Northern Ireland - Social Security and Child Support Commissioners' Decisions

[2006] NISSCSC C1_05_06(RP) (22 May 2006)

Decision No: C1/05-06(RP)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
RETIREMENT PENSION
Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 3 November 2004 (arising out of a hearing on 7 October 2004)
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal by the claimant, with the leave of a legally qualified panel member, from a decision of the tribunal, affirming the decision of the decision-maker to the effect that the claimant is entitled to a Category A retirement pension from 14 January 2004, payable with effect from 19 January 2004.
2. I arranged a hearing of the appeal at which the claimant, who was present, was represented by Mr Allamby, Solicitor, of the Law Centre (NI), while the Department was represented by Mrs McGrath and by Mr McNamara (who dealt with Human Rights issues), both of Decision Making Services.
3. The claimant is a married man who became 65 years of age on Wednesday, 14 January 2004. Up to and including 13 January 2004 he had been in receipt of incapacity benefit (IB). His wife was in receipt of industrial injuries benefit (II) and a retirement pension (RP) in her own right. As a result of payment of national insurance contributions, the claimant was entitled to a full basic pension plus additional and graduated benefits. The total entitlement to state retirement pension was £92.86 per week at the time of reaching pensionable age. On 19 January 2004 the claimant made a claim for a RP. On 26 February 2004 a decision-maker, on behalf of the Department, awarded the claimant a RP of £92.86 per week from Monday, 19 January 2004. A copy of a decision to this effect was sent to the claimant on 5 March 2004. On 30 March 2004 the claimant appealed against this decision on the basis that he had received neither RP nor IB for the five day period 14 January until 18 January 2004.
4. The claimant was represented by Mr Allamby at the appeal hearing while the Department was represented by a Departmental Presenting Officer, Ms Murray. The tribunal gave the following reasons for its decision:

"The appellant […], was born on the 14 January 1939. In accordance with Section 121 the Social Security Contributions and Benefits (Northern Ireland) Act 1992, the law defines pensionable age for a man to be 65. Therefore he became of pensionable age on the 14 January 2004.

This is not in dispute, nor is the fact that the Appellant was entitled to a full basic pension plus additional and graduated benefits totalling £92.86.

On the 19.1.2004 the Appellant made a claim for retirement pension from the 14.1.2004 (this pensionable date/retirement date) and this was received in Pensions Branch on the 21 January 2004. The Department awarded [the claimant] a retirement pension at the above weekly rate with affect [sic] from the 19 January 2004, being the first Monday after his retirement date.

[The claimant] through his own appeal and through a lengthy submission by the Law Centre, submitted that the department should exercise a discretion to make payment from the 14 January 2004 as opposed to the 19.1.2004, and that the decision to do so was in breach of Article 1 Protocol 1 of the European Convention on Human Rights and Article 6(1) of the Human Rights Act 1998 in so deciding.

The Appellant abandoned the argument that the decision was discriminatory.

Section 5(1) (L) [sic] Social Security Administration (NI) Act 1992 provides for the day on which entitlement to benefit begins or ends.

Regulation 16 Social Security Claims and Payments (Northern Ireland) Act 1987 provides that if a customer becomes entitled to a weekly benefit (as here) and he becomes entitled on a day which is not the payday. (Again as is the situation here) then payments of that benefit shall commence on the next benefit payday.

Schedule 6 Paragraph 5 Social Security Claims and Payments (Northern Ireland) Act 1987 provides for payment of a retirement pension on a Monday unless certain conditions apply.

The Tribunal found that the department had followed the regulations properly and correctly, in that the above conditions were satisfied and that although [the claimant's] retirement date was Thursday the 14.1.2004, his payment date was the following Monday, 19 January 2004.

Appeals to the Tribunal generally are governed by the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999. By Regulation 27(1) no appeal lies to an appeal Tribunal against a decision set out in Schedule 1.

Schedule 1, paragraph 5(h) of the Regulations includes decision of the Department as to the time and manner of payments.

Although the Appellant argued that a discretion as the applicable payment day should be utilized and that any narrow interpretation of Regulation 27 and Schedule 1 paragraph 5(h) unduly fettered discretion, the Tribunal found that it was not so and that a reasonable interpretation of the Regulations precludes any such appeal.

The Appellant also argued that the only remedy where discretion of the Department is fettered and unreasonable is judicial review. Such a remedy is still available.

Because the Tribunal finds that no appeal lies in accordance with Regulation 27 and Schedule 1 the present appeal is dismissed the decision stands. Whilst the Tribunal may have considerable sympathy for the Appellant's plight (and no doubt with that of very many others in the same situation). The Tribunal feels constrained by the relevant legislation. Given that the appeal is dismissed at this stage, this Tribunal finds that it does not need to consider the ultra vires or Human Rights Arguments."

