DJ-v-Department for Social Development (IB)[2010] NICom 100
Decision No:  C17/10-11(IB)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCAPACITY BENEFIT

Application by the claimant for leave to appeal
and appeal to a Social Security Commissioner
on a question of law from a Tribunal’s decision
dated 10 February 2009

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	I grant leave to appeal and proceed to determine all questions arising thereon as though they arose on appeal.

2.	The decision of the appeal tribunal dated 10 February 2009 is in error of law.  The error of law identified will be explained in more detail below.

3.	Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

4.	For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.  This is because there is evidence relevant to the issues arising in the appeal, to which I have not had access, and there may be further findings of fact which require to be made.  Further I do not consider it expedient to make such findings, at this stage of the proceedings.  Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination.

5.	In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the appeal tribunal takes into account the guidance set out below.

6.	It is imperative that the appellant notes that while the decision of the appeal tribunal has been set aside, the issue of whether there has been an overpayment of incapacity benefit (IB), and for which periods, and whether that overpayment is recoverable from him, remains to be determined by another appeal tribunal.  In accordance with the guidance set out below, the newly constituted appeal tribunal will be undertaking its own determination of the legal and factual issues which arise in the appeal.

	Background

7.	On 26 July 2007 a decision-maker of the Department decided that an overpayment of IB, amounting to £4470.40, for certain periods between 17 March 2004 and 25 May 2006 had been made which was recoverable from the applicant.

8.	Earlier, on 16 March 2007, another decision-maker of the Department had decided that the appellant was not entitled to IB, for various periods.  An appeal against the decision dated 16 March 2007 was received in the Department on 23 April 2007.  On 21 July 2008 an appeal tribunal heard and disallowed the appellant’s appeal against the decision dated 16 March 2007.  No further action has been taken by the appellant in connection with the decision of the appeal tribunal dated 21 July 2008.

9.	An appeal against the decision dated 26 July 2007 was received in the Department on 5 September 2007.

10.	On 20 February 2008, the Department issued a revised decision in which it was decided that the amount of the overpayment should be £4474.17.

11.	An oral hearing of the appeal took place on 21 July 2008.  The appellant was present as was a Departmental presenting officer.  The appeal was adjourned to permit the Department to provide ‘the relevant instructions given to the appellant to report any change in circumstances and to provide same in additional addendum to submission.’

12.	The substantive appeal tribunal hearing took place on 10 February 2009.  Once again, the appellant was present and was represented.  A Departmental presenting officer was also present.

13.	The appeal tribunal disallowed the appeal, and confirmed the decision dated 20 February 2008.

14.	On 17 June 2009 an application for leave to appeal to the Social Security Commissioner was received in the Appeals Service.  On 2 July 2009, the application for leave to appeal was refused by the legally qualified panel member (LQPM).

	Proceedings before the Social Security Commissioner

15.	On 6 August 2009, a further application for leave to appeal to the Social Security Commissioner was received in the Office of the Social Security Commissioners and Child Support Commissioners.

16.	On 14 October 2009 observations were sought from Decision Making Services (DMS) and these were received on 12 November 2009.  After a very careful analysis of the appeal tribunal’s decision, DMS opposed the application.

17.	Observations were shared with the applicant, and his representative, on 24 November 2009.

18.	On 15 December 2009 a further submission in reply to the observations from DMS was received from the applicant’s representative.

19.	The further submission was shared with DMS on 17 December 2009.

20.	On 18 January 2010 I directed an oral hearing of the application.  Following an earlier postponement of the hearing, the substantive oral hearing took place on 2 June 2010.  At the oral hearing, the appellant was not present but was represented by Mrs Carty from the Law Centre (Northern Ireland), and the Department was represented by Mr Donnan of the DMS section.  Gratitude is extended to both representatives for their detailed and constructive observations, comments and suggestions.

	Errors of law

21.	A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.

22.	In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals.  As set out at paragraph 30 of R(I) 2/06 these are:

“(i)	making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);
(ii)	failing to give reasons or any adequate reasons for findings on material matters;
(iii)	failing to take into account and/or resolve conflicts of fact or opinion on material matters;
(iv)	giving weight to immaterial matters;
(v)	making a material misdirection of law on any material matter;
(vi)	committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

	Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’).  Errors of law of which it can be said that they would have made no difference to the outcome do not matter.”

	Was the decision of the appeal tribunal in the instant case in error of law?

	The submissions of the parties

22.	In the application for leave to appeal to the Social Security Commissioner, the appellant’s representative has submitted that the decision of the appeal tribunal is in error of law on the basis that:

(i)	the appeal tribunal erred in its interpretation and application of section 69 (1) of the Social Security Administration (Northern Ireland) Act 1992 by failing to give adequate consideration to regulation 32 of the Social Security (Claims and Payments) Regulations (NI) 1987 in accordance with the findings of the Court of Appeal for England and Wales in R(IS) 9/06;

(ii)	the appeal tribunal erred in failing to find facts on the evidence before it as to which information issued by the Department imposed a clear and unambiguous duty to notify the particular change of circumstances in this case;

(iii)	the appeal tribunal erred in not giving careful consideration to the wording of the PW (inf) form.  In support of this submission, the appellant’s representative cited the reported decision of the Court of Appeal for England & Wales in R (IB) 4/07 and submitted that the wording of the PW (inf) form was “far from unambiguous”;

(iv)	finally, it was submitted the tribunal erred in not addressing the days the appellant actually worked, as there was evidence that he did not always work on the dates investigated by Benefit Investigation Services.

