Decision No: C15/02-03(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 the Appeal Tribunal
dated 7 September 2001

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal, by the claimant, with leave of a Commissioner, from a decision of a Tribunal to the effect that the claimant is not entitled to Income Support from January 1999 as his capital exceeds £8,000.

2.	I arranged a hearing of this appeal.  The claimant, who was present, was represented by Mr McGuckin, Solicitor, while the Department was represented by Mr Gough of the Decision Making and Appeals Unit.  As well as the advocates’ oral submissions at the hearing, I had the benefit of the appeal papers and written submissions from both the Department and from the claimant’s solicitor.

3.	The issue in this case is whether the Tribunal was correct in deciding that the claimant was not entitled to Income Support as his capital exceeded £8,000.  The decision was made on the basis that in addition to the house that the claimant resides in at No.24, he also owns the house at No.26, the value of which exceeds the prescribed limit of £8,000 and there is no provision in the legislation to disregard the value of No.26.

4.	The claimant had been in receipt of Income Support since April 1988 and, prior to that, of Supplementary Benefit from October 1985.  On 8 March 2000 a decision maker decided that that, based on all the evidence available, the claimant was the owner of both the property at No.24 and the property at No.26.  He also decided that from January 1999 the property at No.24 was ready for occupation and that the capital value of the property did not fall to be disregarded for the period January 1999 to September 1999 while the property was lying vacant.  The decision maker also decided that this property was worth well in excess of £8,000, so, for the period January 1999 to September 1999, the claimant was not entitled to Income Support as he had a capital resource which exceeded the prescribed amount.  The decision maker also decided that the claimant had moved into the property at No.24 some time in October 1999.  From this date the property at No.26 was lying vacant and did not fall to be disregarded.  The decision maker also decided that the property was worth well in excess of £8,000, so from October 1999 the claimant was not entitled to Income Support as he had a capital resource which exceeded the prescribed amount.  The claimant then appealed this decision to a Tribunal.

5.	The Tribunal on appeal gave the following reasons for its decision: -

“The tribunal considered the question of the actual ownership of No 26 H … Road which forms portion of Folio [*****] Co Londonderry.  The Registered Owner in the Folio in 1934 was [MC][JJC] and [DC] were registered as owners on 25 June 1997.  Someone other than the person registered as owner of the Land in Land Registry could have a possessory title to the land on which No 26 was erected.  The Department contends that No 26 has been owned by [the claimant] and [the claimant] contends that it is owned by his late brother [JB] The tribunal noted that in the note of telephone call on 07/02/86 the DOE stated that [the claimant] was the owner of No 26 which appears to have been tenanted by [KK].

In the statement dated 25/02/86 signed by [the claimant] [the claimant] stated that he owned the new house where he lived at No 26.  He further stated that he built the house in 1976 as a replacement for No 24 which was condemned.  He stated that there was a tenant [KK] in the old house until he built his new bungalow in October 1984.  He also stated that he just used the old house now as an outbuilding as it was no longer fit to rent.

When [the claimant] completed form A1 on 25/02/86 he stated that he lived at 26 [H… Road] and that he owned the house.  He also ticked that he had a mortgage or loan on his house.  In addition at Part 5 he stated “Old unused house in my back yard”.

At this time the capital value of the old house at No 24 was disregarded.  [The claimant] completed an A2 Review form on 21/08/92.  In it he stated that he lived at No 26 and he ticked that he owned his own home and also stated that he had a loan of £25,000 with Northern Bank Ltd, Maghera which was taken out in 1975.

On 16/11/92 [the claimant] sent a map of his property to the Department which indicated the position of No 26 as the house and stated that he bought the farm in February 1972.

In a reply dated 28/07/93 [the claimant] wrote that the main part of the house was built in 1976 no mortgage was required.  He also stated he built extension in 1984 this is when loan was taken from Northern Bank.

In reply dated 06/01/95 [the claimant] stated that he had left his son the land at [H… Road] and that he had no land now other than what the house is on.

In an A2 Review form dated 22/04/98 [the claimant] wrote that his brother [JB] in America owned the house where he is living.  The tribunal noted that this appears to be the first mention in the papers that No 26 was owned by [the claimant’s brother] and did not mention the fact that [the claimant’s brother] was deceased.  In the form he also stated that he was building a new house and will be moving in December 1998.

