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1 The claimant’s appeal succeeds in part. The decision of Derby Appeal tribunal given under reference U/42/038/2006/00363 on 13 March 2006 is wrong in law. I set it aside. I make the further finding of fact that is set out at paragraph 35 below and substitute my own decision for that of the tribunal as follows:
The appeal is allowed in part.
From and including 2 November 2004 (and, for the avoidance of doubt, also on 1 November 2004) the work undertaken by the appellant continued to be exempt work within regulation 17 of the Social Security (Incapacity for Work) (General) Regulations 1995.
Accordingly, the appellant did not fall to be treated as capable of work under regulation 16 of those Regulations.
Therefore, there were no grounds upon which either to revise or supersede the decision awarding incapacity benefit to the appellant with effect from either 1 November 2004 or 2 November 2004.
From and including 3 May 2005, the work undertaken by the appellant ceased to be exempt work.
Therefore the decision awarding incapacity benefit to the appellant falls to be superseded on the ground that there has been a relevant change of circumstances since that decision had effect.
The superseding decision is that the appellant is to be treated as capable of work, and is therefore not entitled to incapacity benefit, from 3 May 2005.
2 One effect of my decision is that the appellant may have been overpaid incapacity benefit for a period or periods after 3 May 2005. This appeal is not concerned with the existence or recoverability of any such overpayment. So far as I am aware, the Secretary of State has not, yet made a decision on either of those issues. Any such decision will, of course, carry fresh appeal rights.
3 The appellant is a woman, who at the date of the Secretary of State’s original decision, was 35 years old. She gave up work for a number of years to nurse her son through an illness. Sadly, the son died in December 2003 and the appellant understandably became depressed. She claimed, and was awarded, incapacity benefit on the basis of that depression.
4 Subsequently, on Tuesday 4 May 2004, the appellant started work for MO Limited. At first, she worked 10 hours a week and was paid £60 per week.
5 The appellant must have told the Department promptly that she had commenced work because, on 25 May 2004, the incapacity benefit manager of the local office wrote to her in the following terms:
“You told us you started work on 04/05/04.
This means you can work for less than 16 hours a week, on average, and earn no more than £72.00 a week for a fixed period of 26 weeks from 04/05/04 without your benefit being effected. This fixed period will end on 01/11/04. It will not be altered for any reason, for example holidays or spells of sickness. You may be able to continue with permitted work for a further 26 weeks after 01/11/2004, if you are working with an officer of, or person providing services to the Department for Work and Pensions, and they agree that the extended work period will help you towards work of 16 hours or more a week. This person could be for example a Job Broker, a Disability Employment Adviser or a Personal Adviser. They can provide you with the support needed to find and sustain work, and give you advise [sic] on any training requirements you may need. We will get in touch with you nearer the end of your 26 weeks fixed period to give you more information about the choices available to you” (my emphasis).
6 Later in 2004, the appellant was reassessed under the personal capability assessment. Following a medical examination, she was notified by a letter dated 3 September 2004 that she had been found capable of work from 2 September 2004 and was not entitled to incapacity benefit or national insurance credits. The appellant appealed against that decision and the Secretary of State revised his earlier decision so as to reinstate benefit. The appeal therefore lapsed. (I mention this because the Secretary of State’s submission, which was accepted in toto by the tribunal, states that the appellant had ceased work on 1 September 2004. That was not the case, 1 September 2004 was the last day of her entitlement to incapacity benefit under the decision notified on 3 September 2004. However, that decision was made because, at the time, it had been decided that the claimant failed the personal capability assessment, not because she had stopped work.)
7 The period of 26 weeks referred to in the Jobcentre Plus letter of 25 May 2004 came to an end, as stated in that letter, at the end of Monday 1 November 2004. Contrary to what was promised in that letter, no one from the Department got in touch with the appellant “to give [her] more information about the choices available to [her].” either before or after the end of that period. Page 1E of the Secretary of State’s submission to the tribunal explains that this did not happen “due to case not being re-opened correctly following an appeal”.
8 After the end of the 26 week period, the appellant continued to work for MO Limited on the same basis as before.
9 During the summer of 2005, the appellant was reassessed under the personal capability assessment once again. As part of that assessment, she attended a medical examination on 22 June 2005 and told the medical services doctor, truthfully, that she was working for 10 hours a week. The doctor advised the Secretary of State that the appellant was no longer incapable of work and the Secretary of State subsequently decided that she was no longer entitled to incapacity benefit from, so far as I can tell from the papers, 2 August 2005. The appellant accepted that decision and did not appeal against it.
