WW v HM Revenue and Customs (CHB)

Factual and Procedural Background

This case concerns an overpayment of child benefit arising from the claimant's failure to disclose that her child, M, had been taken into care by the local authority. Under schedule 9 of the Social Security Contributions and Benefits Act 1992 and regulation 18 of the Child Benefit (General) Regulations 2006, child benefit may not be claimed for a child in care, unless exceptions apply, which were not relevant here.

The claimant, who suffers from mental health problems and epilepsy, contended that on two occasions—shortly after M was taken into care and again in October 2007—officers of the Department for Work and Pensions (DWP) assured her they would notify HM Revenue and Customs (HMRC) to stop child benefit payments. The first officer involved was Mrs S; the second officer's identity was unknown.

The First-tier Tribunal initially disallowed the claimant's appeal, confirming the Secretary of State's decision that the claimant had a duty to inform the child benefit office of the change in M's circumstances. The claimant appealed to the Upper Tribunal, which found the First-tier Tribunal had made an error of law and substituted its own decision.

Legal Issues Presented

1. Whether the claimant was under a duty to disclose the material fact that her child was being looked after by the local authority during the relevant periods.
2. Whether oral assurances by officers of the DWP or JobCentre Plus could modify or qualify the claimant’s statutory duty to disclose to HMRC.
3. The extent to which the claimant’s failure to disclose was recoverable as an overpayment of child benefit.
4. The nature and scope of the claimant’s continuing obligation to disclose changes in circumstances affecting entitlement to child benefit.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The Upper Tribunal identified that the First-tier Tribunal erred in law by failing to adequately explain the source and nature of the claimant’s duty to disclose changes affecting child benefit entitlement. The tribunal did not clarify whether the duty arose under paragraph (2) or paragraph (4) of regulation 23 of the Child Benefit and Guardian's Allowance (Administration) Regulations 2003, which have distinct requirements regarding disclosure and notification.

The court found no evidence that the claimant received the relevant leaflet (CH1715) which set out disclosure obligations, although subsequent findings established that the leaflet was sent to the claimant at relevant times. The tribunal’s acceptance of Mrs S’s evidence—that she did not promise to notify the child benefit office—was upheld, but the claimant’s account of a similar assurance from a JobCentre Plus officer in October 2007 was accepted due to lack of contradictory evidence.

The court examined the relationship between the DWP and HMRC, concluding that while the DWP is a distinct entity from HMRC, it retains an administrative role in child benefit matters, including receiving notifications of changes of circumstance. The court held that oral representations by DWP officers could qualify the claimant’s statutory duty to disclose to HMRC, due to the DWP’s ostensible authority to receive and transmit such information.

Applying established principles, the court recognized a continuing duty to disclose, requiring the claimant to make further disclosure if initial attempts were ineffective. The claimant ought reasonably to have realized by January 2008 that the October 2007 disclosure via JobCentre Plus had not resulted in stopping benefit payments and thus had a renewed duty to disclose directly.

Holding and Implications

The appeal is allowed, but only to a limited extent benefiting the claimant.

The Upper Tribunal set aside the First-tier Tribunal’s decision and substituted its own findings:

• From 18 December 2006 to 14 October 2007, the claimant failed to disclose the material fact that her child was in local authority care.
• From 15 October 2007 to 14 January 2008, the claimant was not under a duty to disclose further.
• By 15 January 2008, the claimant should have realized that the October 2007 disclosure was ineffective and had a renewed duty to disclose, which she failed to do.
• Child benefit paid during the periods of non-disclosure (18 December 2006 to 14 October 2007 and 15 January 2008 to 14 March 2008) is recoverable from the claimant.
• Child benefit paid from 15 October 2007 to 14 January 2008 is not recoverable.

The amount recoverable is to be calculated by the Secretary of State, with the claimant having the right to refer any dispute over the calculation to the Upper Tribunal within one month of notification.

No new legal precedent was established beyond clarification of the application of existing principles regarding disclosure duties and the interplay between DWP and HMRC roles.