DA-v-Department for Social Development (JSA) [2010] NICom 40
Decision No:  C1/10-11(JSA)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

JOBSEEKERS ALLOWANCE

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 2 July 2008

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The decision of the appeal tribunal dated 2 July 2008 is in error of law.

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

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.	I am able to exercise the power conferred on me by Article 15(8)(a)(ii) of the Social Security (Northern Ireland) Order 1998 to give the decision which I consider the appeal tribunal should have given as I can do so having made a further finding of fact.

5.	My decision is that overpayment of jobseekers allowance (JSA) had been made for the period from 2 May 2004 to 2 October 2005 amounting to £1703.33 which is recoverable from the appellant.

6.	I find as a fact that on 26 April 2004 the appellant had capital in excess of £8000, in the form of monies in a bank account, and that on 26 April 2004, and when signing the relevant declaration form she knew that she had capital in excess of £8000.

7.	The overpayment of JSA is recoverable as the appellant misrepresented a material fact when she signed a declaration form on 26 April 2004 that she had savings of £3500 when, in fact, she had capital in excess of £8000.

	Background

8.	On 5 November 2007 a decision-maker of the Department decided that an overpayment of JSA had been made for the period from 2 May 2004 to 2 October 2005 amounting to £1703.33 which was recoverable from the appellant.

9.	The decision dated 5 November 2007 would appear to have been a revision of an earlier decision of the Department, dated 8 July 2007, which had also raised an overpayment of JSA against the appellant but for a greater amount.  The revision decision dated 5 November 2007 purported to correct the calculation error.

10.	An appeal against the decision dated 5 November 2007 was received in the Department on 23 November 2007.  The decision dated 5 November 2007 was reconsidered on 26 November 2007 but was not changed.

11.	An appeal tribunal hearing took place on 31 January 2008.  The appeal was adjourned as an indication was given that consideration was being given to criminal proceedings.  A further appeal tribunal hearing took place on 2 July 2008.  The appellant was present as was a presenting officer from the Department.  The appeal tribunal disallowed the appeal, and confirmed the decision dated 5 November 2007.

12.	On 19 December 2008 an application for leave to appeal to the Social Security Commissioner was received in the Appeals Service.  On 27 January 2009, the application for leave to appeal was refused by the legally qualified panel member.

	Proceedings before the Social Security Commissioner

13.	On 27 February 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 (OSSC).

14.	On 20 March 2009 observations were sought from Decision Making Services (DMS) and these were received on 8 April 2009.  DMS opposed the application on the grounds cited in the application.

15.	Observations were shared with the appellant on 21 April 2009.  On 21 May 2009, further written observations in reply were received from the appellant and these were shared with the Department on 5 June 2009.

16.	On 28 July 2009 DMS were asked to provide observations on the following issue:

‘The basis of the overpayment in the present case is stated to be on the basis of a misrepresentation of a material fact.  How, in the statement of reasons for the appeal tribunal’s decision has the appeal tribunal dealt with the misrepresentation issue?’

17.	On 5 August 2009 a further submission was received from DMS in connection with the issue raised in the correspondence dated 28 July 2009.

18.	Further correspondence was received in OSSC from the appellant on 24 August 2009.

	Errors of law

19.	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.

20.	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?

21.	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.”

22.	Section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992, as amended, 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.”

23.	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.

24.	Without an alteration or change in the decision giving rise to the entitlement to the particular benefit, there can be no recovery of it.

25.	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.’

26.	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.’

27.	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.

28.	In the present case, a decision-maker of the Department decided that an overpayment of JSA had been made for the period from 2 May 2004 to 2 October 2005 amounting to £1703.33 which was recoverable from the appellant.  Further, the Department decided that the overpayment of JSA was recoverable as the appellant had misrepresented a material fact when she signed a declaration form that she had savings of £3500 when, in fact, she had capital in excess of £8000.  The overpayment decision is grounded firmly on the basis of a misrepresentation of a material fact.

29.	In the appeal submission, prepared for the appeal tribunal hearing, the issue of a misrepresentation of a material fact is mentioned at paragraphs 5, 6, 8, 9, 10 and 11 of section 5, with cross-annotations to relevant legislative provisions.

