BN v Secretary of State for Work and Pensions (UC)

This is an appeal from the decisions of the First-tier Tribunal dated 15 January 2024. By those decisions the FTT dismissed the appellant’s appeals from the Secretary of State’s decisions that the appellant had been overpaid universal credit and that that overpayment was recoverable from him.

The sole ground on which this appeal has been permitted to proceed before the Upper Tribunal from those two decisions is on the relevance (or otherwise) of the decision in R(K) v SSWP [2023] EWHC 233 (Admin) to the appellant’s case.

The appellant’s argument when seeking permission to appeal based on R(K) was as follows:

“it would be unlawful to recover benefit where [the claimant] had a legitimate expectation that they were entitled [to that benefit]”.

It is said by the appellant that he had raised with the DWP and had been told he was entitled to the backdate. It is further argued that the decision in R(K) may be relevant to this issue.

The decision in R(K) was a judicial review of the Secretary of State’s decision to recover an overpayment of universal credit which had been found in law to be recoverable. The key, and logically prior, issue which arises on this appeal is whether the FTT on a statutory appeal was similarly empowered or authorised to decide a challenge to the Secretary of State’s decision to recover a recoverable overpayment of universal credit.

I am satisfied that the FTT had no such power or authority. The question of whether the decision to recover was flawed for reasons similar to those in R(K) did not therefore arise, and the FTT accordingly committed no error of law in not considering that question on the appellant’s appeals to it as it had no jurisdiction to do so.

The reasons why the FTT had no such power or authority is well explained by the Secretary of State in his main submissions on this appeal and I need do no more than set that submission out here.

“3.

It is clear from primary legislation that the FTT does not have jurisdiction in an appeal to decide whether or not an overpayment within the meaning of section 71ZB of the Social Security Administration Act 1992 (the “1992 Act”) is recoverable. This is confirmed by Upper Tribunal (“UT”) and High Court authority. The FTT can only hear an appeal as to the amount of that overpayment.

4.

Part III of the 1992 Act deals with “Overpayments and Adjustments of Benefit”. Section 71 sets out some general provisions in respect of recovery of overpayments where a claimant has misrepresented or failed to disclose a material fact, and the person receiving the benefit is somehow at fault for the overpayment being made. Section 71ZB was inserted by the by Welfare Reform Act 2012 (the “2012 Act”) and unlike s.71, s.71ZB allows for overpayments to be recovered even where it was caused by the Secretary of State for Work and Pensions (SSWP), and the claimant was not at fault.

5.

Chapter II of the Social Security Act 1998 (the “1998 Act”) deals with “Social security decisions and appeals”. Schedule 3, paragraph 5 provides “A decision whether payment is recoverable under section 71 or 71A of the Administration Act” (underlining added) and paragraph 6 follows on “If so, a decision as to the amount of payment recoverable”. Paragraph 6B (inserted by the 2012 Act) provides “A decision as to the amount of payment recoverable under section 71ZB, 71ZG or 71ZH of the Administration Act” (underlining added).

6.

Paragraph 5 allows one to appeal in respect of whether a payment is recoverable under ss.71/71A, there is no equivalent provisions in respect of payments recoverable under s.71ZB. Rather, in respect of such payments, one can only appeal against the amount.

7.

This was recognised by Upper Tribunal (“UT”) Judge Jacobs in LP v Secretary of State for Work and Pensions (UC) [[2018] UKUT 332 (AAC)] (“LP”), where he stated “A claimant can appeal against ‘the amount of payment recoverable under section 71ZB’, but nothing else”. Hence, ”…the claimant cannot challenge on appeal the Secretary of State’s decision to recover the overpayment”.

8.

The fact that a claimant cannot appeal against the SSWP’s decision to recover an overpayment does not mean that they are without a remedy. The remedy available in such circumstances is to ask the SSWP to waive the overpayment and, if that is refused, to issue a claim for judicial review in the Administrative Court. This was what occurred in R (K) v SSWP. The claimant had been overpaid universal credit due to official error. She challenged by judicial review various decisions by which the SSWP refused to waive recovery of the overpayment. The SSWP “…repeatedly miscalculated her entitlement over a prolonged period, in what was a ‘profound lapse in service’” (at [130]).

9.

The challenge was brought on traditional public law grounds: unlawful policy; fettering discretion; failing to take into account material considerations; legitimate expectations etc.

10.

Steyn J held that “There is no right to appeal against the decision to seek recovery, or not to waive recovery, of an overpayment of UC” (at [13]). She explained that s.71ZB is a power, not a duty, to recover Universal Credit overpayments and “that power falls to be exercised in accordance with public law principles” (at [15]). Further, given “the breadth of the power in section 71ZB, and the unavailability of the defences developed by the common law to avoid injustice, the Secretary of State’s discretion to waive recovery is of crucial importance”.

11.Steyn J considered the provisions of the SSWP’s published “Benefit Overpayment Recovery Guide” as well as those of the unpublished / internal “Decision Makers Guide to Waiver”.

12.She concluded that the SSWP’s decisions failed to take into account relevant considerations, did not properly apply the relevant policies and were lacking in logic in certain respects. She therefore quashed the decisions (at [139]). She did not make any decision herself as to whether or not recovery of the overpayments should be waived. The SSWP would have to make that decision again in light of the judgment.

13.The appellants representative in their grounds of appeal has mentioned that the FtT erred in not considering the approach of the European Court of Human Rights in the case of Čakarević v Croatia – Application No.48921/13 (ECtHR, 26 April 2018).

14.The claimant in that case claimed that her right to peaceful enjoyment of her possessions had been violated, as well as her right to respect for her private life, when she had been ordered to repay unduly received unemployment benefits. The employment agency had instituted civil proceedings against her seeking recovery of the amount on the basis of unjust enrichment and she raised her human rights arguments as a defence. She eventually took her case to the Constitutional Court.

15.The SSWP accepts that there is no reason why an applicant could not raise human rights arguments in a judicial review claim. However, as the FTT has no jurisdiction whatsoever to entertain a challenge to a decision to recover overpayments, there is no appeal in which such arguments could be raised.

16.The SSWP respectfully submits that the FtT found that the appellant had been overpaid, taking into account all the relevant legislation. The Tribunal have not erred in law in not considering the application of R (on the application of K) v SSWP [2023] EWHC 233.”

These appeal proceedings were then sisted (that is, put on hold) to await the decision of the Upper Tribunal in SSWP v IL (ESA) [2025] UKUT 200 (AAC) as it was considering whether the FTT had jurisdiction to consider challenges to the Secretary of State’s decision to in fact recover an overpayment which has been decided to be recoverable. The decision in IL provides clear and further support for the above submissions of the Secretary of State. As it was pithily put in IL:

“The High Court decision in [R(K)]…. does not enable a First-tier Tribunal to decide that a benefit overpayment covered by section 71ZB(1)(a) to (c) is not recoverable where it arose due to the Secretary of State’s actions or failures.”

The appellant by way of response to the above argues that “the SSWP does not appear to have appropriately exercised it’s (sic) power to recover in a fair way”. This cannot assist him on this appeal as it continues to assume a jurisdiction which the FTT did not have.

If the appellant wished to challenge the Secretary of State’s decision to in fact recover the recoverable overpayment of universal credit, his remedy was to seek a judicial review of that decision. He could not raise that issue on the appeal to the FTT as the FTT had no jurisdiction to decide it.

For the reasons set out above, this appeal is dismissed.