Upper Tribunal (Administrative Appeals Chamber), July 31, 2015, [2015] UKUT 423 (AAC)

Resolution Date:July 31, 2015
Issuing Organization:Upper Tribunal (Administrative Appeals Chamber)
Actores:NS v Secretary of State for Work and Pensions (IS) (Remunerative work : Calculation of hours of work)

NS v Secretary of State for Work and Pensions (IS)

[2015] UKUT 0423 (AAC)


CIS/3076/2011 NS v SSWP (IS)

NS v Secretary of State for Work and Pensions (IS)

[2015] UKUT 0423 (AAC)





For the Appellant: Mr Jim Strang, welfare benefits consultant

For the Respondent: Mr Stephen Cooper, solicitor

Decision: To the limited extent hereafter appearing, the appeal is allowed. The decision of the First-tier Tribunal sitting at Birkenhead on 22 July 2011 under reference 062/10/01794 involved the making of an error of law and is set aside. Acting under section 12(2)(b) of the Tribunals, Courts and Enforcement Act 2007 I remake the decision in the following terms:

The claimant's appeal against the entitlement decision taken by the Secretary of State on 13 April 2010 refusing the claimant income support on the basis that between 16 August 2004 and 5 August 2009 she was in remunerative work is dismissed. The decision was in the outcome correct.

The claimant's appeal against the decision of 26 April 2010 that there was a recoverable overpayment of £31,759.15 is allowed as to the calculation of the amount of the overpayment only. The Secretary of State must recalculate the amount of the overpayment on the basis that the number of hours worked, and (where stated there) the gross pay earned by the claimant is as found by the Upper Tribunal in the Appendix to this decision. Where the gross pay is not stated there it is to be calculated using the hours stated there and the following hourly rates:

In the period from week 24 of tax year 2006/7

to the end of that tax year £5.42

In the tax year 2007/8 £5.95

In the tax year 2008/9 £6.00

In the tax year 2009/10 £6.25

He must apply regulation 13 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 in accordance with the Reasons below. The Secretary of State must notify the claimant's representative of the revised calculation no later than 6 weeks after the date of the letter sending him this Decision. The claimant may, within 4 weeks of the date on which that calculation is sent to her representative, apply in writing to the Upper Tribunal for any dispute as to the calculation of the amount to be resolved.



  1. This initially rather technical-seeming case raises questions of some importance with the spread of zero hours contracts and other less conventional working arrangements. They arise in the contexts of determining what is ``remunerative work'' for income support purposes and of calculating the amount of a recoverable overpayment. Although the reasons for my decision contain a fair amount of arithmetic, it does not require more than school mathematics and it is regrettable that the parties and the First-tier Tribunal did not engage more with that aspect of the evidence.

    Relevant History

  2. The claimant had been in receipt of income support from 28 May 1998 pursuant to a decision dated 11 June 1998. The award was initially made on the basis that she was a single parent, but from 27 July 2004 she claimed on the basis of incapacity for work (advantageous to her income support because of the premium a claim on such a basis attracted) and then, having failed the Personal Capability Assessment on 5 April 2005, once again as a single parent. She had previously worked part-time while on income support, stopping in March 2003 because of childcare problems.

  3. It is not in dispute that between 16 August 2004 and 5 August 2009 she worked for a taxi company. There was evidence from the taxi company. In respect of the period between week 20 of tax year 2004/5 and week 23 of tax year 2006/7, it gave details of the claimant's gross pay. From this one could at best only infer the number of hours worked in any given week and, as no hourly rate of pay was given before the tax year 2008/09, even that was not an entirely straightforward exercise. Gross pay varied between £0.00 in some weeks to a peak of £321.00 in one week. The most common entry initially however was the weekly sum of £85.60. From week 24 of tax year 2006/7, following an apparent change of practice in the taxi company's record keeping, the evidence disclosed the weekly hours worked. These varied between 0 hours in a few weeks and a peak of 54.25 hours in one week. Pay rates were shown for 2008/09 as £6 per hour and for 2009/10 as £6.25 per hour. There was also a form completed on behalf of the company in January 2010 where the question ``What were or are this person's contracted hours a week or month?'' was answered by ``18'' and ``What was or is this person's hourly rate of pay?'' by ``£6.25''. There was also evidence demonstrating the content of Forms P60 for relevant tax years.

  4. On 13 April 2010 the decision maker superseded the decision of 11 June 1998 on the ground of relevant change of circumstances, namely that the claimant had since then started employment. On 26 April 2010 the decision maker determined that there had been an overpayment, recoverable on the ground of failure to disclose.

  5. The amount of the overpayment was calculated at £31,759.15. This was on the basis that the claimant's entire entitlement to income support during the relevant period was extinguished by virtue of the work she had been doing.

  6. The claimant's case was:

    (a) that a Ms W, an adviser at the JobCentre, had been aware from the outset that the claimant would be doing the job and that it lasted for 16 hours a week, as she had authorised a payment, initially described as a ``Back to Work Bonus'' (but which the evidence subsequently suggested was made out of the ``Adviser Discretionary Fund'');

    (b) that Ms W had advised the claimant that she could work up to 16 hours a week without it affecting her benefits; and

    (c) that if the claimant had been correctly advised, she could have claimed working tax credit which should, accordingly, be offset against the income support overpaid.

  7. The claimant was prosecuted and pleaded guilty on the basis that she had been advised as set out at (b) above but had failed to notify a change of circumstances when she worked in excess of 16 hours per week. The claimant received a 6 month community order. The overpayment was calculated for sentencing purposes only at £13,841.46. Neither representative was able to explain how this figure had been arrived at. Although the ignorance is on both sides, Mr Strang seeks to take a point based on the lack of explanation for the above figure. There is nothing in it. The purposes for which the figure was calculated are not those with which I am concerned and I do not rely on it.

    First-tier Tribunal in error of law

  8. The First-tier Tribunal took the claimant's appeal as being against both the entitlement and the overpayment decisions. In its statement of reasons (para 21):

    ''The Tribunal accepted the accuracy of the documentation supplied by [the taxi company] as to period of employment and the working of 18 hours per week contracted. The documentation provided by [the taxi company] shows that the appellant was working over 16 hours.''

  9. However, if by that the tribunal meant in each and every week in the relevant period, it patently did not. If alternatively the tribunal was going through an averaging process, it needed to say what it was doing and so I gave permission to appeal. As will be seen, the reference to ``over 16 hours'' was also inexact.

  10. It was common ground that the tribunal had erred in law. What was less forthcoming were positive suggestions as to how the admittedly difficult legislation could sensibly be applied. Further, there were quite significant gaps in the fact finding by the First-tier Tribunal and attempts to fill in the gaps by seeking further particulars through Mr Strang met with only limited success. Consequently I directed an oral hearing, which the claimant was required to attend. It was significantly delayed by the claimant's ill-health and by administrative difficulties, but was eventually held at Liverpool on 7 August 2014. I received little assistance there either with interpreting the financial evidence or with the legislation. Insofar as this decision includes significant aspects which were not raised by or with the parties but which occurred to me afterwards, the parties have had the opportunity to comment on them.

    Remunerative work - General

  11. What the First-tier Tribunal needed to do in the first instance was to determine whether the claimant...

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