Secretary of State for Work and Pensions v DA [2009] UKUT 214 (AAC)

UKUT-AAC
Secretary of State for Work and Pensions v DA
[2009] UKUT 214 (AAC) · 2009-11-06
[1]The claimant died on 19 January 2009, at the age of 77, after the appeal tribunal had made its decision and a district tribunal judge had refused permission to appeal, but before I gave permission on 26 February 2009. The claimant's niece, Mrs B, who had been her receiver under an Order of the Court of Protection dated 6 June 2006, represents the claimant's estate as an executor under her will. She was granted probate of the will on 19 March 2009. The background[2]The course of the decision-making in this case is now known to have been as set out in the following paragraphs, after the investigations described in Mr Atkinson's submission on behalf of the Secretary of State dated 11 March 2009. That is not entirely how it was presented to the appeal tribunal of 27 August 2008 and even Mr Atkinson's account leaves some quite serious difficulties.[3]The claimant was awarded the lower rate of the attendance allowance (AA) from and including 8 February 2005. At that time she was still living in her own home. The claim form had been completed and signed by a friend on her behalf. The form described problems from increasing memory loss and arthritis and a need for continual supervision, but only the boxes for day-time needs were ticked, not those for night-time needs.[4]The claimant became a permanent resident in a care home on 27 October 2005. The Disability and Carers Service (DCS) appears to have found out, according to the letter to Mrs B dated 24 August 2007 (page 38), on 23 January 2006 by a notification from the retirement pension authorities that the claimant was in the nursing home and funded by Nottingham City Council. Also according to that letter, enquiries were made about the funding in the course of which Mrs B said in a telephone call that the claimant would be self-funding from 2 May 2006, but the home said that she had not been self-funding for any period. A supersession decision was given on 23 May 2006, apparently not altering the entitlement to AA, but deciding that the benefit was not payable from and including 28 November 2005 (ie after the first 28 days of residence). At that time, no enquiries were made by DCS about whether or not the fact that the claimant had gone into a care home reflected an increase in her needs and in particular a satisfaction of the night-time conditions, so as to qualify for entitlement to the higher rate of AA. Nor had anyone helping the claimant suggested that there was such a change of circumstances, which the standard instructions issued with awards would have told claimants to disclose.[5]A further decision was given on 6 June 2006, apparently deciding that there had been a recoverable overpayment for some period from 28 November 2005. The existence of this decision has caused some confusion, being labelled a supersession in the computer record and having been wrongly regarded as providing the date of the operative decision on entitlement and payability that needed further supersession later. I do not know if any repayment was made before the further decisions described below.[6]So far as the DCS was concerned, that was how things stood until 11 April 2007, when a letter dated 4 April 2007 was received from Mrs B, as the claimant's receiver. The letter contained the following:
"My aunt ... moved into a residential home in October 2005. Following the death of the person she had shared her house with, the house was cleared and sold. As this process took some time, the local authority (Nottingham City Council) funded my aunt's care until the house was sold, taking out an order on the house to cover the liability. The house was sold on 19.03.07. My aunt became self-funding on 02.05.06 and the underpayments to the council have been taken from the proceeds of sale. I understand that my aunt may be eligible for Attendance Allowance from now on and back-dated to the beginning of the self-funding period."
