Overpayment caused by failure to disclose – whether overpayment recoverable – whether failure reasonable
The claimant had been overpaid income support for her children when she failed to disclose that they had been taken into care. The appeal tribunal found that disclosure was not reasonably required of the claimant until she had been advised by a social worker to report the change as prior to that her learning difficulties had reasonably prevented her from appreciating the need to inform the DWP of this change.
This was an appeal to the Court of Appeal from the Tribunal of Commissioner's decision in CIS/4348/2003.
Reversing this decision, and 20 years of caselaw, the commissioners held that a duty to disclose information for the purposes of s 71 Social Security Administration Act 1992 arose under regulation 32(1) Claims and Payments Regulations. They further held that this duty was not subject to any test of reasonableness, and that providing the claimant knew the fact in question, she had breached this duty, and the overpayment was recoverable from her.
The Court of Appeal upheld the Commissioners’ decision. In their view the meaning of “failure to disclose” in section 71(1) admitted of no qualification in favour of claimants who did not appreciate that they had an obligation to disclose something once they were aware of it. Non-compliance with regulation 32 was not only a necessary but also a sufficient condition of the Secretary of State’s entitlement to recover under s 71(1). The Court said the DWP would have to decide as a matter of discretion, whether to recover overpayments in cases like this one, where the claimant did not realise whether they were being overpaid. It was told that the DWP had a policy on how the discretion should be exercised. The Court said that it should be made available to organisations such as CPAG and Citizens Advice.
Leave to appeal to the House of Lords was refused. The claimant applied to the European Court of Human Rights which gave its decision on 14 February 2012. B has lost her case, but the decision is a positive one.
B argued before the ECtHR that the basis on which the Secretary of State could recover overpayments from her discriminated against her unlawfully contrary to Article 14 taken together with Article 1P European Convention on Human Rights.
Article 1 P. The Court of Appeal held that an overpayment of social security benefit could not come within the ambit of Article 1P. The ECtHR has held that it does, recognising that it carries with it a right for the Secretary of State to recover from future benefit entitlements, which in themselves fall within the scope of Article 1P. This is important, because the right not to be discriminated against under Article 14 only has effect in relation to the enjoyment of other Convention rights. If a person wants to argue that s/he has been discriminated against contrary to Article 14, s/he can only do so if another Convention Article is engaged. There does not have to be a breach of another Article, it is enough that the facts of the case fall “within the ambit” of one or more Convention Articles. The fact that the court has held that an overpayment can engage Article 1P, therefore means that if in future the government introduces an overpayment recovery policy which discriminates against any group, there will be a potential argument under Article 14.
The claimant’s discrimination argument was that she had been:
1. As a claimant who could not reasonably be expected to report a material fact because she was unaware of the requirement to report it, treated differently from someone who could not reasonably be expected to report a material fact because they did not know that fact.
2. As a claimant who was incapable of understanding a material fact she was treated the same as someone who was capable of understanding the requirement to report. The capacity or incapacity to report a fact was a “status” for the purposes of Article 14.
The court dismissed the first argument, agreeing with the Court of Appeal that two groups could not be said to be in relevantly similar situations, because
“the proposition that you cannot report something that you do not know is a simple proposition of logic, whereas the proposition that you cannot report something you do not appreciate you have to report depends on difficult questions of cognitive capacity and moral sensitivity which vary from person to person.”
However, the court accepted that the failure to make a distinction between those who do and do not have the capacity to understand what is required of them required a justification and that it would not be justified if the individual concerned had to bear an excessive burden. In this case B did not have to bear an excessive burden as there was no evidence the reduction in benefit would have a detrimental effect on B’s health and welfare as she had not asked the Secretary of State to waive his right to recover the benefit . This is also helpful, as it suggests that the Secretary of State cannot justify recovery where the level is such as to be detrimental to an individual’s health or welfare if there is a reason for treating that individual differently based on some other status, such as mental capacity.
The full decision is available here.
Counsel in this case are John Howell QC and Tom Weisselberg both of Blackstone Chambers.