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CIS/14551/1996
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
SOCIAL SECURITY ADMINISTRATION ACT 1992
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. The claimant's appeal is allowed. The decision of the Maidstone social security appeal tribunal dated 21 August 1995 is erroneous in point of law, for the reason given below, and I set it aside. The appeal is referred to a differently constituted social security appeal tribunal for determination in accordance with the directions given in paragraphs 15 and 16 below (Social Security Administration Act 1992, section 23(7)(b)).
2. Prior to 26 October 1994 the claimant was in receipt of income support, including an entitlement to the disability premium. His housing costs did not include all the loan interest which he was liable to pay. Interest on something over £15,000 was met, while interest on something over £25,000 was not. That gave rise to a figure for weekly housing costs from 30 June 1994 of £28.83. On 26 October 1994 the claimant sold his existing home and moved to a new home with the assistance of two loans of £27,000 and £586.56. In a letter dated 4 November 1994, he wrote:
"Following my recent call to your office concerning my enforced house move due to my financial situation exacerbated by my post-operative problems ... I have had to 'trade down' on my property in Teston for one in a much cheaper area in Tovil Mill ..."
3. The adjudication officer on 3 January 1995 reviewed the existing decision on the ground of change of circumstances, but did not revise the amount of housing costs, on the ground that the claimant had increased his liability for eligible housing costs and under the terms of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987 remained entitled to only £28.83. The claimant appealed in a letter dated 10 January 1995, which included the following:
"I did, at your request, send in to Mrs (Manager) a letter dated 4/11/94 explaining some of the severe financial problems I have which forced me to `trade down' on my previous property in Teston to a house costing less money in a much less desirable area to reduce considerably my commitment to BNP - all papers and solicitors of the transaction were enclosed with this letter. Originally you were only paying part of this loan as `house improvements' on my old former property ... the balance I was responsible for which, at that time, I considered fair on your part but still nevertheless crippling to me on my benefit monies. I then found this balance `top up' was putting too much strain on me which caused me a very close complete nervous breakdown last year exacerbated by a further operation on my hand at East Grinstead where it was discovered that my original operation at Maidstone Hospital has inexcusably removed 6 cm of nerve from my hand resulting is recurring painful tumours (heuromas) ... Due to the foregoing I realised I must move and `trade down' which was even more traumatic in my mental and physical condition and the poor state of the housing market to alleviate and reduce hopefully to nil my housing expenses by yourselves as I was formerly (and still am in certain areas) living a very frugal life style at my previous address living on next to nothing foodwise and turning off my central heating completely last winter ... to save money, this not being conducive to my mental and physical state which my GP was treating along with my hand problems."
4. The adjudication officer's written submission on form AT2 set out sub-paragraphs (1) to (3) of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987, but not sub-paragraphs (4) to (12). It was submitted that the new loans, being taken out after 2 May 1994, fell within paragraph 5A, so that the housing costs were limited the existing eligible housing costs.
5. A written submission was prepared on the claimant's behalf by someone at Maidstone Citizens Advice Bureau. The first point made was that, since the claimant had reduced the amount of his loans from £40,767.56 to £24,528.56, there was no additional liability within the terms of paragraph 5A. The second point was that as the claimant was a disabled person within paragraph 7B of Schedule 3, the adjudication officer should have considered that provision. I need not go through the other points made.
6. The appeal tribunal confirmed the adjudication officer's decision and decided that the claimant's housing costs remained £28.83. Its reasons in relation to the new loans were recorded as follows:
"The Appellant contends in his letter of appeal that the provisions of paragraph 7B of Schedule 3 is applicable to him, i.e a loan taken cut to adapt a dwelling for the special needs of a disabled person. But in our view there was no adaptation of a dwelling taking place but simply a `trading down' of housing expenses to save money.
In the circumstances, the application of paragraph 5A of Schedule 3, which came into force on May 2, 1994, is relevant to this appeal. In effect, this meant that any increase to his housing costs on the new property is excluded and cannot be met. In essence, his housing costs are limited to £28.83 per week."
7. The claimant was granted leave to appeal to the Commissioner by the appeal tribunal chairman and the adjudication officer's written submission dated 31 July 1996 supported the appeal. It was said that the circumstances fell within the exception in sub-paragraph (8)(b) of paragraph 5A:
"(8) Subject to sub-paragraph (8A), the conditions specified in this sub-paragraph are that the loan was taken out, or an existing loan increased, either--
(a) to make adaptations to an existing property to meet the special needs of a disabled person; or
(b) 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;"
The adjudication officer submitted that the claimant was acquiring a more suitable accommodation to his special needs, as he thought that income support would cover his new housing costs in full, thereby alleviating his financial stress, which would have benefited his mental condition. Because I considered that there were difficulties in accepting that argument, I directed an oral hearing of the appeal.
