JMe	Commissioner's File: CIS/14551/1996
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992 SOCIAL SECURITY ADMINISTRATION ACT 1992
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW
DECISION OF THE SOCIAL SECURITY COMMISSIONER
Name:

Social Security Appeal Tribunal: 

Case No:
[ORAL HEARING]
1. The claimant's appeal is allowed. The decision of the Maidstone social security appeal tribunal dated 21 August 1995 is erroneous in point of law, for the reason given below, and I set it aside. The appeal is referred to a differently constituted social security appeal tribunal for determination in accordance with the directions given in paragraphs 15 and 16 below (Social Security Administration Act 1992, section 23(7)(b)).
2.	Prior to 26 October 1994 the claimant was, in receipt of income support, including an entitlement to the disability premium. His housing costs did not include all the loan interest which he was liable to pay. Interest on something over £15,000 was met, while interest on something over £25,000 was not. That gave rise to a figure for weekly housing costs from 30 June 1994 of £28.83. On 26 October 1994 the claimant sold his existing home and moved to a new home with the assistance of two loans of £27,000 and £586.56. In a letter dated 4 November 1994, he wrote:
"Following my recent call to your office concerning my enforced house move due to my financial situation exacerbated by my post-operative problems ... I have had to `trade down' on my property in Teston for one in a much cheaper area in Tovil Mill ..."
3. The adjudication officer on 3 January 1995 reviewed the existing decision on the ground of change of circumstances, but did not revise the amount of housing costs, on the ground that the claimant had increased his liability for eligible housing costs and under the terms of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987 remained entitled to only £28.83. The claimant appealed in a letter dated 10 January 1995, which included the following:

"I did, at your request, send in to Mrs [B] (Manager) a letter dated 4/11/94 explaining some of the severe financial problems I have which forced me to `trade down' on my previous property in Teston to a house costing less money in a much less desirable area to reduce considerably my commitment to BNP - all papers and solicitors of the transaction were enclosed with this letter. Originally you were only paying part of this loan as `house improvements' on my old former property ... the balance I was responsible for which, at that time, I considered fair on your part but still nevertheless crippling to me on my benefit monies. I then found this balance `top up' was putting too much strain on me which caused me a very close complete nervous breakdown last year exacerbated by a further operation on my hand at East Grinstead where it was discovered that my original operation at Maidstone Hospital has inexcusably removed 6 cm of nerve from my hand resulting is recurring painful tumours (heuromas) ... Due to the foregoing I realised I must move and `trade down' which was even more traumatic in my mental and physical condition and the poor state of the housing market to alleviate and reduce hopefully to nil my housing expenses by yourselves as I was formerly (and still am in certain areas) living a very frugal life style at my previous address living on next to nothing foodwise and turning off my central heating completely last winter ... to save money, this not being conducive to my mental and physical state which my GP was treating along with my hand problems."
4.	The adjudication officer's written submission on form AT2 set out sub-paragraphs (1) to (3) of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987, but not subparagraphs (4) to (12). It was submitted that the new loans, being taken out after 2 May 1994, fell within paragraph 5A, so that the housing costs were limited the existing eligible housing costs.
5.	A written submission was prepared on the claimant's behalf by someone at Maidstone Citizens Advice Bureau. The first point made was that, since the claimant had reduced the amount of his loans from £40,767.56 to £24,528.56, there was no additional liability within the terms of paragraph 5A. The second point was that as the claimant was a disabled person within paragraph 7B of Schedule 3, the adjudication officer should have considered that provision. I need not go through the other points made.
6. The appeal tribunal confirmed the adjudication officer's decision and decided that the claimant's housing costs remained £28.83. Its reasons in relation to the new loans were recorded as follows:
"The Appellant contends in his letter of appeal that the provisions of paragraph 7B of Schedule 3 is applicable to him, i.e. a loan taken out to adapt a dwelling for the special needs of a disabled person. But in our view there was no adaptation of a dwelling taking place but simply a

