R(IS) 12/91

Mr. J. J. Skinner	CIS/330/1990
18.9.90
Housing costs – claimant moving from Dorset to Hertfordshire – whether adjudication officer entitled to regard housing costs in Hertfordshire as excessive by reference to prices in Dorset
The mortgage interest on the claimant’s home in Poole had been allowed in full in the assessment of her income support entitlement. On moving to Hertford she increased her mortgage to purchase a more expensive property of a similar size. The adjudication officer decided to restrict the amount allowed for housing costs on the Hertford property to the level allowed for those costs on the former home in Poole. He further directed that it was reasonable for the claimant to seek alternative cheaper accommodation by returning to the Poole area. On appeal the tribunal upheld the decision of the adjudication officer. The claimant appealed to the Social Security Commissioner.
Held that:
in regarding Poole as a place where suitable alternative accommodation to that in Hertford was available the tribunal erred in law. The comparison to be made in applying paragraph 10(4)(b) of Schedule 3 to the Income Support Regulations 1987 is with areas in which suitable alternative accommodation exists and the requirement of suitability precludes the other area being chosen on too wide a basis. In this respect the unreported conclusions of the Commissioner in relation to a like provision of the Supplementary benefit legislation were followed (para. 8).

DECISION OF THE SOCIAL SECURITY commissioner

1. 	My decision is that the decision of the social security appeal is erroneous in point of law and accordingly I set it aside; I refer the case for determination to a new social security appeal tribunal who should have regard to what I have said in the course of this decision.
2. 	This is a claimant’s appeal against the decision of the Stevenage social security appeal tribunal, given on 16 March 1990, which dismissed her appeal against a decision of the adjudication officer which had imposed a restriction on meeting her housing costs under Schedule 3 of the Income Support (General) Regulations 1987.
3. 	Regulation 17 of the Income Support (General) Regulations 1987 sets out the categories which go towards the total applicable amount which is to be set against the claimant’s income in order to determine entitlement. Regulation 17(1)(e) provides that the amounts covering housing costs are to be determined in accordance with Schedule 3 to the regulations. Paragraph 10 of that Schedule deals with the restriction on the amount of these housing costs, and I set out the sub‑paragraphs of that paragraph which are material to this appeal:
“(3) Where the amounts to be met under paragraphs 7 to 9 and, subject to any deduction applicable under paragraph 11 are excessive, they shall be subject to restriction in accordance with sub‑paragraphs (4) to (6).
(4) Subject to sub‑paragraphs (5) and (6), the amounts to be met shall be regarded as excessive and shall be restricted and the excess not allowed, if and to the extent that ‑
(a) 	the dwelling occupied as the home, excluding any part which is let [. . .], is larger than is required by the claimant and his family and any child or young person to whom regulation 16(4) applies (foster children) and any other non‑dependants having regard, in particular, to suitable alternative accommodation by a household of the same size; or
(b) 	the immediate area in which the dwelling occupied as the home is located is more expensive than other areas in which suitable alternative accommodation exists; or
(c)	the outgoings of the dwelling occupied as the home in respect of which the amounts to be met under paragraph 7 to 10 are higher than the outgoings of suitable alternative accommodation in the area.
(5) Where, having regard to the relevant factors, it is not reasonable to expect the claimant and his family to seek alternative cheaper accommodation no restrictions shall be made under this paragraph.
(6) Where sub‑paragraph (5) does not apply and the claimant (or other member of the family) was able to meet the financial commitments for the dwelling occupied as the home when these were entered into, no restriction shall be made under this paragraph during the first six months of any period of entitlement to income support nor during the next six months if and so long as the claimant uses his best endeavors to obtain cheaper accommodation. 
(7) 	In this paragraph “the relevant factors” are‑
(a) 	the availability of suitable accommodation and the level of housing costs in the area; and
(b) 	the circumstances of the family including in particular the age and state of health of its members, the employment prospects of the claimant and, where a change in accommodation is likely to result in a change of school, the effect on the education of any child or young person who is a member of his family, or any child or young person who is not treated as part of his family by virtue of regulation 16(4) (foster children).”
