J.N. v Secretary of State for Work and Pensions

The decision of the Upper Tribunal is to refuse the ESA entitlement appeal under references SC316/23/00716, 1692864864244330 and UA-2025-000329-ESA. The decision of the Upper Tribunal is to allow the ESA overpayment appeal under references SC316/23/00714, 1695727546622131 and UA-2025-000330-ESA. That decision of the First-tier Tribunal involved an error of law. Under section 12(2)(a), (b)(i) and (3) of the Tribunals, Courts and Enforcement Act 2007, I set that decision aside and remit the case to be reconsidered by a fresh tribunal in accordance with this decision and the following directions. DIRECTIONS

1. The ESA overpayment appeal is remitted to the First-tier Tribunal for reconsideration at an oral hearing.

2. The new First-tier Tribunal should not involve the tribunal judge previously involved in considering this appeal on 17 October 2024.

3. If the Appellant has any further written evidence to put before the tribunal, this should be sent to the HMCTS regional tribunal office within one month of the issue of this decision.

4. The new First-tier Tribunal is not bound in any way either by the decision of the previous tribunal. Depending on the findings of fact it makes, the new tribunal may reach the same or a different outcome to the previous tribunal. These Directions may be supplemented by later directions by a Tribunal Legal Officer, Tribunal Registrar or First-tier Tribunal Judge. REASONS FOR DECISION Introduction

1. The Appellant’s appeal to the Upper Tribunal against the First-tier Tribunal (FTT)’s overpayment decision succeeds and so there will need to be a completely fresh hearing of that Employment and Support Allowance (ESA) appeal before a new FTT. The Upper Tribunal’s decision in summary and what happens next

2. I allow the Appellant’s appeal to the Upper Tribunal in respect of the ESA overpayment decision, an appeal which has the support of the Secretary of State’s representative. The decision of the First-tier Tribunal involves a legal error. For that reason, I set aside the Tribunal’s decision.

3. The Appellant’s case now needs to be reheard by a new and different First-tier Tribunal. I cannot predict what will be the outcome of the re-hearing. So, the new tribunal may reach the same, or a different, decision to that of the previous Tribunal. It all depends on the findings of fact that the new Tribunal makes. The two First-tier Tribunal decisions

4. The FTT made two decisions on the Appellant’s ESA appeals. The first decision was on the ESA entitlement appeal. This has the FTT references SC316/23/00716 and digital 1692864864244330. It has the Upper Tribunal reference UA-2025-000329-ESA.

5. The second decision was on the ESA overpayment appeal. This has the FTT references SC316/23/00714 and digital 1695727546622131. It has the Upper Tribunal reference UA-2025-000330-ESA.

6. For the reasons that follow, I am refusing the Appellant’s ESA entitlement appeal but allowing the ESA overpayment appeal. The factual background

7. I summarised the background to this appeal in my grant of permission to appeal as follows: The background to this appeal

5. The Applicant (hereon, ‘the claimant’) was awarded income-related ESA on 09.03.2016. A decision dated 09.03.2016 subsequently amended the start date to 02.03.2016, being the date of his claim. He had previously been in receipt of contribution-based ESA. At the time of the claim, the claimant stated his savings were approximately £2,000. Following a GMS match in 2021 it was discovered that the claimant had approximately £60k in various bank accounts in his name. (All references to page numbers are to the UT file ending 000329 unless otherwise stated).

6. By the decision of 18.05.2023 (p.241) the decision-maker determined that the claimant had no entitlement to income-related ESA from 09.05.2016. An overpayment decision dated 17.05.2023 determined there was a recoverable overpayment of £41,872.96 (p.237). The claimant requested a mandatory reconsideration of both decisions, asserting that the money was for his children and he was not able to open bank accounts in their names.

7. The entitlement decision was altered following a mandatory reconsideration on 08.08.2023 (p.268), to exclude backdated payments of ESA and PIP from the schedule of assets. The overpayment decision was revised following a mandatory reconsideration on 08.08.2023 (p.121 – UT 000330), and the recoverable overpayment was determined to be £36,232.15.

8. The claimant appealed against both decisions to the FTT and requested an oral face to face hearing. The appeals were heard together on 17.10.2024. The claimant attended by telephone. By a decision notice dated 22.10.2024 (Addition Z16), the FTT refused the entitlement appeal. By a decision notice also dated 22.10.2024 (Addition T – bundle in UT 000330) the FTT allowed the appeal in part, recalculating the overpayment amount to £34,741.95.

9. The claimant requested that the decisions to be set aside on the basis that the FTT did not have all the documentary evidence he had sent in before it. This request was refused by decision notice dated 18.12.2024 (Addition Z24). Permission to appeal was refused on 03.03.2025. The grounds of appeal

8. The Appellant’s grounds of appeal were largely focussed on what he considered to be the unfairness of the FTT proceeding with a telephone hearing when he did not have a copy of the appeal bundle with him as he was not living at home at the time.

9. In granting permission to appeal, I summarised the two issues as follows: “There is an arguable error of law in the set aside decision as the claimant did not have access to the appeal bundles during the hearing. In relation to the overpayment decision (000330) there is a query as to whether the FTT made sufficient findings on the evidence as to whether or not the ESA40 leaflet was sent to the claimant and whether he was aware of his duty to disclose changes of circumstances.”

