CL CIS 2819 2011
| Jurisdiction | UK Non-devolved |
| Judge | Judge C G Ward |
| Judgment Date | 15 May 2015 |
| Neutral Citation | 2015 UKUT 259 AAC |
| Subject Matter | Income support and state pension credit |
| Respondent | Secretary of State for Work and Pensions (IS) |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Docket Number | CIS 2819 2011 |
| Appellant | CL |
Attendances:
For the Appellant: Mr David Forsdick QC (pro bono, via the Free Representation Unit)
For the Respondent: Ms Zoe Leventhal, instructed by Treasury Solicitor
Decision: The appeal is dismissed. The decision of the First-tier Tribunal sitting at Cambridge on 15 November 2010 under reference 034/10/03824 did not involve the making of a material error of law.
REASONS FOR DECISION1. This case has taken a very long time. By no means all of the time taken was avoidable and when it was, it has not always been for the same reason nor the responsibility of the same person or body. I say no more about that save to note that the claimant’s property is understood not to have been in jeopardy as a result and that in the end, both parties have been able to have their case argued by highly experienced counsel, to both of whom I am grateful. It would, in particular, have been very difficult, indeed virtually impossible, for the claimant’s case to have been put by her unaided and Mr Forsdick's willingness to represent her pro bono is much appreciated.
2. The case raises two points in relation to the provision of support for mortgage interest (SMI) via income support:
(a) on its true construction, does the expression “loan” in paragraph 15 of Schedule 3 to the Income Support (General) Regulations 1987 (“the Regulations”) include deferred sale agreements imposed by court order in the course of divorce proceedings ? and
(b) if the answer to (a) is negative, does that amount to unlawful discrimination contrary to Article 14 of the European Convention on Human Rights, read with Article 1 Protocol 1?
3. The claimant (whose own mental health is not robust and who has had problems of alcohol misuse) and her late former husband, Mr L, purchased their then matrimonial home (“the Property”) in 1990, apparently jointly and therefore presumably in joint names with the aid of a mortgage from the Bradford and Bingley. They separated in 1992. Divorce proceedings ensued, in the course of which an order was made at unknown date in respect of the Property (“the Order”). The Order is not in evidence but it appears, and has not been challenged, that it provided that Mr L was entitled to 33% equity in the Property, which was to be sold when the claimant’s son J turned 18, so as to realise the value of Mr L’s interest.
4. The claimant began receiving income support on 18 December 2007. That conferred a prior entitlement to SMI in respect of her original mortgage of £34,000.
5. J turned 18 on 21 February 2008. Around that time he became seriously ill and between May 2008 and January 2009 he underwent 7 heart operations and was admitted to hospital on 5 occasions, 3 of them by emergency ambulance. A more exact chronology, in particular of the development of his illness, is not in evidence. On his discharge from hospital in around January 2009, he continued to receive medical supervision, began to sleep in a ground floor room at the Property with double doors, which was converted to be a bedroom, and there was also a downstairs toilet. He was cared for by the claimant with daily input from the District Nurses for specific tasks.
6. In February 2010 the claimant obtained a loan from Natwest by way of remortgage. The loan (“the 2010 Loan”) was used in part to redeem the existing mortgage from Bradford and Bingley, as to £55,000 so as to buy out Mr L rather than sell the property as per the Order, and as to £7,000 on repairs to the Property. It appears that Mr L’s interest was then released and the claimant and J at some point became joint tenants of the property, although the Secretary of State does not formally concede this.
7. The Secretary of State argues, rightly, that the exact circumstances as at February 2010 are not clear from the evidence. J was at this time at home and had been for over a year. It appears that he made steady but limited progress after his discharge. He had however remained in bed for 6 months after his discharge i.e. to the middle of 2009. By August 2011 he had recovered enough to commence work, although that then led to further serious cardiac difficulties.
8. The Secretary of State’s position on the facts is that while it is accepted on current evidence that sale of the Property was not feasible at the time of J’s 18th birthday, it is not accepted that in February 2010 the circumstances were such that the claimant and J could not have feasibly moved house to other accommodation equally suitable for their needs and paid off Mr L’s share that way, albeit this would have caused disruption and was not their preferred course.
9. On 8 June 2010 the Secretary of State refused the claimant’s claim for SMI in respect of that part of the 2010 Loan which had been used to pay off Mr L. SMI was awarded on the amount borrowed and used to repay the original loan and on a relatively small additional amount in respect of the loan used for home improvements. The claimant’s subsequent appeal was dismissed by the First-tier Tribunal on the papers. That has left a number of gaps in the evidence which, unless I find there to have been an error of law, I am not in a position to fill. In the event I do not consider the gaps matter. On 13 August 2013 I gave permission to appeal.
10. Income support includes an element on respect of SMI where schedule 3 of the Regulations so provides.
11. Para 1 of sch 3 as it stood at the date of decision provided:
“(1) Subject to the following provisions of this Schedule, the housing costs applicable to a claimant are those costs—
(a) which he or, where he is a member of a family, he or any member of that family is, in accordance with paragraph 2, liable to meet in respect of the dwelling occupied as the home which he or any other member of his family is treated as occupying, and
(b) which qualify under paragraphs 15 to 17.”
12. Para 15 provided:“(1) A loan qualifies under this paragraph where the loan was taken out to defray monies applied for any of the following purposes—
(a) acquiring an interest in the dwelling occupied as the home; or
(b) paying off another loan to the extent that the other loan would have qualified under head (a) above had the loan not been paid off.
(2) For the purposes of this paragraph, references to a loan include also a reference to money borrowed under a hire purchase agreement for any purpose specified in heads (a) and (b) of sub-paragraph (1) above.
(3) Where a loan is applied only in part for the purposes specified in heads (a) and (b) of sub-paragraph (1), only that portion of the loan which is applied for that purpose shall qualify under this paragraph.”
13. Para 4 contains complex rules under which, to simplify, a loan which would otherwise have qualified under para 15 does not qualify if, inter alia, a loan is incurred while a person is entitled to income support. Para 4(7) creates exceptions from the para 4 regime, one of which, by para 4(9), is to the effect that:
“The condition specified in this sub-paragraph is that the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant.”
14. Para 16 sets out that loans taken out for the purpose of carrying out “repairs and improvements” (as defined) may qualify. “Repairs and improvements” include, by para 16(2)(k), “adapting a dwelling for the special needs of a disabled person.” Similar provisions about loans used to pay off earlier loans exist to those in para 15(1)(b).
15. Article 14 of the ECHR provides
“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
It is common ground that the right to income support falls within Article 1, Protocol 1: see R(RJM) v SSWP [2009] 1 AC 311.
(a) Deferred sale agreement by Court Order as a “loan”
16. Mr Forsdick's submission is that by para 15 a loan qualifies where (a) it was taken out to defray monies applied for acquiring an interest in the dwelling ; or (b) it was taken out to pay off another loan which would qualify under (a). In order to bring the disputed part of the 2010 Loan within (b), he needs to show that the deferred order for sale of the Proeprty qualified under (a). If it was a loan, it was one in respect of which the claimant was not disqualified from receiving SMI because it was taken out in 1992, thus predating the restrictions imposed by sch 3, para 4 and in any event at that time the claimant was not in receipt of income support. Further, he submits, it was a loan to acquire an interest in a dwelling – in that it prevented a forced sale from occurring for the period of J’s minority. By virtue of the Order, Mr L was forced to defer receipt from the claimant of his share of the...
To continue reading
Request your trial