Ayub Vadivala v Bolton Metropolitan Borough Council (HB)

A revision for ignorance of a material fact under Housing and Council Tax Benefit (Decisions and Appeals) Regulations 2001, regulation 4(2)(b), is available only where the relevant fact existed when the original decision was made. Where self-employment instead began later, the proper route is supersession for a change of circumstances from its actual start date.

A tribunal may not infer an earlier start date speculatively. A claimant who makes the correct benefit entitlement impossible to calculate through dishonest or inadequate evidence cannot require a speculative deduction from an overpayment. Failure to investigate an unsubstantiated tip-off is not, without more, an official error for the recoverability exception.

The claimant received housing and council tax benefit from 5 October 2009 on the stated basis that his only income was employment. In November 2012, enquiries disclosed conflicting accounts about self-employment connected with parcel businesses. The local authority stopped benefit and treated payments from the original award date as overpayments.

The First-tier Tribunal upheld that decision, finding that the claimant had received self-employment income from the date of award. The claimant appealed. The Upper Tribunal considered whether there was evidence to remove entitlement before 12 March 2010, the date of a leaflet linking him to a parcel business, and whether the local authority's earlier failure to investigate that information made the overpayment irrecoverable as official error.

1. Appeal allowed. The First-tier Tribunal's decision was set aside for an error of law. There was no evidential basis for finding that self-employment income pre-dated 12 March 2010. The claimant's dishonesty and unreliable evidence did not justify speculation that his involvement began when benefit was first awarded.

2. Under Housing and Council Tax Benefit (Decisions and Appeals) Regulations 2001, regulation 4(2)(b), revision for ignorance of a material fact requires that fact to have existed when the original decision was made. The relevant self-employment began later. Revision was therefore unavailable, but the decision could be superseded under regulation 7(2) from 12 March 2010, when a change of circumstances occurred.

3. The Upper Tribunal substituted its own decision. It found that the claimant received self-employment income affecting entitlement from 12 March 2010. His changing accounts, documentary material and failure to provide reliable income evidence justified that finding. Benefit paid thereafter was recoverable.

4. Regulation 104 of the Housing Benefit Regulations 2006 did not require a notional deduction. Although a claimant should receive the benefit due on the true facts, the authority and tribunal need not calculate a speculative figure where the claimant's conduct makes the correct circumstances impossible to establish.

5. The local authority's failure to pursue the March 2010 tip-off was not an official error within regulation 100. It was not a clear and obvious factual or legal mistake on material known to the authority. In any event, the claimant could reasonably have realised that he was receiving overpayments. The statutory exception to recoverability did not apply.

The local authority was directed to recalculate the recoverable amount within one month. Any arithmetic dispute could be restored to the Upper Tribunal.

• Upper Tribunal (Administrative Appeals Chamber): Allowed the claimant's appeal and set aside the First-tier Tribunal decision for error of law: [2016] UKUT 16 (AAC).
• First-tier Tribunal (Social Security and Child Support): On 7 August 2014 upheld the local authority's decision that entitlement should be removed from 5 October 2009.