[7]For some reason, despite several enquiries from Mrs B, action was not taken on the substance of that information until 19 June 2007. An officer confirmed the information with the local authority and gave a decision purporting to supersede the decision of 6 June 2006 on the ground of change of circumstances. The new decision was that the claimant was entitled to the lower rate of AA from and including 28 November 2005, that AA was not payable from 28 November 2005 to 7 May 2006, but was now payable from and including 8 May 2006. That was an application of regulation 7(1) of the Social Security (Attendance Allowance) Regulations 1991 (AA not to be paid for any period during which the person's accommodation was provided(a) in pursuance of certain statutes, including the National Assistance Act 1948, or(b) where the cost of the accommodation was borne wholly or partly out of public funds under those or any other statute relating to persons under disability), followed by regulation 8(6)(b) (regulation 7 not to apply when the whole of the cost of the accommodation is met out of the resources of the person concerned, or by another person or a charity). The letter notifying Mrs B (copied at pages 57 and 58) merely said that the decision about AA had been changed because the claimant was in a care home and AA could not be paid from 28 November 2005 to 7 May 2006, but could be paid from 8 May 2006 as the claimant was now self-funding in the care home. It did not mention the rate of AA that was to be paid. It appears (see Mrs B's letter dated 23 July 2007 at pages 34 and 35) that a payment of £2,603.30 in arrears was made on 13 July 2007 and that £43.15 per week was paid thereafter.[8]There are several defects in the decision of 19 June 2007. It wrongly identified the decision that needed supersession as that of 6 June 2006, instead of that of 23 May 2006, it failed to sort out how going into the care home could be a subsequent relevant change of circumstances since that decision had effect and in particular it failed to sort out how a supersession to the advantage of the claimant on that ground on an application made in the letter dated 4 April 2007 could take effect from 8 May 2006, rather than 11 April 2007. A similar problem would also have arisen if the ground of the supersession had been ignorance or mistake of material fact. I shall come back below to how that decision must be regarded as having operated in substance, because in my judgment that holds the key to the complicated procedural problems in this case.[9]Mrs B's letter of 23 July 2007, received on 27 July 2007, as well as reiterating her complaints about the delays in dealing with the case, noted that payment was only being made at the lower rate of AA and continued:
"I would have thought that my aunt was entitled to the higher amount as she has a form of dementia and needs some supervision during the night and the day to prevent her wandering off or injuring herself. However, since I have not filled in a claim form, I accept that I did not specifically claim the higher rate, but neither did I claim the lower rate. Since I wrote to you in April, I have not been asked to complete a claim form or provide any information about my Aunt's circumstances. I have several times asked if you need more information, but you have never replied. Had I received a letter saying what rate you were going to award, I would obviously have challenged it, but it has only been since regular payment was reinstated on the 16th July that this has become clear. What I would now like is an explanation of why this all took so long to sort out and an acknowledgement of the very poor service provided. I would also like my Aunt to receive the higher rate of AA and I would like this back dating to the date when you re-instated her benefit (May 06)."
[10]A reply with an explanation was sent on 24 August 2007 with a form for completion. After consideration of that and further information provided by Mrs B the decision was given on 14 January 2008 superseding the decision dated 19 June 2007 on the ground of a relevant change of circumstances since that decision had effect (an increase in needs). The new decision was that the claimant was entitled to the higher rate of AA from and including 27 July 2007. Mrs B appealed against that decision, arguing that the claimant had needed care at a level qualifying for the higher rate of AA since she went into the care home on 27 October 2005 and that she (Mrs B) had asked for the higher rate as soon as she became aware that the existing entitlement was only at the lower rate, so that back-dating should be allowed to 27 October 2005. The appeal to the appeal tribunal[11]The first written submission on behalf of the Secretary of State had many mistakes. The supplementary submission dated 16 June 2008 explained fairly straightforwardly the view that the relevant change of circumstances was not notified until 27 July 2007 and that, since that was more than 13 months after the claimant had been said to have started to need extra help at night (27 October 2005), there could be no extension of the normal month to allow the supersession to take effect from the date of the change. There was reference to regulations 7 and 8 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. Regulation 7(9), specific to AA and disability living allowance cases (DLA), requires a supersession on the ground of relevant change of circumstances to take effect:
"(b) where-- (i) the change is relevant to the question of entitlement to a particular rate of benefit; and (ii) the claimant notifies the change before a date one month after he satisfied the conditions of entitlement to that rate or within such longer period as may be allowed under regulation 8, the first pay day (as specified in Schedule 6 to the Claims and Payments Regulations) after he satisfied those conditions."
