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Decision in brief

Where universal credit (UC) carer element included in UC first assessment period (AP) following a post-claim change of circumstance in first AP – UC claim made before amendments in 2023 to make specific reference to UC carer element as affecting entitlement to the high rate – no entitlement to the high rate transitional SDP element – on the facts, the carer element was correctly included from date of UC claim – fact that the UC carer element was ‘backdated’ to the start of the first AP under UC supersession rules, and that specific reference to the UC carer element as affecting entitlement to the high rate was not made until 2023, immaterial

Comment from CPAG

Specific reference was made to the UC carer element as affecting entitlement to the high rate of the transitional SDP element in amendments effective from 29 June 2023. From that point, therefore, it is explicit that if someone becomes a carer for either severely disabled claimant in the first AP, the high rate will not apply.

Summary

The claimant (a housing association tenant) became entitled to HB in December 2014. His mother was his appointee. In January 2015 he was detained under the Mental Health Act and admitted to hospital. His detention in hospital continued through 2015 and 2016, although he intended to return to his rented property. Although his mother visited the council in June 2016 and told them orally that her son was in hospital, she did not say that he had been absent since January 2015. The council did not learn of the length of the absence until May 2018, when a social worker informed it that the claimant was not resident at the property. The council decided that an overpayment had occurred and (allowing on the facts for temporary absence of 52 weeks) that a recoverable overpayment had been made between June 2016 and May 2018. That decision was upheld by the First-tier Tribunal, which also found that the housing association had been unaware of the claimant’s absence from the property and that the overpayment was recoverable solely from him, as he had caused it by failing to disclose the length of his stay in hospital. 

Judge West refused the claimant’s further appeal, holding that the tribunal had not made a material error of law. The claimant argued that the overpayment was not recoverable, as it had been caused by official error and the claimant, (through his representative) could not have been expected to have realised that there was an overpayment. The official error was alleged to be that the council failed to respond properly to the visit of the claimant’s mother in June 2016, in particular by not pointing out to her that disclosure of a change of circumstances needed to be made in writing and, more generally, by failing to ask relevant questions about her son’s stay in hospital. The tribunal was then alleged to have erred by failing to consider the substantive cause of the overpayment, and failing to consider or make findings about whether there had been an official error. 

Judge West dismissed those arguments, holding that the substantial, common sense cause of the overpayment (as per the test set out in R (Sier) v Cambridge City Council Housing Benefit Review Board [2001] EWCA Civ 1523) was his failure to disclose the extent of his stay in hospital. The main relevant rule was at regulation 100 of the Housing Benefit Regulations, which provides that any overpayment of HB is recoverable, except those caused by an official error which the claimant had not caused or contributed to, and where the claimant could not reasonably have been expected to have realised there was an overpayment. 

Regarding the duty to disclose, the claimant had failed to comply with the duty under regulation 88 of the regulations to notify a relevant change of circumstance in writing. The claimant’s argument that the council had erroneously failed to advise of that need, so making the official error that had occurred in West Somerset District Council v JMA (HB) [2010] UKUT 190 (AAC), was rejected: it was accepted in this case that in fact the claimant had been clearly advised of that need when he was awarded HB. The judge did accept, however, that the council had nevertheless made an error. That was in June 2016, when it failed to ask the ‘obvious question’ arising from the mother’s partial disclosure, namely how long the claimant had been in hospital (paragraph 56). But, per the reasoning in MB v Christchurch BC (HB) [2014] UKUT 201 (AAC), the claimant still needed to show that he did not cause or materially contribute to that error – which in the present case he had. Regarding the cause of the overpayment, held the judge, ‘if a claimant (or a person acting on his behalf) has failed to disclose a material fact, the reality is that he has materially contributed to the mistake, act or omission on the part of the council’ (paragraph 70). Putting it slightly differently (with the focus more on the substantial cause of the overpayment), the judge also said: ‘... a claimant who has got benefit by not disclosing a relevant fact (as required by regulation 101(2)(b) as to the duration of his hospitalisation) is not able to turn the case into one of overpayment caused by official error by saying that, if only officialdom had been more vigilant, the problem would have been spotted’ (paragraph 71). 

Comment from CPAG

This decision, which applies existing authority, is a further illustration of the harsh environment for claimants where the rules do not provide an overall test of reasonableness regarding the duty to disclose. As the judge also said: 

‘I am bound to say, however, that the situation in which the appellant therefore finds himself is a very unfortunate and a very unhappy one, through no fault of his own. I am, nevertheless, satisfied that his lack of mental capacity is not a relevant factor for the purposes of the housing benefit legislation, although it may well be a relevant factor in the council’s consideration of what it should do in the light of this decision.’

Summary

The claimant had been entitled to income-related employment and support allowance (ESA). The award included the ‘severe disability premium’ (SDP). But in September 2019, the ESA award was ended as he had been remanded in custody. In December 2019, the claimant was released and (following advice from the job centre) he made a claim for UC. The claimant disputed the resulting UC award as the amount was less than his ESA had been. He eventually appealed, but the appeal was not considered by the First-tier Tribunal until March 2022. The tribunal allowed the claimant’s appeal, on the basis that at the time of the claim for UC the claimant was in fact still entitled to an award of housing benefit (HB) that included the SDP, and under the so-called ‘SDP gateway’ provision (at regulation 4A of the Universal Credit (Transitional Provisions) Regulations 2014 No.1230) in force at that time, the claimant should therefore not have been allowed to claim UC. The tribunal further held that the Secretary of State should now treat the claim for UC as a claim for income-related ESA. 