The correspondence on file includes letter dated 29/10/99 stating that [the claimant’s] name does not appear on the Land Certificate and this means that he has not nor has he ever been the owner of No 26.  However [the claimant] contends that it was owned by his late brother whose name also did not appear on the Land Certificate.  On 24/02/00 he stated that he thought there were no deeds as [the claimant’s brother] had built the house on ground owned by [JC](Deceased) and that he thought that the ground was bought by [the claimant’s brother].

The note of [the claimant’s] call at the Public Office on 24/02/00 states that [the claimant] was asked to contact [his sister-in-law] in order to obtain copy of deeds lent said he would not because “[his sister-in-law] was not right in the head”.  [The claimant] said on 16/08/00 that he was taken up wrong but in the note it is included in italics and the note appears to state what was said by [the claimant].

The tribunal notes that [the claimant] contends that he meant that he owned No. 26 in the way that a Northern Ireland Housing Executive tenant would say that he owned a house.  However the tribunal does not accept this as the forms clearly state that he owns the house and he refers to a mortgage of the house which would not be the position in a tenancy.

The tribunal noted that the Land Purchase Annuity for Folio [*****], Registered Owner, [MC] had been redeemed presumably on behalf of [MC] but also noted that the lands in the Folio comprised over thirty acres and that No 26 only sat on a small portion of that land.

On the balance of probabilities on the basis of all the evidence before it and in particular the references by [the claimant] to ownership including the statement signed by [the claimant] on 25/02/86 stating that he owned the new house when he lived at No 26 [H… Road] and that he built this house in 1976 as a replacement for No 24 and the ownership by [the claimant’s brother] was not mentioned until the review in 1998 the tribunal decides that [the claimant] was the owner of both Nos 24 and 26 [H… Road].  As the property at No 24 was ready for occupation from June 1999 the capital value of the property did not fall be disregarded for the period January 1999 to September 1999 while the property was lying vacant and the tribunal accepts that the property was worth in excess of £8000 as this figure was not disputed.

From the time [the claimant] moved from No 26 into No 24 the property at No 26 was lying vacant and did not fall to be disregarded and the tribunal accepts that the property was worth in excess of £8000 as this figure was not disputed.”

6.	The Legally Qualified Member, who was the only member of the Tribunal, made the following record of proceedings: -

“Documents Considered:

Submission papers.
Copy letter dated 27/10/95 from Land Purchase Association Branch.
Copy letter dated 23/11/95 to Department of Agriculture for Northern Ireland redeeming Land Purchase Annuity.

Miss McKenna handed in original letter from [the claimant’s sister-in-law] – a sheet of white paper signed [by the claimant’s sister-in-law].  The letter was dated April 17 2000 prior to the previous hearing.  She said it was not possible to produce evidence as to who paid for the building – Miss McKenna said that she understood that [the claimant’s brother] paid for the building.

Miss McKenna handed in Land Purchase Annuity correspondence – said Folio registered in the name of [DC] – previous owner [JJC] and [DC] – said [JJC] died before 1997 and then [DC] was registered as owner.  She said Folio [*****] was held by Bank of Ireland – Land Purchase Annuity presumably paid off.   The chairman said the question appears to be one of possessory ownership.  Miss McKenna referred to mortgage – said Bank will not give mortgage until title is furnished to them – the Bank would lend money on the security of a house which he did not own.

The loan was with the Bank in the name of [B…] Construction.
The Presenting Officer said she had nothing further to add.
[The claimant] said his brother was in the house nearly a year – from October 1976 to 1977.  In 1977 he went back to America.
[The claimant] said he was working in Belfast in 1976-77.  He was a brickie.

He had gone to live in America in 1955 and lived in America from 1955 to 1976.

He said he intended to retire when he came in 1976 and his wife came with him.

The house had been built before then.  His brother bought the site from ….  He decided to go back to America in 1977 – worked as bricklayer.
He thinks his wife worked too.

[The claimant] moved in when his brother left the house – he was going back to New York.

He came back every year from 1977 until 1984.  He was aged 50 when he died.

[The claimant] said his brother intended to come back to live in the house when he finished work in America.

[The claimant] said he applied for a grant in 1984 for No 24 – problem getting grant.

[The claimant] said No 26 is now vacant – has been vacant since he moved into No 24.

[The claimant], Miss McKenna and Mrs Doyle said they had nothing further to add.”