23.	As was noted above, in a careful and detailed analysis of the appeal tribunal’s decision, and the grounds submitted by the appellant, DMS, represented by Mr Donnan, opposed the application for leave to appeal.

	Analysis – was the appellant working during the relevant period?

24.	As was noted above, on 26 July 2007, a decision-maker of the Department decided that an overpayment of IB, amounting to £4470.40, for certain periods between 17 March 2004 and 25 May 2006 had been made which was recoverable from the applicant.  On 20 February 2008, the Department issued a revised decision in which it was decided that the amount of the overpayment should be £4474.17.

25.	A copy of the decision dated 26 July 2007, as revised on 20 February 2008, was attached to the appeal submission prepared for the appeal tribunal hearing as Tab No 5.  The stated basis for the overpayment was that ‘… on 17 March 2004, or as soon as practicable after, (the claimant) failed to disclose the material fact that he was in remunerative employment.’

26.	In the present case, and as was noted above, on 16 March 2007, a decision-maker of the Department had decided that the appellant was not entitled to IB, for various periods.  An appeal against the decision dated 16 March 2007 was received in the Department on 23 April 2007.  On 21 July 2008 an appeal tribunal heard and disallowed the appellant’s appeal against the decision dated 16 March 2007.  No further action has been taken by the appellant in connection with the decision of the appeal tribunal dated 21 July 2008.  Additionally, the TAS administrative file relating to this appeal is no longer available.

27.	The legal basis for the disallowance of entitlement to IB for the stated periods was that the appellant was working during those periods.  It would appear that the evidential basis for the disallowance was correspondence from two Borough Councils of dates on which the appellant had operated a stall at markets within the jurisdiction of those Borough Councils.  Additionally, the Department supplied evidence relating to observations carried out on the appellant and a transcript of an interview under caution with the appellant.

28.	The legal basis for the recovery of overpaid IB was the failure by the appellant to disclose the material fact that he was in remunerative work during the relevant periods.

29.	Section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992 provides that:

	(5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above or under regulations under subsection (4) above unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under Article 10 or superseded under Article 11 of the Social Security (Northern Ireland) Order 1998

30.	In summary, this paragraph says that there can be no recoverable overpayment of social security benefit, unless the original decision which gave rise to the award of benefit, now deemed to have been overpaid, is revised or superseded.  Without an alteration or change in the decision giving rise to the entitlement to the particular benefit, there can be no recovery of it.

31.	The importance of the proper identification of a section 69(5A) decision was emphasised by Deputy Commissioner Powell in C10/07-08(IS).  At paragraph 4 he stated:

‘ … the relevant statutory provision, which is section 69(5A) of the Social Security Administration (NI) Act 1992, expressly provides that a decision which seeks to recover an amount of overpaid benefit cannot be made unless the determination in pursuance of which the amount was overpaid has been revised or superseded by a separate decision.  In other words, the decision which awarded benefit must be abrogated or corrected in one of the ways permitted by the legislation before a decision can be made as to how much has been overpaid and what is now recoverable.  Put like that, the sequence of decisions is logical.  The two decisions can be contained in a single document provided that the sequence is apparent.  Section 69(5A) is an important safeguard.  Tribunals, rightly, are alert to see that it has been complied with.  Nothing I am going to say casts doubt on their vigilance.  A tribunal must allow an appeal against a decision seeking to recover overpaid benefit once it becomes clear that the decision which awarded benefit has not been revised or superseded in the appropriate manner.  Further, a tribunal should also allow an appeal where not only is there no copy of the revision or supersession decision before it but such evidence as is relied upon leaves the tribunal uncertain as to whether the necessary decision was taken.’

32.	In essence, the appeal tribunal will have to identify two decisions.  The first is a decision which alters previous decision(s) awarding entitlement to benefit – that can be described as the entitlement or section 69(5A) decision.  The second is a decision that overpaid benefit is recoverable – that can be described as the recovery or section 69(1) decision.  At paragraph 10 of C10/07-08(IS), Commissioner Powell stated:

‘It is now settled law, and section 69(5A) so provides, that the recovery of an overpayment of benefit requires two distinct decisions which are often called the “entitlement decision”, which changes the entitlement to benefit for a past period through the process of revision or supersession, and the “recoverability decision”.  The latter being based on the former.  I use the word “distinct” deliberately.  Since the recoverability decision is based on the entitlement decision it must be proceeded by it.  Subject to that, the two decisions can be given on the same date or even in the same document – provided that they are distinct and that it is clear that the entitlement decision comes first.’

33.	Deputy Commissioner Powell also emphasised the importance of ensuring that there has been a proper notification of a decision, including a section 69(5A) decision, to a claimant, and set out the consequences where no such proper notification had been made.

34.	In the statement of reasons for the appeal tribunal’s decision, the first paragraph makes reference to the decision of the Department dated 16 March 2007, the legal effect of that decision, and the upholding of the decision on appeal by the appeal tribunal on 21 July 2008.  It is arguable, therefore, that the appeal tribunal was alert to the requirement to identify a section 69(5A) or entitlement decision.

35.	The appellant’s representative has argued, however, that there was a duty on the appeal tribunal to make findings in fact as to whether the appellant was actually working during all of the periods for which entitlement was denied, and recovery was sought.  The appellant’s representative has submitted that during the interview under caution, the appellant stated that there were certain days on which he attended the relevant market but was unable to work because he felt ill.  Instead he returned home.  The appellant stated that he would have paid his market fee for those days – hence the confirmation by the Borough Council – but would not have actually worked on those days.

