2011 12 Welfare Benefits

Sunday 1 January 2012

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Residential care home residents to retain mobility component of personal independence payment: On 1 December 2011 the Government announced that the mobility component of disability living allowance will not be removed from people living in residential care homes and that the mobility component of personal independence payment, which will replace disability living allowance, will also be payable at both the standard or enhanced rate to people in residential care homes provided they satisfy the entitlement conditions. The Parliamentary Under-Secretary of State for Work and Pensions' (Maria Miller) written statement can be found in Hansard 1 Dec 2011: Column 78WS (click here for link). The change in policy was in part a response to the findings of Lord Lowe's review (click here for link) which found that (i) its removal would lead to a loss of independence for disabled people and (ii) there was no evidence of a duplication of funding in relation to the mobility needs being met by local authorities and those being met by DLA mobility.

Cuts to housing benefit based on under-occupation: On 9 December 2011 the National Housing Federation (which represents housing associations) issued a story highlighting the impact of the 'bedroom tax' in the Welfare Reform Bill saying that new figures reveal it could cost poor families up to £1,400 per year which was higher than the figure previously quoted by the Government. Under the proposal, anyone deemed to be under-occupying by one bedroom stands to lose up to 15% of their housing benefit and those considered to have two or more 'spare' bedrooms – even if they are in use – will lose up to 25% of their benefit.

Figures produced by the Department for Communities and Local Government, show that the average social sector rent for three-bedroom properties in England is £83 a week. This means affected families face losing between £12 and £20 per week – or between £645 and £1,076 a year.

  • Based on cuts of up to 25% a household deemed to be under-occupying a three-bedroom home in England faces losing up to £20.70 a week – or £1,076 a year.
  • In London, a family under-occupying a three-bedroom home could have their housing benefit docked by an eye watering £1,385 a year - the largest penalty of any region Britain.
  • And in the North West – the region with the highest level of under occupancy – families living in a three-bedroom property face a cut of up to £955 a year in their housing benefit.

The Government had previously estimated that 670,000 families across the country will lose an average of £676 per year under the new social sector 'size criteria'. The NHF point out that where a family is out of work and in receipt of housing benefit under the new size criteria, a family may be penalised for ‘under-occupying’ even where every bedroom in the home is in regular use. For example, benefit may be cut where teenagers have been given their own bedroom, rather than being forced to share. Separated parents will be penalised for keeping a 'spare' bedroom for when their children visit. And foster parents may receive a cut even where their bedrooms are occupied by foster children, who for benefit purposes do not count as part of the household (click here for link to NHF website). David Orr, chief executive of the Federation, said:

"We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought.

Thousands of hard-up families face penalties of up to £1,400 a year simply because the Government have deemed their homes are suddenly too big for their needs.

This will have disastrous implications for huge numbers of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families."

In Secretary of State for Work and Pensions v Slavin [2011] EWCA Civ 1515 (09 December 2011) (link to transcript) the Court of Appeal has considered whether a claimant in an NHS funded care home was 'undergoing medical or other treatment as an in-patient' for the purposes of entitlement to Disability Living Allowance. The claimant, who had a number of health problems including Fragile X Syndrome (autistic traits) and challenging behaviour, lived in a privately run care home. The fees for his accommodation and care were paid by the local Health Authority but, although the care home was staffed by appropriately experienced and skilled care staff, it did not have any staff with medical or nursing qualifications. Prior to moving into the care home in 2007, the claimant had been living with his parents and was in receipt of the higher rate of the mobility component and the highest rate of the care component of disability living allowance. However, when the claimant moved into the care home, the DWP decided that neither component was payable because he was 'being maintained free of charge while undergoing medical or other treatment as an in-patient ... in a hospital or similar institution...' for the purposes of regulation 8 (care component) and regulation 12A (mobility component) of theSocial Security (Disability Living Allowance) Regulations 1991 (SI 1991/2890). His appeal was dismissed by a tribunal but allowed by the Upper Tribunal in CDLA/3638/2008; [2010] UKUT 482 (AAC). Tthe Secretary of State then appealed. The Court of Appeal dismissed the Department's appeal concluding that although the claimant's healthcare needs qualified him for an NHS-funded residential placement at a care home he could not be described as 'undergoing medical or other treatment as an in-patient … in a hospital or similar institution', in the terms of relevant regulations. Whilst case law had established that 'medical or other treatment' is to be read as including nursing as well as medical treatment, e.g.Minister of Health v Royal Midland Counties Home for Incurables at Leamington Spa[1954] Ch 530 and White v Chief Adjudication Officer (1993) (R(IS) 18/94), the care the claimant received from staff in his care home did not amount to nursing –

