TT-v-Department for Social Development (PC) [2016] NICom 38

Decision No:  C1/15-16(PC)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

PENSION CREDIT

Appeal by the Department to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 21 May 2015

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the Department for Social Development (“the Department”) from the decision of a tribunal sitting at Limavady on 21 May 2015, leave to appeal having been granted by the legally qualified member (LQM) of the tribunal. 

2.	For the reasons I give below, I disallow the Department’s appeal and uphold the decision of the tribunal. 

	REASONS

	Background

3.	The respondent was born on 6 February 1948.  Having reached the qualifying age of 60, he made a claim to the Department and was awarded state pension credit (PC) from 6 February 2008.  As he was approaching the age of 65, he made a telephone claim for retirement pension (RP) to the Department.  In the course of his telephone claim with a member of staff of the Department’s Pension Centre, he was advised that his PC would probably be reduced by the amount of his RP. He was awarded RP from 11 February 2013. 

4.	Some months later, on 30 September 2013, the section of the Department administering PC observed that, whereas the respondent was now receiving RP, it had not been taken into account for the purpose of calculating his entitlement to PC.  His award of PC was superseded from 11 November 2013 and he was notified that he was entitled to PC at a reduced rate.  On 6 November 2013 the Department decided that the respondent had been overpaid PC amounting to £4,254.66 between 11 February 2013 and 10 November 2013 inclusive, and that this was recoverable from him because he had failed to notify the Department that he was in receipt of RP.  The respondent appealed. 

5.	The appeal was considered by a tribunal consisting of a legally qualified member (LQM) sitting alone.  A Departmental presenting officer did not attend the appeal hearing.  The tribunal allowed the appeal.  The Department requested a statement of reasons for the tribunal’s decision. This was issued on 8 July 2015.  By an application received on 4 August 2015 the Department applied for leave to appeal to the Social Security Commissioner.  Leave was granted by the LQM on 17 August 2015 on the basis that the application raised an important question concerning the duty of disclosure where different benefits were administered in one building, asking was the correct decision reached on the facts of the case.  On 7 September 2015 the appeal was received at the Office of the Social Security Commissioners. 

	Grounds

6.	The Department, represented by Mr Kirk of Decision Making Services (DMS), submits that the tribunal erred in law as it had based its findings of fact on inadequate evidence and thereby made irrational findings as to:

a)	whether the respondent had disclosed his award of RP to the PC decision-maker;

b)	whether the same office administers both RP and PC. 

7.	The respondent was given an opportunity to make observations in response to the Department’s appeal.  He responded, represented by Ms Rogers of Law Centre (NI). Ms Rogers submitted that the tribunal had not erred in law and indicated that the respondent opposed the appeal. 

	The tribunal’s decision

8.	The tribunal made the findings of fact that the PC and RP offices have a telephone number in common, that PC and RP were administered from the same building and both PC and RP staff come under the same “umbrella” of what was known as the Pension Service.  The tribunal accepted that the respondent spoke to a Departmental adviser who took his claim for RP and that the adviser was made aware of his PC, but did not advise him to contact the PC office separately.  The tribunal found that the information in an INF4 leaflet issued to the respondent did not identify an obligation to contact specific and separate staff within the Pension Service dealing with PC.  It found that any requirement to make separate disclosure had not been brought to the attention of the respondent in a clear and unambiguous manner.  The tribunal further observed the confusing similarity between the use of the term “State Pension” by the Department to describe RP and the term “State Pension Credit” used to describe PC.

9.	The tribunal accepted that the facts and evidence pointed to a conclusion that the office in question, i.e. Pension Service, knew the relevant fact concerning the respondent’s RP.  The tribunal accepted that the respondent believed he was dealing with a single office which was responsible for administering all benefits relevant to his pension payments.  The tribunal was not satisfied that the respondent had received adequate instructions or information to report details about his RP to PC, given the facts relating to the administration of both benefits from one place.  It found that he had not failed to disclose a material fact, allowing his appeal. 