36.	In response to this submission, Mr Donnan submits that the issue of whether the appellant was actually working during the relevant periods was more relevant to the entitlement decision dated 16 March 2007, and the issue of adequate findings in fact on this issue was more pertinent for the appeal tribunal hearing on 21 July 2008.  Mr Donnan conceded, quite rightly in my view, on the basis of the principles in CIS/1330/2002, that the appeal tribunal in the instant case was not bound by the findings in fact of the appeal tribunal on 21 July 2008 which had clearly accepted that the appellant had been working on all of the dates during the relevant periods, and was not entitled to IB for those periods.  Finally, Mr Donnan submitted that the appeal tribunal was not obliged to consider the issue of whether the appellant had actually worked on all of the days during the relevant period as that issue was not raised expressly or implicitly by the appeal.

37.	I would note at this stage that the decision under appeal to the appeal tribunal in the instant case was that an overpayment of IB for certain periods between 17 March 2004 and 25 May 2006 had been made which was recoverable from the applicant.  Those periods were:

17/03/04 to 07/04/04
28/04/04 to 12/05/04
26/05/04 to 26/05/04
09/06/04 to 09/06/04
30/06/04 to 11/08/04
25/08/04 to 25/08/04
08/09/04 to 13/10/04
27/10/04 to 27/10/04
03/11/04 to 03/11/04
24/11/04 to 08/12/04
22/12/04 to 22/12/04
05/01/05 to 05/01/05
26/01/05 to 26/01/05
16/02/05 to 09/03/05
23/03/05 to 23/03/05
30/03/05 to 30/03/05
20/04/05 to 18/05/05
08/06/05 to 22/06/05
06/07/05 to 06/07/05
27/07/05 to 14/09/05
28/09/05 to 19/10/05
02/11/05 to 02/11/05
09/11/05 to 09/11/05
08/01/06 to 08/01/06 
15/01/06 to 25/05/06

38.	The decision notice for the appeal tribunal’s decision records that:

‘An overpayment of Incapacity Benefit has been made from 17/3/04 to 25/5/06 (both dates included) amounting to £4,474.17.  On 17/3/04, or as soon as practicable after, the appellant failed to disclose the material fact that he was in remunerative employment.  As a consequence, Incapacity Benefit, amounting to £4,474.17 was paid from 17/3/04 to 25/5/06 (both dates included) which would not have been paid but for the failure to disclose.  Accordingly that amount is recoverable from the appellant.’

	The emphasis in the citation is mine.

39.	The content of the decision notice reflects the revision decision dated 20 February 2008, as set out at Tab No 6 of the appeal submission.  In the statement of reasons for the appeal tribunal’s decision the content of the decision is replicated as in the decision notice.

40.	It is arguable that the decision of the Department, and that of the appeal tribunal, should have specified the disallowance and recovery for the specific dates set out above.  I do not know, for example, whether there were other dates within the period from 17 March 2004 to 25 May 2006 when it was accepted that the appellant was not working and was, accordingly, entitled to IB.  The failure by the appeal tribunal to specify the periods, would not, however, render its decision as being in error of law.

41.	Was the issue of the dates on which the appellant actually worked an issue which was raised by appeal?  With respect to the submission made by Mr Donnan on this question, I find that it was.  The evidential basis for the recovery decision was the same as that for the entitlement decision.  The submission was that the appellant was working during certain periods and was, as a result, not entitled to IB during those periods and was, as a result, overpaid IB for those periods, and failed to disclose the fact that he was working, and that, accordingly, the Department was entitled to recover the overpaid IB.  The issue of ‘working’ is an essential link in that chain.

42.	Was the appeal tribunal obliged to make findings in fact as to the precise dates on which the appellant was working during the relevant periods?  I find that it was so obliged, although I do so with some reluctance.  It had, in my view, to be established as a fact that the appellant was actually working on all of the relevant days during the specified periods.  If he was not working on those days, then he remained entitled to the benefit and was not overpaid the benefit.  In the interview under caution, he queried that he had actually been working on some of the days specified by the Department.  In those circumstances, the appeal tribunal was obliged to explore the issue further.

43.	My reluctance arises from the fact that the appellant, who was represented at the appeal tribunal did not raise this issue in his letter of appeal or at the oral hearing of the appeal itself.

44.	I have considered the question of whether the appeal tribunal may have felt itself to be bound by the findings in fact made by the appeal tribunal which heard and determined the appeal against the entitlement decision on 21 July 2008.  I am of the view that there is no evidence that it did feel itself to be bound.  Nonetheless, I would remind appeal tribunals of the principles set out in CIS/1330/2002, which summarises the position where there are separate appeals, involving the same appellant, against entitlement and recovery decisions.

45.	I have noted, in the instant case, that a direction had been given at one stage in the proceedings that the appellant’s appeals against the entitlement and recovery decision should be heard together.  That direction was not complied with.  If it had been complied with, then many of the issues now arising on appeal to the Social Security Commissioner might have been resolved.

46.	With a lack of enthusiasm, therefore, I set aside the decision of the appeal tribunal as being in error of law on the basis of a failure to make findings in fact on an issue raised by the appeal.

The other grounds for appealing

47.	The other grounds on which the appellant’s representative has submitted that the decision of the appeal tribunal is in error of law all relate to the basis on which the appeal tribunal addressed the evidential source of the legal duty to disclose a change of circumstances likely to affect entitlement to benefit.  Having found that the decision of the appeal tribunal was in error of law on another basis, I do not have to explore these issues.