Regulation 8 allows, on application, a longer period than a month to be used for the purpose of regulation 7(2) and (9) under some quite restrictive conditions (eg that special circumstances are relevant to the application and made notification within a month not practicable, as well as a general test of reasonableness). However, there is an overriding condition in regulation 8(3)(b) that the application for extension is made within 13 months of the date the change occurred. The appeal tribunal's decision[12]Mrs B attended the hearing on 27 August 2008, as did a presenting officer on behalf of the Secretary of State. She explained, among other things, that the claimant first went into the care home when the lady with whom she lived broke her leg. But that lady died in December 2005 and that was when Mrs B became involved. She told the Pensions Service in January 2006 that the claimant was in the home and they said that they would contact the attendance allowance office. It took some time for her to become an appointee and then receiver.[13]The appeal tribunal allowed the appeal. Its decision notice, later adopted by the chairman as the statement of reasons, continued:
"The decision of the Secretary of State issued on 19.6.07 is revised. The tribunal determined that the appeal dated 27.7.07 relates to an appeal against the decision dated 19.6.07. For the avoidance of any doubt that appeal is admitted late on the grounds of a reasonable prospect of success. The decision dated 19.6.07 contains 2 parts - entitlement to attendance allowance and payability. The Tribunal is therefore entitled to look at the entitlement decision as well as payability. The decision on entitlement concerns an award of attendance allowance at the lowest rate from 28.11.05. The Tribunal had evidence that was in existence at the date of the decision that shows [the claimant] was in need of full-time care - 24 hours a day. The Tribunal was therefore entitled to consider entitlement from 28.11.05 as well as the payability issue. The decision of 19.6.07 puts entitlement from 28.11.05 into the issues before the Tribunal. The Tribunal needs to consider change of circumstances from 28.11.05 at the date of the decision it can take account of information that was obtaining at the date of the decision even though this may not have been before the Secretary of State when the decision was made. Consequently [the claimant] is entitled to the highest rate of attendance allowance from 28.11.05. Attendance allowance is not payable from 28.11.05 to 7.5.06."
The appeal to the Upper Tribunal[14]The Secretary of State now appeals with my permission. The six-month qualifying period for the higher rate of the care component[15]There can be no doubt that the appeal tribunal erred in law, on the assumption that it was entitled to consider the substance of when the claimant became entitled to the higher rate of AA, in choosing the date of 28 November 2005. As pointed out when granting permission to appeal, and taken up on behalf of the Secretary of State, a person who is entitled to the lower rate of AA does not become entitled to the higher rate until the attendance conditions for qualification for the higher rate have been satisfied for a period of six months (Social Security Administration Act 1992, section 65(1)(b) and (3)). Here, Mrs B has throughout her involvement put the date from which the claimant first met the night-time qualifying conditions at 27 October 2005. On that basis, she could not become entitled to the higher rate of AA before 27 April 2006. Period for notifying change of circumstances runs from end of qualifying period[16]Mr Atkinson submitted in the submission of 11 March 2009 for the Secretary of State, and I accept, that because the conditions of entitlement are not satisfied until the expiry of the six-month qualifying period, in the light of the precise terms of regulation 7(9)(b) of the Decisions and Appeals Regulations (see paragraph 11 above) regulation 8(3)(b) can only be interpreted as making the 13-month absolute limit, as well as the normal month, run from the end of the six-month qualifying period, not the beginning. In other words, in the present case, if it is in the end relevant, the limit would run from 27 April 2006, not 27 October 2005. However, that would not in itself help the case for the claimant. If the Secretary of State is right about everything else, notification on 27 July 2007 was still more than 13 months after 27 April 2006. The available powers of revision and supersession[17]I also agree with Mr Atkinson that it does not matter whether the appeal tribunal was right or not to decide that Mrs B's letter of 23 July 2007 should have been treated as an appeal against the decision of 19 June 2007, but not for quite the same reasons. I agree that if the case for the claimant has to rely on powers to supersede for relevant change of circumstances it runs into insuperable difficulties. However, I have concluded that the appeal tribunal got perhaps 70% or 80% towards the correct solution in principle (apart from the blip about the six-month qualifying period) by concentrating on the decision of 19 June 2007. Indeed, I find it remarkable that it was able to do so in a decision made and recorded straight after the hearing when it has taken me a great deal longer to work through many stages of reasoning to the same practical result. Since that reasoning went beyond the points raised in the first round of written submissions, I have issued this decision in draft form for the comments of both parties. Neither objected to the outcome suggested. I have taken into account the comments on behalf of the Secretary of State and also made minor corrections and improvements.