	Relevant Legislation

10.	The legislation relating to the recoverability of social security benefits is to be found at section 69(1) of the Social Security Administration (NI) Act 1992 (“the 1992 Act”). This provides: 

69.—(1) Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure—

		(a) a payment has been made in respect of a benefit to which this section applies; or

		(b) any sum recoverable by or on behalf of the Department in connection with any such payment has not been recovered,

	the Department shall be entitled to recover the amount of any payment which the Department would not have made or any sum which the Department would have received but for the misrepresentation or failure to disclose.

11.	The concept of failure to disclose is connected to a duty to disclose which is held to arise from regulation 32 of the Social Security (Claims and Payments) Regulations (NI) 1987 (“the Claims and Payments Regulations”). This provides:

32		(1) Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner as the Department may determine and within the period applicable under regulation 17(4) of the Decisions and Appeals Regulations such information or evidence as it may require for determining whether a decision on the award of benefit should be revised under Article 10 of the 1998 Order or superseded under Article 11 of that Order.

		(1A) Every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner and at such times as the Department may determine such information or evidence as it may require in connection with payment of the benefit claimed or awarded.

		(1B) Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall notify the Department of any change of circumstances which he might reasonably be expected to know might affect—

		(a) the continuance of entitlement to benefit; or

		(b) the payment of the benefit,

as soon as reasonably practicable after the change occurs by giving notice of the change to the appropriate office—

		(i) in writing or by telephone (unless the Department determines in any particular case that notice must be in writing or may be given otherwise than in writing or by telephone); or

		(ii) in writing if in any class of case it requires written notice (unless it determines in any particular case to accept notice given otherwise than in writing).

(6) 		This regulation shall apply in the case of state pension credit subject to the following modifications—

		(a) in connection with the setting of a new assessed income period, the information and evidence which the Department may require to be notified in accordance with this regulation includes information and evidence as to the likelihood of future changes in the claimant’s circumstances needed to determine—

		(i) whether a period should be specified as an assessed income period under section 6 of the 2002 Act in relation to any decision, and

		(ii) if so, the length of the period to be so specified; 

		(b) except to the extent that sub-paragraph (a) applies, changes to an element of the claimant’s retirement provision need not be notified if—

		(i) an assessed income period is current in his case; or

		(ii) the period applicable under regulation 17(4) of the Decisions and Appeals Regulations has not expired.

By regulation 2(1) of the Claims and Payments Regulations, 

	““appropriate office” means “an office of the Department and, where any provision in these Regulations relates to a claim, notice or other information, evidence or document being received by or sent, delivered or otherwise furnished in writing to an appropriate office, includes a postal address specified by the Department for that purpose”.

	Hearing

12.	I held an oral hearing of the appeal.  The respondent was present and was represented by Ms Rogers of Law Centre NI.  The Department was represented by Mr Kirk of DMS. 

13.	Mr Kirk for the Department submitted that the tribunal had erred in finding that PC and RP were one office and submitted they are identified as two separate offices by the INF4 leaflet referred to by the tribunal.  He submitted that the respondent had failed to disclose the fact that he was awarded RP to the office administering PC.  This resulted in overpayment and the overpayment was therefore recoverable.  He submitted that the evidence of the respondent was that he had only communicated with an adviser dealing with his RP claim.  He submitted that those administering PC did not hold any record that the respondent had notified them of receiving RP, as he was obliged to do.  He submitted that the tribunal focused on the question of whether he was instructed to report his RP to PC by the adviser who took his RP claim.  It was submitted that this ignored the instructions in the INF4 which had been issued to the respondent. 

14.	Mr Kirk further referred to evidence before the tribunal in the form of a letter from Marion Sharkey of the Social Security Agency Pensions Service, stating that she had listened to a recording of the telephone claim for RP and that he was notified that his PC would probably be reduced by his “State Pension” but that the adviser did not tell him that they would notify “Pension Credit”.  Mr Kirk submitted that there had been no modification of the instructions in the INF4 by this telephone call. 

