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You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> SK v Secretary of State for Work and Pensions [2013] UKUT 138 (AAC) (18 March 2013) URL: http://www.bailii.org/uk/cases/UKUT/AAC/2013/138.html Cite as: [2013] UKUT 138 (AAC) |
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IN THE UPPER TRIBUNAL Case No. CJSA/516/2012
ADMINISTRATIVE APPEALS CHAMBER
Before Judge Nicholas Paines QC
Decision: The decision of the First-tier Tribunal involved an error of law. I set it aside and give the decision that the tribunal ought to have given, which is a decision superseding the Secretary of State’s decision of 27 November 2009 so as to include the claimant’s housing costs in his award of jobseeker’s allowance with effect from the first day of the benefit week in which his housing costs became payable.
REASONS FOR DECISION
1. This case raises difficult issues about the correct application of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 to the facts of the case. A number of different provisions of the Regulations were debated before the First-tier Tribunal, which made a valiant attempt to negotiate its way through them. I have reached a slightly different conclusion on how the Regulations operate in this case, albeit one that is not without its own complications.
2. The claimant was awarded a jobseeker’s allowance with effect from 16 September 2009. The benefit was withdrawn on 2 November 2009, apparently because of the claimant’s failure to sign on, but a fresh award was made with effect from 27 November. (It was subsequently withdrawn owing to a further failure to sign on in May 2010, but a third claim, with effect from 19 April 2010, was in payment at the time of the claimant’s appeal.) Benefit was paid to him fortnightly in arrears.
3. The claimant had housing costs - a mortgage. By virtue of schedule 2 to the Jobseeker’s Allowance Regulations 1996 read with the Social Security (Housing Costs Special Arrangements) (Amendment and Modification) Regulations 2008 his housing costs fell to be met by JSA 13 weeks after his initial award – i.e. on or about 18 December 2009. It is common ground that form MI 12 was sent to him by Jobcentre Plus in November 2009 and received back on 12 April 2010; the claimant had signed the form on 21 March and sent it on to his lender for completion and return. The form is designed for claimants of income support or JSA to give details of their mortgages.
4. On 18 May 2010 a decision-maker decided that the claimant was entitled to have his mortgage interest paid with effect from 21 March 2010. The claimant queried why the interest was not being paid with effect from December 2009; he was told that payment was being made with effect from the date on which he signed the form MI 12. (The claimant’s representative subsequently criticised the use of this date as having no warrant in the Social Security and Child Support (Decisions and Appeals) Regulations 1999; it seems to me that it was chosen with a view to palliating the consequences for the claimant of the late return of the form.) The full correspondence is not in the papers; it may be that the claimant appealed at that time. At all events, an appeal brought in March 2011 came before the First-tier Tribunal. By this time the claimant had consulted a representative who had obtained a further explanation from Jobcentre Plus; this was to the effect that the payments could not be backdated to December 2009 because of the claimant’s delay in returning form MI 12; it was “standard Departmental procedure to accept backdating only where the MI 12 is returned within four weeks of being issued”.
5. The claimant’s grounds of appeal were that a change of circumstances had occurred on 18 December 2009 when the waiting period for coverage of his housing costs expired; though the claimant had not returned form MI 12 within four weeks, the fact that it had been sent to him showed that the Department were already aware that the claimant had housing costs that would be covered by benefit with effect from the December date. This was not, therefore, a case of late notification of a change of circumstances.
6. The appeal provoked a reconsideration of the decision, but the decision was not changed. The decision-maker reasoned that there had been no delay by the claimant’s lender, with the result that regulation 7(12) and (13) of the Decisions and Appeals Regulations did not allow a retrospective extension; none of the provisions of regulation 8 applied, since the claimant had not given any reasons for the late notification of his change of circumstances. It was implicit in this that the case was one of supersession upon notification of a change of circumstances where the notification was late; I shall return to the question of the applicable Regulations later in this decision. The relevant provisions are set out at paragraphs 17 to 19 below.
