AZ v Secretary of State for Work and Pensions

This case is remitted to the First-tier Tribunal for reconsideration at an oral hearing.

The First-tier Tribunal hearing the remitted appeal shall not involve any members of the panel whose decision the Upper Tribunal has set aside.

If any party has any further evidence to put before the First-tier Tribunal this should be sent to the regional office of Her Majesty’s Courts and Tribunals Service within one month of the date on which this decision is issued. Any such further evidence must relate to the circumstances as they were at the date of the decision of the Secretary of State under appeal.

The panel hearing the remitted appeal is not bound in any way by the decision of the previous First-tier Tribunal. Depending on the findings of fact it makes the new panel may reach the same or a different outcome from the previous panel.

Copies of this decision shall be added to the bundle to be placed before the panel of the First-tier Tribunal hearing the remitted appeal.

This appeal relates to a decision of the First-tier Tribunal dated 11 June 2024.

In the decision notice the First-tier Tribunal made decisions in relation to the Appellant’s appeals against linked entitlement and recoverable overpayment Income-related Employment and Support Allowance (ESA(IR)) decisions.

The entitlement appeal has the First-tier Tribunal reference 1696-2584-1231-1624 and the recoverable overpayment appeal has the First-tier Tribunal reference 1698-8385-6931-8825.

Although the Appellant applied for permission to appeal both decisions to the Upper Tribunal, he was only granted permission to appeal the recoverable overpayment decision. This decision therefore relates only to the recoverable overpayment decision.

In the recoverable overpayment decision the First-tier Tribunal refused the appeal and confirmed the Secretary of State’s decision of 28 February 2023 that there had been an overpayment of £6414.62 from 22 March 2021 to 21 April 2022 which was recoverable from the Appellant.

In summary my decision is that the First-tier Tribunal erred in law and its decision should be set aside.

The Appellant was entitled to ESA(IR) from 3 September 2012. The Appellant was absent from the UK, and in Pakistan, from 22 March 2021 to 13 January 2022. On 3 September 2022 the Appellant was interviewed by a compliance officer in relation to the period he had spent in Pakistan.

The First-tier Tribunal made the following findings of fact about the Appellant’s visit to Pakistan:

It is accepted that the Appellant made no declaration of his plans to travel outside of the United Kingdom before he travelled, nor, until the compliance interview, when he returned to the United Kingdom.

On 14 February 2023, in a decision notified to the Appellant on 28 February 2023, a decision maker decided that the Appellant was not entitled to ESA (IR) for the period 22 March 2021 to 13 January 2022 (‘the entitlement decision’).

On 28 February 2023 a decision maker determined that the Appellant had been overpaid by of £6414.62 from 22 March 2021 to 21 April 2022 which was recoverable from the Appellant (‘the recoverable overpayment decision’).

Following a mandatory reconsideration the decision remained unchanged. The Appellant appealed both the entitlement decision and the recoverable overpayment decision to the First-tier Tribunal.

The First-tier Tribunal in a decision dated 11 June 2024 upheld the entitlement decision and the recoverable overpayment decision.

The Appellant applied for a statement of reasons and District Tribunal Judge Smith directed that the Decision Notice should stand as the statement of reasons. The Appellant applied for permission to appeal to the Upper Tribunal.

District Tribunal Judge Smith refused permission to appeal on 9 October 2024 on the grounds that there was no error of law in the decision and the findings of fact and reasons explained adequately why the appeal could not be allowed having regard to the relevant legislation.

The Appellant renewed his application to the Upper Tribunal. Upper Tribunal Judge Citron refused permission to appeal the entitlement decision on 2 January 2025.

Upper Tribunal Judge Citron gave permission to appeal the recoverable overpayment decision for the following reasons:

“10.