30.	How did the appeal tribunal deal with the issues of the identification of a section 69(5A) decision and misrepresentation?  The statement of reasons for the appeal tribunal’s decision has been prepared with care and attention.  The reasons identify the decision under appeal; set out the relevant legislative provisions relating to misrepresentation; make findings in fact set out the issues arising in the appeal; and identify reasons for its decision.  Where, then, did the appeal tribunal go wrong?

31.	The appeal tribunal heard and determined the appeal against the Department’s overpayment decision, dated 5 November 2007, on the same date as it heard and determined an appeal against a Departmental entitlement decision, dated 21 March 2007.  The statement of reasons for the appeal tribunal decision in the instant case, that is in relation to the appeal tribunal’s conclusions on the overpayment decision, is, in substance identical to the statement of reasons for the appeal tribunal’s decision in the appeal against the entitlement decision.  The only differences between the two statements are the minor sections which identify the decisions under appeal, and the legislative provisions relevant to the issues arising in the individual appeals.

32.	The major problem arising from the replication of the reasons for the two individual appeals is that the substantive part of the reasons is taken up with how the appeal tribunal addressed the issues relating to the entitlement decision.  Those issues related to whether the appellant had capital in excess of the statutory capital limits for entitlement to social security benefits; whether any of the capital could be disregarded under legislative provisions relating to capital disregards; and identifying the appellant’s intentions with respect to her capital.  The replicated reasons also deal with a number of other issues and grievances raised by the appellant in her letter of appeal.

33.	The net result of the replication of the reasons from the entitlement appeal to the overpayment appeal is that the reasons focus on the relevant entitlement issues to the detriment of the overpayment issues.  What are those overpayment issues?  They are:

(i)	whether the Department made a decision which altered previous decision(s) awarding entitlement to benefit, thereby satisfying section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992, as amended; and

(j)	whether the appellant did misrepresent a material fact thereby permitting the Department to recover an overpayment of a social security benefit for a particular period.

34.	In relation to whether there was in existence a decision which satisfied the requirements of section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992, as amended, DMS has submitted that:

‘Finally, I wish to inform the Commissioner that I have examined the decisions made in this case to ensure the Department has made a proper decision on entitlement on which a recoverable overpayment decision can be based in accordance with section 69 (5A) of the Social Security Administration (NI) Act 1992.  I will clarify the dates of the relevant decisions and notifications below, should the Commissioner require this information.

I wish to highlight that there are some discrepancies in dates used by the Department, both in its references within the appeal submission in this case and in some of the decisions made.  However, I would submit that such minor errors do not invalidate those decisions as I will now clarify.

As already submitted, the Department had originally made an overpayment decision on 08/07/07 – the first discrepancy arises in that this is referred to in Section 2 of the Department’s submission to the tribunal as the decision dated 17/08/07.  I would confirm the original overpayment decision was made on 08/07/07 but notified on 17/08/07, which is how this mistake has occurred.

Also, the first overpayment decision refers to an entitlement decision dated 29/03/07 which contradicts other references made by the Department to a decision of 21/03/07.  I would reassure the Commissioner that on checking the correct position with the decision maker, it is confirmed that the decision to revise entitlement following the discovery that (the claimant) had undisclosed capital, was made on 21/03/07.  The first overpayment decision has been revised in any case.

The revised overpayment decision dated 05/11/07 refers to an entitlement decision dated 29/06/07.  In performing my checks on the validity of this decision, I have had to examine evidence from the associated appeal LA3/08-09(JSA), so I will be referring to such evidence in the next few paragraphs.

The papers in LA3/08-09(JSA) show a revised entitlement decision made by the decision maker on 29/06/07, following an application by (the claimant) on 16/04/07.  The outcome is that the decision disallowing JSA (IB) dated 21/03/07 is revised to the effect that (the claimant) is not entitled to JSA (IB) from 02/05/04 to 03/01/05 and entitled to a reduced amount of JSA (IB) from 04/01/05 to 02/10/05.