7.	The claimant then, through his solicitor, sought leave from the legally qualified member to appeal to a Commissioner.  However leave was refused on 27 June 2002.  Leave was then sought directly from the Commissioner on the following grounds: -

“1.	The Tribunal’s decision contains a false proposition of law ex facie.  It is recorded in the ‘Reasons for Decision’ - “the tribunal decides that [the claimant] was the owner of both Nos 24 and 26 [H… Road]”.  No. 26 lies within a Folio registered in the names of [JJC] and [DC].  The latter is still alive.  [The claimant] has not made an application to be registered as owner of this property by adverse possession.  The only person who potentially could is the widow of the Appellant’s late brother, [NB] who lives in America.  A letter dated 17 April 2000 was produced to the tribunal.  The legally qualified member makes no reference to this letter and the Reason for Decision and therefore the Appellant contends that inadequate/no weight was given to the contents thereof.

2.	A failure to state adequate reasons.  It is not clear whether the Tribunal accepted or rejected the contents of the said letter of 17 April 2000 attached hereto.  If the latter the Tribunal have failed to give reasons for rejecting this evidence.

3.	The Tribunal failed to give proper consideration and due weight to the title deeds and documents produced and the Tribunal consequently erroneously misinterpreted same.”

8.	I granted leave to appeal on 24 October 2002.

9.	Initially it seems that there was an issue whether there were proper grounds for supersession of the original decision in this case.  However, at the hearing it was agreed that regulation 6 of the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999, which sets out the circumstances in which a decision may be superseded and permits supersession where there has been a relevant change of circumstances is applicable.  It was accepted in this case that the change of use of No.24 from an “outhouse” to a dwelling fit for habitation constituted a change of circumstances.

10.	Mr McGuckin submitted that the Tribunal had come to the wrong decision in relation to the issue of landownership.  I have reviewed the evidence accepted by the Tribunal and have come to the conclusion that, in light of that evidence, it was perfectly entitled to come to the decision to which it came.  Therefore, in spite of Mr McGuckin’s forceful arguments, I see no legal substance in his submission on this point.

11.	The Tribunal has also set out its reasons perfectly adequately on these relevant issues and there is no reason, in my view, for me to conclude that the Tribunal has not taken into account all the relevant evidence, including the letter of 17 April 2000 and also given due weight to the relevant title deeds and documents produced.  I also see no substance in the submission that the Tribunal has erroneously misinterpreted these deeds and documents.

12.	However, Mr Gough both in his oral submissions and in his skeleton argument to me dated 3 December 2002 has raised another point of substance.  In the circumstances I consider it appropriate to set out paragraphs 11 to 14 of the skeleton argument.  These paragraphs are in the following terms: -

“Effect of the Change (of circumstances) 

11.	The value of No 24 had been disregarded under regulation 6(2) of the then Supplementary Benefit (Resources) Regulations (NI) 1984, which allowed for the disregard of capital valued at £3,000 or less.  I am not aware of any valuation having been carried out, possibly as the value was considered well below the £3,000 threshold.  That disregard appears to have been carried through to the current Income Support scheme which replaced Supplementary Benefit from 1987.

12.	As pointed out in the submission to the Tribunal, section 130 of the Social Security Contributions and Benefits Act provides that no person shall be entitled to an Income Related Benefit if his capital exceeds the prescribed amount.  Regulation 45 of the Income Support (General) Regulations (NI) 1987, “the General Regulations”, provides that in this case the prescribed amount is £8,000.  Regulation 46(2) of the General Regulations provides for the disregard from the calculation of the claimant’s capital, any capital specified in schedule 10.

13.	The submission to the Tribunal refers only to two paragraphs in schedule 10 i.e. paragraphs 1 and 2 and stated that none of the other paragraphs applied.  Paragraphs 1 and 2 are as follows:

1.	The dwelling occupied as the home but, notwithstanding regulation 23 (calculation of income and capital of members of claimant’s family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.

2.	Any premises or land acquired for occupation by the claimant as his home which he intends to occupy within 26 weeks of the date of acquisition or such longer period as is reasonable in the circumstances to enable the claimant to obtain possession and commence occupation of the premises or land.

14.	In its reasons for the decision the Tribunal did not actually state which paragraphs in schedule 10 it was referring to, however as it in effect upheld the Decision Maker’s decision it is reasonable to assume it considered the above paragraphs and decided that No 24 could not be disregarded for the period January 1999 to October 1999 as No 24 was ready for occupation from January 1999 and was lying vacant until October 1999 and that paragraph 2 of schedule 10 did not apply from January 1999.  As the Tribunal decided that [The claimant] owned No 26 also, in deciding that No 26 did not fall to be disregarded from October 1999, the Tribunal in effect decided that none of the paragraphs in schedule 10 applied.”