15.	While accepting that the letters issued to the respondent were headed “Social Security Agency, Pensions Service,” Mr Kirk submitted that there were separate branches within the Pensions Service.  While the letter contained a single generic telephone number, he submitted that the recorded message on dialling the number then gave separate options for PC and RP.  He accepted that the PC and RP offices were situated in the same building, albeit on different floors.  Nevertheless, he submitted, the claimant’s duty was to report a change in circumstances to the relevant office – not to a particular building.  He submitted that the tribunal had not produced any evidence to support a conclusion that RP and PC was one branch in the same office.  He submitted that the tribunal had erred by basing findings of fact on the telephone call without adjourning to consider a transcript of the call. 

16.	Ms Rogers submitted that the tribunal had not erred in law. She relied on the decision of the Great Britain Social Security Commissioner in CIS/1887/2002 and of Chief Commissioner Mullan in CC v Department for Social Development (IS) [2010] NI Com 5, referring in turn to CSB/677/86.  She submitted that the respondent, having received notification of his award of RP from the Pension Service, would not be under a duty to inform the same Pension Service of that fact.  She accepted that the INF4 had been received by the respondent.  However, the key issue was identifying the “us” referred to in the instructions.  She submitted that the cover letter enclosing the INF4 was from the Pensions Service.  As far as the respondent was concerned, the Pensions Service already knew the information that RP was claimed.  She submitted that the requirements of the INF4 did not give rise to an obligation to inform the specific PC branch, this being a situation where it appeared to the respondent that the information in question had already been communicated. 

	Assessment

17.	It is settled law that the question of failure to disclose, for the purpose of section 69 of the 1992 Act, is linked to the obligations placed on a claimant by regulation 32 of the Claims and Payments Regulations.  These include an obligation to furnish information or evidence which the Department might require for determining whether a decision should be revised or superseded (arising from regulation 32(1)), an obligation to furnish information or evidence as the Department may require in connection with payment of the benefit claimed or awarded (arising from regulation 32(1A)) and a distinct obligation to notify the Department of any change of circumstances which the claimant might reasonably be expected to know might affect the continuance of entitlement to benefit (arising from regulation 32(1B)) (see Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16 at paragraphs 32, 40 and 54). 
	In terms of how disclosure should be made, a Tribunal of Great Britain Social Security Commissioners in R(SB)15/87 at paragraph 28 has said that a claimant’s duty is “best fulfilled by disclosure to the local office where his claim is being handled”. In Hinchy, it was said by Lord Hoffman at paragraph 23,

	“Disclosure, then, must be made to the relevant official and not to the Secretary of State as an abstract entity.  What assumptions can be made about what the relevant official already knows?  The Commissioners have on the whole resisted arguments that the relevant official must be assumed to know, or that the claimant is entitled to assume that he knows, anything about his other benefit entitlements which cannot be described as common knowledge.  It is not for the claimant to form views about what may go on behind the scenes in the Social Security or other benefit offices.  His duty is to comply with the instructions in the Order Book.  A disclosure which would be thought necessary only by a literal-minded pedant (see, for example, CSB/1246/1986) need not be made, but the safest course is to resolve doubts in favour of disclosure”.

18.	Lord Hoffman reiterated at paragraph 32 that “the claimant is not entitled to make any assumptions about the internal administrative arrangements of the Department.  In particular he is not entitled to assume the existence of infallible channels of communication between one office and another”. 

19.	I further observe that the Tribunal of Great Britain Social Security Commissioners in R(SB)15/87 accepted at paragraph 25 that “it is not possible to “disclose” to a person a fact of which he is, to the knowledge of the person making the statement as to the fact, already aware” (approving the statement of Latham CJ in the Australian case of Foster v Federal Commissioner of Taxation (1951) 82 CLR 606). It further said, at para 28:

		"28. We accept that a claimant cannot be expected to identify the precise person or persons who have the handling of his claim. His duty is best fulfilled by disclosure to the local office where his claim is being handled, either in the claim form or otherwise in terms that make sufficient reference to his claim to enable the matter disclosed to be referred to the proper person… But… there can be other occasions when the duty can be fulfilled by disclosure elsewhere. This can happen, for instance, if an officer in another office of the Department of Health and Social Security or local unemployment benefit office accepts information in circumstances which make it reasonable for the claimant to think the matters disclosed will be passed on to the local office in question."