4. 	By a decision issued on 15 November 1989 the adjudication officer decided that the claimant was entitled to housing costs of £101.25 per week from 24 October 1989; he allowed the claimant the interest on a mortgage of £46,500 but decided that she was not entitled to the increased housing costs incurred when she increased her mortgage to £70,000 on moving from Poole, Dorset to Hertford. He so decided because, in his opinion, the accommodation in Poole was suited to the claimant’s requirements and she had moved to a more expensive area. At the material time the claimant was aged 34 years and separated from her husband. She had living with her a daughter aged four years. The claimant had lived for six years in Australia but when she separated from her husband she returned to the United Kingdom and went to live on 20 September 1987 in Poole, Dorset. Initially she lived with her parents in Poole, but on 4 February 1988 she moved into her own house there. In order to purchase it she had borrowed £46,500 from a building society and interest on this loan was allowed in full by the Department of Social Security. On 20 October 1989 the claimant moved to Hertford. She sold her house in Poole and she purchased a two 
bedroomed property for £79,000; in order to do so she took out a mortgage of £70,000 on the security of the new home at Hertford. She moved to Hertford because her parents were going to live in Spain and had sold their home in Poole. She had come originally from the Hertford area and members of her family lived in that area. Prior to moving she enquired at the benefit office in Poole and told them that if she were to acquire the new home she would have to take out a mortgage of approximately £60,000 to £70,000. Correspondence passed between the claimant and the Department of Social Security office in Poole and the letters were before the tribunal.
5.	The adjudication officer in his submission to the tribunal accepted that the claimant occupied a two bedroomed home and that this was not excessive accommodation for her and her daughter. He also conceded that the outgoings for the home in Hertford were not higher than those for suitable alternative accommodation in the area. He restricted the amounts of the mortgage interest payment on the grounds that the claimant’s housing costs in respect of her home in Hertford were to be restricted to the level of the housing costs paid in respect of her former home in Poole; and he further decided that in the circumstances of the case it was reasonable for the claimant and her daughter to seek alternative cheaper accommodation by returning to the Poole area.
6.	The claimant appealed against that decision on the grounds that she was informed by the Department of Social Security before she moved that, provided she qualified under the regulations and her house fell within the guidelines, the full interest on her mortgage would be paid. She referred to a letter which had asked her to state the reasons for her move and she said that she had repeatedly telephoned the office to ask whether any further details of her move were required. She also alleged that her reasons for moving back to Hertfordshire, which was where she grew up, were justified and supported by her social worker, psychologist and general practitioner. She was represented before the tribunal by Mrs. White of the Hertford Citizens Advice Bureau and the facts pertaining to her case were stated to that body. It was said also that when her parents had emigrated to Spain she had felt very isolated as the remaining members of her family lived in Hertfordshire. Her daughter’s health had suffered and she herself had become depressed. The house she bought was a similar size to the house she had occupied earlier. She explained to the tribunal that she had sought assurances from the offices of the Department of Social Security, both in Dorset and in Hertfordshire, that the increased amount of interest would be met, but it is recorded that she admitted to the tribunal that she never received a categorical assurance that interest on £70,000 would be paid and that in the end she had to make her own judgement, in conjunction with the building society, as to the loan. The tribunal dismissed the claimant’s appeal. They gave their reasons for so doing in the following passage:
“The tribunal adopted the reasoning of the adjudication officer, as expressed in box 1 above. To interpret regulation 17(e) of the Income Support (General) Regulations in the manner which the appellant had sought would have been to apply a reasoning applicable in another age in very different social conditions from those now current. [The claimant] since her return from Australia, had never been employed, which was most certainly not her fault, but she had obtained two mortgage advances from a Building Society, one for £46,500, and this latest one for £70,000. In each instance, the mortgage repayments, in terms of interest alone, were massive. To allow the payment of interest on a greater amount than £46,500 could not be justified without there being the clearest realisation on the part of all concerned of the financial consequences for public funds. Such an open‑ended commitment was never intended, and the purpose of the safe‑guards in paragraph 10(4) of Schedule 3, particularly (b), was to prevent excessive public expenditure. Clearly it would be right for the Commissioner to review such a sensitive issue, with such far‑reaching implications.”