8. The claimant attended the oral hearing and was represented by Mr David Forsdick of the Free Representation Unit. The adjudication officer was represented by Mr Leo Scoon of the Office of the Solicitor to the Department of Social Security. I am grateful to all present at the hearing for their assistance.
9. Mr Forsdick has persuaded me, but only just, that the appeal tribunal did err in law in failing to deal with sub-paragraph (8) of paragraph 5A. Social security appeal tribunals have an inquisitorial jurisdiction and should, as it was put in paragraph 5(1) of Commissioner's decision R(SB) 30/84, "determine the appeal with due regard to all potential heads within the material legislation". But that duty, in the light of paragraphs 10 and 11 of the Tribunal of Commissioners' decision R(SB) 2/83, is to be judged on the basis of the evidence presented to the appeal tribunal. There can be no obligation on an appeal tribunal to identify and investigate uncanvassed factual points except in the most obvious and clear-cut circumstances. Thus, here a failure to deal with sub-paragraph (8) could only be an error of law if there was sufficient indication of a case which could be made in the evidence before the appeal tribunal. Mr Scoon submitted that there was no such indication. He said that the whole thrust of what was put forward by the claimant was that the move was for financial reasons and that there was nothing to indicate that there was anything in the physical nature or qualities of the new accommodation which made it more suitable to the claimant's special needs as a disabled person. As I have indicated, this is a long way from clear-cut case, but on balance I conclude that there was enough in the claimant's letter of 4 November 1994, his letter of appeal and in the (misguided) reliance on paragraph 7B in the written submission to indicate that the claimant was putting forward his physical and mental condition, or in other words his special needs as a disabled person, as one of the reasons why he moved accommodation. Although there was nothing in the evidence before the appeal tribunal to indicate that there was anything special about the nature of the new accommodation, I think that the indications about the reasons for the change were just enough, especially where the claimant was appearing unrepresented before the appeal tribunal and the written submission drafted for him was obviously incoherent, to give rise to a duty on the appeal tribunal to consider sub-paragraph (8).
10. Accordingly, the appeal tribunal's decision must be set aside as erroneous in point of law, although without any personal fault on the part of its members in view of the omission of any reference to sub-paragraph (8) in the adjudication officer's submissions to them. The appeal must be referred to a differently constituted social security appeal tribunal for determination in accordance with the directions below.
11. In order to give directions to the new appeal tribunal I must consider some of the wider submissions about the proper interpretation of paragraph 5A(8). Mr Scoon submitted that in order for the sub-paragraph to apply there has to be something about the physical character or quality of the new accommodation that makes it more suited to the special needs of the disabled person. He said that the alleviation of mental stress through the alleviation of financial stress was too remote from that requirement to come within the scope of sub-paragraph (8). Mr Forsdick submitted that that was not necessarily so and that it is a question of fact for appeal tribunals to determine what are the special needs of a disabled person and when new accommodation is more suited to those needs. I think that the proper interpretation lies somewhere between those two positions, but not far from the way that Mr Forsdick put things in his closing submission.
12. Some propositions are I think clear. First, the fact that the new accommodation is more suited to the special needs of the disabled person need only be one of the reasons for the acquisition. It does not have to be the sole or predominant reason. Second, the new accommodation only has to be more suited: there is no test of whether or not it was reasonable to acquire the new accommodation. Third, the special needs of the disabled person must be needs stemming from the person's disability. That follows from the force of the word "special". "Disabled person" is given quite a wide definition in sub-paragraph (8), including those who are suffering disablements and incapacities which are not permanent (or even, for the over-75s, who have no disability at all apart from the effects of age). I consider that the person's overall mental and physical condition must be taken into account, not merely whatever condition it is that in the circumstances triggers the application of the definition. However, only needs stemming from something which amounts to a specific disease or bodily or mental disablement, ie of a kind identified by medical science, or from the effects of ageing for the over-75s, can be special needs of the disabled person. Fourth, within those limits (and any others discussed below), the application of sub-paragraph (e) is a matter of fact for adjudication officers and appeal tribunals. Wide words are used in the sub-paragraph and the adjudicating authorities must apply them to the circumstances as they find them, rather than some legal gloss imposed by Commissioners' decisions.