48.	Not to address certain of the issues arising would be to do a disservice to Mr Donnan from DMS who has undertaken an extensive and forensic analysis of the evidence which was and was not before the appeal tribunal, and the reliability of that evidence in light of the authorities on failure to disclose.  Additionally, I wish to take the opportunity to remind decision-makers and appeal tribunals of the current state of the law in relation to aspects of failure to disclose.  Finally, there is an opportunity to give guidance to the differently constituted appeal tribunal on how it might address the evidential and fact-finding issues on the re-hearing of this appeal.

	Current appellate authority on the legislative source of the duty to disclose

49.	There is in place a legislative mechanism for the recovery of all social security benefits which have been overpaid.  Section 69(1) of the Social Security Administration (Northern Ireland) Act 1992, as amended provides that:

“(1)	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 the section applies;

(b) any sum recoverable by or on behalf of the Department in connection with any such payment has not been recovered,

the Department shall be entitled to recover the amount of any payment which the Department would not have made or any sum which the Department would have received but for the misrepresentation or failure to disclose.”

50.	In B v Secretary of State for Work & Pensions (reported as R(IS)9/06), the Court of Appeal for England & Wales upheld the decision of the Tribunal of Commissioners in Great Britain in R(IS)9/06.  In that latter decision, the Tribunal of Commissioners had considered, in depth, the nature of the legal test in respect of failure to disclose, by analysing the relationship between section 71 of the Social Security Administration Act 1992 (the Great Britain equivalent to section 69 of the Social Security Administration (Northern Ireland) Act 1992) and regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (which has an equivalence in regulation 32 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987).

51.	In summary, the Tribunal of Commissioners found that:

“1.	Section 71 does not purport to impose a duty to disclose, but rather presupposes such a duty, the actual duty in this case being in regulation 32 of the Social Security (Claims and Payments) Regulations 1987, which provides for (a) a duty to furnish information and evidence pursuant to a request from the Secretary of State, and (b) a duty to notify the Secretary of State of any change of circumstance which the claimant might reasonably be expected to know might affect the right to benefit.

2.	In relation to the duty to furnish information and evidence pursuant to a request, whilst there is no duty to disclose that which one does not know, if a claimant was aware of a matter which he was required to disclose, there was a breach of that duty even if, because of mental incapacity, he was unaware of the materiality or relevance of the matter to his entitlement to benefit, and did not understand an unambiguous request for information, and a failure to respond to such a request triggered an entitlement to recovery under section 71 of any resulting overpayment.

3.	Insofar as R(SB) 21/82 imported words from regulation 32 into the construction of section 71 in stating that the non-disclosure must have occurred in circumstances in which, at lowest, disclosure by the person in question was reasonably to be expected, that decision and subsequent decisions that have relied on it were wrongly decided.

4.	The form INF4 supplied to claimants contained an unambiguous request by the Secretary of State to be informed if a claimant’s children went into care and by not disclosing the fact to the Department, the claimant was in breach of her obligation under regulation 32, so that the Secretary of State was entitled under section 71 to recover the overpayment resulting.”

52.	In C6/08-09(IB), I said the following, at paragraphs 40 to 42:

‘40.	Firstly, as was noted above, the practical outcome of the cases referred to above is that an appeal tribunal, when determining whether an overpayment of a social security benefit is recoverable on the basis of a failure to disclose, will have to consider where the requirement to provide the relevant information came from.  This will necessitate identifying whether the case comes within the first or second duty in regulation 32.

41.	In the case of the first duty, it will also require the provision of proof by the Department that the requirement to provide information was made to the claimant.  That proof may be in the form of receipt of an information leaflet such as Form INF4 or instructions in an order book.  It will not be enough, however, for the information leaflet or order book to be produced.  The wording of the relevant instructions will have to be looked at in close detail to ensure that the instructions to disclose were clear and unambiguous.

42.	In the case of the second duty, the requirement is that the change of circumstances is which the claimant might reasonably be expected to know would affect his entitlement to benefit.’

53.	My comments reflect those of Upper Tribunal Judge Lane in DG v Secretary of State for Work & Pensions ([2009] UKUT 120 (AAC)).  At paragraphs 13 to 18 of her decision, she summarised the most recent case-law on the source of the duty to disclose:

‘13.	Section 71(1) of the Social Security Administration Act 1992 clearly entitles the Secretary of State to recover an overpayment which arises as a consequence of a failure to disclose a material fact, however innocent.  The appellant’s return to work was undoubtedly a material fact.

14.	In R(IS)9/06 a Tribunal of Commissioners reconfirmed the established principle that the failure to disclose a material fact under section 71(1) presupposed the existence of a duty to disclose.  However, it rejected the proposition laid down in previous cases, including R(SB)21/82 and R(SB)54/83, that the duty derived from section 71(1) and its breach established by showing that the claimant failed to disclose a material fact where such disclosure was reasonably to be expected.

15.	The Tribunal of Commissioners held instead that the source of the duty was regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987, as then formulated, which imposed various obligations to furnish information and notify changes of circumstances.  Regulation 32(1) was amended into its current form from 5 May 2003 by the Social Security and Child Support (Miscellaneous Amendments) Regulations 2003 (SI 2003/1050).  Though the regulation is now laid out in three paragraphs, 32(1), (1A) and (1B), the duties remain essentially similar to those in the previous formulation.  Unsurprisingly, the Tribunal of Commissioners confirmed that their reasoning was equally applicable to the amended form of the regulation.  The reasoning of the Tribunal of Commissioners in R(IS)9/06 was upheld in full by the Court of Appeal in B v Secretary of State for Work and Pensions [2005] EWCA Civ 929.  Paragraphs (‘§’) 23, 27, 29 and 42; and also §11 of B v Secretary of State) refer.