"The Lodge is registered as a care home only, not as a nursing home, and it does not purport to provide nursing care. Its staff are trained to handle challenging behaviour and to support in other ways the particular needs of residents; they are given an initial induction and ongoing training and are encouraged to work towards NVQs. But they do not have professional qualifications or training as nurses, nor do they work under the supervision of qualified nurses. It is true that they look after residents who, in the case of the respondent at least, suffer from a disability of the mind amounting to "illness", but it does not follow that the care they provide is nursing care; and in my view it can fairly be described as domestic care (or "personal" care, within the meaning of s.3(1) of the Care Standards Act 2000) rather than nursing care. There is nothing in the nature even of the "palliative treatment" referred to in the Leamington Spa case. The management of challenging behaviour is no doubt a demanding aspect of the care provided, but of itself it does not seem to me to constitute nursing. The support of residents in the administration of their medication is not sufficient to give the care a nursing rather than domestic or personal character. The situation is therefore materially different from that considered in the three main authorities." (paragraph 55).

The Supreme Court in Secretary of State for Work and Pensions v Payne & Anor [2011] UKSC 60 (14 December 2011) (click here for transcript) held that, as a matter of statutory construction, the Secretary of State has no power to recoup Social Fund loans and benefit overpayments by deduction from current benefit payments where a debt relief order ('DRO') has been made, and the social security debt is one of the debts listed on the DRO (thereby upholding the decisions of Cranston J in the High Court and the majority of the Court of Appeal, Smith and Toulson LJJ). The Secretary of State had argued that the statutory power of deduction under the social security legislation is not a "remedy" within the terms of the insolvency legislation but is rather an adjustment to the level of benefit which the claimant is entitled to receive at source - such that Mrs Payne and Ms Cooper were only ever entitled to the net sum after the deduction was made (the 'net entitlement principle'); and that both the loan and the overpayment were to be regarded as payments in advance of future benefit by analogy with the recoupment of overpaid rent in Bradley-Hole v Cusen [1953] 1 QB 300. The Court rejected this analysis saying that there was no such thing as the so-called "net entitlement principle"as: (i) the claimant to social security benefit has a statutory entitlement to the amount of benefit which is awarded by the Secretary of State or a tribunal; (ii) such awards cannot be regarded as an advance payment of future benefit as the claimant's circumstances may change; and (iii) the liability to repay Social Fund loans or overpayments arises independently of the claimant's entitlement to any benefit from which the Secretary of State may later decide to recoup it (para [21]).

The Court went on to say that, in order to bring coherence to this area of the law, the same principle applied to the bankruptcy scheme. Consequently, the Secretary of State has no power to recoup social security debts on the making of a bankruptcy order, which meant R v Secretary of State for Social Security, Ex p Taylor and Chapman [1997] BPIR 505 (HC) was wrongly decided (para [23]). Finally, the Supreme Court said that R (Balding) v Secretary of State for Work and Pensions [2007] EWCA Civ 1327, [2008] 1 WLR 564 (CA) was rightly decided when it held that a social security debt was wiped out when the bankrupt was discharged. The Court said Balding applied equally to the discharge of a DRO (para [26]).

In the course of the hearing the Supreme Court was told that considerable sums of money owed to HMRC, the Secretary of State and other public bodies are listed in DROs. The figures quoted were respectively nearly £9m to HMRC, nearly £8m to the Secretary of State, of which over £6m was in respect of Social Fund loans, and £20.7m to 'other public bodies'. Lady Hale SCJ observed:

"It would, of course, be open to the Government to promote delegated legislation to exclude these liabilities from the definition of "qualifying debts" in the DRO scheme altogether (and, indeed, to seek corresponding amendment to section 382 with regard to "bankruptcy debt"), but that would raise policy issues which are not for this Court." (At para [29]).

On 21 December 2011 the DWP issued Urgent Bulletin HB/CTB U6/2011 to local authorities on 'Debt Relief Orders and Overpayment recovery' which considers the impact of the judgment for recovery of overpayments of Housing and Council Tax Benefit by local authorities where the claimant has a DRO or is subject to a bankruptcy order (click here for link). Desmond Rutledge of Garden Court Chambers acted on behalf of Mrs Payne.

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