Proof that this decision was properly notified to (the claimant) on 29/06/07 is also included with the associated appeal LA3/08-09(JSA) (there is a slight typing error within the decision dated 29/06/07 as it refers to this notification being issued on 29/07/06 – this should read 29/06/07).  Therefore:

•	as the latest decision on entitlement covers the full period for which the Department is seeking recovery,

•	the overpayment decision of 05/11/07 properly refers to the correct entitlement decision of 29/06/07, and

•	proof exists that notifications of both the entitlement decision made 29/06/07 and the overpayment decision of 05/11/07 have been issued to (the claimant).

I would respectfully submit that the overpayment decision dated 05/11/07 complies with the requirements of section 69 (5A) of the Administration Act.’

35.	In the instant case, I am prepared to accept that there was in existence a decision which satisfied the requirements of section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992.  In essence the identified section 69(5A) decision is the entitlement decision, the appeal against which was dealt with on the same day as the appeal in the instant case.

36.	Further, to the extent to which the substantive parts of the statement of reasons in the instant case is taken up with an analysis of whether the entitlement decision was correct, I am prepared to accept that the appeal tribunal has dealt with the first of the overpayment issues that is whether the Department made a decision which altered previous decision(s) awarding entitlement to benefit, thereby satisfying section 69(5A).

37.	How did the appeal tribunal deal with the second of the overpayment issues, that is, whether the appellant did misrepresent a material fact thereby permitting the Department to recover an overpayment of a social security benefit for a particular period?

38.	Having looked at the statement of reasons for the appeal tribunal’s decision, it is clear to me that the appeal tribunal has not addressed the evidential basis upon which it has decided that the appellant did misrepresent a material fact permitting the Department to recover an overpayment of a social security benefit for a particular period.  Apart from a reference to the actual provisions of section 69 of the Social Security Administration (Northern Ireland) Act 1992, there is no other reference, in the statement of reasons, to misrepresentation, or to the evidential basis on which the appeal tribunal determined that the appellant had misrepresented a material fact.

39.	It seems to me that where an appeal tribunal is confirming a decision of the Department, whereby the Department seeks to recover a significant sum of an overpaid social security benefit, the appellant is entitled to be informed of the evidential basis upon which the appeal tribunal has determined that the basis for recovery – in this case misrepresentation of a material fact – has been established.

40.	In further written observations on how the appeal tribunal dealt with the issue of misrepresentation, DMS submitted that:

‘The Department, at paragraph 9 of Section 5 of its appeal submission, had set out two questions for the tribunal to consider in relation to (the claimant’s) appeal:

(1)	Did (the claimant) misrepresent the material fact in question?  And

(2)	Has an overpayment occurred due to this misrepresentation and if so is it recoverable from (the claimant)?

The statement of reasons from the tribunal hearing records the Legally Qualified Member’s (LQM’s) findings in relation to the matter of misrepresentation as follows:

“The Appellant’s entitlement to Contribution Based Jobseekers Allowance was due to expire on 1 May 2004 and the Appellant completed a fresh claim for Income Based Jobseekers Allowance on 26 April 2004 on Form Jobseekers Allowance 2.  It is the information provided on this form which has led to the difficulties and the alleged overpayment.

On Jobseekers Allowance 2 dated 26 April 2004 the Appellant completed the section relating to income by stated (sic) that she had £3,500.00 in savings.  In fact, it is now accepted by the Appellant that she had approximately £9,700.00 in savings...

Decision

There is no dispute by the Appellant that she did have capital in excess of the prescribed limits and for the period claimed by the Department.”

I would respectfully submit to the Commissioner that, whilst the tribunal has not explicitly recorded in the statement of reasons that (the claimant) misrepresented a material fact, the extracts I have quoted from the statement of reasons show that the tribunal has implicitly addressed the matter of misrepresentation to a satisfactory degree.

I submit that the tribunal has adequately answered the questions put to it by the Department regarding misrepresentation, in focusing on the relevant section of the JSA 2 application form and what (the claimant) had answered at that part of the form.  The tribunal then set out that (the claimant) did not dispute that she had more capital than she actually reported.

I would acknowledge that the tribunal has not specifically stated in the statement of reasons that (the claimant) misrepresented the amount of her capital when completing her JSA (IB) application form (although the LQM does record that (the claimant) misrepresented a material fact in the decision notice dated 02/07/08).  However, whilst this was not stated, I respectfully submit that the tribunal’s conclusions on misrepresentation can be otherwise understood in what was expressed.’