16.	It is clear from R(IS)9/06 (§54) and B v Secretary of State for Work and Pensions (§ 36 and 40) that section 71(1) does not include a test that a claimant must reasonably be expected to disclose a material fact (‘the reasonable expectation’ test) before the Secretary of State can recover an overpayment.  The Court of Appeal went so far as to refer to the importation of that test into section 71(1) as incoherent.  R(SB) 21/82 and subsequent cases purporting to impose this test, including R(SB)54/83 upon which decision makers frequently rely, were considered to be wrong.

17.	Although the Tribunal of Commissioners and Court of Appeal in R(IS)9/06 and B v Secretary of State for Work and Pensions were dealing specifically with the scope of what is now regulation 32(1)/(1A), their reasoning is equally applicable to the relationship between section 71(1) and regulation 32(1B).  The test of reasonable expectation is as legally incoherent for regulation 32(1B) as it is for regulations 32(1) and (1A).  Indeed, the implication of this test into section 71(1) overpayments by reference to a breach of the duty in regulation 32(1B) would, in effect, impose a double hurdle on the Secretary of State, who would first have to establish what the claimant might reasonably be expected to know might affect his benefit, and then whether he could reasonably be expected to make a disclosure.  I note that the learned authors of Sweet and Maxwell’s Volume III, Administration, Adjudication and the European Dimension of Social Security Legislation 2008/09 still refer to the reasonable expectation test in their commentary on regulation 32(1B) (§2.187), but they may have overlooked the need consequent on the change in relation to section 71(1) when amending the commentary for regulation 32 of the Claims and Payments Regulations.

18.	I therefore conclude that the gateway duties to recovery are as defined in regulation 32, and it is to those duties that the tribunal must look when deciding if a case for recovery is made out.’

	Current appellate authority on clarity of instructions

54.	There have been further discussions about the requirement for the instructions to be clear and ambiguous.  23.  In Hinchy v Secretary of State for Work & Pensions ([2005] UKHL 16), Baroness Hale, in discussing the regulation 32 duty to provide information, stated, at paragraph 55:

‘I say this because this regulation has to be interpreted and applied in its factual context.  Those administering the system on behalf of the Secretary of State have to understand all its ramifications and interactions.  Claimants cannot be expected to do so.  They cannot be expected to guess all the information which may be relevant to their claims.  They do not know the conditions of entitlement or how their right to one benefit may affect their right to another.  It is incumbent upon the Secretary of State to make it clear what information he requires.  This has to be made particularly clear where any reasonable claimant might not think that it was relevant at all.  It should also be made particularly clear where it might not occur to any reasonable claimant in this day and age that the relevant office did not already have the information in question.  In this context, there is a difference between matters which only the claimant can know and matters which someone in the benefits system knows or ought to know.  The claimant cannot be expected to guess who needs to know the information required.  It is incumbent upon the Secretary of State to make it plain to whom the information is to be given or the change in circumstances notified.’

55.	In R(A)2/06, Commissioner Rowland stated, at paragraph 17:

‘17.	This once again brings to the fore a point that has frequently been made by Commissioners over the last quarter of a century:  in cases where the Secretary of State seeks to recover an overpayment on the ground that there has been a failure to disclose a material fact, it is essential for the Secretary of State to produce evidence showing why the claimant was under a duty to disclose that fact.  That usually involves showing why the claimant should have realised that the fact was relevant.  Evidence of instructions to report the fact is likely to be the best evidence.  It is particularly important that there should be evidence of a duty to report the relevant change in circumstances in cases like the present where the fact in issue may appear obviously relevant to those involved in the administration of benefit but where its possible relevance might reasonably have escaped a member of the public in the absence of any instructions or other information provided to him or her by the Department.  Before a person can be shown to have failed to disclose a material fact, it must be shown that, under regulation 32 (or some other statutory provision or legal principle), there was a duty on that person to make the disclosure.’

56.	In CDLA/4384/2003, Commissioner Rowland noted that the instructions in B were clear and unambiguous.  At paragraphs 8 and 9 of his decision, he stated:

‘8.	 … The more difficult cases, which the Tribunal of Commissioners did not have to consider, are those where instructions to report facts are ambiguous or expressed in such general terms as to require some interpretation by a claimant or where written instructions have been qualified by an officer acting on behalf of the Secretary of State or, indeed, where there have been no relevant instructions at all but the claimant might have had reason to suspect that he was not entitled to all the benefit he was receiving.

9.	In any of those circumstances, it seems to me that the question whether there has been a “failure” by the claimant to “disclose” (for the purposes of section 71(1) of the 1992 Act) or to “notify” (for the purposes of regulation 7(2)(c)(ii) of the 1999 Regulations) a fact to the Secretary of State must inevitably be determined by considering whether the Secretary of State could reasonably have expected the claimant to disclose or notify that fact.  Regulation 32(1) of the 1987 Regulations does not provide a simple answer where it is necessary to consider whether the Secretary of State has actually required the claimant to report particular “facts affecting the right to benefit”.  It may be necessary to decide how a reasonable claimant could have construed the instruction and it is, furthermore, expressly provided that a general requirement to keep the Secretary of State informed of changes of circumstances applies only in respect of “any change of circumstances which [the claimant] might reasonably be expected to know might affect the right to benefit”.  In the present case, there is no evidence in the papers before me as to what, if any, instructions were given to the claimant.  Not only is such information required when considering whether an overpayment is recoverable under section 71(1) of the 1992 Act, it is also required for the purpose of determining whether a supersession decision is to be made retrospective under regulation 7(2)(c)(ii) of the 1999 Regulations.’

