Morrell v. Secretary of State for Work and Pensions CIS 5140 2001
| Jurisdiction | UK Non-devolved |
| Judge | Judge E. Jacobs |
| Judgment Date | 11 April 2003 |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Subject Matter | Recovery of overpayments |
| Docket Number | CIS 5140 2001 |
| Appellant | Morrell v. Secretary of State for Work and Pensions |
R(IS) 6/03
Morrell v. Secretary of State for Work and Pensions [2003] EWCA Civ 526
Mr. E. Jacobs CIS/5140/2002
25.4.02
CA (Thorpe, Sedley LJJ, Richards J)
11.4.03
The claimant was in receipt of income support between June 1995 and August 1999. For much of that period she received regular sums of money from her mother, either paid to her towards rent and living expenses or paid directly to her landlord for rent. The amounts were paid by way of loan, to be reimbursed when her circumstances improved. During this period she completed four review forms on which she replied “no” to the question: “Does anyone pay money to someone else on your behalf?”. In 1997 and 1999 she gave the local authority information about the loans received to date and they in turn informed the Benefits Agency, but no action was taken by the Benefits Agency on either occasion. Later in 1999 her entitlement to income support ceased because she moved in with her fiancé. In 2000 the Benefits Agency decided that benefit had been overpaid and was recoverable for two periods: the first starting from the week after receipt of the review form in September 1995 and terminating when the Benefits Agency were notified of the loans in 1997 and the second starting from the week after receipt of the review form in 1998 and terminating when the Benefits Agency were again notified of the loans in 1999. The claimant appealed, arguing that the loans were not income and that, even if they were, any overpayments were not recoverable as they were not caused by the claimant’s misrepresentation. The tribunal rejected both arguments, as did the Commissioner.
The claimant appealed to the Court of Appeal.
Held, dismissing the appeal, that:
1. following Leeves v. Adjudication Officer, “income” should be given its ordinary and natural meaning and the fact that a payment is a loan and therefore subject to a repayment obligation does not necessarily give it a different character. It was necessary to look at the nature of the repayment obligation (paras. 31-33);
2. the Commissioner was correct to conclude that the loans received by the claimant from her mother were income, as there was no certain and immediate obligation to repay (paras. 33 and 37);
3. the Court left open the question of whether an element of recurrence or regularity was essential for a loan to count as income (paras. 35-36);
4. the department were entitled to rely on the information in a review form as an up-to-date and accurate statement of a claimant’s circumstances, regardless of any information they may have received in the past. The overpayments were caused at least in part by the claimant’s misrepresentations on the forms and were therefore recoverable (paras. 44-47).
DECISION OF THE SOCIAL SECURITY COMMISSIONER
- My decision is that the decision of the Sutton appeal tribunal, held on 4 January 2001, is not erroneous in point of law.
The appeal to the Commissioner
- This is an appeal to a Commissioner against the decision of the appeal tribunal brought by the claimant with the leave of a district chairman of tribunals. The Secretary of State supports the appeal.
The history of the case
- This case concerns the recoverability of alleged overpayments of income support. They are said to arise because the claimant misrepresented her income. She did not disclose on review forms that her mother was paying money each month either directly to her or to her landlord in order to discharge her liability for rent.
- As presented to the tribunal, there were two periods of recoverable overpayment, one from 1995 to 1997, the other from 1998 to 1999. They were separated by a period during which the Department was aware of the true facts but did not act on them. The claimant again became the causative agent of the overpayment when she completed a further review form.
- The claimant has been represented on her appeal, both to the appeal tribunal and to the Commissioner, by a solicitor. The arguments put on her behalf are set out clearly in the papers and I need not repeat any more of them than is necessary to make this decision understandable.
Did the claimant receive income?
- The first issue raised by the claimant’s solicitor is: were the payments made by the claimant’s mother income? The solicitor argues that they were not, because they were loans which the claimant was liable to repay. Reference is made to the detailed wording of the Income Support (General) Regulations 1987 in an attempt to show that loans are not income unless they are expressly treated as income. I reject that argument.
- The tribunal found that the loans made by the claimant’s mother were income. It was entitled to make that finding.
- A loan is not necessarily income. It may be no more than a one off payment or one of a few instalments. That explains why a student’s loan has to be treated as income in the legislation and why paragraph 30 of Schedule 9 to the Income Support (General) Regulations 1987 uses the general word ‘payment’.
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Whether the claimant is receiving income has to be judged by reference to the normal meaning of that word.
- It obviously means money, or the equivalent, that is coming to the claimant. It need not come directly to the claimant. It is sufficient if it is paid to someone else on her behalf. So, it does not matter whether her mother paid the money to her or paid it for convenience to the landlord.
- A further requirement is that it must be recurring. In this case it was paid regularly each month for a number of years.
- Also in this case, its payment was predictable and the amount was known or ascertainable in advance. Those are not, perhaps, essential features of income. But they reinforce the classification of the mother’s payments as such.
- There is authority that money that a claimant is liable to repay does not count as income: see the Court of Appeal decision in Leeves v. Chief Adjudication Officer reported as R(IS) 5/99. However, the principle laid down by that case only covers money which is subject to an immediate obligation to repay. The money was not immediately repayable in this case. I have no doubt that the mother was accurately recording what was agreed when she wrote (page 40):
“I expect to be reimbursed gradually as her problems decrease.”
- The claimant’s solicitor also argues that, as the loans were not income, there was no misrepresentation by the claimant. That argument falls with my rejection of the argument that the loans were not income.
The interpretation of the questions on the review form
- The claimant’s solicitor argues that the wording of the review form was not adequate to refer to loans. I reject that argument. The forms are drafted to give as much guidance as is realistic without overwhelming the claimant with detail. In this case, that balance was struck by (a) giving general guidance on the kind of information that was required, (b) asking a series of fairly specific questions, and (c) giving examples to make some of the questions clearer. The tribunal correctly found that the question meant what it said and that the claimant’s answer to it was not accurate.
Causation
- The claimant’s solicitor argues that the claimant’s answers on the review forms were not one of the causes of the overpayments. The argument is that the Department did not act on the information about the loans when it was made known in 1997. It is argued that that shows that the Department would not have acted differently if the claimant had reported the loans on her review forms
- I reject that argument. The flaw in it is obvious. The failure by the Department to act on the information in 1997 was a mistake. It broke the chain of causation when it was received, but when the claimant repeated her misrepresentation on later review forms, she again became one of the causes of the overpayment.
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