Decision No: C14/99-00(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 9 March 1999

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant, with the leave of a Commissioner, against the decision of a Tribunal to the effect that an overpayment of Income Support amounting to £1755.00 had been made over the period from 6 August 1997 to 5 May 1998 and is recoverable from the claimant.

2.	The claimant has been receiving Income Support since 7 May 1996 as a lone parent.  On review an Adjudication Officer on 3 November 1998 revised the decision for the period from 6 August 1997 to 5 May 1998 to the effect that the claimant was entitled to a reduced amount of Income Support.  As a consequence Income Support amounting to £1755.00 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.	The claimant has been claiming Income Support for herself and her 3 children since 7.5.96.

2.	Since 6.8.97 to 26.10.98 she has been working part time at G… Post Office,.. A… A…, Belfast.  The Post Office contains a shop and it was in the shop that the claimant worked.  The shopkeeper employs a number of part-time staff.  The premises close half day on Wednesday.

3.	The claimant typically worked from 2.00 pm to 5.30 on Monday, Tuesday, Thursday and Friday.  On Wednesday she worked From 9.00-1.00.  This total 18 hours per week.

4.	She and her employer state she was paid £15.00 per week as wages which they claim equates to £1 per hour and that it was not necessary for the claimant to work her full hours but, she still got paid the same.  Her employer has given the names of 7 other employees and claims not to know several of their addresses.  The Tribunal does not accept the evidence of the claimant or her employer as to the wages paid or that the addresses of the employees was unknown.  The Tribunal do accept the claimant worked at least 15 hours per week.

5.	The claimant did not declare she was working.  She was observed working by the fraud investigating officers on the 9, 10, 11 and 17 and 19 February 1998.

6.	The claimant was interviewed on 12 March 1998.  She was asked to confirm the details in her original claim for Income Support dated 7.5.96 and state if there had been any changes.  The claimant stated she had had a baby girl on 19.10.96 whom she was also claiming for.  The claimant was asked if she had done any work since 7.5.96 either paid or unpaid.  The claimant said she had not and signed a declaration to that effect.  The Tribunal do not accept the claimant was unaware of what she was signing as claimed by the claimant.

7.	The claimant was interviewed by a Fraud Investigation Officer on 7.5.98 and 12.5.98.  In the course of the first interview the claimant stated she had been working from August 1997 and was still working and claimed to be earning £15 per week at £1 per hour.

8.	The claimant’s order book was recalled on 10.11.98 following a call from Family Credit that the claimant had stated she was working 16 hours per week from 9.11.98.  The claimant continued to be overpaid Income Support up until then.  The total overpaid from her starting work on 6.8.97 to 27.10.98 is £2880 as per Tab1.  She continued to cash her order book up to 11.11.98 when she claimed Family Credit.  The amount overpaid from 6.9.97 to the date of interview on 7.5.98 totals £1775.

9.	The claimant is to be treated as having notional earnings of £60 per week being £4 per hour multiplied by 15 hours per week.  The Department of Economic Development state the average shop assistant’s wage is £4.30.  The claimant’s employer when interviewed on 29.4.98 named 7 employees doing similar work.  All but the claimant and her sister who was also on benefit where paid £4 per hour.  The Tribunal agrees with the Adjudication Officer calculation of the overpayment.

10.	The claimant has a good knowledge of the benefit system.  She was aware that she had an obligation to report.  She was aware that she had an obligation to report any work done whether paid or unpaid.  She also was aware that in certain circumstances she could work up to 15 hours a week and earning up to £15.  The claimant did not report the work she had been doing until she was interviewed by the Fraud Officer on 7.5.98 although she was aware from when she started work that she should have.  By encashing her order book she signed same declaring she was entitled and had reported all relevant changes whereas this was not so.”

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

“The Adjudication Officer was entitled to review the award of Income Support as there had been a change of circumstance namely it had been discovered the claimant was working (Section 23(1) Health and Social Services Administrative (NI) Act 1992.