7. The claimant’s submission to the First-tier Tribunal disagreed with this analysis. It was submitted that the only change of circumstances that had occurred was the expiry of the 13 week waiting period; there had been no change, for example, in the claimant’s mortgage commitments. Of the potentially relevant subparagraphs of regulation 7(2) of the Decisions and Appeals Regulations, the claimant’s representative excluded regulation 7(2)(b) on the ground that the returning of form MI 12 did not constitute or notify a change of circumstances: the Secretary of State was already aware of the passage of 13 weeks since the award, with the consequence that the housing costs had become payable.
8. It was submitted that the relevant provision was regulation 7(2)(bb) and the relevant date was the date in November 2009 on which the Secretary of State sent out form MI 12, since that was when the Secretary of State ‘commenced action with a view to supersession’ within the meaning of that subparagraph. The claimant’s representative considered regulation 7(12) and (13) and submitted that, in a case that potentially fell both under those paragraphs and under regulation 7(2), regulation 7(2) should prevail as it was couched in mandatory terms (‘the decision … shall take effect’).
9. The case came before the First-tier Tribunal in August 2011; the claimant and his representative did not attend but a representative of the Secretary of State did. The tribunal judge was careful to put the claimant’s case to the Secretary of State’s officer, who conceded that this was not a case about notification of a change of circumstances but submitted that the Secretary of State needed the information contained in form MI 12 in order to calculate the additional payment. There was debate about how much information about the mortgage had been contained in the original claim form, which was no longer available. The presenting officer emphasised the claimant’s delay of four months in returning the form; the judge reminded her of the claimant’s explanation of the delay – his wife’s illness with the consequence that responsibility for the care of her and their very young children had fallen on him – but the presenting officer maintained that this did not explain a delay of four months with no requests for more time.
10. The judge dismissed the appeal, holding – I am sure, correctly – that the original JSA claim form would not have contained enough information to enable the additional payment to be reliably calculated and made. She held that this was a case of supersession upon application by the claimant, the application being constituted by the returning of form MI 12. The original claim form could not in her view be regarded as a notification that the claimant would become entitled to housing costs, because it could not then be predicted that he would be entitled to JSA for the necessary 13 weeks. Noting that the claimant’s representative had not relied on regulation 8 of the Decisions and Appeals Regulations (extension of time for late notification of changes), the judge held that the effective date of the supersession was governed by regulation 7(2)(b): the beginning of the benefit week in which the notification was made. She held that regulation 7(12) and (13) did not apply as this was not a case of delay by the lender, and confirmed the Secretary of State’s approach of treating the date of the claimant’s signature of the form as the date of notification.
11. The claimant sought permission to appeal, taking issue with the propositions that he notified a change of circumstances by returning form MI 12 and that he did so when he signed the form. He submitted that the change of circumstances was accepted to be the mere passage of 13 weeks; form MI 12 could not be a notification of that change of circumstances as it did not contain a statement that the claimant had completed 13 weeks of entitlement. It merely contained details of his mortgage. There was nothing from the claimant that could be analysed as being an application for supersession; alternatively, even if the form MI 12 could be so analysed, the Secretary of State had in any event begun to act on his own initiative by sending the form out in the first place.
12. It was submitted that the relevant provision of regulation 7 was therefore regulation 7(2)(bb) and the effective date was when the Secretary of State ‘commenced action with a view to supersession’ by sending the form out (it was the fault of the Regulations, and not the claimant, that the effective date thus prescribed was earlier than the change of circumstances). In any event regulation 7(2)(b) could not be the applicable provision since it is impossible to notify a fact (here, the passage of 13 weeks) that is already known to the Secretary of State; if the relevant provision was not regulation 7(2)(bb) it was regulation 7(2)(a).
13. A First-tier Tribunal judge gave permission to appeal and Judge Levenson directed a submission from the Secretary of State. This disputed the tribunal’s conclusion that regulation 7(12) and (13) did not apply: they did not refer to delay on the part of a lender but simply to the fact that the lender had not supplied information to the Secretary of State (which could, as here, be the result of delay by the claimant in forwarding the form to the lender). Regulation 7(12) and (13) dealt specifically with the problem of late supply of information about a mortgage and must be taken to over-ride regulation 7(2). The Secretary of State invited the Upper Tribunal to substitute a decision that the effective date in this case fell at the beginning of the benefit week eight weeks before the returning of the form.
