ME v Secretary of State for Work and Pensions (SPC)

Recovery of a social-security overpayment under Social Security Administration Act 1992 section 71(1) requires the Secretary of State to establish the statutory conditions. Where recoverability depends on an alleged failure to disclose, the evidence must establish both a duty to disclose and a failure which caused the overpayment.

An inquisitorial tribunal must investigate a realistic possibility, raised by the evidence, that the claimant complied with the alleged disclosure obligation. It errs in law if it determines recoverability without resolving that material issue. If the Secretary of State cannot prove the conditions for recovery, the recovery decision must be set aside.

Mr E received pension credit which was not adjusted for occupational-pension income. The Secretary of State retrospectively superseded the award, generating an overpayment. Mr E did not appeal that supersession.

The Secretary of State separately decided that the overpayment was recoverable under section 71(1) of the Social Security Administration Act 1992, alleging that Mr E had failed to disclose the income as required by a pension-credit booklet and award letter. Mr E appealed to the First-tier Tribunal, which upheld recoverability.

On appeal, the issue was whether the First-tier Tribunal should have investigated the possibility that Mr E's telephone disclosure to Jobcentre Plus used the number specified for pension-credit notifications, and whether the Secretary of State could prove the statutory conditions for recovery.

1. Appeal allowed. The First-tier Tribunal made an error of law and its decision was set aside under section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007.

2. The tribunal had accepted that Mr E made disclosures to Jobcentre Plus. The evidence showed that a Pension Service letter displayed the same telephone number as earlier Jobcentre Plus correspondence. That raised a realistic possibility that Mr E had made disclosure through the number required by the pension-credit arrangements.

3. As an inquisitorial tribunal, the First-tier Tribunal should have investigated that possibility before finding that Mr E failed to comply with a duty to disclose. Its failure to do so was material because the alleged failure was the basis on which recoverability under section 71(1) of the Social Security Administration Act 1992 was asserted.

4. The Secretary of State bore the onus of proving the conditions in section 71. Owing to the passage of time, the Department could not provide Mr E's award letter and could not establish those conditions. The Upper Tribunal therefore remade the decision under section 12(2)(b)(ii): Mr E had not failed to disclose a material fact in consequence of which the overpayment was made, and the overpayment was not recoverable from him.

• Upper Tribunal (Administrative Appeals Chamber): Allowed Mr E's appeal, set aside the First-tier Tribunal decision for error of law, and remade it under section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007.

• First-tier Tribunal: On 6 November 2014, upheld the Secretary of State's decision that the pension-credit overpayment was recoverable.

• Secretary of State: On 15 February 2013, decided that the overpayment was recoverable under section 71(1) of the Social Security Administration Act 1992.