20.	There is no real dispute as to the facts of this appeal. It is common case that the respondent, after he had been awarded RP, did not make a separate communication of that fact to PC.  The award of RP was a relevant change of circumstances that affected the rate at which PC was payable to him.  On the face of it, therefore, the respondent had failed to disclose a material change in circumstances.  However, was that a disclosure which would be thought necessary only by a literal-minded pedant, as per Lord Hoffmann in Hinchy?

21.	The tribunal’s reasoning in this case was that the obligation to disclose had been met by the respondent since the “office in question, i.e. Pension Service” knew the relevant fact concerning the respondent’s RP. It found that there could be no failure to disclose where the material fact is already known to the person or office to whom, under the principle in Hinchy, notification would otherwise have to be made.  The tribunal was not satisfied that the INF4 leaflet or any of the correspondence, literature or other evidence before the tribunal showed that the staff within the Pension Service were separately identified to the respondent as different offices, or that there was a need to track down and notify any separate individual or section of individuals within Pension Service at the same address or that any of these requirements were brought to the respondent’s attention in a clear and unambiguous manner. 

22.	Mr Kirk submits that the tribunal has erred in law by making irrational findings about the Department’s organisation of its offices.  However, certain matters are not in dispute. He submitted that the two branches of the Department in issue, PC and RP, are administered separately. However, he accepted that they are housed in the same office building, and therefore have a common address.  They share a contact telephone number, albeit that automatically voiced options will take a caller to particular branch.  The two branches appear to correspond with claimants under a common letterhead which reads, as I have seen from relevant letters on the file, “Social Security Agency, Pensions Service”. Sometimes the term “Pensions Centre” appears instead. 

23.	The duty to disclose under regulation 32(1) derives from the instructions given to a claimant by the Department.  The respondent was sent his instructions in the INF(PC) Version 02/12, a specimen of which appeared in the papers before the tribunal and before me. I have not seen a copy of the actual cover letter that issued the INF4(PC) to the respondent. However, I have been provided with a specimen copy of such a letter. 

24.	At page 2, part of the INF4 reads:

	“Please take time to read this booklet. Keep it in a safe place with the Pension Credit decision letter that came with it. If your circumstances change you can use the booklet to check whether you need to tell us about the change”. 

25.	At page 4, part of the INF4 reads:

	“Changes you must tell us about 
	If you do not have 
	an assessed income 
	period you must report 
	changes about:

	Your family, 

•	Where you live, 
•	Earnings, 
•	Benefits, allowances or tax credits, 
•	Hospitals and care homes, 
•	Caring for someone, 
•	Going abroad, 
•	Coming from abroad. 
•	
	And also: 

•	Savings and investments, 
•	Personal or work-related pensions, 
•	Income from annuities

How to tell us about changes 
You can tell us about a change of circumstances for you or your partner:

•	by phone – we can accept a change of circumstances by phone but we may ask you to confirm some changes in writing
•	in writing
•	by completing a Pension Credit reply slip if you have one

26.	The INF4 booklet does not appear to contain a contact address or telephone number.  It is therefore reasonable to expect that the relevant address or telephone number is that appearing in the letter enclosing the INF4 booklet.  Having seen a copy of a specimen letter, I observe that it is headed “Social Security Agency, Pension Service”. 

27.	As Baroness Hale put it at paragraph 37 of Hinchy, whether the respondent was in breach of his duty to disclose depends upon how one reads the instructions in the INF4. Mr Kirk has challenged the tribunal’s findings as regards the actual organisation of the Department’s offices as being irrational and based on no evidence.  However, the factor which the tribunal considered most important when it decided the appeal was not the actual organisation of the Department’s offices but rather the respondent’s understanding of it.  