[18]In my judgment, the chain works in the following way. On the basis that the appeal before the appeal tribunal was that against the decision of 14 January 2008, that decision was itself a supersession of the decision of 19 June 2007. Therefore, the appeal tribunal, standing in the shoes of the decision-maker of 14 January 2008, could consider not just potential grounds of supersession, but also (especially as there is only power to supersede if revision is not available) potential grounds of revision. A ground of revision under regulation 3(5)(a) of the Decisions and Appeals Regulations is that the decision arose from official error.[19]As briefly noted in paragraph 8 above, there were several defects in the decision of 19 June 2007. In particular, there are formidable technical problems, if a decision has actually been given that AA or DLA is not payable because of residence in a care home funded by a local authority, in reinstating payability back to the beginning of the period in question after reimbursement of the local authority on the sale of a house. Those problems were exposed in the decisions of the Court of Appeal in Northern Ireland in Chief Adjudication Officer v Creighton , R1/00 (AA), where they were disregarded on a concession on behalf of the Department of Social Development, and in the decisions of British Commissioners in R(A) 1/02 and CA/3800/2006.[20]In the present case, the decision of 23 May 2006 could not consistently with the terms of regulation 7(2) or (9) of the Decisions and Appeals Regulations be superseded on the ground of relevant change of circumstances so as to reinstate payability of AA from 8 May 2006. The most specific provision is in regulation 7(9)(c), that the superseding decision takes effect from the first pay day after the change occurred where:
"(i) the change is relevant to the question of whether benefit is payable; and (ii) the claimant notifies the change before a date one month after the change or within such longer period as may be allowed under regulation 8."
It follows from the decisions mentioned in paragraph 19 above (and see the further discussion below) that the change to be taken into account on 19 June 2007 has to be regarded as the reimbursement made to the local authority after the sale of the claimant's house. Regulation 7(9)(c) would then not help the claimant much. I do not see how the change to be taken into account could be regarded constituted merely of the making of an agreement with the local authority that it would meet care home fees in circumstances in which it normally would not (because of the value of the house that was no longer the claimant's home) subject to the right of reimbursement from the proceeds, which is presumably what happened on 2 May 2006. That particular circumstance might or might not have been notified close to that date (depending on exactly what was said in the telephone conversation mentioned in the DCS letter of 24 August 2007). But even if it could properly be regarded as a change of circumstances, there would be problems (which I do not need to explore here) in taking it into account in a supersession of a subsequent decision under regulation 6(2)(a) of the Decisions and Appeals Regulations.[21]In relation to that last point, if it were argued that another ground existed to supersede the decision of 23 May 2006, that is, ignorance or mistake of material fact, that would not take the case any further forward. For both that ground and the supersession ground of error of law there is nothing in the Decisions and Appeals Regulations to take either situation out of the default rule in section 10(5) of the Social Security Act 1998 a superseding decision takes effect on the date on which it is made. And, in any event, there cannot be supersession of a decision that can be revised (regulation 6(3)) and, as shown below, the decision of 23 May 2006 should have been revised.[22]The upshot is that the decision on 19 June 2007 to reinstate payability of AA from 8 May 2006 on the basis of supersession of the decision on 23 May 2006 embodied fundamental errors of law. It can only be regarded as having arisen from official error. Therefore the decision of 19 June 2007 properly fell to be revised on that ground.[23]The question then arises, what decision should have been given on 19 June 2007? The answer is that the decision of 23 May 2006 should in its turn have been revised for official error. To identify the nature of that error I need to look in more detail at the decisions mentioned in paragraph 19 above. In Creighton , the Court of Appeal in Northern Ireland held as follows, having said that a conclusion to the contrary would be repugnant to common sense and elementary fairness:
"We accordingly hold that in cases where a health board or trust enters into an arrangement with the provider of accommodation and pays the costs, but is ultimately reimbursed by or on behalf of the claimant, the case falls within Regulation 8(6) and the claimant does not lose his or her entitlement to payment of attendance allowance. The cost is borne out of public funds in the first instance when the board or trust makes the payments, bringing Regulation 7 into play; but when the refund is made that cost is met out of the claimant's own resources and Regulation 8(6) operates to make Regulation 7 inapplicable. We do not consider that it makes a difference whether reimbursement is agreed in advance between the board or trust and the claimant or his representative or whether it is subsequently arranged, if it is in fact made."
