IN THE UPPER TRIBUNAL Case
No. CIS/932/2009
CIS/935/2009
ADMINISTRATIVE APPEALS CHAMBER
Before Deputy Upper Tribunal
Judge Mark
Decision: These appeals are dismissed.
REASONS FOR
DECISION
- Paragraph 29 of Schedule 9 to the Income Support (General)
Regulations 1987 provides for the following sums to be disregarded in
calculating a claimant’s income other than earnings:
“29.—(1)Subject to sub-paragraph (2), any payment received
under an insurance
policy, taken
out to insure against the risk of being unable to maintain repayments on
a loan which
qualifies under paragraph 15 or 16 of Schedule 3 (housing costs in
respect of
loans to acquire an interest in a dwelling, or for repairs and improvements to
the dwelling,
occupied as the home) and used to meet such repayments, to the extent
that it does
not exceed the aggregate of–
(a) the
amount, calculated on a weekly basis, of any interest on that loan which
is in excess
of the amount met in accordance with Schedule 3 (housing costs);
(b) the
amount of any payment, calculated on a weekly basis, due on the loan
attributable
to the repayment of capital; and
(c) any
amount due by way of premiums on–
(i) that
policy, or
(ii) a policy
of insurance taken out to insure against loss or damage to any building
or part of a
building which is occupied by the claimant as his home.
(2) This
paragraph shall not apply to any payment which is treated as
possessed by the claimant by virtue of regulation 42(4)(a)(ii)
(notional income).”
- The claimant took out, and paid the premiums in respect
of, not just one policy, but two policies, to insure against that risk.
He was then made redundant, and claimed income support. In calculating
his income the question arose to what extent the payments made under these
policies were to be taken into account. The insurance company with whom
policy A was written made monthly payments of £604.35 direct to the
claimant’s mortgagee. The first payment was made in late April 2008 to
cover the period from 21 March 2008 to 19 April 2008. According to the
claimant’s representative, the payments were made direct to the mortgage
company at the election of the claimant because that was simpler (file,
p.51).
- The insurance company with whom policy B was written made
payments of £611.64 monthly directly to the claimants’ bank account, the
first payment being made on 29 April 2008 to cover the period 26 March
2008 to 24 April 2008. The claimant’s bank statements in evidence are
incomplete, but show that on at least one occasion following receipt of
£611.64 in respect of policy B, a payment was made of £605 to the
mortgagee from the claimant’s bank account. The claimant has given
evidence that this happened on each occasion such a payment was received.
- As the claim to income support was only from 29 April 2008,
nothing turns on the different commencement dates under the two policies.
Both were in payment throughout the period of the claim.
- The mortgage company itself provided a written statement
by letter dated 28 March 2008 that the monthly instalments were £604.35
and that there were no arrears. It is clear therefore that the payments
made direct to the mortgage company in respect of policy A were sufficient
to discharge the monthly instalments. There is nothing to indicate that
the claimant had any immediate liability to pay the additional £605 or
£611.64 per month to the mortgage company.
- It is common ground that the payments made to the mortgage
company in respect of the monthly payments due under policy A should not
be taken into account in calculating the claimant’s income for income
support purposes. The question for the tribunal was whether (subject to
two small further deductions) the payments made direct to the claimant in
respect of policy B should be taken into account, as the tribunal held to
be the case.
- The claimant’s representative on this appeal complains
that the tribunal failed to explain why the payments in respect of policy
B should be treated differently from the payments in respect of policy A,
and that the tribunal failed to apply the appropriate disregard under
paragraph 29 of schedule 9 to the 1987 Regulations. She contends that
there is nothing in paragraph 29 that enables it to be interpreted as
applying to only one mortgage protection policy. It is also said that the
correct approach is to consider first whether the payment is being used
for the purpose for which it was designed, and if so then paragraph 29
allows deductions from those payments as specified in sub-paragraphs 1(a),
(b) and (c). Any residual income after completing this calculation, she
concedes, would be assessable income for income support purposes.
- I have no difficulty in accepting this argument. I see no
reason why the reference to a policy in the singular in paragraph 29
should not include more than one policy. The problem with the argument in
the present case is that it defeats the claimant’s claim because, once the
payments in respect of policy A have been used to pay in full the monthly
amounts due in respect of the mortgage, the payments under policy B cannot
be used for that purpose. Subject to the two remaining items to which
they could be applied they are therefore, on the claimant’s
representative’s own argument, to be assessable income for income support
purposes. It further seems to me that this is self-evidently the reason
given by the tribunal in the second paragraph at p.3 of the statement of
reasons. I do not regard these reasons as being that in no circumstances
can paragraph 29 apply to more than one policy. What is said is that the
payments in respect of policy B can only be covered by the disregard
provision in paragraph 29 insofar as there is anything falling within that
paragraph which remains to be paid after the mortgage company has received
the payments in respect of policy A.
- The fact, if it is the case, that the claimant chose to
pay most, or even all, of the sums received in respect of policy B to the
mortgage company as voluntary payments in reduction of his mortgage debt
does not mean that the sums so paid fall within the disregard in paragraph
29.
- This appeal has been supported by the Secretary of State,
who appears to me to have misinterpreted the reasoning of the tribunal in
the same way as the representative of the claimant. The Secretary of
State also submits that it is not clear from the available evidence what
amounts covered by the disregard had to be paid and were paid from the
receipts in respect of policy B. The monthly amounts that were due in
respect of mortgage interest and capital repayments are clearly set out in
the letter from the mortgage company to which I have referred. There is
no indication that any further sums were due by way of capital repayment,
so that any additional payments made in reduction of capital by the
claimant out of the proceeds of policy B did not fall within the disregard
in paragraph 29. There is no suggestion that the sums paid in respect of
insurance premiums were incorrectly stated by the tribunal and in any
event, if there was some small error, there is no suggestion that it could
possibly have affected the claimant’s entitlement to income support given
the sort of sums involved.
- The question has been raised on behalf of the claimant
what the position might have been had policy B provided that any payments
would only be made to the mortgage company and that had been what
happened. I can understand that in those circumstances it could be harsh if
the claimant were to be treated as being in receipt of income when the
payments were actually only being made direct to a third party in
discharge of a capital liability and he had no right to receive or use
them as income. The answer may be that in those circumstances the
payments were not to be treated as income at all in the ordinary use of
that word, but it is unnecessary for me to decide this question.
- There is no suggestion that the tribunal in any way
misdirected itself with regard to the question of non-disclosure. The
appeal against the overpayment decision is solely on the basis that there
was no overpayment on the grounds that I have dealt with above. That
appeal therefore also fails.
(signed)
Michael Mark
Deputy Upper
Tribunal Judge
7
October 2009