`trading down' of housing expenses to save money.
In the circumstances, the application of paragraph 5A of Schedule 3, which came into force on May 2, 1994, is relevant to this appeal. In effect, this meant that any increase to his housing costs on the new property is excluded and cannot be met. In essence, his housing costs are limited to £28.83 per week."
7.	The claimant was granted leave to appeal to the Commissioner by the appeal tribunal chairman and the adjudication officer's written submission dated 31 July 1996 supported the appeal. It was said that the circumstances fell within the exception in subparagraph (8)(b) of paragraph 5A:
"(8) Subject to sub-paragraph (8A), the conditions specified in this sub-paragraph are that the loan was taken out, or an existing loan increased, either-
(a) to make adaptations to an existing property to meet the special needs of a disabled person; or
(b) to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant;"
The adjudication officer submitted that the claimant was acquiring a more suitable accommodation to his special needs, as he thought that income support would cover his new housing costs in full, thereby alleviating his financial stress, which would have benefited his mental condition. Because I considered that there were difficulties in accepting that argument, I directed an oral hearing of the appeal.
8.	The claimant attended the oral hearing and was represented by Mr David Forsdick of the Free Representation Unit. The adjudication officer was represented by Mr Leo Scoon of the Office of the Solicitor to the Department of Social Security. I am grateful to all present at the hearing for their assistance.
9.	Mr Forsdick has persuaded me, but only just, that the appeal tribunal did err in law in failing to deal with sub-paragraph (8) of paragraph 5A. Social security appeal tribunals have an inquisitorial jurisdiction and should, as it was put in paragraph 5(1) of Commissioner's decision R(SB) 30/84, "determine the appeal with due regard to all potential heads within the material legislation". But that duty, in the light of paragraphs 10 and 11 of the Tribunal of Commissioners' decision R(SB) 2/83, is to be judged on the basis of the evidence presented to the appeal tribunal. There can be no obligation on an appeal tribunal to identify and investigate uncanvassed factual points except in the most obvious and clear-cut circumstances. Thus, here a failure to deal with sub-paragraph (8) could only be an error of law if there was sufficient indication of a case which could be made in the evidence before the appeal tribunal. Mr Scoon submitted that there was no such indication. He said that the whole thrust of what was put forward by the claimant was that the move was for

financial reasons and that there was nothing to indicate that there was anything in the physical nature or qualities of the new accommodation which made it more suitable to the claimant's special needs as a disabled person. As I have indicated, this is a long way from clear-cut case, but on balance I conclude that there was enough in the claimant's letter of 4 November 1994, his letter of appeal and in the (misguided) reliance on paragraph 7B in the written submission to indicate that the claimant was putting forward his physical and mental condition, or in other words his special needs as a disabled person, as one of the reasons why he moved accommodation. Although there was nothing in the evidence before the appeal tribunal to indicate that there was anything special about the nature of the new accommodation, I think that the indications about the reasons for the change were just enough, especially where the claimant was appearing unrepresented before the appeal tribunal and the written submission drafted for him was obviously incoherent, to give rise to a duty on the appeal tribunal to consider sub-paragraph (8).
10. Accordingly, the appeal tribunal's decision must be set aside as erroneous in point of law, although without any personal fault on the part of its members in view of the omission of any reference to sub-paragraph (8) in the adjudication officer's submissions to them. The appeal must be referred to a differently constituted social security appeal tribunal for determination in accordance with the directions below.
11. In order to give directions to the new appeal tribunal I must consider some of the wider submissions about the proper interpretation of paragraph 5A(8). Mr Scoon submitted that in order for the sub-paragraph to apply there has to be something about the physical character or quality of the new accommodation that makes it more suited to the special needs of the disabled person. He said that the alleviation of mental stress through the .alleviation of financial stress was too remote from that requirement to come within the scope of sub-paragraph (8) . Mr Forsdick submitted that that was not necessarily so and that it is a question of fact for appeal tribunals to determine what are the special needs of a disabled person and when new accommodation is more suited to those needs. I think that the proper interpretation lies somewhere between those two positions, but not far from the way that Mr Forsdick put things in his closing submission.
12. Some propositions are I think clear. First, the fact that the new accommodation is more suited to the special needs of the disabled person need only be one of the reasons for the acquisition. It does not have to be the sole or predominant reason. Second, the new accommodation only has to be more suited: there is no test of whether or not it was reasonable to acquire the new accommodation. Third, the special needs of the disabled person must be needs stemming from the person's disability. That follows from the force of the word "special". "Disabled person" is given quite a wide definition in sub-paragraph (8), including those who are suffering disablements and incapacities which are not permanent (or even, for the over-75s, who have no disability

