CIS 4712 2002

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1	I allow the appeal.

2	The claimant and appellant is appealing with permission of a Commissioner against the decision of the Colwyn Bay appeal tribunal on 29 July 2002 under reference U 03 915 2002 00039.

3	For the reasons below, the decision of the tribunal is set aside. I refer the appeal to a new tribunal to consider in accordance with the directions in this decision (Social Security Act 1998, section 14(8) and (9)).  

4	I held an oral hearing of this appeal at the Cardiff Civil Justice Centre on 8 July 2003. The claimant was represented by Angela Williams of Citizens Advice Cymru and Diana Bradley of Ynys Mon CAB. The Secretary of State was represented by Mr V Lewis of the Office of the Solicitor to the Department for Work and Pensions. I am grateful to them for their help in this case, and in particular for the written submissions made for the hearing.

5	I announced at the end of the hearing that the appeal was to be allowed, and it was agreed that the appropriate course was to refer the matter to a new tribunal for rehearing. This confirms that decision with full reasons.

Background to this appeal 

6	The decision under appeal, notified on 4 July 2001, is that the claimant is entitled to housing costs limited to £3.06 a week because a mortgage was taken out while the claimant was receiving benefit.  The facts underlying the claim are not in dispute and may be summarised briefly. The claimant and his wife (Mr and Mrs B) have lived in their house since 1972. They previously rented it from the local council but in 1996 they bought the house jointly with their son, C, who was working but who also lived there.  So did a daughter, who was still at school. Mr and Mrs B had claimed housing benefit for the rent up to the time of purchase. C made the arrangements to buy the house and, at first, paid the mortgage. No claim was made by either Mr and Mrs B or C for help with the mortgage.  C left the house in April 2001 and refused to make any further mortgage payments. Mr B applied for help with housing costs from June 2001.  Mr and Mrs B are both unable to work. Mr B was receiving the lowest rate of the care component and higher rate of the mobility component of disability living allowance.  Entitlement to income support is not in question.

7	The Secretary of State established from the local authority that the amount of housing benefit being received by Mr and Mrs B at the time of the purchase of the house was £3.06 a week. The housing costs allowed for income support were therefore limited to that sum by reason of Schedule 3, paragraph 4, to the Income Support (General) Regulations 1987.

8	There is also a separate question about a second loan taken out on 25 August 2000. This was also claimed to be relevant to the housing costs of Mr and Mrs B. But the Secretary of State declined to accept any part of the loan as relevant. This was stated to be because the loan had been taken out by C and Mr and Mrs B had produced no evidence of the purpose for which it was taken out.

The second loan

9	I deal with this matter shortly, as I agreed with the submissions of the parties on this point at the oral hearing. It was conceded by the Secretary of State, rightly in my view, that the tribunal had not dealt with this issue adequately. The tribunal dealt with this very much as a secondary issue but in reality it is of equal standing with the issue about housing benefit. Although the tribunal made some relevant findings of fact about the purpose or purposes of the loan, it did not deal with the matter fully. It was not even clear who was liable for the loan repayments. 

10 	This issue must go to a new tribunal. The new tribunal must deal with the issue fully, if possible with a copy of the relevant loan agreements and evidence about the items on which the loan was spent in front of it when it does so. It should in particular consider if any of the expenditures come within paragraph 16(2) of Schedule 3. Both parties are directed to produce any copies of the agreement that they have and any other relevant documentary evidence for that hearing. So far as possible, all documentary evidence should be submitted to the tribunal within one month of the date of  issue of this decision.

The housing benefit limit

11	This is a more difficult issue – not least because of the tenacious arguments put forward on the point by Angela Williams -  and I reserved my decision on it. The difficulty arises because of the limit on housing costs under Schedule 3 to the Income Support (General) Regulations 1987 imposed by paragraph 4(7) of that Schedule.  Paragraph 4 is about housing costs not met.  One of the purposes of paragraph 4 is to stop any direct overlap with housing benefit. Linked with this are rules to stop people claiming more by way of income support than was being claimed under housing benefit. This deals with cases such as that of Mr and Mrs B who buy the house they had previously rented from the local authority.

12	The relevant provisions are in paragraph 4(7) to (11). The key is in paragraph 4(8). This applies if during a relevant period “the claimant or a member of his family acquires an interest in a dwelling which he then occupies or continues to occupy as his home” and in the week preceding the week in which that interest was acquired “housing benefit was payable to the claimant or a member of his family”.  But there is a limit to the housing costs payable:

“…the amount to be met by way of housing costs shall initially not exceed the aggregate of-
	(i)	the housing benefit payable in the week mentioned …; and
	(ii)	any amount included in the applicable amount of the claimant or a member of his family in accordance with regulation 17(1)(e) or 18(1)(f) in that week;
and shall be increased subsequently only to the extent that it is necessary to take account or any increase, arising after the date of the acquisition, in the standard rate or in any housing costs which qualify under paragraph 17 (other housing costs).