13.	Mr Gough has submitted that the Tribunal has erred in law in upholding the decision maker’s decision relating to paragraph 2 of schedule 10 and in failing to consider more fully other paragraphs in schedule 10 and the effect on the claimant.  

14.	Regulation 2 of the Income Support (General) Regulations (Northern Ireland) 1987 defines “dwelling occupied as the home” as follows: -

“Dwelling occupied as the home” means the dwelling including any garage, garden and outbuildings normally occupied by the claimant as his home, together with –

(a)	any agricultural land adjoining that dwelling: and

(b)	any land not adjoining that dwelling which it is impracticable or unreasonable to sell separately; …”

15.	Mr Gough has submitted that No.26, including the garden was the “dwelling occupied as the home” up until the claimant moved in October 1999 into No. 24 when No. 24 became the “dwelling occupied as the home”.

16.	Mr Gough also submitted that paragraph 2 of schedule 10 cannot be the appropriate provision in this case as the claimant already owns No.24.  Therefore he had already acquired it and did not need to do anything further in order to possess it as it already was his.  Mr Gough has submitted that paragraph 2 is appropriate in circumstances where a person buys a plot of land to build a home and then proceeds so to do.

17.	Mr Gough has also referred me to paragraph 28 of schedule 10 which states as follows: -

“28.   Any premises which the claimant intends to occupy as his home to which essential repairs or alterations are required in order to render them fit for such occupation, for a period of 26 weeks from the date on which the claimant first takes steps to effect those repairs or alterations, or such longer period as is reasonable in the circumstances to enable those repairs or alterations to be carried out and the claimant to commence occupation of the premises.”

Mr Gough has submitted that paragraph 28 is the relevant legislation in the present case.

18.	It is correct that the evidence before the Tribunal was that No.24 had been condemned and was being used as an outbuilding until demolition.  The claimant applied for and was given a replacement grant for No.24.  According to Mr Gough’s submission, the value of No.24 would fall to be disregarded from the date the claimant first took steps to have the dwelling rebuilt and such a disregard would then be for a period of 26 weeks or such longer period as was reasonable to commence the occupation of No.24.  It is correct that No.24 was inspected by the Northern Ireland Housing Executive and was ready for occupation in January 1999 as far as it was concerned.  This was the basis that the decision maker and the Tribunal both decided that the value of No.24 could not be disregarded from January 1999.

19.	Mr Gough, however, has drawn my attention to an interesting point.  He has submitted that, whether considering paragraph 2 or paragraph 28 of schedule 10, a statement from the Northern Ireland Housing Executive is insufficient to determine when a disregard should cease.  He has pointed out that the Housing Executive would consider a house fit for occupation if the work was complete and satisfied all the Building Regulations for the release of a grant.  He has submitted that other issues should be considered for the purposes of the disregards set out in paragraphs 2 and 28 of schedule 10.  He has pointed out that no one appears to have asked the claimant why he did not move in until October 1999.  He has submitted that such information is necessary before the appropriate disregard could be applied.  He specifically has noted that the claimant has some health problems.  He has pointed out that in circumstances where the plaster in a house was not dry or for some other health reasons relating to him or members of his family, it could be deemed unsuitable for the family to move in depending on all the facts.  In those circumstances it might be appropriate to extend the disregard up to the date of occupation.  Mr Gough has further submitted that by failing to explore these issues the Tribunal has erred in law.

20.	I consider that Mr Gough is substantially correct.  In this very difficult area of law I consider that it is necessary for a Tribunal to take each issue stage by stage.  I conclude that paragraph 28, for the reasons set out by Mr Gough, is the appropriate disregard to be considered in this case.  I also consider that it is necessary for the Tribunal to rule on the reasonableness, or otherwise, of the delay in the claimant moving into his home and that the Housing Executive inspection cannot be conclusive on this point.  It is a matter for the Tribunal having heard of the facts and having asked all the relevant questions of the claimant. 