at all apart from the effects of age). I consider that the person's overall mental and physical condition must be taken into account, not merely whatever condition it is that in the circumstances triggers the application of the definition. However, only needs stemming from something which amounts to a specific disease or bodily or mental disablement, ie of a kind identified by medical science, or from the effects of ageing for the over-75s, can be special needs of the disabled person. Fourth, within those limits (and any others discussed below), the application of sub-paragraph (8) is a matter of fact for adjudication officers and appeal tribunals. Wide words are used in the sub-paragraph and the adjudicating authorities must apply them to the circumstances as they find them, rather than some legal gloss imposed by Commissioners' decisions.
13. Difficulty does, however, arise when considering financial factors. Some of the difficulty is removed, as Mr Forsdick recognised, by the application of the third point in paragraph 12 above. Many income support claimants will be under financial stress, which is a cause of anxiety and turmoil. If the claimant concerned happens to be a disabled person, that cannot transform a "trading down" for the sole reason of reducing overall mortgage interest liabilities into something within sub-paragraph (8). It must also be the case that financial factors cannot be ignored, as in practice it will often be difficult to disentangle such factors from the circumstances as a whole. For instance, one can use an example raised during the oral hearing, of a disabled person who cannot afford to heat their accommodation adequately, although it could be heated adequately by someone with enough money. If the person's physical and mental condition is such that there is a special need for heating, I do not think that it would be doubted that smaller or more compact accommodation which costs less to heat to an adequate level is more suited to the disabled person's special needs. Similarly, one can adapt the facts of .Commissioner's decision CIS/7273/1995, where the claimant moved to be near her son who could look after her. If the reason why the son could not look after the claimant in their existing accommodation was that he could not afford the traveling expenses, I do not think that that would prevent the application of sub-paragraph (8).
14. Where does the relevance of financial factors stop? Can it extend to bring the pure circumstance of an alleviation of financial stress alleviating mental stress within the scope of sub-paragraph (8) ? Mr Forsdick submitted that it could extend that far if the adjudicating authority was satisfied as a matter of fact of a direct link between the characteristics of the new accommodation, including its price, and the special needs of the disabled person. That submission cannot be accepted in its entirety. Without seeking to draw any definite legal lines, I think that two particular considerations point in that direction. First, the question to be asked is whether the accommodation itself is more suited to the special needs of the disabled person, not whether the terms of the acquisition of the new accommodation make the circumstances as a whole more suited to those special needs. The relevant characteristics of the new

accommodation could possibly include its running costs, but not the price that had to be paid for it or the size of the loan which had to be taken out. Second, part of the means by which in the present case the claimant expected to be relieved of financial stress (and thereby of mental stress) was by all of the loan interest on his new home being met as an income support housing cost. To allow such an expectation to work in favour of the removal of a restriction on the meeting of all the interest, through the operation of sub-paragraph (8), would be wrong. It would introduce an undesirable circularity of reasoning. Such expectations should not be taken into account.
Directions to the new appeal tribunal
15.	There must be a complete rehearing on the evidence presented and submissions made to the new appeal tribunal. Such evidence can include the points made by the claimant in his letter dated 17 January 1997 about the nature of his new home compared with the previous home and any medical evidence which he wishes to put forward. The new appeal tribunal must apply the general approach to paragraph 5A(8) of Schedule 3 to the Income Support (General) Regulations 1987 set out in paragraphs 11 to 14 above, both to identifying the issues on which findings of fact are necessary and to determining the proper result in the light of the findings of fact made.
16. If the new appeal tribunal decides that neither sub-paragraph (8) nor any of the other exceptions apply, there seems to be little dispute about the application of the general rule in paragraph 5 (1) to (3) . It is clear that, within the terms of subparagraph (3), the claimant's "new liability" exceeded his "former liability", as the latter refers to the costs which were formerly potentially applicable as housing costs (Commissioner's decision CIS/11293/1995). Here the excluded interest on the £25,000 or so did not represent costs potentially applicable -under the provisions of Schedule 3. It seems also that, where the amount of the "former liability" has changed during the course of the relevant period (which might cover a long period of income support entitlement) , it is the most recent amount with which the comparison has to be made under paragraph 5A(3).
(Signed) J Mesher Commissioner
	Date:	16 April 1997