The Court of Appeal therefore upheld the various Commissioners' decisions against which the Department of Social Development had appealed, without troubling (because of the concession by the Department) how the decisions could put that substantive entitlement in place retrospectively once the reimbursement had been made.[24]That issue was addressed by Mr Commissioner Howell QC in R(A) 1/02. He was dealing with dates when the relevant concept was of review and the current division between revision and supersession had not been introduced. He said this in paragraph 49:
"The true reason why any decision purportedly applying regulation 7 to a bridging period for which it is not applicable must be reviewed and corrected is that such a decision is wrong in law. It must in my judgment be an error in law to have applied the wrong regulation to such a period, even on a provisional basis. It is certainly an error to have done so on the basis that reg 8(6)(b) could never apply to a bridging period because the only question was whether the weekly payments to the home were being made by the claimant or the local authority, which as noted above was the assumption consistently applied by the department and its adjudication officers in these and many other cases."
If it had been necessary, the Commissioner would have been prepared to hold, contrary to the approach in Creighton , that a person receiving assistance from a local authority by way of a bridging arrangement and accruing a liability to make full reimbursement was to be regarded even in the current week as meeting all of their own costs under regulation 8(6) of the AA Regulations (paragraph 45). In the cases before him there was never any doubt about the sufficiency of the claimant's assets to meet the liability for reimbursement once realised.[25]Mr Commissioner Jacobs took matters one step further, at the suggestion of the representative of the Secretary of State in that case, in CA/3800/2006. There, the local authority had stepped in to pay for the claimant's accommodation when her investments ran out. At that point, a supersession decision was made that AA was not payable. Later, the claimant received compensation for bad investment advice and the local authority required her to reimburse them for the full costs that they had met in the interim. The suggestion accepted by the Commissioner was that, instead of terminating payment on supersession, the Secretary of State should merely have suspended making payments under the power in regulation 16 of the Decisions and Appeals Regulations. Not to do that was an official error that could be corrected by revision. CA/3800/2006 therefore fills in what might otherwise have been a gap left by R(A) 1/02, in explaining what sort of decision the Secretary of State ought to give at the beginning of a period covered by the Creighton principle. However, it did not seek to define exactly when the circumstances would be such as to require the consideration of mere suspension of payment rather than a supersession decision making benefit not payable. The Commissioner does not say whether or not the claimant in CA/3800/2006 had already lodged her claim with the Financial Services Ombudsman at the time that the local authority started to pay her care home fees, but in view of the timescale it seems likely that she had.[26]Applying that approach to the present case as best one can, given that neither the decision of 23 May 2006 nor any contemporaneous documents are in the papers, it can be concluded that that decision arose from official error. One must first accept the clear directions of principle from a court whose decisions Commissioners and the Upper Tribunal follow except in quite exceptional circumstances (R(IB) 4/04) and from a reported Commissioner's decision accepted as correct by at least a majority of Commissioners. Those directions require that an acceptable technical means be found to allow claimants in circumstances like those of the present case to be paid AA and DLA for a past "bridging" period once reimbursement is made to a local authority. That requirement is strengthened by the fact that the Secretary of State has not seen fit to amend the Decisions and Appeals Regulations to make specific provision for these particular circumstances where there appears to be a consensus about the only right and proper outcome in practice. Therefore, some flexibility in the application of the test of official error is allowed.