21.	Mr McGuckin specifically accepted Mr Gough’s submissions on these points, without prejudice to his other arguments.  

22.	Mr Gough has also pointed out that there was no dispute raised regarding the fact that where a claimant has more than the prescribed amount of capital, he is not entitled to Income Support.  In this case the prescribed amount is £8,000 in accordance with regulation 45 of the Income Support (General) Regulations (Northern Ireland) 1987.  However, regulation 49 provides that capital should be calculated at its current market value less 10%, where there would be expenses attributable to sale and the amount of any encumbrance secured on it.  The submission to the Tribunal does deal with these aspects and states that there is no evidence of any mortgage or encumbrance on either property and that the value of each property would be worth well in excess of £8,000, even taking into account 10% expenses.

23.	Mr Gough has expressed a certain unhappiness that the Tribunal appears to have accepted this line of argument set out in the written submission to the Tribunal although the Tribunal has made no reference to any encumbrances.  He has pointed out that there is evidence of loans in the past and it is not known whether the loan or loans have been paid off.  Although the claimant was not allowed housing costs on the loan for No.26, as he failed to show that it was for the purposes of acquiring his home (or perhaps carrying out essential repairs), if there is a loan outstanding secured on No.26, then the amount outstanding would fall to be deducted from the value of No.26.  Mr Gough has also pointed out that it is the responsibility of the claimant to provide such evidence.

24.	Mr Gough has submitted that the Tribunal has erred in law by not dealing specifically with encumbrances even though there is some evidence of loans.  There may be substance in this submission but, in light of my decision on other aspects of this case, it is somewhat academic what conclusion I come to.  Suffice to say I am not satisfied that the Tribunal erred in law by failing to deal specifically with encumbrances but a Tribunal re-hearing this case would be well advised to deal with this matter when reassessing the appropriate decision in this case.

25.	While there is no doubt that supersession in itself is not an issue in the present appeal, Mr Gough has pointed out that there may be an error relating to the effective date of the change of circumstances.  He has submitted that in this case there are a number of possible relevant dates.  The first possible date is the date that No.24 could no longer be disregarded.  The second possible date would be the date that the claimant moved into No.24 when the value of No.26 could no longer be disregarded as it was no longer the “dwelling occupied as the home”.  These dates are not known exactly as the references made to them are to January and October 1999 without specific dates.

26.	The relevant legislation is set out in paragraphs 2 and 3 of schedule 2A of the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999, which are in the following terms: -

“2.	In the cases set out in paragraph 3, the superseding decision shall take effect from the day on which the relevant change of circumstances occurs or is expected to occur.

3.	The cases referred to in paragraph 2 are where –

(a)	income support is paid in arrears and entitlement ends, or is expected to end, for a reason other than that the claimant no longer satisfies the provisions of section 123(1)(b) of the Contributions and Benefits Act: 

…”

27.	As the legislation refers to “day” it seems to me that the Tribunal must do its best to identify the appropriate date or dates in order to determine the effective dates of change.  In not so doing it seems to me that Mr Gough’s submission is correct that the Tribunal has erred in law.  It is also correct to say that the Tribunal got no assistance in the Departmental submission in relation to this point.

28.	For the reason stated I conclude that the Tribunal has erred in law.  Accordingly I allow this appeal.  In the circumstances I set the Tribunal’s decision aside and refer the case back for re-determination by a freshly constituted Tribunal, which should have regard to my views expressed in this decision.  In particular the Tribunal should have regard to paragraph 28 of schedule 10 of the Income Support (General) Regulations (Northern Ireland) 1987.  It also should consider the issue of the reasonableness, or otherwise, of the claimant not moving into No.24.  It should also specifically deal with the effective date of the supersession.  Moreover it should also deal with any relevant issue relating to encumbrances.  

29.	At the re-hearing the Tribunal may hear additional evidence in relation to the ownership of the relevant land.  There has been conflicting evidence in relation to this and Mr Gough has reminded me in his submissions that the claimant on 6 January 1995 said that he had left the land on which No.26 was situated to his son, while on 22 April 1998, when completing a review form, he stated that he owned 26 acres of land.  This potential conflict of evidence does not appear to have been clarified.  It may or may not become an issue before the new Tribunal.

30.	While I have specifically decided that the Tribunal, on the evidence before it, was entitled to come to the conclusion to which it came in relation to the ownership to the property in issue, the claimant’s solicitor has indicated that this evidence is rebuttable.  I do not know whether this is correct but the issue will remain one for the Tribunal re-hearing the case and anything I have stated here should not be taken as an indication one way or the other.

J A H Martin QC
Chief Commissioner

13 March 2003