13. Difficulty does, however, arise when considering financial factors. Some of the difficulty is removed, as Mr Forsdick recognised, by the application of the third point in paragraph 12 above. Many income support claimants will be under financial stress, which is a cause of -anxiety and turmoil. If the claimant concerned happens to be a disabled person, that cannot transform a "trading down" for the sole reason of reducing overall mortgage interest liabilities into something within sub-paragraph (8). It must also be the case that financial factors cannot be ignored, as in practice it will often be difficult to disentangle such factors from the circumstances as a whole. For instance, one can use an example raised during the oral hearing, of a disabled person who cannot afford to heat their accommodation adequately, although it could be heated adequately by someone with enough money. If the person's physical and mental condition is such that there is a special need for heating, I do not think that it would be doubted that smaller or more compact accommodation which costs less to heat to an adequate level is more suited to the disabled person's special needs. Similarly, one can adapt the facts of Commissioner's decision CIS/7273/1995, where the claimant moved to be near her son who could look after her. If the reason why the son could not look after the claimant in their existing accommodation was that he could not afford the travelling expenses, I do not think that that would prevent the application of sub-paragraph (8).
14. Where does the relevance of financial factors stop? Can it extend to bring the pure circumstance of an alleviation of financial stress alleviating mental stress within the scope of sub-paragraph (8)? Mr Forsdick submitted that it could extend that far if the adjudicating authority was satisfied as a matter of fact of a direct link between the characteristics of the new accommodation, including its price, and the special needs of the disabled person. That submission cannot be accepted in its entirety. Without seeking to draw any definite legal lines, I think that two particular considerations point in that direction. First, the question to be asked is whether the accommodation itself is more suited to the special needs of the disabled person, not whether the terms of the acquisition of the new accommodation make the circumstances as a whole more suited to those special needs. The relevant characteristics of the new accommodation could possibly include its running costs, but not the price that had to be paid for it or the size of the loan which had to be taken out. Second, part of the means by which in the present case the claimant expected to be relieved of financial stress (and thereby of mental stress) was by all of the loan interest on his new home being met as an income support housing cost. To allow such an expectation to work in favour of the removal of a restriction on the meeting of all the interest, through the operation of sub-paragraph (8), would be wrong. It would introduce an undesirable circularity of reasoning. Such expectations should not be taken into account.
Directions to the new appeal tribunal
15. There must be a complete rehearing on the evidence presented and submissions made to the new appeal tribunal. Such evidence can include the points made by the claimant in his letter dated 17 January 1997 about the nature of his new home compared with the previous home and any medical evidence which he wishes to put forward. The new appeal tribunal must apply the general approach to paragraph 5A(8) of Schedule 3 to the Income Support (General) Regulations 1987 set out in paragraphs 11 to 14 above, both to identifying the issues on which findings of fact are necessary and to determining the proper result in the light of the findings of fact made.
16. If the *new appeal tribunal decides that neither sub-paragraph (8) nor any of the other exceptions apply, there seems to be little dispute about the application of the general rule in paragraph 5(1) to (3). It is clear that, within the terms of sub-paragraph (3), the claimant's "new liability" exceeded his "former liability", as the latter refers to the costs which were formerly potentially applicable as housing costs (Commissioner's decision CIS/11293/1995). Here the excluded interest on the £25,000 or so did not represent costs potentially applicable under the provisions of Schedule 3. It seems also that, where the amount of the "former liability" has changed during the course of the relevant period (which might cover a long period of income support entitlement), it is the most recent amount with which the comparison has to be made under paragraph 5A(3).
(Signed)
J Mesher
Commissioner
CIS/16250/1996
SOCIAL SECURITY ADMINISTRATION ACT 1992
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. For the reasons given below, this appeal by the claimant succeeds. I set aside the decision of the social security appeal tribunal of 9 April 1996. In accordance with section 23(7) (a) (ii) of the Social Security Administration Act 1992 I make my own findings of fact and substitute my own decision.
2. My decision is that mortgage interest payments in relation to the acquisition of the house in Somerset on 22 May 1995 are payments of eligible interest for the purposes of calculating entitlement to income support (including housing costs). I refer to the adjudication officer for decision the determination of the amount of income support to be paid on this basis.
3. The claimant was born on 26 December 1927 and lives with his wife who was born on 21 May 1930. He was in receipt of income support from 11 April 1988 for his wife and himself. They owned their own 'property in Cornwall, in which they lived, until 22 May 1995. The claimant and his wife each received higher rate mobility component of disability living allowance. The income support entitlement included, at the relevant time, higher pensioner premium. However, prior to 22 May 1995 it did not include any housing costs because there was no outstanding mortgage or similar charge on their property. The issue in this case is whether income support entitlement should include housing costs from 22 May 1995.
