MW v The Secretary of State for Work and Pensions

A claimant who knows that a change of circumstances may affect entitlement must notify the Secretary of State under regulation 32(1B) of the Social Security (Claims and Payments) Regulations 1987. The duty is not discharged by informing a local authority or by assuming that information supplied in connection with another person’s benefit claim will reach the relevant decision-maker.

The question whether third-party information amounts to disclosure on the claimant’s behalf depends on the evidence. It must have reached the relevant benefit office, been known to the claimant, and have made it reasonable for the claimant to take no further action. A civil penalty under section 115D of the Social Security Administration Act 1992 requires findings on reasonable excuse and an actual exercise of discretion.

The claimant received income-related employment and support allowance including a severe disability premium. His adult daughter moved into his home. The Secretary of State decided that the premium had ceased, that an overpayment was recoverable, and that the claimant was liable to a £50 civil penalty.

The First-tier Tribunal dismissed the appeals against the overpayment and penalty decisions. It found that the claimant had not notified the Department for Work and Pensions and that information given to the local authority, or potentially in connection with his daughter’s separate claim, did not amount to notice on his claim.

On appeal, the claimant contended that there was no duty or failure to disclose because the Department already knew his daughter’s address. He also challenged the civil penalty. The central issues were whether the overpayment decision involved an error of law and whether the penalty had been lawfully imposed.

1. The overpayment appeal was dismissed. The First-tier Tribunal was entitled to find that the claimant did not notify the Secretary of State that his daughter had moved in, and that neither the local authority nor the Department’s systems had communicated that information to the decision-maker responsible for his claim.

2. The finding that employment and support allowance leaflets had been sent could no longer be supported. That did not affect the result. The claimant’s admitted knowledge that he had to report his daughter’s move was sufficient to establish a duty under regulation 32(1B) of the Social Security (Claims and Payments) Regulations 1987.

3. Applying Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16 and R(SB) 15/87, disclosure had to be made to the relevant official or office. A claimant could not assume that departmental systems would communicate information held in relation to another claim. Third-party disclosure could operate on the claimant’s behalf only if the specified factual conditions were established. They were not established here.

4. SK v Department for Communities (ESA) [2020] NICom 73 was distinguished. It depended on findings that the relevant benefits branch had actually received computerised notice of a change made by the Department itself. No comparable findings or evidence existed in this case. The Tribunal observed that the application of Hinchy v Secretary of State for Work and Pensions to modern digital administration will require consideration in an appropriate case.

5. The civil penalty appeal was allowed. The First-tier Tribunal had not properly explained why there was no reasonable excuse and had not exercised the discretion whether to impose a penalty. The Upper Tribunal remade the decision, rather than remitting it, and held that the claimant was not liable for the £50 penalty.

• Upper Tribunal (Administrative Appeals Chamber): The overpayment appeal was dismissed. The civil-penalty appeal was allowed, the First-tier Tribunal decision was set aside on that issue, and the decision was remade.
• First-tier Tribunal (Social Entitlement Chamber), Liverpool: On 10 March 2021, it dismissed the claimant’s appeals against the overpayment and civil-penalty decisions under file references SC944/20/00633 and SC944/20/00634.