10 The doctor’s report must also have mentioned that the appellant was working because the appellant says that, shortly afterwards, she received a letter from Jobcentre Plus dated 16 August 2005 asking her about the work she was doing. Subsequently, on 12 October 2005, a decision maker acting on behalf of the Secretary of State superseded the decision awarding the appellant incapacity benefit and substituted a decision that the appellant was to be treated as capable of work from 2 November 2004 “because she has worked and that work does not fall with an exempt category”.
11 The appellant’s appeal against that decision was received on 7 November 2005.
12 In a document that was before the tribunal, the appellant stated:
“I also believe that the 10 hours I originally worked was going to eventually help me to work for more hours, … I do now work approximately 25 hours per week, so it has helped me by going to work for 10 hours and then increased my hours and changed my job recently”
The tribunal’s decision.
13 The appellant requested that her appeal should be considered on the papers without an oral hearing and it was accordingly listed on that basis at Derby on 13 March 2006. The tribunal’s decision was in the following terms:
“Appeal is disallowed.
The decision of the Secretary of State issued on 12/10/2005 is confirmed.
[The appellant] was not entitled to incapacity benefit from 1st November 2004 because the work that she was then doing could not be regarded as permitted work in accordance with regulation 17 of the Social Security (Incapacity for Work) (General) regulations 1995. The Secretary of State has made the right decision for the right reasons.
My decision does not extend to the matter of whether benefit has been overpaid to the appellant or whether, if it has, it is recoverable from her.
Both parties indicated that they would be content to a hearing on the papers. We were satisfied that it would not be repugnant to the interests of justice to proceed on that basis.
The parties to this appeal are entitled to request from me a written statement of the reasons for the decision in accordance with regulation 53(4) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. They should treat this decision as such a statement for all purposes” (original emphasis).
The appeal to the Commissioner.
14 Even though the chairman had said unambiguously that the decision notice itself was to be treated as his statement of reasons, the appellant then made a request for such a statement and, unfortunately, there was a delay in drawing her attention to the fact that such a request was not necessary in this case. In due course, however, she applied for leave to appeal to the Commissioner. Her stated grounds were as follows:
“I am appealing against the decision, as I believe that I should have been notified at the end of my 26 week initial period of work. You say that you would contact me nearer the end of the 26 week period. I was not contacted by you to say the 26 week period was to end. I was still unwell at this time, under the care of my GP and a mental health councillor. I don’t believe it was up to me to contact you. During telephone contacts I have had with you, nothing has ever been said to me that I shouldn’t still be in receipt of incapacity benefit. I rang you on several occasions, one to query the increase in benefit. Still no one informed me that I shouldn’t be in receipt of incapacity benefit. You were totally aware of my circumstances regarding my employment as nothing had changed. I still worked 10 hours a week. I believe that it is your error as you did not advise me the 26 week period had ended. As far as I am concerned you knew of my working situation as nothing had changed. I believe my working for 10 hours, this has significantly improved my self esteem and well being in order to get me back into full time employment …”
15 Leave to appeal to the Commissioner was granted by the District Chairman of Appeal tribunals with responsibility for the Derby appeal tribunal on 5 July 2006.
16 The Secretary of State’s representative does not support the appeal. She points out that:
although the Secretary of State’s decision treated the appellant as incapable of work from and including 2 November 2004, the submission writer had presented the appeal to the tribunal—and the tribunal had given its decision—on the basis that she was not entitled from 1 November 2004; and that
it was arguable that if the appellant had been contacted during October or November 2004, a further 26 weeks of exempt work might have been permitted.
However, she submits that the tribunal reached a decision that was legally open to it on the evidence that was available.
17 The law relevant to this appeal can be found in regulations 16 and 17 of the Social Security (Incapacity for Work) (General) Regulations 1995 (“the Incapacity for Work Regulations”). At the time the tribunal had to consider (and so far as is relevant) those Regulations were in the following terms:
“Person who works to be treated as capable of work
16.—(1) Subject to paragraphs (3) and (4) and regulation 13(3) (persons receiving certain regular treatment) a person shall be treated as capable of work on each day of any week commencing on Sunday during which he does work to which this regulation applies (notwithstanding that it has been determined that he is, or is to be treated under regulations 10 to 15 or 27 as, incapable of work or that he meets the conditions set out in regulation 28(2) for treating a person as incapable of work in accordance with the personal capability assessment until a determination has been made in accordance with that assessment) unless that work—
(a) falls into any of the categories of exempt work set out in regulation 17(1); and
(b) is done within the limits set out in regulation 17(2).