The relevant law as regards overpayment was alluded to in the FTT bundle (although not in the FTT decision); I understand it to be as follows (the following being brief summaries of the provisions):

a.

section 71 of the Social Security Administration Act 1992, which gives the Respondent the right to recover certain sums where a person, whether fraudulently or otherwise, has (amongst other things) failed to disclose any material fact and, in consequence, a relevant benefit payment has been made;

b.

regulation 32(1A) of the Social Security (Claims and Payments) Regulations 1987 provides that certain benefit recipients shall furnish in such manner and at such times as the Respondent may determine such information or evidence as the Respondent may require in connection with payment of the benefit;

c.

regulation 32(1B) of those regulations provides that certain benefit recipients must notify the Respondent of any change of circumstances which he might reasonably be expected to know might affect the continuance of entitlement to the benefit as soon as reasonably practicable after a change occurs, by giving notice in a certain manner.

11.

The FTT’s decision on overpayment is not expressly reasoned, in the sense that it is a single line stating what the decision is, immediately following its decision on entitlement. However, page 36 of the FTT overpayment bundle (the “mandatory reconsideration”) does provide insight into the Respondent’s reasoning, as follows:

“When your claim was decided on 06/09/12 you were issued with a notification letter which tells you that you are required to immediately report any change in your circumstances to us. When your claim was uprated on 22/01/13, 21/04/14 and 20/01/15 you were issued an ESA40 booklet. The ESA40 booklet tells you about your responsibilities whilst you are claiming ESA and it specifically informs you to let us know straight away about any changes to do with work

You were issued with change of circumstances letters on 25/03/17, 21/03/19 and 28/02/20. These letters advised you to report any changes in your circumstances immediately to the Department.

I therefore consider that you were aware of the requirement to immediately notify any changes in your circumstances to the Department.”

12.

The implication of the FTT decision’s lack of (express) reasoning on overpayment is that the FTT considered it reasonably obvious from the circumstances of the case, as set out in the FTT decision’s consideration of entitlement, that the Respondent’s overpayment powers were engaged under the relevant legal provisions, as summarised above. In my view, this approach was arguably an error of law, because

a.

it was not obvious, either from the FTT decision itself or from the evidence from the Respondent at page 36 of the overpayment bundle (quoted above), whether the FTT’s decision was based on regulation 32(1A) or on regulation 32(1B) (or on both);

b.

if the FTT’s decision on overpayment was based on regulation 32(1A), it was not obvious why the FTT concluded that the communications from the Respondent to [the Appellant] (in the evidence before it) met the test in the case law of having to provide specific, clear and unambiguous instructions; it is arguable that the evidence before the FTT (as quoted at paragraph 11 above, being instructions to report “any change in circumstances”) were too vague to meet this test (I note the evidence there that the Respondent says that [the Appellant] was sent an “ESA40 booklet” – however, that booklet does not appear to have been before the FTT, as evidence i.e. I do not see it in the FTT bundle); and

c.

if the FTT’s decision on overpayment was based on regulation 32(1B), it was not obvious why the FTT concluded that [the Appellant] (or his appointee) might reasonably be expected to know that his absence from Great Britain for nearly 9 months in 2021-22 might affect his continued entitlement to ESA. It seems to me arguable that this test requires the FTT

i.

to identify, via evidence-assessment and fact-finding, the key relevant characteristics and circumstances of [the Appellant] and his appointee themselves (which might include matters such as: whether in fact they received the communications from the Respondent referred to on page 36 of the bundle; and an objective assessment of whether [the Appellant] or his appointee was able to read, understand and apply what was said in those communications), and then

ii.

to determine whether a reasonable person, with those characteristics, would have known that such absence might affect entitlement to ESA.

The Secretary of State’s representative made thoughtful submissions on the appeal and indicated that the Secretary of State supported the appeal. She asked that the First-tier Tribunal decision be set aside and the matter remitted to a freshly constituted panel of the First-tier Tribunal for redetermination. 

Ms Sultana, on behalf of the Appellant, made no submissions in response.

Both parties agreed to a decision without reasons.

Neither party asked for an oral hearing. In exercising my discretion I took account of the fact that the parties have provided detailed written submissions and that the appeal was supported by the Respondent. I decided that I could fairly determine the appeal on the papers and that it was proportionate and in the interests of justice to do so.

