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Neutral Citation Number:
Reported Number:	R(IS)2/07
File Number:	CIS 2901 2004
Appellant:
Respondent:
Judge/Commissioner:	Mr R.J.C. Angus
Date Of Decision:	05/04/2005
Date Added:	21/04/2005
Main Category:	Income support and state pension credit
Main Subcategory:	housing costs
Secondary Category:
Secondary Subcategory:
Notes:	Housing costs – ineligible service charges – calculation of proportion of salary costs attributable to provision of accommodation – whether contribution to reserve fund for future maintenance of building ineligible as “amount for repairs and improvements” The claimant was the leasehold owner of a flat in a complex of sheltered accommodation. The leaseholders were obliged to pay a service charge which covered services in respect of the buildings, gardens and ground as well as personal and communal services provided by the ground landlord. By paragraph 17 of Schedule 3 to the Income Support (General) Regulations 1987 service charges are eligible housing costs subject to certain deductions, which include any amount for repairs and improvements, as defined in paragraph 16(2) of that Schedule, to the building of which the dwelling forms a part and any charges not connected with the provision of adequate accommodation. The claimant’s claim for income support included an amount representing 20 per cent of the salary bill and staff advertising costs of the management company. The decision-maker disallowed those costs on the ground that it had not been demonstrated that that proportion of the costs was connected with the provision of adequate accommodation. The claimant appealed and an appeal tribunal allowed her appeal, accepting the estimate of 20 per cent based on job descriptions of the staff. The Secretary of State appealed to the Commissioner. At issue before the Commissioner was the correct apportionment of salary and administration costs and also whether the part of the service charge attributable to the reserve fund for future maintenance was eligible or excluded as falling within paragraph 16(2). Held, allowing the appeal, that: 1. there was no adequate evidential basis for the tribunal’s finding that 20 per cent was the proportion of staff costs attributable to provision of accommodation. In order to obtain a sufficiently accurate assessment of that proportion, it was necessary to establish the number of hours per week spent by the employees in providing those services (paragraphs 27 and 28); 2. Kerr v The Department for Social Development [2004] UKHL 23 (also reported as R(SF) 1/04) did not relieve the claimant from the duty to provide evidence of what service charges were deductible and was not authority for the tribunal to award benefit in default of proper investigation by the Secretary of State (paragraphs 29 and 30); 3. in the absence of sufficiently detailed evidence of the amount of time devoted by staff to accommodation-related services the tribunal should have adjourned the hearing for the claimant’s representative to supply the Secretary of State with the necessary information about staff activity (paragraph 30); 4. the cost of repairs or improvements to the fabric of the claimant’s own dwelling or the building of which it forms part were not deductible under paragraph 17(2) from the service charge (paragraphs 36 and 41); 5. none of the contingencies itemised in the reserve fund schedule corresponded to the paragraph 16(2) list of what was deductible in terms of paragraph 17(2) and in any case what was deductible was the current or recent capital cost of works described in paragraph 16(2) incurred within the time prescribed by paragraph 16(1), not the claimant’s current contributions to a reserve against such capital costs in the future (paragraphs 39 to 43). The Commissioner directed the Secretary of State to re-assess the claimant’s housing costs in the light of paragraphs 27 to 47 of his decision. Note: See also R(PC) 1/07.
Decision(s) to Download:	R(IS)_2-07_bvam.doc