17.—(1) The categories of exempt work referred to in regulation 16(1)(a) are—
(a) work in respect of which the required notice is given, and—
(i)-(iii) …; or
(iv) to which paragraph (1A) below applies;
(1A) This paragraph applies in the case of a person whose circumstances are specified—
(a) in sub-paragraph (a) of paragraph (1B) below, to work which is undertaken by that person during the period specified in sub-paragraph (b) of that paragraph;
(b) in sub-paragraph (a) of paragraph (1C) below, to work which is undertaken by that person during the period specified in sub-paragraph (b) of that paragraph;
(1B) For the purposes of paragraph (1A)(a) above—
(a) the specified circumstances are where—
(i) no work to which paragraph (1A) applies has previously been undertaken by that person, or
(b) the specified period is the period of 26 weeks beginning with the first day on which the work is undertaken.
(1C) For the purposes of paragraph (1A)(b) above—
(a) the specified circumstances are where—
(i) work to which paragraph (1A) applies has previously been undertaken by that person during a period specified in paragraph (1B)(b) above, and
(ii) there is appropriate evidence that, by undertaking further work, during the period specified in sub-paragraph (b) below, he is likely to improve his capacity to engage in full-time work;
(b) the specified period is the period of 26 weeks beginning immediately after the end of the period specified in paragraph (1B)(b) above.
(1E) In this regulation—
"appropriate evidence" means, in relation to any work—
(a) evidence from an officer of, or person providing services to, the Secretary of State who is authorised by the Secretary of State for the purpose; and
(b) evidence (if any) from any other person (including the person undertaking the work),
or such part of such evidence as constitutes the most reliable evidence available in the circumstances;
"the required notice" means, in relation to work referred to in any of heads (i) to (iv) of paragraph (1)(a), notice to the effect that the person is undertaking, or is about to undertake the work, given in writing to the Secretary of State by that person or another person acting on his behalf—
(a) in the case of work referred to in paragraph (1)(a)(i) to (iii), at any time before the person ceases to undertake the work;
(b) in the case of work referred to in paragraph (1)(a)(iv), no later than the end of the period of 42 days which begins with the day on which the work begins;
(2) The weekly limits in relation to exempt work are—
(a) that earnings from work referred to in paragraph (1)(a)(ii)-(iv) do not exceed £72.00;
(b) that, subject to paragraph (3), the combined total of the number of hours spent doing work referred to in paragraph (1)(a)(iv) is less than 16;
18 It will be seen that the general rule (in regulation 16) is that any claimant who actually works is to be treated as capable of work and is therefore not entitled to incapacity benefit. The only exception to that rule arises if the work is “exempt work”, i.e., work that satisfies the requirements of regulation 17(1) and (2).
19 It is common ground that, throughout the period with which the tribunal was concerned, the appellant earned less than £72.00 per week and worked for fewer than 16 hours per week. Regulation 17(2) is therefore satisfied.
20 As far as regulation 17(1) is concerned, it is also not in dispute that “the required notice” was given or that, during the first 26 week period from 4 May 2004 to 1 November 2004 (both dates included), the appellant’s circumstances fell within regulation 17(1B).
21 The issue that the tribunal therefore had to decide was whether during the further period of 26 weeks from 2 November 2004 to 2 May 2005 (both dates included) the appellant’s work was exempt by virtue of her circumstances falling within regulation 17(1C).
Reasons for setting aside the tribunal’s decision.
Inadequacy of reasons
22 The tribunal’s decision does not identify that issue or make any express findings of fact on it. Other than to say that “the Secretary of State has made the right decision for the right reasons”, the tribunal does not give any explanation why the appeal has been concluded against the appellant.
23 Leaving aside for the moment the question of whether the Secretary of State has indeed made the right decision for the right reasons, I do not consider that to be a satisfactory state of affairs. The impression given by the decision—and reinforced by the fact that what is really no more than the briefest summary has been directed to stand as a full statement of reasons—is that the tribunal has simply “rubber-stamped” the Secretary of State’s decision. That may not have been the case, but it is nevertheless how it appears.
24 I do not rule out the possibility that it may, on occasion, be sufficient for a tribunal simply to adopt the submission of the Secretary of State as a basis for its own decision. But such cases are likely to involve issues that are factually and legally straightforward. And it will certainly only be appropriate if the Secretary of State’s submission actually is correct. As I explain below, this is not such a case.
25 Even if it had been, this appeal involved:
a claimant who had suffered a devastating loss but was nevertheless taking active steps to put her life back on track rather than rely indefinitely on benefit; and
who was being disadvantaged by the admitted errors of the Department and in particular their failure to take the steps that they had promised her would be taken;
in circumstances where, if those steps had been taken, it was highly probable that she would have been permitted a further 26 week period of exempt work and, therefore, of entitlement to incapacity benefit.
