DAA-v-Department for Social Development (IS) [2011] NICom 207
Decision No:  C11/07-08(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 17 September 2007

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the Department of Social Development (“the Department”) against a decision of the appeal tribunal sitting at Omagh on 17 September 2007 (“the appeal tribunal”).  In this decision I shall refer to the respondent as “the claimant”.  She was the appellant before the appeal tribunal which allowed her appeal.

2.	Permission to appeal to the Social Security Commissioners was granted to the Department by the legally qualified panel member (LQPM) who conducted the hearing on 17 September 2007.  He succinctly identified the point of law which falls for determination in the following terms:

“Whether the Department can recover an overpayment on the basis of a decision on entitlement which has not been communicated to a claimant.”

	To understand that issue it is necessary, first, to refer to some general background and then to what are, for present purposes, the important facts in the present appeal.  I shall do so as briefly as I can.

3.	Our system of social security requires that there be a system of adjudication of claims for benefit.  Someone has to make a decision that an applicant for benefit satisfies the relevant conditions and is entitled to the benefit which he or she seeks.  The system is “decision based”.  By that is meant that the system operates on the basis of formal, and formally recorded, decisions.  If an applicant is awarded a particular benefit that applicant, and everyone else concerned, needs to know certain information.  At the very least, he or she needs to know how much they have been awarded and for how long.  Depending on the circumstances, other information may also be required.  Awards of benefits can be altered in all sorts of ways.  For example, the amount awarded may be increased or decreased.  The period of the award may be shortened or lengthened or a decision may be made that the award shall cease altogether.  Again, and for obvious reasons, the alteration has to be by way of a formal decision.

4.	Given that background, it is not surprising that there are regulations governing the decision making process.  One of these, which is important in the present appeal, is section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992 (as in force at the time).  Sub-section (1) first of all confers a power on the Department to recover overpayments in specified circumstances.  It is in the following form:

(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 this section applies; or

(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.

Subsection (5A) then provides a check on that power in the following form:

(5A)	Except where regulations otherwise provide, an amount shall not be recoverable under sub-section (1) 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.

This means that if the Department wishes to recover an overpayment it must make two decisions which I shall call “the entitlement decision” and “the overpayment decision”.  The entitlement decision, in effect, reverses or at least varies the decision which awarded benefit and under which the person claiming benefit has now received more than he or she should have received.  It is then open to the Department to seek to recover all or part of the overpayment by making the overpayment decision.  Different considerations apply to the two decisions.  In particular the person claiming benefit may have available a number of defences in response to the overpayment decision which were not available to him or her in relation to the entitlement decision.  Further, it is both logical and well established that the entitlement decision must precede the overpayment decision.  If they are taken in the wrong order the overpayment decision is without practical effect and, as sub-section (5A) states, the relevant “amount shall not be recoverable”.

5.	I turn to what happened in the present case.  Since the more controversial facts have yet to be determined I shall say as little as possible.  In June 2003, the claimant made a claim for income support (IS) on behalf of herself and her two children and on the basis that she was a lone parent.  IS was awarded from and including 2 June 2003.  At the end of 2004 or the beginning of 2005, facts came to light which suggested that the claimant was living with a man whom I shall call “R”.  In March 2005, she was interviewed.  The questions whether the claimant and R were living together and, if so, during which period or periods, are matters which remain to be found by the new tribunal and I say nothing one way or another.  The new tribunal will have to listen to the evidence and make appropriate findings of fact.  For present purposes, what is important is that investigations eventually led to a series of decisions beginning with a decision dated 11 March 2006, that the claimant and R were living together as husband and wife.  See Tab 6 to the Department’s submissions to the appeal tribunal.  There then followed decisions based on that initial decision.  This is one of those cases where a number of revisions were made with regard to the claimant’s entitlement with corresponding adjustments to the amount the Department was seeking to recover from her.  Details of these various decisions will be found conveniently set out in the form of a table at section 4 of the Department’s submissions.  See parts 6 to 16 of the table.  The final two decisions were a revised decision dated 24 October 2006, that the claimant and R should be treated as a couple from 23 June 2003 to 20 February 2005, and IS was not payable for that period.  See part 15 of the table in section 4 and Tab 16 to the submissions.  That decision was an entitlement decision.  The next decision was the resulting overpayment decision based on that entitlement decision.  This was made on 8 November 2006.  Details will be found at part 16 of the table and Tab 17 to the submissions.  The claimant was notified of the overpayment decision by a letter dated 8 November 2006, a copy of which will be found at Tab 18 to the submissions.