41.	With respect to the submissions made by DMS, I cannot agree that it sufficient for it to be implicit in the statement of reasons that the appeal tribunal has addressed the misrepresentation issue.  That issue was fundamental to the appeal.  Accordingly it was incumbent on the appeal tribunal to make explicit its findings and conclusions with respect to it.

42.	The failure, by the appeal tribunal, to address the evidential basis on which it has determined that there had been a misrepresentation of a material fact renders its decision on that aspect of the appeal erroneous in law and it must, accordingly, be set aside.

	The appellant’s grounds for appealing to the Social Security Commissioner

43.	In her application for leave to appeal to the Social Security Commissioner, the appellant has submitted that the decision of the appeal tribunal was in error of law on the basis of a number of identified grounds.  These were the same grounds which were set out by the appellant in her application for leave to appeal to the Social Security Commissioner against the decision of the appeal tribunal in respect of the entitlement decision, dated 21 March 2007.  Those grounds are not relevant to the issues arising in the present appeal, namely whether the appeal tribunal’s decision with respect to the overpayment decision was correct.  In any event I have dealt with the issues raised in my decision on the application for leave to appeal in respect of the entitlement decision – A3/08-09(JSA).

	Further errors in the decision-making process identified by DMS

44.	In the written observations on the application for leave to appeal in the instant case, DMS have submitted that:

‘I would provide comment on the mistakes made by the Department with regard to the overpayment decision in this case.  I acknowledge that the decision maker originally erred on two fronts when deciding the overpayment.

Firstly, the overpayment was originally calculated as being £2,603.94 – recoverable from (the claimant) in respect of 02/05/04 to 02/10/05.  Whilst this was clearly the amount of JSA (IB) she had received over this period of time, the decision maker omitted to consider an easement that could be applied to the amount deemed overpaid.

This was to consider a notional deduction to the amount of capital taken into account in the overpayment calculation.  By applying this deduction, (the claimant’s) capital figure was treated as having depreciated over the overpayment period, leading to a reduction to the amount of benefit overpaid.

This was corrected when (the claimant) appealed in a revised decision dated 05/11/07.  However a further mistake occurred when this decision was notified to (the claimant) on that date.  The letter from the Department dated 05/11/07 informed her that she had been overpaid Income Support totalling £1,703.33.  It can be seen from the tribunal papers that this mistake was rectified by the Department, reissuing the same letter to (the claimant) to inform her it was Jobseekers Allowance that was overpaid.

Despite these errors, I would respectfully submit in accordance with the tribunal’s findings in its statement of reasons, that these mistakes, whilst regrettable, do not affect the validity of the decision (as rectified) that JSA (IB) totalling £1,703.33 for the period 02/05/04 to 02/10/05 has been overpaid to (the claimant) on the basis of her misrepresentation regarding her capital and is therefore recoverable from her.’

45.	I would agree that the mistakes identified by DMS in the decision-making process, involving do not affect the validity of the decision under appeal to the appeal tribunal.  I would note, however, that errors such as these have contributed to the justifiable sense of grievance which the appellant has in respect of the Departmental decision-making process, and would submit that greater care could and should have been taken in that decision-making process.

	Disposal

46.	The decision of the appeal tribunal dated 2 July 2008 is in error of law.

47.	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.

48.	I am able to exercise the power conferred on me by Article 15(8)(a)(ii) of the Social Security (Northern Ireland) Order 1998 to give the decision which I consider the appeal tribunal should have given as I can do so having made a further finding of fact.

49.	My decision is that overpayment of JSA had been made for the period from 2 May 2004 to 2 October 2005 amounting to £1703.33 which is recoverable from the appellant.

50.	I find as a fact that on 26 April 2004 the appellant had capital in excess of £8000, in the form of monies in a bank account, and that on 26 April 2004, and when signing the relevant declaration form she knew that she had capital in excess of £8000.

51.	The overpayment of JSA is recoverable as the appellant misrepresented a material fact when she signed a declaration form on 26 April 2004 that she had savings of £3500 when, in fact, she had capital in excess of £8000.

(signed):  K Mullan

Commissioner

7 May 2010