	The use of template submissions in overpayment appeals

57.	The general appeal submission is drafted in a standard template format which the Department has been utilising for overpayment appeals for some time.  In my view, that format requires revising to take into account the significant developments which have taken place, at Social Security Commissioner and appellate court level, in connection with the scope of the ‘failure to disclose’ test, as set out in section 69 of the Social Security Administration (Northern Ireland) Act 1992, and the equivalent section 71 of the Social Security Administration Act 1992.  Some of the relevant case-law has been set out above.  Other important cases include Hinchy v Secretary of State for Work & Pensions ([2005] UKHL 16) and Hooper v Secretary of State for Work & Pensions ([2007] EWCA Civ 495).  All of those decisions set out important principles with respect to ‘failure to disclose’, identify relevant issues associated with the legislative test, and impose requirements on adjudicating authorities including decision-makers of the Department and appeal tribunals.  It is essential that appeal submissions reflect the currency of the legal developments with respect to particular issues arising in the appeal.  In this respect, the current standard template utilised for overpayment appeals requires to be amended.

58.	At paragraph 12 of the submission, in the instant case, the following very general comments are made:

‘I submit that (the claimant) worked and subsequently the Department decided that the work undertaken by him did not fall into an exempt category, and as a result an overpayment has occurred.  The Social Security Agency pays incapacity benefit to those persons who are entitled to it and it is the Agency that seeks to recover any benefit that is overpaid.  Incapacity benefit was paid to (the claimant) and the recovery is sought from him.  I submit that it is reasonable to expect (the claimant) to advise the Department of any work that he was undertaking …’

59.	Such a general submission does not, in my view, amount to a rigorous legal and evidential assessment of the source of the duty to disclose.

	The clarity of forms ‘PW (Cov) 02/02’ and ‘PW (inf) 02/02’

60.	In the statement of reasons for the appeal tribunal’s decision, the appeal tribunal has concluded that the instructions given to the appellant in:

(a)	the letters issued to all recipients of IB, from 4 March 2002, to publicise the introduction of new permitted work rules; and

(b)	various forms and questionnaires throughout the period of his claim

amounted to clear and unambiguous instructions of a requirement to disclose any change in his circumstances which might affect his entitlement to benefit.  His failure to adhere to those instructions, by reporting that he was working, had resulted in the overpayment of social security benefits which were recoverable from him.

61.	In the written observations on the application for leave to appeal, Mr Donnan has indicated that the ‘mail-shot’ letters which were issued to all recipients of IB in 2002 were forms ‘PW (Cov) 02/02’ and ‘PW (inf) 02/02’.  In relation to the clarity of the instructions in these mail-shot forms, Mr Donnan submitted that:

‘18.	The Department accepts that the PW mail-shots issued to (the claimant) in 2002 are ambiguous – these forms were not worded in strong enough language that would have put (the claimant) on sufficient notice that if he started work then this was a change he must report to the Incapacity Benefit office.

19.	These mail-shots were closely examined by the Court of Appeal in Hooper v Secretary of State (reported as R (IB) 4/07) and I agree with Mrs Carty’s quotations from paragraphs 50, 56 and 57 of that decision in so far as the Court of Appeal was not satisfied that the mail-shots contained language that was unambiguous.

20.	The Court also made reference to a previously reported decision R (IB) 4/05 where the Commissioner in that case expressed dissatisfaction with the mail-shots issued in 2002.  I quote from paragraph 14 of that decision:

“In fact the leaflet, which started by explaining that from 8 April 2002 there were new more flexible rules for people who wanted to try paid work while getting incapacity benefit, and that it would now be much easier to do this without it affecting benefit entitlement, made no mention of any notification condition when setting out the requirements for the "permitted work" claimants were told they were now allowed to do.  In the section of the leaflet describing what qualified as "permitted work" it referred to the various conditions as to hours of work, earnings and so forth, but at no point there or elsewhere in the leaflet did it set out anything that reflected the actual condition as to notification or the 42-day time limit for it under regulation 17.  Instead all the leaflet contained was a passage in a separate section, after the one that described what work was "permitted" and after the express assurance that "Permitted work will not affect your incapacity benefit", saying:

"You will no longer need to get a doctor to agree that the work will help your medical condition, but you should tell the office that deals with your benefit before you start work.  You should fill in an application form before you do any permitted work." ”

62.	It is important to note that Commissioner Howell, in R(IB) 4/05 agreed with the decision of Commissioner Mesher in CIB/3925/2003.  It is also important to note that the Chief Commissioner, in C19/03-04(IB) albeit in an obiter comment, also found that the relevant forms were misleading.

63.	I agree with Mr Donnan’s concession with respect to the ambiguity of the wording of the ‘mail-shot’ leaflets, issued to IB recipients in 2002.  There is clear authority, at the level of the Court of Appeal in England and Wales that the wording of the instructions in these leaflets is not clear and unambiguous and does not meet the regulation 32(1) requirements.