6.	The claimant appealed.  The grounds on which she did so were as follows; see Tab 1 to the submissions:

“I am appealing against the decision dated 08/11/06, in being charged with the overpayment of income support amounting to £16,685.38.  My grounds of appeal being that I did not live with [R] as a couple.  It is on these grounds that I now lodge my appeal.”

	That was the factual basis of the appeal.  Further, the entitlement decision (24 October 2006) was taken before the overpayment decision (8 November 2006).  However, on 4 January 2007, a LQPM considered the appeal papers and issued a number of directions.  One of these directed the Department to provide proof that the entitlement decision had been notified to the claimant.

7.	The directions were complied with and the appeal came on for hearing by the appeal tribunal on 17 September 2007.  The claimant’s appeal was allowed on what might be termed a preliminary point.  The record of the proceedings records the following:

“Presenting Officer

The entitlement decision was revised on 24.10.2006, in favour of Appellant.  New appeal rights arose.  This decision was issued on 22.05.2007, see Addendum Tab 2 [a reference to the further submissions lodged in compliance with the directions of 4 January 2007].  No appeal has been received and no further decision regarding overpayment on foot of that decision has been made or issued, since 22.05.2007.”

	The reasons for allowing the appeal were as follows:

“In this case, a number of decisions and supersessions were made, but ultimately the Department sought to rely on a decision of 24.10.2006 (on entitlement) and a subsequent decision of 08.11.2006 (on the alleged overpayment arising from the decision of 24.10.2006).  However, at the hearing, it became clear that the decision of 24.10.2006 was not issued to the Appellant until 22.05.2007, long after the decision of 08.11.2006.

It follows that the requirements of Section 5A of the Social Security Administration (NI) Act 1992 have not been met, in that there was no evidence before the Tribunal of a properly issued decision to revise or supersede an earlier determination on entitlement, and the overpayment alleged in the decision of 08.11.2006 was not recoverable.”

	In short, although the entitlement decision and the overpayment decision had been taken in the correct order, the failure to notify was fatal.

8.	The Department sought permission to appeal to the Social Security Commissioners.  The LQPM who had comprised the appeal tribunal granted permission and, as recorded above, identified the relevant point of law as being whether the Department can recover an overpayment on the basis of a decision on entitlement which has not been communicated to the claimant.  When the appeal reached the Office of the Social Security Commissioners it was stood over to await the determination of another appeal, with rather similar facts, which when it reached the Court of Appeal became known as Hamilton –v- Department for Social Development [2010] NICA 46 (“the Hamilton case”).

9.	In the Hamilton case the Department succeeded before the Commissioner and his decision was upheld on appeal.  In the present appeal the Department has lodged submissions applying the judgment of the Court of Appeal.  See, in particular, paragraphs 19 to 26 of its submissions under the heading “Relevance of Court of Appeal decision on the instant case”.  The claimant has been given the opportunity to respond to the Department’s submissions but has not done so.  I accept those submissions.

10.	It is, however, difficult to do justice to them without setting them out at length.  One way of summarising them is as follows.  The Department referred to paragraphs 28 to 30 of the judgment delivered on behalf of the Court of Appeal by Girvan LJ:

“[28]	Under the relevant legislation in the present instance there is a duty imposed upon the Department to bring to the attention of a claimant any decision which determines his entitlement to receive benefits when he has a right of appeal.  The duty is to give written notice of the decision against which the appeal lies and to give written notice of the right to appeal.  Regulation 28 of the 1998 Regulations indicates that the written notice of the decision does not have to give the reasons.  The claimant may ask for the reasons within one month of the date of notification.  They must then be given within 14 days.  The appeal must be brought within one month of the notification or within 14 days of the receipt of the reasons when requested.  Regulation 7 makes clear that a supersession decision takes effect “from the date of change” of circumstances giving rise to the supersession.  Hence, the Regulations envisage that such a decision takes effect before notice is actually given to the claimant.  In the absence of a regulation under Article 11(6) varying the date of effectiveness of a decision, Article 11(5) would have provided that the decision takes effect on the date in which it is made (which may not be the date on which it comes to the notice of the claimant).  Regulation 7 is intra vires for the 1998 Order authorises regulations specifying a date for a decision taking effect which is different from the date on which it is made.  As noted, Anufrijeva recognises that Parliament may make clear that an administrative decision takes effect before notice of the decision comes to the attention of the party affected.  In the present instance, the Order and Regulations do spell out that such a decision will take effect in this case from the date of the relevant change of circumstances.  It is thus clear that when the recoverability decision was made the relevant entitlement decision was effective from 4 October 2004 being the date of the relevant change of circumstances and the recoverability decision, accordingly, had been validly made.