The chairman granted leave to appeal to the Commissioner.
7. 	Mr. E. Glatter of the Citizens Advice Bureau at Hertford has prepared the claimant’s grounds of appeal and written argument in support of her case. The first point taken on her behalf is that the tribunal were wrong in their interpretation of paragraph 10(4)(b) of Schedule 3 to the Income Support (General) Regulations. It is pointed out that the tribunal had evidence before them that similar sized properties in Hertford were not obtainable at a lower price than that paid by the claimant and they found this as fact. They, however, compared the prices of property in Hertford with the prices of property in Dorset. The adjudication officer now concerned supports the appeal and accepts that the tribunal were in error in deciding that the claimant’s housing costs in respect of her home in Hertford were to be restricted to the level of the housing costs paid in respect of her former home in Poole. He points out that the tribunal concentrated on the premises at Poole and omitted to find any facts connected with suitability in terms of paragraph 10(4) of Schedule 3 of the new home.
8. 	Paragraph 10 of the Schedule allows an adjudication officer to place restriction on meeting housing costs to the extent that they are excessive. The criteria which has to be taken into account is specified in paragraph 10(4), and in so far as the present case is concerned it is (b) of that sub‑paragraph which is material. It is to be borne in mind that the comparison is with areas in which suitable alternative accommodation exists; to say that a dweller in Dorset can find suitable alternative accommodation in Glasgow at a cheaper rate clearly would not come within sub‑paragraph (b) and would ignore the condition that it must be a suitable alternative. CSB/1016/1982 is a decision where a Commissioner held, for the purpose of a like provision in the supplementary benefit legislation, that: 
“Area connotes something more confined, restricted and more compact than a locality or a district . . . It might consist of dwelling houses or flats contiguous to a road or a number of roads, refer to a neighbourhood or even to a large block of flats. It is not capable of precise definition in the context of the regulations, which apply to the entire country with the many variations which occur in different towns and localities. It has no strictly defined boundary and is most likely to be within the knowledge of chairman and members of appeal tribunals for the locality.”
The Commissioner went on to explain that the requirement of suitability must preclude the other area being chosen on too wide a basis. In my judgement what was said by the Commissioner in that decision as to regulation 21 of the Supplementary Benefit (Requirements) Regulations is as true of paragraph 10(4) of Schedule 3 to the Income Support (General) Regulations 1987 and the tribunal in the case before me should have looked at the case in that way. In regarding Poole as a place where suitable alternative accommodation to that in Hertford was available the tribunal were choosing on too wide a basis. The new tribunal should have regard to an area in the sense explained by the Commissioner in CSB/1016/1982 and in doing so to use their knowledge of the locality.
9. 	I now turn to the remaining ground of appeal. Clearly there was a need for the tribunal to decide whether it was reasonable, having regard to the relevant facts as defined in paragraph 10(7), to expect the claimant and her daughter to seek cheaper accommodation. Though they were addressed on this aspect of the case they do not appear to have made any findings thereon.
10. 	Clearly the decision of the tribunal was erroneous in point of law and has to be set aside. The claimant’s representative requested that the disposal of this appeal be expedited and a nominated officer so ordered. Both the adjudication officer now concerned and the claimant’s representative agree that the absence of any findings of fact pertinent to the claimant’s present home prevents me from giving the decision myself. It was suggested by the claimant’s representative on 24 August 1990 that I should delay the giving of the decision in order that they may provide evidence relating to the area in which the claimant’s house is situated. I decided not to delay my decision. I did so for two reasons; first the claimant’s representative had initially asked for the case to be expedited and it has been given priority over other cases pending: second the question which will arise on the new evidence is one which can be best decided by a social security appeal tribunal whose members have knowledge of the locality in which the claimant’s home is situated.

Date: 18 September 1990	(signed) Mr. J. J. Skinner	Commissioner