Terms & Conditions

[Mike Hughes]

Doh. I always forget this.

CJSA/2628/2017 and CJSA/1192/2019
Whether funds derived from personal injuries compensation held in a joint account are held in a ‘trust’ for the purposes of paragraph 17 of Schedule 8 to the JSA Regulations 1996
[2020] UKUT 49 (AAC)

Background

The claimant (Q) received income-based jobseeker’s allowance (JSA) from January 2008 until December 2010 (Period 1) and from November 2011 to April 2013 (Period 2). Throughout Period 1, and for at least the first five months of Period 2, Q had capital in various bank accounts that exceeded either the upper JSA capital limit of £16,000 or the lower limit of £6,000. Q did not declare that capital when she claimed JSA.

After becoming aware of the accounts, the DWP decided that Q was not entitled to JSA in both periods and had been overpaid £8,288.84 JSA for Period 1 and £5,577.36 for Period 2.

Q’s appeals against the entitlement and overpayment decisions were dismissed by the First-tier Tribunal (save for the tribunal reducing the amount of recoverable overpayment in Period 1 in light of the Department conceding that it could not prove that Q had misrepresented the level of her capital in her original claim in 2008).

The tribunal’s reasons for dismissing the appeals included that –

Q had received personal injuries compensation at least 52 weeks before the overpayment periods in question, of which substantially in excess of £16,000 remained at the time of her JSA claims (which had not been placed in a ‘personal injuries trust’);
compensation monies had been moved around between various bank accounts held jointly by Q and her parents, while a further transfer of a substantial sum was made to an account with the Yorkshire Building Society in the joint names of Q’s parents (the tribunal also decided that Q was named on the account), and there was no evidence to indicate that Q ceased to be beneficially entitled to the money moved around in this way; and
a specified sum of money, used by Q to purchase her home, was transferred from the Yorkshire Building Society account to an account in Q’s sole name immediately before being withdrawn to make the purchase.
The claimant appealed to the Upper Tribunal.

Issues before the Upper Tribunal

Whether the claimant was the beneficial owner of sums held in her parent’s joint bank account / whether capital possessed by the claimant derived from personal injuries compensation fell to be disregarded during any period when it was deposited in an account jointly held by her and her parents.

Decision

Judge Poynter allows the appeal, sets aside the decision, and directs the Secretary of State to recalculate the claimant’s entitlement.

Reasons

Judge Poynter identifies a number of errors of law in the tribunal’s decision, principal of which was that the tribunal made findings of fact in relation to Q’s beneficial ownership of capital in the Yorkshire Building Society account that were contrary to the evidence –

‘The finding that Q was one of the names on the Yorkshire Building Society Account was contrary to all the evidence and also the express concession made by the presenting officer. It was a finding of fact for which there was no evidence and, therefore, an error of law.

That error is material. The schedule of capital shows that, if the amount credited to the Yorkshire Building Society Account is removed from the calculation, Q’s capital fell below £6,000 on a date in March 2012. That would mean that … Q was not disentitled to JSA from approximately that date and had not been overpaid JSA thereafter.’ (paragraph 33 and 34)

Having set aside the decision on the grounds that the tribunal incorrectly concluded that Q was the beneficial owner of the sums held in the Yorkshire Building Society Account, Judge Poynter directs the Secretary of State to recalculate the claimant’s entitlement.

In addition, Judge Poynter considers the effects of the capital disregard rules under paragraph 17 of Schedule 8 to the Jobseeker’s Allowance Regulations 1996, which includes –

17. – Where the funds of a trust are derived from a payment made in consequence of any personal injury to the claimant or the claimant’s partner, the value of the trust fund and the value of any right to receive any payment under that trust.

Highlighting that paragraph 17 does not require the trust to be in any particular form or even that there be an express trust (contrary to the tribunal’s reliance on needing evidence of a ‘personal injuries trust’), Judge Poynter holds that a trust was in fact created whenever money derived from Q’s personal injuries compensation was held in a joint account with one of her parents –

‘Given that Q and one of her parents were named on the account but the money in the account was Q’s alone, Q and the parent must have been jointly holding the capital represented by the account on a bare trust for Q in her sole capacity.

In those circumstances, the tribunal should have held that paragraph 17 of Schedule 8 was satisfied to the extent that the money derived from Q’s personal injury compensation was held in a joint account. Its conclusion that paragraph 17 did not apply was wrong in law.‘ (paragraph49 and 50)

Accordingly, Judge Poynter directs the Secretary of State, when recalculating the claimant’s entitlement, to disregard any capital possessed by her derived from personal injuries compensation during any period in which it was held in a joint account.