CIS 14141 1996
| Jurisdiction | UK Non-devolved |
| Judge | Judge J. Mesher |
| Judgment Date | 02 April 1997 |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Docket Number | CIS 14141 1996 |
| Subject Matter | Commissioners' procedure and practice |
Commissioner's File: CIS 14141/96
Mr Commissioner Mesher
2 April 1997
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
Claim for: Income Support
Appeal Tribunal: Huddersfield SSAT
[ORAL HEARING]
1. The claimant's appeal is allowed as a matter of law, but without any change
in the practical outcome. The decision of the Huddersfield social security
appeal tribunal dated 23 January 1996 is erroneous in point of law, for the
reason given below, and I set it aside. It is expedient for me to substitute my
decision for that of the appeal tribunal without making any fresh or further
findings of fact (Social Security Administration Act 1992, section 23(7)(a)(i)).
My decision is that the decision under which the claimant was entitled to income
support immediately before 26 April 1995 falls to be reviewed on the ground of
relevant change of circumstances (Social Security Administration Act 1992,
section 25(1)(b)), but that in relation to the period from 26 April 1995 to 1
October 1995 the existing decision is not to be revised on review so as to
include housing costs in respect of interest on the loan taken out on 26 April
1995 in the claimant's applicable amount.
2. This is one of four appeals with essentially identical facts which were heard
together before me. In all of the cases the claimants were owner-occupiers of
their homes free of any mortgage and had been in receipt of income support
without any housing costs for loan interest. After 2 May 1994 they took out
loans to pay for essential repairs and improvements to their homes arranged
through the Anchor Housing Association and asked for the interest on the loans
to be met as housing costs. That was refused by the adjudication officer,
applying paragraph 5A of Schedule 3 to the Income Support (General) Regulations
1987 ("paragraph 5A"), which was inserted with effect from 2 May 1994 and
remained in force until the wholesale replacement of Schedule 3 on 2 October
1995. The refusal was confirmed by the appeal tribunal in all four cases.
3. At the oral hearing, the claimant was represented by Mr Bruce Moore, the
company secretary and solicitor to Anchor Trust, accompanied by Mr Geoffrey
Ferres, welfare rights development officer of Anchor Housing Association, who
had represented the claimants below. 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 both representatives for their clear and concise
submissions.
4. The case turns on the proper effect and meaning of paragraph 5A. For ease of
reference I have attached to this decision as appendix A a copy of the
regulations which inserted paragraph 5A, as made by the Secretary of State for
Social Security and laid before Parliament (the Income Support (General)
Amendment Regulations 1994). I have also attached as Appendix B a copy of the
draft regulations as referred to the Social Security Advisory Committee ("SSAC")
by the Secretary of State in October 1993. The draft regulations, together with
SSAC's report on the proposal to make the regulations and the Secretary of
State's statement under section 174(2) of the Social Security Administration Act
1992 were published as Cm 2537.
The adjudication officer's decision
5. The view taken by the adjudication officer when making the adverse decision
was straightforward, and turned on the precise words of sub-paragraphs (1), (3)
and (5) of paragraph 5A. It was briefly as follows. Sub-paragraph (1) applies
where a liability to pay loan interest is first incurred after 2 May 1994 and,
as the claimant was entitled to income support when the liability was incurred,
would prevent the entire loan interest being met as a housing cost.
Sub-paragraph (3) modifies the operation of sub-paragraph (1), but only where
before the incurring of the "new liability" for loan interest there was a
housing cost applicable for loan interest (the "former liability"). In all four
cases, there was no such former liability, so that sub-paragraph (3) had no
application. Sub-paragraph (5) on loans for repairs and improvements only
operates as an exception to sub-paragraph (3), in contrast to sub-paragraphs (6)
to (11). Thus, as sub-paragraph (3) had no application, neither did
sub-paragraph (5). It was accepted by the adjudication officer that the loan
made to the claimant met the conditions of paragraph 8(3) of Schedule 3, with
the modification required for the purpose of paragraph 5A(5) (see the report of
the review visit on page 1P and the appeal tribunal's acceptance on page 54).
The practical result was that if the claimant had had some existing loan
interest being met as a housing cost, regulation 5A(5) would have allowed the
extra cost of the interest on the repairs and improvement loan to be met. But as
she did not have any existing loan interest the cost of the interest on the
repairs and improvement loan could not be met.
The argument for the claimant
6. The argument made on behalf of the claimant to the appeal tribunal to avoid
that result (rejected by the appeal tribunal) was essentially the same as that
made to me by Mr Moore. The argument is for what might be called a super-literal
construction, supported by evidence about the intention of the Secretary of
State when making the amending regulations.
7. The argument picks up on an ambiguity in sub-paragraphs (1) and (3) of
paragraph 5A suggested by the editor of the 1994 edition of Mesher and
Wood,CPAG's Income-related benefits: the legislation at page 234. Briefly, it is
as follows. Sub-paragraph (1) does not expressly say that it applies where the
relevant housing costs are first incurred after 2 May 1994. It applies where the
costs "were incurred" after 2 May 1994. Housing costs are relevant to the
calculation of the claimant's weekly applicable amount under regulation 17(1) of
the Income Support Regulations and generally refer to the amounts which a
claimant is liable to pay week by week. Therefore, sub-paragraph (1) could be
said to apply, for instance, to the liability to pay interest in weeks falling
after 2 May 1994 on a loan taken out well before 2 May 1994 and when the
claimant was not entitled to income support. On that basis, there would be
little or no point in the reference to the relevant period and the definition in
sub-paragraph (2) including linking periods. There would also be a strange
effect on sub-paragraph (3). In every case where there was a liability to meet
loan interest in more than one week, there would be a former liability, in the
first week, and a new liability, in the second week. That, said Mr Moore, would
alleviate the apparent effect of sub-paragraph (1) in applying paragraph 5A to
loans taken out before 2 May 1994. If the claimant had been receiving income
support immediately before 2 May 1994 there would be a former liability, in the
last week before 2 May 1994, and a new liability, in the next week, of exactly
the same amount, so that the amount of the former liability could continue to be
met. In addition, it would allow the interest on the claimants' loans for
repairs and improvements to be met in the second week of liability to make
payment. In relation to that second week there would be a former liability -the
housing cost in the first week - to which the new liability in the second week
was equal, so that the whole of the cost could be met. Mr Moore recognised
though, that if that were right, the exclusion of any housing cost under
regulation 5A could last only for one week and that sub-paragraph (3)(b) would
be deprived of any practical application.
8. The recognition that the interpretation suggested above has bizarre and
absurd results is then used in this way. Mr Moore agrees with the comment on
page 234 of the 1994 edition of Mesher and Wood that such results "could no
doubt be avoided by a purposive interpretation of para. 5A as a whole". But, he
says, if a purposive approach has to be taken to make sense of paragraph 5A, the
true and full purpose should be looked at. He then refers to the Secretary of
State's statement in Cm 2537 as showing the intention that interest on loans for
essential repairs and improvements...
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