	The other evidence before the appeal tribunal

64.	It is clear that the appeal tribunal was alert to the requirement for the Department to demonstrate that the appellant had been given clear and unambiguous instructions to disclose.  At the first oral hearing of the appeal, held on 21 July 2008, and as the record of proceedings for that hearing demonstrate, the LQPM questioned the Departmental presenting officer on the evidential source of the instructions to the appellant to report.  The appeal was adjourned in order to ‘… allow the Department to provide the relevant instructions given to the appellant to report any change in circumstances and to provide same in additional addendum to submission.’  A further submission was provided for the substantive appeal tribunal hearing.

65.	In the written observations on the application for leave to appeal, Mr Donnan submits, quite correctly, that in both R(IB) 4/05 and in Hooper, the Department had conceded that the issue of the ‘mail-shot’ leaflets was the sole evidence of the instructions which were issued to the claimants in those cases to report changes in their circumstances which might affect their entitlement to benefit.  Mr Donnan submits that in the instant case, the appeal tribunal had been provided with additional evidence of instructions which had been given to the appellant to disclose changes in his circumstances which might affect his entitlement to benefit.  Mr Donnan submits that the additional evidence was before the appeal tribunal and the appeal tribunal gave consideration to it.  What was that additional evidence?  In the written observations, Mr Donnan submits that it amounted to:

•	copies of two IB questionnaires completed by the appellant on 5 August 2002 and 13 July 2004 both of which contained signed declarations by him

•	a copy of a ‘sick line’ (form Med 3) completed by the appellant’s general practitioner, which had a declaration at the end to be signed by the appellant

•	copies of decision letters that would have been issued to the appellant during the period of his IB award, including the initial award notice (IB30) and a form IB72, both forms containing a paragraph on “changes you must tell us about”

66.	I agree with Mr Donnan that the appeal tribunal was entitled to consider whether there was additional evidence, outside of the ambiguous ‘mail-shot’ leaflets, which contained instructions on the requirement to disclose changes of circumstances which might affect entitlement to benefit.  I also agree with Mr Donnan when he submits that the contents of the additional evidence would have to be examined to determine whether the instructions given to the appellant were clear and unambiguous.

67.	The examination of that additional evidence will now be for the differently constituted appeal tribunal which will re-hear this appeal.  The appeal tribunal will wish to consider the following, however.

68.	In relation to the IB questionnaire, dated 5 August 2002, Mr Donnan has submitted that:

‘I acknowledge that the declaration signed by (the claimant) at the end of this form would be insufficient to put him on notice of reporting changes to his circumstances such as starting work, as he was merely signing a statement which said “I declare that the information I have given on this form is correct and complete”.  I therefore submit that this evidence is not of any assistance in that regard.’

69.	In relation to the IB questionnaire, dated 13 July 2004, Mr Donnan has submitted that:

‘It should be noted that the declaration on this questionnaire contains an extra paragraph - “I understand that I must promptly tell the office that pays my benefit of anything that may affect my entitlement to, or the amount of, my benefit”.  I respectfully submit that, whilst this does not provide a list of changes that a claimant must report, it nevertheless remains a consideration that such a declaration (using the word “must”) would have made (the claimant) aware that he needed to report his part time work to the IB office in case it had an effect on his benefit.’

70.	In relation to the form Med 3, Mr Donnan has submitted that:

‘ … [the form] which had a declaration at the end signed by (the claimant) stating “I declare that…my circumstances and those of my dependants are, and have been, as last stated.  (If there has been a change cross out this declaration.  Attach a signed and dated statement of the new facts to this form).”

I would inform the Commissioner that I have contacted the IB office for further information on the provision of such medical evidence in (the claimant’s) case.  I was informed that these Med 3 forms were required of (the claimant) in support of his IB award up to 2003 only, as from that year (exact date unknown) (the claimant) passed the Personal Capability Assessment, meaning he was no longer required to submit medical evidence.  The Med 3 sample that was provided to the tribunal in this case was dated 06/08/02 and it appears from the doctor’s evidence these forms were submitted every 13 weeks.  Therefore, I submit that the declaration on this form has evidential value only until 2003.

Having said this, I would refer again to Tab 4 of the appeal papers in the first IB appeal – to the interview with (the claimant) and Benefit Investigation Services.  His answer A16 states that he started work around 2001/2002 (the Department was only able to determine an overpayment from 17/03/04 on the basis of the evidence supplied by North Down Borough Council regarding (the claimant’s) work as a trader in Bangor market – their earliest records only going back to 17/03/04 – please see Tab 2 of those papers which I have included as Tab 2 to this submission).

I submit that the Med 3 certificates (the claimant) was required to sign (as frequently as 13 weekly) would have value as supporting evidence for the Department in that he would have been aware of the need to keep the IB office informed that his circumstances remained unchanged from those he originally declared.’

71.	In relation to the first of the decision letters (IB30), Mr Donnan has submitted that:

‘… the initial award notice IB30 which would have been issued to (the claimant) around March 2002 (which would be around the time he started work).  However the relevant information on this form stated “There are certain changes that you must tell us about because they might affect the amount of money you get.  If something changes…you should inform us immediately”.  Again, this form did not provide a sample list of potential changes; however it has evidential value in relation to what (the claimant) would have been informed at the outset of his IB award.  However, it is worth pointing out that, unfortunately, this form uses the word “should”.’

72.	In relation to the second of the decision letters (IB72), Mr Donnan has submitted that:

‘… [the form] which also contained a paragraph on “changes you must tell us about”.  It seems this particular form was issued periodically following completion of an IB questionnaire, so it is likely an IB72 was issued to (the claimant) in 2004.  The wording on this form regarding potential changes is identical to the IB30 form.’

