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Recovery of overpayment – failure to disclose – claimant lacking capacity to understand materiality of fact – whether requirement that disclosure be reasonably to be expected
The claimant, who had quite severe learning disabilities, was in receipt of income support. Her children were taken into care and removed from her home. The claimant, though able to read, was not capable of understanding the information on Form INF4 or in her order book that she should report their removal as a change of circumstances. The Benefits Agency continued to pay child-related benefit premiums for a substantial further period, and an overpayment resulted, which the Secretary of State claimed an entitlement to recover under section 71 of the Social Security Administration Act 1992 on the ground that she had failed to disclose a material fact. The claimant appealed to a tribunal, which allowed the appeal. The Secretary of State appealed and the Chief Commissioner convened a Tribunal of Commissioners to hear the case as of special legal difficulty involving consideration as to the correctness of conflicting Commissioners’ decisions as to the nature of the duty to disclose a material fact.
Held by the Tribunal of Commissioners, allowing the appeal, that:
1. section 71 does not purport to impose a duty to disclose, but rather presupposes such a duty, the actual duty in this case being in regulation 32 of the Social Security (Claims and Payments) Regulations 1987, which provides for (a) a duty to furnish information and evidence pursuant to a request from the Secretary of State, and (b) a duty to notify the Secretary of State of any change of circumstance which the claimant might reasonably be expected to know might affect the right to benefit (paragraphs 30 to 32);
2. in relation to the duty to furnish information and evidence pursuant to a request, whilst there is no duty to disclose that which one does not know, if a claimant was aware of a matter which he was required to disclose, there was a breach of that duty even if, because of mental incapacity, he was unaware of the materiality or relevance of the matter to his entitlement to benefit, and did not understand an unambiguous request for information, and a failure to respond to such a request triggered an entitlement to recovery under section 71 of any resulting overpayment (paragraphs 33 to 46);
3. insofar as R(SB) 21/82 imported words from regulation 32 into the construction of section 71 in stating that the non-disclosure must have occurred in circumstances in which, at lowest, disclosure by the person in question was reasonably to be expected, that decision and subsequent decisions that have relied on it were wrongly decided (paragraphs 47 to 61);
4. the form INF4 supplied to claimants contained an unambiguous request by the Secretary of State to be informed if a claimant’s children went into care and by not disclosing the fact to the Department, the claimant was in breach of her obligation under regulation 32, so that the Secretary of State was entitled under section 71 to recover the overpayment resulting (paragraph 62).
The claimant appealed to the Court of Appeal. Before the Court of Appeal it was additionally argued for the claimant that the recovery of an overpayment of benefit from a claimant who is incapable of understanding that there is something to report was in breach of Article 14 of the European Convention on Human Rights (prohibition of discrimination) taken with Article 1 of Protocol 1 (Article 1P1) (protection of property).
Held by the Court of Appeal, dismissing the appeal, that:
1. recovery of an overpayment of benefit from a claimant who is incapable of understanding that there is something to report had no connection with deprivation of possessions and therefore Article 1P1 was not engaged; however, mental capacity was arguably at least as sensitive a personal characteristic, in relation to discrimination, as race or sex and if the alleged discrimination had been sufficiently related to Article 1P1, persuasive arguments as to justification would have been required (paragraphs 17 to 26, 52 to 53);
2. there is no basis for the construction in R(SB) 21/82, the reasoning for which was unclear and which had not been subjected to further analysis in the Commissioner’ decisions that followed it; section 71 and regulation 32 make no such allowance and leave room for none and there is no basis in section 71 for imposing or requiring a moral obligation to disclose in addition to the legal obligation imposed by regulation 32 (paragraphs 36 to 40, 47 to 49).
The claimant’s petition to the House of Lords for permission to appeal was refused.
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