[27]Here, DCS has stated in the letter of 24 August 2007 (page 38) that, before the decision of 23 May 2006 was made, information was received from Mrs B on the telephone that the claimant would have been self-funding her stay from approximately 2 May 2006. The home then stated on the telephone that she was not self-funding. If what the home meant was that the local authority continued to pay all the fees, that was of course entirely compatible with a "bridging" agreement having been made and the home might not necessarily know that that had happened. In view of how common this kind of situation must be, it seems to me that the circumstances were crying out for further investigation, at the least seeking evidence from the local authority and, if necessary, further details from Mrs B of what she meant by becoming self-funding, before a decision was taken. There could have been a suspension of payment for the future while that evidence was gathered. There was no great urgency to make a decision in relation to past periods of payment. Looking at the official error in that way, no person outside the Department for Work and Pensions materially contributed to the error (see the definition in regulation 1(3)). The appeal tribunal would have been entitled to conclude, and I conclude on the evidence before me, that the decision of 23 May 2006 arose from official error and therefore fell to be revised as at 19 June 2007. The official error was the failure to make proper investigations as to the circumstances from and including 2 May 2006 and to consider suspension of payment rather than a decision that AA was not payable. Then on revision whatever should have been the proper decision as at 23 May 2006 is to be given, in the light of all the evidence now available, whenever that evidence came into existence.[28]The significance of all that for the issue with which Mrs B is particularly concerned, the date from which the claimant's accepted entitlement to the higher rate of AA can be put into effect, is as follows. Decisions about AA are decisions about the benefit as a whole. So, even if the cause of looking again at what should have been decided on a particular date is one issue (eg payability), all issues relevant to the benefit as a whole (eg the proper rate of entitlement) can be considered if they arise from the evidence now available. Therefore, since the chain of revisions for official error can be traced back from the decision of 14 January 2008, through that of 19 June 2007 and to that of 23 May 2006, there can be a general reconsideration of what decision should have been given as at that last date. Since it seems to have been accepted that the claimant met the attendance conditions for the night-time in addition to the day-time from 27 October 2005, the decision given as at 23 May 2006 should include a supersession of the initial decision awarding AA on the ground of relevant change of circumstances on the expiry of the six-month qualifying period for the higher rate on 27 April 2006. However, since that change of circumstances was not notified within the prescribed time, the superseding decision that the claimant is entitled to the higher rate of AA cannot take effect before the date of the decision itself, ie 23 May 2006. When a decision is revised, the general rule is that the revision takes effect from the date that the original decision takes effect (section 9(3) of the Social Security Act 1998), so that the date on which the decision is made for the purposes of section 10(5) is 23 May 2006, not the date on which the Upper Tribunal's decision is made.[29]In addition, since it appears to be agreed that, from the date of her admission to the care home to 1 May 2006, the claimant was caught by regulation 7(1) of the AA Regulations and not helped by regulation 8(6), the superseding decision should include the decision that AA was not payable for the period from 28 November 2005 to 7 May 2006. It is now also agreed that on the evidence now available the claimant was assisted by regulation 8(6) from 8 May 2006 until her death, so that from that date the appropriate rate of AA (initially the lower rate, changing to the higher rate from the first pay-day after 23 May 2006) was payable to her. Conclusion[30]That is the same outcome as reached by the appeal tribunal with the correction to take account of the six-month qualifying period and of the date on which a superseding decision on 23 May 2006 could take effect. However, the appeal tribunal attempted to reach that outcome by asking itself what decision should have been made on 19 June 2007 in exercise of the power of supersession, relying on changes of circumstances since 28 November 2005. It did not ask itself how it could look directly at changes since that date when there had been an intervening decision (as described in the DCS letter of 24 August 2007 and revealed by the fact that the decision of 19 June 2007 purported to supersede a decision dated 6 June 2006), even though it was given scant information about that decision. Nor did it ask itself how its award was compatible the provisions on the effective dates of supersessions of AA and DLA decisions on the ground of relevant change of circumstances. The award was not compatible with those provisions, for the reasons explained above. Therefore, the decision of the appeal tribunal must be set aside for error of law, but the decision set out at the beginning of this decision is to be substituted. (Signed on original): J Mesher Judge of the Upper Tribunal Date: 6 November 2009

Cited in 1 later judgment