14. In reply, the claimant’s representative submitted that regulation 7(12) could not apply: it applied where the Secretary of State was prevented from making a decision because a lender had not supplied information earlier, whereas in this case the information was supplied on 12 April 2010 but the decision was not made until 18 May. Moreover, since this was not a case of an application, regulation 7(12) could only allow the effective date of the decision to be up to eight weeks before the decision was made; in this case an effective date up to eight weeks earlier would be not before 23 March, which was after the date from which the Secretary of State had already begun paying the claimant’s mortgage costs.
15. Judge Humphrey directed a submission from the Secretary of State on the meaning of expression ‘action with a view to supersession’ in regulation 7(2)(bb). The Secretary of State submitted that action with a view to supersession was not the same as taking action to determine whether there were grounds for supersession, which was what the sending out of form MI 12 amounted to. In reliance on the decision of Judge Jacobs in CDLA/3688/2001 he submitted that he took action with a view to supersession when he took the supersession decision on 18 May 2010; this was, however, without prejudice to his primary position that regulation 7(12) and not regulation 7(2) applied; regulation 7(12) produced an effective date of 9 February.
16. The claimant’s representative notified the Upper Tribunal that she did not wish to make any further observations.
The relevant legislation
(1) This regulation–
(a) is, except for paragraphs (2)(b), (bb) or (be), (29) and (30), subject to Schedules 3A, 3B and 3C; and
(b) contains exceptions to the provisions of section 10(5) as to the date from which a decision under section 10 which supersedes an earlier decision is to take effect.
(2) Where a decision under section 10 is made on the ground that there has been, or it is anticipated that there will be, a relevant change of circumstances since the decision had effect or, in the case of an advance award, since the decision was made, the decision under section 10 shall take effect–
(a) from the date the change occurred or, where the change does not have effect until a later date, from the first date on which such effect occurs where–
(i) the decision is advantageous to the claimant; and
(ii) the change was notified to an appropriate office within one month of the change occurring or within such longer period as may be allowed under regulation 8 for the claimant's failure to notify the change on an earlier date;
(b) where the decision is advantageous to the claimant and the change was notified to an appropriate office more than one month after the change occurred or after the expiry of any such longer period as may have been allowed under regulation 8–
(i) in the case of a claimant who is in receipt of … jobseeker's allowance … and benefit is paid in arrears, from the beginning of the benefit week in which the notification was made;
(ii) in the case of a claimant who is in receipt of … jobseeker's allowance … and benefit is paid in advance and the date of notification is the first day of a benefit week from that date and otherwise, from the beginning of the benefit week following the week in which the notification was made; or
(iii) in any other case, the date of notification of the relevant change of circumstances; or
(bb) where the decision is advantageous to the claimant and is made on the Secretary of State's own initiative—
(i) except where paragraph (ii) applies, from the beginning of the benefit week in which the Secretary of State commenced action with a view to supersession; or
(ii) in the case of a claimant who is in receipt of … jobseeker's allowance … where benefit is paid in advance and the Secretary of State commenced action with a view to supersession on a day which was not the first day of the benefit week, from the beginning of the benefit week following the week in which the Secretary of State commenced such action;
…..
(12) Where this paragraph applies, a decision under section 10 may be made so as to take effect as from such date not more than eight weeks before–
(a) the application for supersession; or
(b) where no application is made, the date on which the decision under section 10 is made,
as is reasonable in the particular circumstances of the case.
(13) Paragraph (12) applies where–
(a) the effect of a decision under section 10 is that there is to be included in a claimant's applicable amount an amount in respect of a loan which qualifies under–
…..
(ii) paragraph 14 or 15 of Schedule 2 to the Jobseeker's Allowance Regulations;
… and
(b) that decision could not have been made earlier because information necessary to make that decision … had not been supplied to the Secretary of State by the lender.
19. Regulation 8(1) provides that
(1) For the purposes of regulation 7(2) … a longer period of time may be allowed for the notification of a change of circumstances in so far as it affects the effective date of the change where the conditions specified in the following provisions of this regulation are satisfied.
