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Neutral Citation Number:
Reported Number:	R(DLA)2/07
File Number:	CDLA 3742 2004
Appellant:	SB v Secretary of State for Work and Pensions [2006] EWCA Civ 89
Respondent:
Judge/Commissioner:	Judge S.J. Pacey
Date Of Decision:	14/02/2007
Date Added:	06/07/2007
Main Category:	Recovery of overpayments
Main Subcategory:	offset of benefits
Secondary Category:	Claims and payments
Secondary Subcategory:	other
Notes:	(Only the Court of Appeal decision is reported. The Commissioner's decision can be found under CDLA/3742/2004.) Payment – offset under regulation 5 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 – whether arrears resulting from the suspension of payments pending the making of an award superseding a previous award can be offset against an overpayment arising as a result of the subsequent award The claimant suffered from autism and received DLA middle care and lower mobility components. In September 2001 he began boarding at a residential college funded by the Learning and Skills Council, continuing to live with his parents during school holidays and half-terms. He was therefore not entitled to the care component except during the vacation periods. When the change of circumstance came to light, on renewal of the DLA claim by SB’s father on 27 May 2003, the payment of the care component was suspended under regulation 16(1) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 pending investigation. A decision was issued on 13 October 2003, described as superseding the award of 14 July 2000, ruling that no care component was to be paid for the period SB was in the residential home and that any DLA already paid should be treated as paid on account of that benefit awarded. The suspension was lifted but no payments were made of the care component unpaid since May 2003. On January 2004 the overpayment was found not to be recoverable but calculated to include the amount of care component due for the summer of 2003 (£529) as a sum which could be offset against the overpayment. The tribunal, on appeal from the claimant’s father, upheld the decision that the overpayment was not recoverable; this involved also upholding the decision that the arrears due could be offset against the overpayment although the tribunal’s reasons did not address this issue. The claimant appealed and the Secretary of State requested that the Commissioner address the legitimacy of offsetting the sum relating to the later period against the overpayment held to be irrecoverable. The Commissioner accepted the Secretary of State’s argument that regulation 5 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 (the Regulations) entitled the decision-maker to offset the arrears and dismissed the appeal. The claimant appealed to the Court of Appeal. It had been argued at all stages by both parties that the October decision superseded the original decision with retrospective effect and both parties sought a determination as to the proper construction of regulation 5 on that basis. Held, allowing the appeal, that: 1. regulation 5(1) allows for overpayments to be offset against “arrears” of entitlement “under the subsequent determination”. However the Regulations were passed pursuant to section 71(6)(b) of the Social Security Administration Act 1992 which empowers the Regulations to deal with “arrears” payable “by virtue of the subsequent determination”. The sum in this case was in arrears, not by virtue of the subsequent determination on entitlement but by virtue of the decision to suspend payments and/or by virtue of a delay in reaching a decision as to the amount of the overpayment (paragraphs 24 to 26); 2. regulation 16(3) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 draws the line at allowing recovery of recoverable overpayments against arrears due to suspension of payments and, while the same distinction is not drawn in the 1988 Regulations in relation to non-recoverable overpayments, any interpretation should reach a logical result which will not be seen as arbitrary or capricious (paragraphs 27 and 28); 3. even if the decision of October 2003 had entirely replaced the July 2000 decision, the entitlement to £529 for the summer months was not arrears of entitlement under (or by virtue of) the subsequent decision, but was arrears by virtue of the suspension of payment directed in May 2003. The determination in October 2003 was simply determining that, during the period of overpayment, that overpayment should be being treated as paying on account that now held to be due (but in arrears) over that same period (paragraph 30).
Decision(s) to Download:	DLA_ 2 07 ws.doc