The claimant was observed working by Fraud Officer on 5 separate days.  She was interviewed on 12.3.98.  This no doubt was a short interview and its main purpose was to give the claimant an appointment to declare she had been working (the observations having taken place between the 9.2.98 and 19.2.98).  The claimant was not asked at this stage about specific work but was asked simply had she done any work paid or unpaid since 4.5.96.  The claimant signed a statement that she had not which was not true.  We do not accept the claimant did not know what she was signing or that the sheet was partly covered up.  Having heard from the claimant and having regard to her various correspondence with the Department she strikes us as an assertive individual who would not be easily coerced or agree to sign anything against her will.  We also do not accept she thought she was being interviewed about Child Maintenance but was specifically asked about work in the context of her Income Support claim.

The claimant was subsequently interviewed on 7.5.98.  She admitted working at the G… Post Office from August 1997 earning £15 per week.  She claimed she had agreed to work 15 hours at £1 per hour.  Her employer was interviewed on 29.4.98.  She had provided what purported to be wages records for 7 employees.  She claimed not to know the addresses of 4 of her staff.  To the Tribunal it is unbelievable that a person in charge of a Post Office does not know the addresses of their staff.  This is also contrary to the claimant’s evidence and it was a small community where everyone knew each other and her employer knew where she lived.  Of the 7 staff all but the claimant and her sister are paid £4 per hour.  Some of the staff work on the Post Office side but one young member works in the shop of the Post Office, as does the manageress’s brother-in-law.  The manageress claims that a young employee’s wages drop to £1 per hour when she works in the shop.  We do not believe this distinction.

The Tribunal find the evidence of both the manageress and the claimant unreliable.  We feel that the claimed £1 per hour is contrived, along with the hours worked, to keep the stated total of £15 per week earnings and 15 hours per week work.  We do not believe the claimant would have worked for £1 per hour.  Her account and that of her employers of keeping the hours worked in her head and of getting paid the same amount irrespective of the hours worked is unbelievable.  

At page 213 of Mesher Regulation 42, (6) of the Income Support (General) Regulations 1987 is discussed.  Contrary to the claimant’s representatives submission, if the two conditions in sub-paragraph and (b) are met there is no discretion whether or not to apply paragraph 6 (notional income).  In the present case sub-paragraphs (a) and (b) are met viz (a) the claimant performs a service by working for her employer and (b) that employer pays less then that paid for comparable employment in the area.  When (a) and (b) are met the Adjudication Officer shall treat the claimant as possessing such earnings as is reasonable for that employment.  None of the exceptions apply.  We feel that £4 per hour is a realistic figure given the Department of Economic Development’s figure and those of his other employees (See (R (SB) 13/86).

As we have said the claimant in her correspondence, in her interviews and before us came across as a person with knowledge of the benefit system from whom disclosure could have been expected and was not forthcoming.  Her encashment of her Order Book constituted misrepresentations (See R(SB) 94/87).

For completeness we would make comment on two further points raised by the claimant and her representative.  Firstly, it is regrettable that public money continued to be wasted on the continued overpayment of the claimant up to November 1998 given that she was observed working in February, denied this fact on 12.3.98 and then admitted working when interviewed on 7.5.98.  The fact she was thereafter overpaid does not however convert an overpayment into an entitlement but the Adjudication Officer has accepted it affects recoverability post 7.5.98.  For the period from the observations to the 7.5.98 and the subsequent Adjudication Officer’s decisions there was some delay.  This however does not excuse the claimant from her obligations (See Duggan v Chief Adjudication Officer (CA) and R(SB) 13/89.  The second point is that the claimant states she was better off on Income Support and has submitted comparative figures based on her award of Family Credit.  This however is irrelevant to the issue of her failure to disclose and overlooks the claimant’s obligations to society.

In conclusion, we are satisfied the Adjudication Officer has established rounds to review the award of benefit.  There has been a failure to disclose and disclosure was to be expected.  We accept the overpayment calculation as accurate.”

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

“1.  Is that from 8.8.97 to 26.10.98 the claimant had notional earnigns (sic) of 
£60 per week attributable to her work as a shop assistance (sic).