The regulation goes on to require an application which, among other things, gives reasons for the failure to notify the change of circumstances earlier.
7. … where a decision in respect of a claim for jobseeker's allowance is superseded on the ground that there has been or there is expected to be, a relevant change of circumstances, the supersession shall take effect from the first day of the benefit week (as defined in regulation 1(3) of the Jobseeker's Allowance Regulations) in which that relevant change of circumstances occurs or is expected to occur.
Paragraph 7 is in turn subject to paragraphs 8 to 11 of the schedule, which I have not set out as they do not have any application to the facts of this case.
Discussion
21. The scheme of the legislation is that section 10(1) introduces the concept of supersession either on the Secretary of State’s own initiative or on an ‘application made for the purpose’. Section 10(5) then provides for the effective date of such a decision, subject to regulations such as regulation 7 of the Decisions and Appeals Regulations. In regulation 7, regulation 7(1) provides that regulation 7 is, for the most part, subject to schedules 3A to 3C. It is therefore sensible to go next to those schedules in order to see whether any of their provisions applies to the facts of a particular case and, if so, to turn back to regulation 7 in order to see whether any of its provisions that are not subject to the schedules also apply to the facts of a case; if so, the legislative intention appears to be that they should prevail.
22. The legislation uses, in different places, the concept of an application for supersession and the concept of a notification of a change of circumstances. They are not precisely the same thing: notifying a change of circumstances means telling the Secretary of State that circumstances have changed or will change, whereas applying for a supersession decision means asking the Secretary of State to take such a decision; that may well be on the grounds of a change of circumstances that the claimant is notifying to the Secretary of State at the same time, but it could equally be on the ground of a change of circumstances that the Secretary of State knows about but has not reacted to. Conversely, where a claimant notifies the Secretary of State of a change in circumstances leading to a lower benefit entitlement, he is simply performing his duty to notify the Secretary of State of such a change; if the Secretary of State responds by superseding the earlier decision, that is the Secretary of State acting of his own initiative. It would be perverse to regard the claimant as having applied for a reduction of his award.
23. In the present case, regulation 7(1) leads one to paragraph 7 of schedule 3A, which I have set out at paragraph 20 above. The terms of paragraph 7 fit this case exactly: the Secretary of State’s decision of 18 May 2010 did supersede a decision in respect of a claim for jobseeker's allowance on the ground that there had been a relevant change of circumstances. Therefore, it seems to me, the paragraph applies and sets an effective date of the first day of the benefit week in which the relevant change of circumstances occurred – subject only to the possibility of the paragraph being over-ridden by one of the provisions of regulation 7 referred to in regulation 7(1).
24. Of those provisions, the potentially relevant ones are regulation 7(2)(b) and 7(2)(bb). However, regulation 7(2)(b) cannot, it seems to me, be in point. It applies to changes in circumstances that are favourable to a claimant, but does not refer to a late application for a supersession but rather to a late notification of the change of circumstances. In this respect I agree with the claimant’s representative that the returning of form MI 12 could not amount to notifying the Secretary of State that the 13 week waiting period had expired because (a) the form did not contain this information and (b) the Secretary of State knew it anyway. Regulation 7(2)(b) therefore cannot over-ride paragraph 7 of schedule 3A in this case. (I add for completeness that regulation 7(2)(a) cannot do so either, both because it only applies where a change is notified and because it is not one of the provisions expressed to over-ride the schedules.)
25. That leaves regulation 7(2)(bb) and, possibly, regulation 7(12) and (13). Regulation 7(2)(bb) only applies where a superseding decision is made on the Secretary of State’s own initiative. The claimant maintains that the Secretary of State’s decision in his case was made on the Secretary of State’s own initiative, whereas the Secretary of State maintains (and the tribunal agreed) that it was made on an application constituted by the claimant’s returning of form MI 12. If the Secretary of State and the tribunal are right, then regulation 7(2)(bb) is not in point either, and the effective date remains governed by paragraph 7 of the schedule.