13	The reference to regulation 17(1)(e) and the proviso will cover any additional entitlement arising under the second loan I have already considered. Otherwise the final proviso is not relevant on the facts of this case.  The question therefore is to establish what was “the housing benefit payable in the week mentioned”. The finding of the tribunal was that “Mr B was in receipt of £3.06 housing benefit for the period 20 8 96 to 25 8 96. This ceased on 26 8 96 when he received council tax benefit.”  This was based on a letter from the local authority confirming that figure. It was a low figure because of non-dependent deductions made, in particular, for C. 

14	Angela Williams submitted that the housing benefit paid in the week before purchase was not correct. It was based on the assumption, which could be shown to be wrong, that C was earning at a particular level.  In a later letter the authority indicated the precise basis of the calculation of entitlement of £3.06, and indicated that on information subsequently made available the housing benefit entitlement could have been either £35.67 a week or  £29.56 a week, depending on other assumptions. That letter was, of course, not before the tribunal but I mention it to put the claimant’s claim in context. 	The argument for the claimant is that paragraph 4(8) applies to the housing benefit “payable”, not the amount actually paid. The amount payable should be at least the £29.56, because it was now shown that the amount paid was far too low. The tribunal should have directed the local authority to recalculate the housing benefit, and should have taken the recalculated figure into account.

15	This argument was supported by reference to the dictionary definition of “payable” as “that is to be paid; due, owing, falling due”.  This, it was argued, is a clear reference to receivability not receipt. Reference was also made to Commissioner’s decision CIB 14383 1996 (*66/99) in which the Commissioner commented on the differences between “payable” and “paid” in the context of overlapping benefits. 

16	 In further support of that argument, Angela Williams drew my attention to Command Paper 2905, the report of the Social Security Advisory Committee on the relevant amendment of the Schedule in 1995, and the government’s reply to that report.
At paragraphs 68 and 69 of the report, the Committee is critical of the proposals to limit income support housing costs for those exercising a right to buy their own council houses. The Committee recommends that this element of the proposal is not proceeded with.   The response of the Secretary of State for Social Security to that recommendation is at paragraph (17) of the response. It asserts that:

.. in order to protect the interests of the taxpayer, the amount allowed to meet their mortgage interest payments, and any service charges and ground rent, is restricted to the amount of housing benefit they were entitled to.  

17	My attention was also drawn to the official guidance on the provision in the Decision Maker’s Guide at paragraph 23480 (Housing costs for loan interest will be met if a claimant or a family member). This concludes: “ But the housing costs met for loan interest cannot initially exceed the amount of HB and any eligible housing costs that the claimant was entitled to immediately before the purchase”. Finally, I was taken through other uses of “paid” and “payable” in Schedule 3.
	
18	In reply, Mr Lewis accepted the terms of the Decision Maker’s Guide and did not seek to content that “payable” meant only “actually paid”. Taking into account decisions CIS 12124 1996 and CIB 14383 1996, he submitted that in this context, it was proper to look to entitlement not to actual payment. For example, there could have been an outstanding claim for change in the level of benefit during the relevant week. If there was, and the housing benefit was increased as a result, then that would be relevant.  But this was to be seen in the context of income support as a last resort benefit, and in the light of clear Court of Appeal authority that the matter must be looked at at the date of claim.

19	The key to the current problem was that the issue of the level of housing benefit was a question of fact, not law, for the appeal tribunal dealing with the income support claim. The task of the Secretary of State and of the tribunal was to establish the entitlement to housing benefit at the relevant time as a matter of fact. If the tribunal did establish that issue, then the finding was not open to appeal. Nor was it open to the tribunal itself to work out possible housing benefit entitlement as a matter of law. If at some later stage it was shown that the entitlement changed, then application  could be made for revision or supersession. 

“the housing benefit payable in the … week”

20	 I accept the arguments that in this context the phrase “payable in…” refers to entitlement for the week rather than to actual payment in the week. Otherwise, for example, the regulation might produce an inappropriate result of either nil or a large amount because of a delay in payment or a back payment being paid in the week. Equally, if the figure was in dispute at the relevant time, then that dispute and its outcome should also be taken into account. Otherwise the dispute would be prejudged. But I also accept the submission that this is a question of fact for an income support appeal tribunal, not a question of law. It is not for the appeal tribunal to determine the level of entitlement, although the tribunal may now have the capacity and training to do it. It is for the parties to show the tribunal the correct figure on the evidence – most obviously from the relevant housing benefit authority. 

21	As I have set aside the decision of the tribunal, its conclusions on the issue of the entitlement of the claimant to housing benefit also no longer stand. I do not therefore need to consider if the tribunal was right in law in the way it decided this point. The new tribunal must make its own findings of fact on the question, and then reach the appropriate decision. I direct the new tribunal to decide, as a question of fact, the entitlement of the claimant to housing benefit in the week before the week in which the home was bought and to apply paragraph 4 to those findings. It will have before it the additional evidence in the papers and any other evidence the parties put before it, but it is for the tribunal to reach that decision, not me. Again, if the parties have further documentary evidence on this point, it is to be sent to the tribunal within a month of issue of this decision. 

								David Williams
								Commissioner

								07 August 2003
[Signed on the original on the date shown]