In other words, the Secretary of State was effectively seeking to benefit from the failure of his own staff to follow the proper administrative procedures and to honour their promise to contact the appellant towards the end of the first 26 week period.
26 In those circumstances, the interests of justice required the tribunal, in the exercise of its inquisitorial jurisdiction, to scrutinise the Secretary of State’s submission closely. I regret that I cannot be satisfied from the tribunal’s decision that it did so. On the contrary, the fact that the tribunal disentitled the appellant to incapacity benefit from 1 November 2004 (the incorrect date given in the submission), when the actual decision under appeal, which was in the papers, correctly (at least on the view taken by the Secretary of State) disentitled her from 2 November suggests that the necessary scrutiny was absent and that the tribunal simply took the submission at face value.
27 The inadequacy of the tribunal’s reasons is sufficient, on its own, for me to set its decision aside. However, there would be no point in my doing so if the tribunal had, in fact, reached the only decision that was legally possible. I therefore turn to consider regulation 17(1C).
28 Regulation 17(1C) allows claimants a second 26 week period of permitted work on the same basis as, and following immediately on from, the first period of 26 weeks permitted by regulation 17(1B). However, by virtue of regulation 17(1C)(a)(ii), this is only possible where:
“there is appropriate evidence that, by undertaking further work, during the period specified in sub paragraph (b) below, [the claimant] is likely to improve [her] capacity to engage in full time work”.
29 The Department interprets the requirement that there should be “appropriate evidence” as meaning evidence from “an officer of, or person providing services to the Department for Work and Pensions”. In practical terms that means a job-broker, a disability employment adviser or a personal adviser (see the letter quoted at paragraph 5 above).
30 However that is not what the law says. The definition of “appropriate evidence” in regulation 17(1E) covers not merely:
“evidence from an officer of, or person providing services to, the Secretary of State who is authorised by the Secretary of State for the purpose”
”evidence … from any other person (including the person undertaking the work)” (emphasis added).
The definition also provides that “appropriate evidence” may consist of such part of such evidence as constitutes the most reliable evidence available in the circumstances.
31 Therefore, the appellant’s own evidence, quoted at paragraph 12 above, that
she believed that the work she did was eventually going to help her to work longer hours; and that
she had subsequently increased her hours to 25 hours a week;
was capable of amounting to the “appropriate evidence” that was required by regulation 17(1C).
32 The tribunal should therefore have considered that evidence and made findings of fact as to whether the work undertaken by the appellant during the second 26 weeks period was likely to improve her capacity to engage in full time work.
33 The Secretary of State’s submission does not address that issue. Far from this being an appeal in which the Secretary of State made the right decision for the right reasons, he has made the wrong decision by failing to identify correctly what it was necessary for him to decide and has therefore failed to give any relevant reasons at all. By adopting the Secretary of State’s submission lock, stock and barrel, the tribunal similarly failed to identify and deal with the real issue that was before it and thereby erred in law. As that error potentially affects the outcome of the appeal, I must set the tribunal’s decision aside.
Reasons for the substituted decision
34 This is a case in which it is appropriate for me to make further findings of fact and to substitute my own decision for that of the tribunal.
35 I find as a fact that the work undertaken by the appellant between 2 November 2004 and 2 May 2005 (both dates included) was likely to improve her capacity to engage in full time work.
36 That finding is based on the appellant’s evidence which I accept as “appropriate evidence”. In the absence of “evidence from an officer of, or person providing services to, the Secretary of State who is authorised by the Secretary of State for the purpose”, the appellant’s evidence “constitutes the most reliable evidence available in the circumstances”.
37 I regard the appellant’s evidence as being credible. I rely in particular upon the fact that the appellant did actually increase her hours of work before the date of the Secretary of State’s decision.
38 It follows that:
throughout the period from 2 November 2004 to 2 May 2005, the work undertaken by the appellant fell within an exempt category; and that
therefore, regulation 16(1) did not operate so as to treat her capable of work; and that
the appellant was therefore entitled to the incapacity benefit that she received during that period.
39 From 3 May 2005, however, she ceased to be so entitled. This is because regulation 17 does not provide for any circumstances in which work that pays £60 per week may fall into an exempt category for a continuous period of more than 52 weeks.
40 I have therefore superseded the decision awarding the appellant incapacity benefit on the ground that there has been a relevant change of circumstances since that decision had effect. The superseding decision is that the appellant is not entitled to incapacity benefit from 3 May 2005.
(Signed on the original) Richard Poynter
23 January 2007