73.	In summary, Mr Donnan submitted that:

‘The Department will, however, accept that some of the additional forms supplied to the tribunal could not be regarded as making it absolutely clear to (the claimant) of the mandatory requirement of reporting changes to his circumstances to the IB office.

The exceptions to this would be the Med 3 form (as already stated) and also the IB questionnaire completed by (the claimant) on 13/07/04.  The wording on this form made it clear that (the claimant) must promptly inform the IB office of anything that may affect his entitlement to or the amount of his benefit.

I would respectfully submit therefore that the declaration on this questionnaire as signed by (the claimant) on 13/07/04 may have carried sufficient weight for the tribunal to reach the decision that it did and as such the tribunal has not erred in law.

Mrs Carty also highlights that the Department has not adduced evidence of form INF4 being issued.  To answer that point I would submit that the INF4 form is used by the Department in means tested benefits such as Income Support and Jobseekers Allowance.  I have checked with the IB office to be sure and they confirmed that they do not use such a form in their contact with IB claimants.’

	The evidence which was not before the appeal tribunal

74.	In the written observations on the application for leave to appeal, Mr Donnan has also submitted that:

‘I should point out that there was another form that the Department should have supplied to the tribunal.  This is form BF 1014 (NI) and I have been informed by the IB office that it is sent to IB claimants every year (around January/February time), in advance of the new rates of IB taking effect from April of that year. …

The relevant extract I would refer to is found on page 3 which states:

“Tell us straight away if you…

…start or think about doing any work, including permitted or voluntary work”

As already stated, this form should have been included with the Department’s submission to the tribunal and it is regrettable that this was not done.  However, I would submit that the wording of this form in particular would comply with the expectations of the Court of Appeal in the Hooper case as well as those of the Commissioner in R (IB) 4/05, in that it specifically refers to starting work as a change that needs to be reported “straight away” and does not use ambiguous wording such as “you should report”.

As this form would have been issued to (the claimant) at the start of each year, I would respectfully submit that the Department can produce evidence in this case of regular, clearly worded notifications sent to him to inform him of the need to report a number of different changes to his circumstances – one such change being that he intends to start work (including permitted work).

It is the 2004 version of form BF 1014 (NI) that I have included with this submission.  I acknowledge that the tribunal was ignorant of this notification, and the Department’s presenting officer contributed to this by not supplying it as evidence.

Secondly, I would refer to (the claimant’s) original Incapacity Benefit claim form – form SC1, as being relevant as to whether he would have been put on sufficient notice by the Department regarding the fact that if he was working, then this would be something the Department needed to know.

I have taken the opportunity of requesting a copy of this claim form (…).  It is signed and dated by (the claimant) on 04/03/02.  On page 2 of this form (the claimant) answers no to both questions asking if he is employed or self employed.

Bearing in mind (the claimant) informed the interviewing officer on 06/10/06 that he started work either at the end of 2001 or 2002 (…) and he completed this claim form for Incapacity Benefit on 04/03/02, I would submit that, depending on the timing of the commencement of this work, he should have realised from such questions on his claim form that it was important to inform the IB office if he was working.

I would accept that this consideration would only be relevant if (the claimant) did start work prior to 04/03/02 – however his answer number A16 would indicate that he did start at work either at the end of 2001 or early in 2002.  In pursuit of this line of thought, I will provide further comment on (the claimant’s) IBB claim form dated 04/03/02.

At page 3 of the SC1 claim form, (the claimant) answered no to the question “Have you worked as a self employed person in the 21 weeks before this period of sickness began?”  Also he answered no to the question on page 4 as to whether he had worked for an employer in the past 21 weeks.  Again I would submit if it was the case that (the claimant) had recently started work prior to 04/03/02 then he should have been aware from this line of questioning that this would be something he needed to report to IBB.

At part 33 of this claim form (the claimant) signed the declaration to the effect that the information he had provided was correct and complete.  The Department did not cite misrepresentation as grounds for recovery in its decision on the overpayment in this case, but nevertheless, the evidence of what was on (the claimant’s) IB claim form would be relevant to the issue of what notice the Department had put on him regarding the need to report work he had done.’

	Disposal

75.	The decision of the appeal tribunal dated 10 February 2009 is in error of law.  Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

76.	The Department is directed to prepare a further submission for the appeal tribunal hearing to be conducted by the differently constituted appeal tribunal.  The new submission should specifically address the legal and evidential basis on which the Department submits that there has been an overpayment of IB for a particular period, and the basis upon which that overpaid benefit is recoverable from the appellant.

77.	The Department should attach to that submission all of the evidence in its possession which relates to the legal issues identified as arising in the appeal.  The Department should undertake an assessment of the evidence which it submits represents the source of the clear and unambiguous instructions given to the appellant concerning his duty to disclose to the Department materials facts, particularly changes of circumstances, relevant to his entitlement to benefit.

78.	The appellant, and his representative, may wish to continue with a submission to the differently constituted appeal tribunal, that the appellant was not actually working on certain of the days on which he has been denied entitlement to benefit, and in relation to which the Department submits benefit has been overpaid and is recoverable from him.  In such a case, the appellant, and his representative will wish to give consideration to the evidence which he requires to adduce in support of such a submission.

79.	It will be for the appeal tribunal to consider the submissions made by the parties to the proceedings on these issues, and any evidence adduced in support of them, and then to make its determination, in light of all that is before it.

(signed):  K Mullan

Commissioner

20 October 2010