Secretary of State for Work and Pensions CPC 1699 2012
| Jurisdiction | UK Non-devolved |
| Judge | Judge N J Wikeley |
| Judgment Date | 17 January 2013 |
| Neutral Citation | 2013 UKUT 29 AAC |
| Subject Matter | Income support and state pension credit |
| Respondent | DL |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Docket Number | CPC 1699 2012 |
| Appellant | Secretary of State for Work and Pensions |
[2013] AACR 22
(Secretary of State for Work and Pensions v DL (SPC)
[2013] UKUT 29 (AAC))
Judge Wikeley CPC/1699/2012
17 January 2013
Housing costs – ineligible service charges – general and administrative charges – proper method of calculation – inconsistency of approach between R(IS) 2/07 and R(PC) 1/07
The claimant owned on a long leasehold a flat situated within a retirement complex designed for independent, but supported, living of residents. All residents paid a monthly service charge. The claimant was eligible for help under state pension credit (SPC) towards her accommodation costs but not her supported living costs. The Department for Work and Pensions (DWP), after considering the information provided by the management agents, assessed the claimant’s eligible costs as just over £60.00 a month (the actual service charge was over £400). The claimant appealed to a First-tier Tribunal (F-tT) referring to a previous decision, CIS/2901/2004, later reported as R(IS) 2/07), and the DWP’s own guidance on implementing that decision. At the hearing the claimant was represented but the Secretary of State was not. After considering all the available evidence, the F-tT allowed the claimant’s appeal. The DWP appealed against that decision. It argued that the F-tT had misinterpreted the case law concerning the assessment of eligible service charges and had failed to undertake a sufficient analysis of the evidence. It was argued by the claimant’s representative that the Secretary of State was simply seeking to re-argue factual issues already decided by the F-tT and had misunderstood the evidence before the F-tT as well as the relevant case law.
Held, dismissing the appeal, that:
- an appeal at this level was not an opportunity to re-run the case on the facts or to raise points which had not been previously raised. It was axiomatic that the weight to be attached to any particular piece of evidence was quintessentially a matter for the fact-finding tribunal. As Rix LJ explained in Fryer-Kelsey v Secretary of State for Work and Pensions [2005] EWCA Civ 511 (reported as R(IB) 6/05), it was not the function of appellate courts, including the Upper Tribunal, “to set the appeal tribunal to rights by teaching them how to do their job of weighing the evidence” (paragraphs 29 to 30)
- there was nothing to suggest that the F-tT had failed to apply properly the principles in R(PC) 1/07 regarding the use of data from other retirement developments to establish costs: it considered both personal and documentary evidence at the hearing and had not unquestioningly relied on evidence about other similar developments (paragraph 33)
- the F-tT failed to adopt the approach advocated in cases CPC/968/2005 and R(PC) 1/07 to the allocation of administrative costs for “accommodation” and “support” purposes (to apportion them by the same ratio as eligible versus ineligible costs and not staff costs). Instead it inadvertently accepted the approach taken in R(IS) 2/07. But the assessment was inevitably complex and the eventual figure necessarily approximate. The legal system should strive for, but will not always attain, perfection and any error of law must be material to the outcome. Any difference in outcome for the claimant was marginal and she was content with the F‑tT’s decision. So, given the particular circumstances of this appeal, it was neither right nor proportionate to declare the F-tT’s decision erroneous in law only then to decline to set it aside or to re-make it in similar terms (paragraphs 46 to 49).
DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
The DECISION of the Upper Tribunal is to dismiss the appeal by the Secretary of State.
The decision of the Birmingham First-tier Tribunal dated 18 August 2011 under file reference SC024/11/04218 does not involve an error on a point of law. The First-tier Tribunal’s decision stands.
This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007.
REASONS FOR DECISION
The issues in this appeal
1. This appeal is about the proper calculation of the claimant’s entitlement to state pension credit (SPC), and in particular the assessment of SPC eligible housing costs where service charges are payable on a flat in a retirement complex. At the risk of some over-simplification, the principal issue concerns the attribution of service charges as between, on the one hand, accommodation costs (which qualify for SPC) and, on the other, supported living costs (which do not qualify for SPC purposes but may be met under the social services “Supporting People” programme).
2. The appellant before the Upper Tribunal is the Secretary of State for Work and Pensions. He appeals against the decision of the First-tier Tribunal (F-tT) which was in favour of the claimant, an elderly lady of 97. On one level the issue is simple – should SPC cover 15 per cent of her service charge bill for 2010/11 (as the Secretary of State argues) or 51 per cent of that cost (as is argued on her behalf).
3. However, this appeal is also something of a test case, or at the very least a lead case. The claimant lives in a development operated by Retirement Security Limited (RS Ltd), who have a total of 32 such complexes around the country with some 1,600 residents, of whom 240 have SPC awards. RS Ltd is aware of some 16 other related appeals pending before the F-tT. However, there will doubtless be other retirement home providers with many other residents who may also be affected.
The oral hearing before the Upper Tribunal
4. I held an oral hearing of this appeal in London on 28 November 2012. The Secretary of State was represented by Mr Matthew Sabey of the Solicitor’s Office. The claimant (and respondent on this appeal) was represented by Mr Jim Tindal of counsel. I am grateful to them both for their submissions.
5. The claimant herself, understandably, was not present. However, the hearing was attended by Mr R Bessell, the Chairman of Retirement Security Limited, who has acted as her representative throughout. I simply acknowledge that it is clear from the file that he has worked tirelessly (over a number of years) on behalf both of the claimant and other residents in a similar position.
The background to this appeal
6. The claimant lives in a flat in a RS Ltd complex in the West Midlands designed for independent but supported living. She owns her flat on a long leasehold. The management company for the complex in question (PCL) devise an annual budget for the service charge which is then split between residents on a monthly basis. The managing agent is RS Ltd. The annual PCL service charge budget for 2010/11 was in total £237,046, or £411.54 per month for each of the 48 residents. In very crude terms, this budget can be classified under four heads (or at least it was so divided in the Department’s matrix used for assessing SPC entitlement): staff salaries (approximately £140,000), administrative and general costs, including communal utility bills (£42,000), the reserve fund (£25,000) and other buildings and property-related costs (eg lift maintenance, gardening, totalling some £30,000). Also, and as noted above in very broad terms, SPC meets the accommodation element of the service charge, but not those costs relating to the support of residents.
7. The Secretary of State’s decision maker decided on 15 March 2011 that the eligible amount of such housing costs for the claimant was £14.77 a week or £767.75 a year (or, on my arithmetic, £63.98 a month). This actually represented a slight decrease on an earlier assessment that the eligible housing costs were £15.90 a week. The decision maker took the view that RS Ltd had not provided a full breakdown of (i) the number of hours worked by staff, (ii) the weekly duties of staff and (iii) the future uses of the reserve fund. The decision maker accordingly deducted from the service charge (a) the manager’s salary; (b) the duty managers’ salaries; (c) the housekeeping assistants’ salaries; (d) the sleeping in allowance; and (e) the future maintenance fund.
8. Putting the matter the other way around, the decision maker allowed about 15 per cent of the annual service charge, representing most but not quite all of the buildings and property-related costs relating to lift maintenance, the fire alarm, gardening, repairs, window cleaning and buildings insurance. This ratio of 15 per cent was also applied to the administrative and general costs, including communal utility bills. Everything else – notably staff costs – was found to be...
To continue reading
Request your trial