10. In relation to the two substantive decisions, relating to the ESA entitlement and overpayment decisions, my initial observations were as follows: The appeal against the entitlement decision UA-2025-000329-ESA

23. My current view is that there does not appear to be merit in the grounds of appeal in relation to the entitlement decision. The FTT gave consideration to the documentary and oral evidence and the SoR adequately explains the decision. It is also not immediately obvious that there were documents that might have made a difference to the outcome and to which the claimant could have drawn attention had he had the bundles with him. The appeal against the overpayment decisionUA-2025-000330-ESA

24. It is arguable that the FTT failed to make sufficient findings of fact in relation to the ESA40 Leaflet being issued to the claimant. The respondent provided no documentary evidence, such as the initial ESA entitlement letter enclosing the ESA40, and no further submissions about whether there was any record of it being sent on their computer systems. The DWP submissions state “Leaflet ESA40 would be issued at the outset of his claim” (Addition A – 000330 bundle). The claimant maintained in his email dated 16.10.2024 (Addition Z12) that he did not think he had received the ESA40. The FTT should arguably have explained their reasons for disregarding the claimant’s evidence in favour of the DWP’s, or as a part of its inquisitorial jurisdiction, requested further oral evidence from the claimant on whether he received the ESA40.

25. However, there may be sufficient evidence to show that the Appellant might have been aware of his duty to disclose. In the notes of his telephone claim he was “given the number to report any changes and he stated that he knew the number” (p.11) and in his interview under caution it was stated that his previous claim ended due to his failure to provide evidence of his savings (Addition L p.59). The SoR does not sufficiently engage with the Appellant’s duty to disclose and whether it had arisen. The FTT made the finding about the ESA40 and then later state at paragraph 54 SoR “the appellant has stated that he believed he was on contribution based ESA. The tribunal accepts that he may have made a genuine mistake, but the fact remains that he was made aware that he must report changes in circumstances to the respondent…” It is perhaps arguable that there are insufficient findings of fact and inadequate reasons provided by the FTT in their conclusion that the Appellant was made aware he must report changes. The Secretary of State’s submission on the appeal

11. Ms L Foody, the Secretary of State’s representative in these proceedings, supports the Appellant’s appeal.

12. Her submission on the issue of the appeal against the ESA overpayment decision is as follows:

14. Moving onto the second ground, I submit that the FTT failed in their inquisitorial duty when concluding the appellant was aware that they had to report changes. The FTT states that they found the appellant was made aware that they had to report any changes in circumstance to the Secretary of State. However, the FTT fails to explain how they found that the appellant was placed under a duty to disclose.

15. The FTT rely on the evidence at page 11 of the FTT bundle which states that the appellant was aware of a number to report any changes. However, despite this the FTT then goes on to find that ““the appellant has stated that he believed he was on contribution based ESA. The tribunal accepts that he may have made a genuine mistake, but the fact remains that he was made aware that he must report changes in circumstances to the respondent…” (paragraph 54, FTT Bundle). The FTT should have made further findings of fact on whether the appellant was placed under a duty to disclose from the receipt of an ESA40, the annual letter sent by the Secretary of State that imposes a duty to disclose to all claimants. Especially since the appellant was unaware of the benefit they were in receipt of.

16. There is evidence throughout the FTT Bundle which suggests that the appellant may have not received the ESA40 (Addition Z12, FTT Bundle). Additionally, the appellant thought they were on ESA(C) (Addition Z12, FTT Bundle). The FTT fail to make further findings of fact on whether the appellant had received the annual ESA40 leaflet which placed them under a duty to disclose any changes in their circumstances, which is vital to the recoverability of the overpayment. Paragraph 6 of CI/747/2011 sets out: “It is a good rule of thumb that the principal arguments advanced by the losing party should expressly be addressed in the statement of reasons. This is required as a matter of fairness because it is only by giving reasons that the tribunal can demonstrate that it has in fact given proper consideration to the arguments.”

17. As such, I submit that the FTT have erred in law. I request that the UT judges sets this decision aside and remits this back to the FTT to allow them to make further findings of fact on whether the appellant received the ESA40 form.

13. For completeness, I should add that the Appellant has made further observations on his appeal by e-mail which I have taken into account but need not rehearse here as the appeal to the Upper Tribunal is supported. Analysis: a summary

14. I agree with the analysis of the Secretary of State’s representative in her written submission supporting the appeal to the Upper Tribunal in relation to the overpayment decision.

15. I am accordingly satisfied that the First-tier Tribunal erred in law for those reasons. I therefore allow the Appellant’s appeal to the Upper Tribunal and set aside (or cancel) the Tribunal’s decision to that extent.

16. I therefore remit (or send back) the original appeal for re-hearing to a new tribunal, which must make a fresh decision. The FTT is the appropriate forum for further fact-finding. What happens next: the new First-tier Tribunal

17. There will therefore need to be a fresh hearing of the appeal before a new First-tier Tribunal. Although I am setting aside the previous Tribunal’s decision, I should make it clear that I am making no finding, nor indeed expressing any view, on whether the overpayment of ESA is recoverable. That is a matter for the good judgement of the new Tribunal. That new Tribunal must review all the relevant evidence and make its own findings of fact. The FTT’s decision refusing a set aside

18. Given that the FTT’s substantive decision on the ESA overpayment issue has been set aside in error of law, I need not address the question of whether the FTT’s decision refusing a set aside was itself in error of law. Conclusion

19. I refuse the appeal against the ESA entitlement decision. However, I conclude that the ESA overpayment decision of the First-tier Tribunal involves an error of law. I allow that appeal and set aside the decision under section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007. The case must be remitted for re-hearing by a new tribunal subject to the directions set out above (section 12(2)(b)(i)). My decision is also as set out above. Nicholas Wikeley Judge of the Upper Tribunal Authorised by the Judge for issue on 30 September 2025