26. The process which led eventually to the decision of 18 May 2010 was one launched by the Secretary of State on his own initiative. The Secretary of State had responded to the information in the JSA claim form that the claimant had a mortgage by asking for further details of it to be supplied on form MI 12; that can only have been with a view to a future supersession decision that the Secretary of State was contemplating making without the claimant having asked for it.
27. If (which the papers do not disclose) no time limit is set for the return of form MI 12 – or if a claimant returns it within the time set – I see no escape from the conclusion that the whole process has run its course at the Secretary of State’s initiative and regulation 7(2)(bb) applies.
28. If there was a time limit, which the present claimant did not comply with, his later returning of the form could be seen as the claimant applying for a supersession decision after failing to comply with the conditions on which the Secretary of State was prepared to supersede of his own initiative. In that case, neither regulation 7(2)(b) nor regulation 7(2)(bb) would apply: regulation 7(2)(b) would not apply because, even if returning the form were a late application for supersession, it would not be a late notification of a change in circumstances; regulation 7(2)(bb) would not apply because the decision was not made on the Secretary of State’s own initiative. The result would be that the effective date remained that derived from paragraph 7 of the schedule.
29. If no time limit was expressly set in this case, then on the face of it regulation 7(2)(bb) applies. If so, it would advance the effective date of the decision to the beginning of the benefit week in which the Secretary of State commenced action with a view to supersession under regulation 7(2)(bb)(i) (the claimant’s benefit being paid in arrear). In my judgment that would be the week in which the Secretary of State sent out form MI 12. CDLA/3688/2001does not lead to any other conclusion: the issue that Judge Jacobs was dealing with in that case was whether a purported supersession decision had been taken less one month after the decision it purported to supersede; Judge Jacobs held that the decision was taken on the date it was decided to take it. He was not dealing with the concept of commencing action with a view to supersession.
30. If, by virtue of regulation 7(2)(bb), the effective date is in November, then it is earlier than the date of the change of circumstances (and quite possibly earlier than the decision it supersedes); that is an absurd result that cannot have been intended. The explanation of why regulation 7(2)(bb) is worded as it is is presumably that the draftsman only envisaged a situation in which the Secretary of State began, on his own initiative, preparations for supersession in response to a change of circumstances that had by then already occurred.
31. Applying the required objective approach to construction, it would in my view be apparent to a reader knowing the background that regulation 7(2)(bb) could not intend a decision to ‘take effect’ – in the sense of the new rate of benefit being paid – in advance of the change of circumstances. It could only be taken to mean that the decision was to have effect as if made as at the date the Secretary of State commenced action, but that it would take effect prospectively on the basis of what was, as at that date, a future change of circumstances.
32. If form MI 12 was sent out at a time when the claimant did not have an award of JSA (which was the position between 2 and 27 November) it seems to me impossible to make sense of regulation 7(2)(bb) at all; it would produce a decision prospectively to add housing costs to a then non-existent award. In that event, regulation 7(2)(bb) could not operate so as to over-ride paragraph 7 of the schedule.
33. There remains the question of whether regulation 7(12) and (13) could apply. I agree that regulation 7(13) is not predicated on delay by a lender, but simply on the late supply of the information for any reason. However, the relationship between regulation 7(12) and (13) and regulation 7(2) is obscure. As the claimant’s representative points out, regulation 7(2) is expressed in mandatory terms whereas regulation 7(12) appears to confer a discretion. That gives some support to the view that it is intended to empower the Secretary of State as a matter of discretion to substitute a date in the range prescribed by regulation 7(12) for the date prescribed by regulation 7(2). However, (a) the Secretary of State did not purport to apply regulation 7(12) in his decision in this case; and (b) regulation 7(12) is not a provision that prevails over paragraph 7 of schedule 3A.
34. I therefore decide that the effective date of supersession in this case is governed by paragraph 7 of schedule 3A or, depending on the facts, regulation 7(2)(bb). I do not need to decide whether regulation 7(2)(bb) applies in this case. Construed so as to avoid absurdity, it produces the same result as paragraph 7 of schedule 3A: the claimant is entitled to the payment of his mortgage interest with effect from the first day of the benefit week in which his housing costs became payable.