Section 71(1) of the Social Security Administration Act 1992 (the 1992 Act) provides:

Section 5 of the 1992 Act, which is headed “Regulations about claims for andpayments of benefit”, gives the Secretary of State the power to make regulations and provides, materially:

“(1)

Regulations may provide –

…

(i)

for the person to whom, time when and manner in which a benefit to which this section applies is to be paid and for the information and evidence to be furnished in connection with the payment of such a benefit;

(ii)

for notice to be given of any change of circumstances affecting the continuance of entitlement to such a benefit or payment of such a benefit [or of any other change of circumstance of a prescribed description]

(1A) Regulations may make provision for requiring a person of a prescribed description to supply any information or evidence which is, or could be, relevant to –

(a)

a claim or award relating to a benefit to which this section applies, or

(b)

potential claims or awards relating to such a benefit.”

Regulation 32 of the Social Security (Claims and Payments) Regulations 1987 was made pursuant to Section 5 of the 1992 Act. Regulation 32 provides:

“(1)

Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner […] as the Secretary of State may determine … such information or evidence as the Secretary of State may require for determining whether a decision on the award of benefit should be revised under section 9 of the Social Security Act 1998 or superseded under section

10 of that Act.

(1A) Every beneficiary and every person by whom, or on whose behalf, sums by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such information or evidence as the Secretary of State may requirein connection with payment of the benefit claimed or awarded.

(1B) Except in the case of a jobseeker’s allowance, every beneficiary and every person by whom or on whose behalf sums by way of benefit are receivable shall notify the Secretary of State of any change of circumstances which he might reasonably be expected to know might affect –

(a)

The continuance of entitlement to benefit; or

(b)

The payment of the benefit,

As soon as reasonably practicable after the change occurs by giving

notice of the change to the appropriate office –

…

I am satisfied on the arguments before me that the First-tier Tribunal erred in law in the recoverable overpayment decision to which it came on 11 June 2024 and that the decision should be set aside as a result.

The First-tier Tribunal’s reasons for both the entitlement decision and the recoverable overpayment decision were as follows:

The First-tier Tribunal does not expressly set out why it decided that the overpayment was recoverable. I agree with Upper Tribunal Judge Citron that it can be implied that the First-tier Tribunal took the view that the reason why the overpayment was recoverable was reasonably obvious from its other findings.

I find that the reason why the First-tier Tribunal determined that the overpayment was recoverable is not reasonably obvious from its other findings. Without any express reasoning in support of its conclusion, it is not clear on what basis the First-tier Tribunal concluded that it the payment was recoverable.

It is not clear whether the First-tier Tribunal reached this conclusion on the basis of regulation 32(1A) and if so, on what basis it decided that the Appellant had received a document containing an unambiguous duty to disclose.

It is not clear whether the First-tier Tribunal reached the conclusion on the basis of regulation 32(1B) and if so, whether it had applied the correct test, i.e. whether a reasonable person in the claimant’s particular circumstances might reasonably have been expected to know that the change of circumstances might affect his entitlement to benefit. If the First-tier Tribunal did apply the correct test, it is not clear what findings of fact, if any, the First-tier Tribunal made to support its conclusion.

I conclude thatthe reasons are not sufficient to give the parties a reasonable understanding of the basis on which the First-tier Tribunal’s conclusions have been reached and it is not possible to know whether the First-tier Tribunal may have misdirected itself or omitted to take account of some material consideration.

I find, for those reasons, that the First-tier Tribunal erred in law because it made insufficient findings of fact to support its decision and it failed adequately to explain its reasons for the findings it did make.

For the above reasons the appeal is allowed and the decision is set-aside.

Because further facts need to be found, and because the First-tier Tribunal is best placed to find those facts, I am not able to re-decide the appeal and I remit the matter to be re-heard by a newly constituted First-tier Tribunal.

The Appellant’s success on this appeal to the Upper Tribunal on error of law says nothing one way or the other about whether his appeal will succeed on the facts before the First-tier Tribunal, as that will be for that Tribunal to assess in accordance with the law on the basis of its findings of fact.