Judge Wikeley allowed the Secretary of State’s appeal and substituted a decision that the claimant’s appeal to the First-tier Tribunal was dismissed. The tribunal had been entitled to hold that the claimant was entitled to HB that included the SDP at the time of the claim for UC, and (as the Secretary of State conceded) on that basis regulation 4A should have prevented the claim for UC. But the tribunal erred in holding that the Secretary of State was (somehow) to treat the UC claim as a claim for income-related ESA: there was simply no legal basis for that. Further, given the fact that a UC claim had been made and admitted, the error in allowing it did not render the UC award void but rather simply ‘left open the possibility of revision for official error, but no such steps have been taken in this case’ (paragraph 26). Regulation 4A (and so the ‘SDP gateway’) had been removed from 27 January 2021 and no new claim for income-related ESA could be made. If the claimant could show a loss caused by the DWP’s failure to apply the SDP gateway at the relevant time, that could amount to grounds for a claim for compensation for maladministration; but tribunals had no jurisdiction over such matters. 

Comment from CPAG

This decision illustrates the predicament a claimant can be placed in where the DWP simply ignores the rules. If the claimant had been correctly prevented from claiming UC in 2019 by the SDP gateway, he could at that point have made a new claim for income-related ESA. As at the time of the UC claim the SDP was included in only in an HB claim, the UC award would not have included a transitional SDP element, and the claimant may indeed have been considerably worse off on UC.

Summary

The claimant applied for UC on 17 August 2021. On 11 September 2021, he was remanded in custody. On 20 September 2021, it was decided the claimant was not entitled to the housing element of UC because he was in prison. On appeal, the First-tier Tribunal held that the claimant was entitled to the housing element from the start of his claim and throughout the period he was remanded in custody. 

Judge Wikeley allowed the Secretary of State’s appeal and substituted a decision that the Secretary of State’s decision on 20 September, that the claimant was not entitled to the housing element, was correct. The tribunal had erred in wrongly interpreting the relevant rule, which was at regulation 19 of the Universal Credit Regulations 2013 No.376. That provides that ‘entitlement to universal credit does not arise’ in certain situations, including where the claimant is a prisoner. There was no dispute that the claimant counted as a prisoner while being held on remand (because of the definition of ‘prisoner’ at regulation 2). But at subparagraph (2) of regulation 19, an exception applies for a prisoner, so that such a person can be entitled to the housing element for the first six months as a prisoner where ‘the person was entitled to universal credit immediately before becoming a prisoner...’. It was this wording that the tribunal had wrongly interpreted (other requirements including that the housing element was included and that the person had not been sentenced to a term expected to last longer than six months were certainly met by the claimant). 

The First-tier Tribunal held that the claimant ‘had entitlement to universal credit from the date of his claim on 17 August 2021 onwards...’, and that was ‘in place immediately before he became a prisoner...’ (quoted at paragraph 19). But, held Judge Wikeley, that was wrong: 

‘The fundamental difficulty with the tribunal’s approach in this case was that it sought to interpret regulation 19 of the UC Regulations 2013, and in particular the concept of entitlement to benefit, in isolation from the overall architecture of the universal credit scheme’ (paragraph 23). 

In particular, section 7 of the Welfare Reform Act 2012 provides that UC is ‘payable in respect of each complete assessment period within a period of entitlement’, and that a ‘period of entitlement’ means ‘a period during which entitlement to universal credit subsists’. Given that an assessment period is (per regulation 21 of the regulations) a period of one month starting with the first date of entitlement, it followed that ‘... in order to be paid UC in respect of an assessment period, a claimant needs to be entitled to the benefit throughout that assessment period. Entitlement must subsist throughout, or the period in question is not an assessment period as so defined’ (paragraph 27). In the present case, the claimant had not been entitled to UC throughout his first assessment period (ie, his entitlement did not ‘subsist’ for that period), as he had become a prisoner before that period had ended. The claimant therefore failed to meet the requirement in regulation 19(2)(a) that he was ‘entitled to universal credit immediately before becoming a prisoner’, as that must refer to entitlement in the immediately preceding assessment period. 

Comment from CPAG

Put shortly, the problem for the claimant in this case was that he became a prisoner during his first UC assessment period. In this case, the result did not strike the judge as unlawful. The Secretary of State’s representative confirmed that things would have been different (ie, such that the claimant would have had entitlement to the housing element) had he become a prisoner in his second assessment period. The differential treatment of those who become prisoners in their first assessment period was explained by the overall structure of UC, which involved payment in arrears and complete assessment periods. That had an ‘inherent logic and is administratively efficient’. That harsh outcomes in individual cases did not automatically render benefit rules unlawful had been recognised by the Court of Appeal – for example, in the decisions in Pantellerisco and Johnson. The judge observed that, had a UC assessment period been set as one week rather than one month, then the claimant would have been entitled: ‘However, that was not the legislative choice adopted by parliament. I simply add that it will be no consolation to the claimant that the court recognises the risk of harsh outcomes when operating a complex welfare system’ (paragraph 34).