has not erred in law in this respect in coming to its decision.

21.	Mr Bennett also drew my attention to the fact that the Tribunal failed to make findings after the date on which the claimant's first wage was due to be paid in order to determine the date of review for overpayment purposes.  Mr Bennett, however, also submitted that this was only a technical error as the Tribunal did go on to confirm specifically the overpayment period as determined by the Adjudication Officer.

22.	By reason of the provisions of regulation 42(6) of the Income Support (General) Regulations (Northern Ireland) 1987 where a claimant is treated as possessing earnings, these earnings are treated as actual earnings.  Regulation 29 provides for the calculation of earnings derived from employed earner's employment and income other than earnings and specifically directs that such payments should be taken into account on the date on which the payment is treated as paid under regulation 31. This regulation makes it clear that the crucial date is that on which the payment is due to be paid even though this date may will be different from the date of actual payment.  Accordingly, as the claimant was claiming Income Support from 1992 and her employment commenced on June 1997, her earnings, both notional and actual, failed to be taken into account from the first day of the benefit week in which her first earnings were due to be paid.  It is clear that from the employer's details that the claimant's earnings were first paid for the week ending 7 June 1997.  As Mrs McRory has pointed out in her letter dated 6 March 2000, in the absence of any evidence to the contrary it would be reasonable to assume that the earnings were first due and paid on Friday 7 June 1997.  As the claimant's benefit week ends on a Monday, her benefit week runs from Tuesday to Monday.  Accordingly it would seem that her earnings were due to be taken into account from the first day of the benefit week in which they were due to be paid, namely Tuesday 3 June 1997. Therefore the relevant earnings which had to be taken into account extended over the period covering each subsequent benefit week until the claimant stopped work.

23.	As Mrs McRory has pointed out the Tribunal has failed to make any findings on the date the claimant's wages were due to be paid but it did confirm the overpayment determined by the Adjudication Officer, namely from 3 June 1997 until 3 April 1998. Therefore, from all the available evidence, it seems that the Tribunal was right in its conclusion.

24.	However, in my view, the failure of the Tribunal in the present case to carry out the usual process of ascertaining the relevant first wage date is not fatal to the Tribunal's decision as, for the reasons stated in the previous paragraph, it seems clear that the Tribunal came to the correct conclusion in any event.

25.	In considering the two additional points put forward by Mr Bennett (and Mrs McRory) I have noted that the claimant's solicitors have not taken issue with the submissions of Mr Bennett and Mrs McRory even though an opportunity was given to the solicitors to make observations on these points.  

26.	In all the circumstances I am satisfied that the decision of the Tribunal is not erroneous in point of law.  Accordingly I dismiss this appeal.

	(Signed):  J A H MARTIN QC

	CHIEF COMMISSIONER

	31 JULY 2000