[29]	The letter of 8 September 2006 makes clear that the Department had decided two things.  Firstly, it had decided that the claimant’s entitlement to income support had ceased from 4 October 2004 because her carer’s allowance had ceased.  Secondly, it had decided that the sum of £7,142.14 was recoverable.  Inasmuch as the claimant had been previously made aware of the first entitlement decision taking the period of non-entitlement back to 4 October 2004 beyond the date of 31 January 2006 (of which decision the claimant was aware) the letter of 8 September 2006 itself brought to the claimant’s notice the effect of the second entitlement decision.  The letter of 8 September 2006 accordingly satisfied the requirements of Regulation 28 in that it gave her written notice of the decision as well as notice of her right to appeal and her right to ask for reasons.  Anyone receiving the letter would have known that they could appeal against the decisions that the moneys were recoverable and that they were recoverable from 4 October 2004.

[30]	We must reject the claimant’s contention that because the second entitlement decision had not been brought to her notice prior to the recoverability decision there was no operative recoverability decision.  Insofar as the second entitlement decision indicated that the claimant had not been entitled to income support from 4 October 2004 to 30 January 2006 it was not in itself a decision having the character of a determination with binding legal effect and consequences.  For the decision to have a legal outcome for the claimant it had to be followed by a decision that the sum in question was recoverable from the claimant.  There was no reason why the Department could not at the same time decide (a) that the claimant was not entitled to the benefit from a given date and (b) that a sum was recoverable.  Such a two pronged decision made at the same time would be both logical and administratively sensible.  There is no logical reason why the Department must decide that the claimant was not entitled to a benefit from a given date, give notice of the decision to the claimant and await the outcome of an appeal before moving to the stage of deciding whether the moneys are recoverable, a stage which might never be reached if the Department concluded that recovery was inappropriate.  In that event the supersession decision would ex hypothesi have no legal outcome for the claimant.  A claimant faced with such a two pronged decision could appeal both decisions at the one time.  The tribunal would logically have to decide the validity of the supersession decision first before moving to the question whether the moneys were recoverable.  Thus communication of the supersession decision contemporaneously with the recoverability decision in no way prejudices the claimant whose appeal rights are protected.  The claimant in this case had a full opportunity to challenge the correctness of the second entitlement decision as a necessary first question in relation to her challenge to the recoverability decision.  As has been noted, the claimant does not in fact challenge the correctness of the second entitlement decision.”

11.	In the present appeal, notice of the overpayment decision of 8 November 2006, was given by way of the letter of that date which will be found at Tab 18 of the submissions to the appeal tribunal.  The letter begins:

“About your Income Support

We are writing to you because we have had to look again at your money.  We have decided that you have been paid £16685.38 too much Income Support from 23 June 2003 to 20 February 2005.  This was because you were living as a couple with [R] and not regarded a lone parent for Income Support purposes.  As the amount of your overpayment has changed your previous appeal has lapsed so if you disagree with this decision you need to lodge a new appeal.  You need to pay this back.”

	The letter then sets out details of the calculations and enclosed printed information about appealing the decision.  Finally, in paragraph 27 of its submissions the Department said this:

“27.	In light of the Court of Appeal judgment in the Hamilton v The Department of Social Development case, I submit the Tribunal erred in law in deciding that the overpayment of Income Support of £16685.38 was not recoverable because formal notification of the entitlement decision dated 24/10/06 was not issued to (the claimant) until after the recoverability decision was made.  This is because (the claimant) was made aware of the effects of that decision when she received notification of the recoverability decision on 08/11/06 thereby satisfying the requirements of Regulation 28 of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999.  As a consequence, I further submit that the conditions of Section 69(5A) of the Social Security Administration (NI) Act 1992 were satisfied and the Tribunal should have proceeded to consider (the claimant’s) defence that she did not live with [R] as a couple.”

	The Department conclude by submitting that I should allow the appeal and refer the matter back to a differently constituted tribunal for rehearing.

12.	I accordingly take that course.  The new tribunal should proceed on the basis that the overpayment decision of 8 November 2006 is a valid decision.  It should proceed to determine the claimant’s substantive defence.

(signed):  J P Powell

Deputy Commissioner

14 November 2011