LH v Secretary of State for Work and Pensions (RP)

A breach of a duty to furnish or notify information under the Claims and Payments Regulations does not without more establish a failure to disclose for the recovery provisions in section 71 of the Social Security Administration Act 1992. Disclosure means revealing a material fact which, so far as the claimant knows, is previously unknown to the relevant recipient.

A claimant cannot fail to disclose an annual uprating of state retirement pension where that uprating is public information, is known to the administering office, and the claimant knows the office has that knowledge. The Secretary of State must establish a failure to disclose a material fact before an overpayment is recoverable under section 71.

The appellant received a state retirement pension which included a dependency increase for his wife. Before she began receiving her own state retirement pension, he wrote to the Pension Service to report the impending award. Owing to an administrative error, the dependency increase continued until 2013.

The Secretary of State sought recovery of the resulting overpayment, principally on the basis that the appellant had failed to report the annual upratings of his wife’s pension from 2005. The First-tier Tribunal at Brighton dismissed the appeal and held the overpayment recoverable. The central issue was whether a claimant can fail to disclose information which the relevant Pension Service office already knows, and which the claimant knows it already knows.

1. Appeal allowed. The First-tier Tribunal erred in treating the overpayment as recoverable. Its decision was set aside, and the Upper Tribunal remade the decision: the overpayment between 31 May 2004 and 14 April 2013 was not recoverable under section 71 of the Social Security Administration Act 1992.

2. The appellant had timely notified the Pension Service that his wife would receive her own state retirement pension. The Secretary of State accepted that this fully discharged the relevant duty under regulation 32(1A) of the Social Security (Claims and Payments) Regulations 1987. The published guidance did not require him to report the amount of that pension.

3. For section 71, a failure to disclose is not established merely because a claimant may have breached a regulatory duty to notify or furnish information. The statutory recovery power requires proof of a failure to disclose a material fact. Following R(SB)15/87, disclosure involves revealing information which, so far as the claimant knows, was previously unknown to the recipient.

4. The annual uprating of the wife’s state retirement pension was information known to the Secretary of State and the Pension Service. It was also information which the appellant knew the office knew, since it applied generally to state retirement pensions. He could notify the office of that fact, but could not disclose it to that office. His failure to repeat it could therefore not found recovery under section 71.

5. The Tribunal declined to follow the contrary analysis in GK v Secretary of State for Work and Pensions, [2009] UKUT 98 (AAC). The Court of Appeal decision in B v Secretary of State for Work and Pensions, [2005] EWCA Civ 929, concerned the meaning of “failure” and the source of the relevant duty; it did not alter the ordinary meaning of “disclose”.

• Upper Tribunal (Administrative Appeals Chamber): Allowed the appellant’s appeal, set aside the First-tier Tribunal’s decision for material legal error, and remade the decision so that the overpayment was not recoverable.
• First-tier Tribunal, Brighton: On 28 July 2014, under reference SC177/14/00037, dismissed the appellant’s appeal and upheld recovery of the overpayment.
• Secretary of State: Decision of 26 June 2013 held the retirement-pension overpayment recoverable.