28.	The submission of Mr Kirk is that the respondent’s duty to disclose the award of RP to those administering PC arose from the date of notification of the RP award.  He submits that the respondent was obliged to communicate the specific fact of his award of RP to those administering PC.  However, whereas the instructions in the INF4 require the claimant to tell “us” about any changes, they do not give any more specific information as to who is meant by “us”.  As he was sent an INF4(PC) booklet along with an annual notification of the assessment of his PC award by the “Pension Service, Mail Opening Unit, PO Box 42, Limavady, BT49 4AN”, his duty must be to notify the “Pension Service” at that address.  However, I observe that the letter notifying him of the award of RP which he might be expected to disclose to the Pensions Service came from the “Pension Centre, Mail Opening Unit, PO Box 42, Limavady, BT49 4AN”. 

29.	The respondent had been in telephone contact with the Pension Centre to make his claim to RP.  The adviser he spoke to was made aware that he received PC and advised him that his award of PC might be affected. He was not instructed that he would have to make a separate notification to a specific branch of the Department administering PC in the course of his telephone claim. 

30.	The phrase “joined up government” was coined to express a concept where different branches of government and different services within Departments communicate with each other in the interests of efficiency and good governance.  I consider that an appearance of joined up government has been given to the respondent by the material I have seen, which refers to a Pension Service and a Pension Centre, sharing a common address.  The reality may well be different. However, from the INF4 and the letters from the Department notifying him of awards of benefit, the respondent had no information to suggest that a specific branch administered PC separately from RP.  The respondent was not instructed to make disclosure to any specific section of the Pension Service. 

31.	Some forty years ago, GB Commissioner Mitchell in CSB/677/1986 considered a case on an equivalent point where the same “issuing office” notified a claimant that his sickness benefit would be replaced by invalidity benefit from a particular date.  He poured scorn on the idea that the claimant would have to write to the same issuing office to notify it of the contents of its notice to him.  Commissioner Mitchell did not regard this as a case in which the point in issue was whether the claimant was reasonable in assuming that there would be internal liaison between different offices of the Department.  Only one office was involved and the respondent was not instructed to make disclosure to any particular section, but rather to the office. In other words he could not reasonably have been expected to make disclosure of information to an office which had communicated that same information to him.  I consider that CSB/677/1986 is on all fours with the present case.

32.	The tribunal in the present case elected to follow the precedent of GB Commissioner Howell in CIS/1887/2002.  The Commissioner in CIS/1887/2002 approved the principle applied in CSB/677/1986 in a case which post-dated Hinchy.  The distinguishing factor was that in Hinchy two separate benefit offices were involved. CIS/1887/2002 involved the submission of an incapacity benefit form to the same office as dealt with income support. Commissioner Howell observed at paragraph 5 that: 

“… documents relating to each were issued from the same office at the same address, not identified as coming from difference offices bearing different addresses.  Within the office itself, the work of dealing with the two interconnected benefits was handled in separate “sections”, but there was no evidence about how staff were allocated from time to time to work on one or the other, or a combination of the two”. 

33.	Commissioner Howell held at paragraph 18 that there was no requirement for separate notification of staff within a single office by virtue of the particular tasks the individuals within it happen from time to time to be engaged on.  His decision was approved by Chief Commissioner Mullan in CC v Department for Social Development [2010] NI Com 5, at paragraph 36, albeit obiter because that particular case involved two separate offices. 

34.	I do not accept the submission of Mr Kirk that the tribunal made irrational findings about the actual organisation of the Department.  I consider that the tribunal properly addressed the question of what should be expected of the claimant in terms of complying with the duty under regulation 32(1) in the light of the instructions he was given.  It appears to me that the tribunal made a sustainable decision and applied the requirements of regulation 32(1) appropriately to this case.  Whereas two terms are used to describe the office administering PC and RP – namely, Pensions Centre and Pensions Service – these are not terms which suggest that one is an entity dealing separately with PC and one with RP. 

35.	As I consider that the tribunal made sustainable findings of fact on the evidence, and has applied the law correctly and reasonably to the facts, I must disallow the Department’s appeal. 

(signed):  O Stockman

Commissioner

2 June 2016