4. Neither the claimant nor his wife can walk more than very short distances. The house in Cornwall had a flight of about 17 steep stairs internally and the claimant and his wife had to go on all fours to climb the stairs. There were also steps to the front door and to the back door and between some of the rooms. There was no downstairs toilet. There were three rooms. There was no downstairs toilet. There were three large bedrooms, an upstairs bathroom and toilet, and a kitchen/diner, living room, sun room and porch downstairs. Nobody lived in the accommodation apart from the claimant and his wife. The house was over 9 miles from the GP and approximately 45 miles from the nearest hospital. They have four sons, none of whom lived within easy reach of the house in Cornwall.
5. On 22 May 1995 they completed an arrangement with a developer whereby they sold the house in Cornwall for £38,000, purchased a new house in Somerset for £59,500, and took out a mortgage from a Building Society for £21,500. On 19 June 1995 the claimant applied for a review of his entitlement to income support on the basis that he now had housing costs in relation to the interest on the mortgage, which should be met as part of his income support payments. On 15 August 1995 the adjudication officer decided that there was no entitlement to housing costs. An application for a review of this decision by an adjudication officer was considered but the same decision was reached. On 23 October 1995 the claimant appealed to the social security appeal tribunal. The tribunal met to consider the matter on 6 February 1996 but was unable to hear the appeal. A second tribunal met on 9 April 1996£ and, by a majority, confirmed the decision of the adjudication officer. On 16 July 1996 the claimant applied for leave to appeal to the Commissioner. Leave was granted by the chairman of the tribunal on 18 August 1996. The appeal is supported by the adjudication officer now concerned with the matter.
6. The new house in Somerset has only one step to the front door, has eight shallower steps internally with a banister rail each side, has a downstairs toilet, is much smaller and easier to maintain with one large and two small bedrooms and a bathroom upstairs and a small kitchen, living room and toilet downstairs. The new house is within minutes of both the doctor and the nearest hospital, and within 15 to 20 minutes travelling time of each of the four sons. There is a shower. The claimant has a driving licence but is physically unable to drive. He had a stroke in 1995. His wife has numbness on the left side of her body. Between moving house and the date of the final tribunal hearing the claimant visited the hospital in Somerset between 25 and 30 times. The house in Somerset was a standard house on an estate and had not been specially adapted for the needs of the claimant or his wife.
7. Paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987 was in force from 2 May 1994 to 1 October 1995. From 2 October 1995 there is transitional protection for those benefiting for the relevant rule in paragraph 5A. In brief, paragraph 5A(1) provides that housing costs incurred after 2 May 1994 but during a period during which the person who incurred the costs is entitled to income support, shall not be met. Subject to exceptions which are not relevant in this case, this provision was designed to prevent people who were in receipt of income support from taking on new liabilities to be met from income support. However, by virtue of paragraph 5A(6) and (8) (b) of Schedule 3 there is an exception in the case of a disabled person. A disabled person. is defined to include a person in respect of whom a higher pensioner premium is included in his applicable amount for the purposes of income support. There is no dispute or doubt for these purposes that the claimant is a disabled person. The exception to the general rule is if the loan is taken out:
"(b) 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..."
8. The reasoning of the original adjudication officer is unclear and the adjudication officer neither attended nor was represented at the final tribunal hearing. The majority of the tribunal seemed to base its decision on the fact that the new house was a normal house and not specially adapted in any way. The dissenting member of the tribunal was of the opinion that the facts to which I have referred above showed clearly' how the new accommodation was more suitable than the house in Cornwall, both in respect of the house itself and its location and the circumstances generally. In general terms, the adjudication officer now concerned with the matter supports the view taken by the dissenting member of the tribunal, as do I.
9. The key issue is what is meant by the phrase "the special needs of a disabled person". Since the description "a disabled person" states nothing about the nature of the disability, and since the word "special" is used, the regulation can only be referring to the special needs of a particular disabled person, special in the sense that they are special to that person and arise from that particular person's disability. In this case the special needs were to have a house with easier access internally and externally, one in which it was easier to move around and had both upstairs and downstairs toilet facilities, one which was close to medical attention, and one which was within reasonable reach of such members of the family (or any other person) as were willing and able to provide assistance as appropriate. In all of these respects it is quite clear that the accommodation in Somerset was more suited to the special needs of the claimant than had been the accommodation in Cornwall.
10. In asking itself whether the new house had been specially adapted, the tribunal was asking the wrong question. it failed to consider relevant matters, and was in error of law on the face of the record. As the primary facts in this case are not disputed, no purpose would be served by referring the case to a new tribunal and I consider it expedient to make my own findings of fact and give my own decision as above.
(Signed)
H Levenson
Commissioner
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