2.	Between 6.8.97 to 5.5.98 inclusive she was overpaid £1755 in Income Support as she failed to disclose the material fact she was working.

3.	During the period 6.8.97 to 28.10.97 and 5.11.97 to 5.5.98 inclusive by signing the counterfoils in her Order Book she misrepresented that she had reported all facts relevant whereas she had not reported she was working and consequently £1775 was paid in Income Support from 6.8.97 to 5.5.98 which would not have been but for the failure to disclose and misrepresentation.  The amount is recoverable from the claimant.

From 6.5.97 to 27.10.98 inclusive the claimant was overpaid £1125 in Income Support but same is not recoverable as the claimant had disclosed her employment when interviewed.

Appeal dismissed.”

6.	The claimant then applied to the Chairman for leave to appeal to a Commissioner.  Leave was refused on 19 August 1999.  However, leave to appeal was granted by a Commissioner on 23 February 2000. 

7.	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 erred in law in assessing an unrealistically high level of notional earnings.

8.	Mrs McRory, now the relevant Departmental Official, opposed the claimant’s appeal but accepted that the Tribunal erred in law in another respect although she did submit that this error did not vitiate the Tribunal’s decision.  

9.	Mrs McRory’s submission is contained in a letter dated 16 December 1999 and was made in response to an invitation to the Department to make observations on the claimant’s application for leave to appeal.  The claimant’s solicitors were given an opportunity to make further submissions or observations in reply but did not take the opportunity.

10.	Having considered the circumstances of the case I am satisfied that the appeal can properly be determined without a hearing.  It is also relevant to note that the present case has great similarity to the appeal involving the claimant’s sister in which I gave a decision on 31 July 2000 (C10/99(IS)).  As the claimant’s solicitors pointed out in a letter dated 9 September 2000 to the Office of Social Security Commissioners, the “related cases are almost identical”.  Therefore the present decision is to some extent identical or similar to the decision in C10/99(IS).

11.	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.  Mrs McRory 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 special care in dealing with this case.  The Tribunal rejected the statement from both the claimant and her employer that she received £15 per week and concluded that the £1 per hour that was claimed to be the correct figure was “contrived”, along with the hours worked, to keep the stated total at £15 per week earnings and 15 hours per week work.”  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 so doing, took into account both the rates of pay available to the claimant’s fellow employees and wage rates of shop assistants as supplied by the Department.  The Tribunal then, in effect, determined that a reasonable rate of pay for the claimant was £4 per hour.  In my view this conclusion was entirely reasonable and cannot be said to be 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.	It seems to me that the claimant’s basic submission is that the decision to require repayment of the notional amount of money is unfair as she never received this amount of money in the first place.  However, as I pointed out in the related case involving the claimant’s sister (C10/99(IS)) the claimant 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 in fact work but she was paid a totally unrealistic or “contrived” wage.  She continued to receive benefits while she was paid this lower wage.  Perhaps the employer has been the beneficiary of this arrangement but it is wrong, in my view, to conclude that 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.  As I stated in C10/99(IS) 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 in this case a Commissioner cannot assess the relevant responsibilities of the claimant and her employer and vary any repayments due to the State in light of their relative responsibilities.  

18.	Mrs McRory in her letter dated 16 December 1999 drew my attention to a possible error in the Tribunal’s decision.  She submitted that the Tribunal 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 were actual income.  Therefore notional deductions have to be made from earnings to obtain a net figure.  

19.	In my view Mrs McRory is correct in this submission.  However, as she has pointed out, in the present case the amount of earnings established is below the minimum levels at which liability for income tax and national insurance contributions starts.  Therefore, whilst it is technically necessary for 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 (as in C10/99(IS)), in the special circumstances, that the Tribunal’s oversight has had no part to play in the decision making process in the present case and, therefore, the Tribunal has not erred in law in this respect in coming to its decision.

20.	In considering this additional point put forward by Mrs McRory I have noted that the claimant’s solicitors have not taken issue with Mrs McRory’s submissions even though an opportunity was given to the solicitors to make observations on this point.

21.	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

10 OCTOBER 2000