5. Leave to appeal was granted by the legally qualified panel member, the only member of the tribunal, on 3 March 2005, on the following point of law:

"Whether the tribunal was correct in law in finding that in accordance with regulation 27 and Schedule 1, Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999, no appeal against the decision lay, and was therefore correct in not considering submissions (1) that Sch 1 of para 5(h) of the Claims and Payments Regulations [sic] was ultra vires, and (2) that the failure to pay retirement pension on the Appellant's 65^th birthday was contrary to the Human Rights Act."

The reference to the Claims and Payments Regulations ought to be a reference to the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999 - SR1999/162.

6. I have had the benefit of the claimant's original appeal documentation, along with written submissions from Mr Allamby received on 13 June 2005, a skeleton argument received on 25 November 2005 and further post-hearing submission received on 9 January 2006, while I have also had the benefit of the following submissions made on behalf of the Department, namely, submissions dated 31 May 2005 from Mrs McGrath, skeleton argument and letter both dated 16 November 2005 from Mrs McGrath and a post-hearing submission dated 5 December 2005 from Mr McNamara. It is worthy of note that in this rather complicated case both parties' representatives amended or changed their basic submissions so that the case as finally argued has changed to a great extent from that originally argued before the tribunal and in the early written submissions.
7. The relevant domestic legislation is to the following effect. Section 30A(5) of the Social Security Contributions and Benefits (Northern Ireland) Act provides that a person is not entitled to incapacity benefit beyond pensionable age. Entitlement to a Category A retirement pension is governed by section 44 of the Act which, in so far as is relevant, provides:

"44.-(1) A person shall be entitled to a Category A retirement pension if –

(a) he is over pensionable age; and

(b) he satisfies the contribution conditions for a Category A retirement pension specified in Schedule 3, Part I, paragraph 5;

and, subject to the provisions of this Act, he shall become so entitled on the day on which he attains pensionable age and his entitlement shall continue throughout his life.

(2) A Category A retirement pension shall not be payable in respect of any period falling before the day on which the pensioner's entitlement is to be regarded as commencing for that purpose by virtue of section 5(1)(l) of the Administration Act.

(3) A Category A retirement pension shall consist of -

(a) a basic pension payable at a weekly rate; and

(b) an additional pension payable where there are one or more surpluses in the pensioner's earnings factors for the relevant years.

…"

Section 121 of the Act sets out that pensionable age has a meaning given by the rules in paragraph 1 of Schedule 2 to the Pensions (Northern Ireland) Order 1995 which provides that "a man attains pensionable age when he attains the age of 65."

Section 5(1)(l) sets out that regulations may provide "for the day on which entitlement to a benefit is to begin or end." By section 5(2)(a) of the Administration Act, section 5 applies to benefits as defined in section 121 of the Social Security Contributions and Benefits (Northern Ireland) Act which includes a Category A retirement pension.

Regulations 16, 22 and Schedule 6, paragraph 5, of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 - SR 1987/465 - set out the conditions as to when a retirement pension shall become payable.

Regulation 16, in so far as is relevant, is in the following terms:

"16.-(1) For the purpose only of determining the day from which benefit is to become payable, where a benefit other than one of those specified in paragraph (4) is awarded for a period of a week, or weeks, and the earliest date on which entitlement would otherwise commence is not the first day of a benefit week, entitlement shall begin on the first day of the benefit week next following.

(1A) …

(1B) …

(1C) …

(2) Where there is a change in the rate of any benefit to which paragraph (1) applies, the change, if it would otherwise take effect on a day which is not the appropriate pay day for that benefit, shall take effect from the appropriate pay day next following.

(3) For the purposes of this regulation the first day of the benefit week -

(a) in the case of child benefit or guardian's allowance is Monday;

(b) in the case of family credit or disability working allowance is Tuesday; and

(c) in any other case is the day of the week on which the benefit is payable in accordance with regulation 22 (long-term benefits)."

The relevant portion of regulation 22 provides as follows:

"Long term benefits

22.-(1) Subject to the provisions of this regulation and regulation 25(1), long term benefits may be paid at intervals of four weeks, or weekly in advance.

(1A) …

(2) Where the amount of long term benefit payable is less than £5 a week the Department may direct that it shall be paid (whether in advance or in arrears) at such intervals as may be specified not exceeding 12 months.

(3) Schedule 6 specifies the days of the week on which the various long term benefits are payable."

The relevant portion of paragraph 5 to Schedule 6 of the Regulations states as follows:

"5. Retirement pension shall be payable on Mondays, except that –

…

(d) the Department may, notwithstanding anything contained in the foregoing provisions of this paragraph, arrange for retirement pension to be payable on such other day of the week as it may, where payment is by direct credit transfer or in the circumstances of any particular case, determine;

(e) where, in relation to any person, any particular day of the week has become the appropriate day of the week for the payment of retirement pension, that day shall thereafter remain the appropriate day in his case for such payment."

8. Accordingly the position in domestic law is that IB ceases when a man reaches the age of 65 – on 14 January 2004 in the claimant's case. To be entitled to a Category A retirement pension a man must be over 65 years of age. A retirement pension is not payable for any period falling before the day on which a person is regarded as commencing entitlement. Under the Regulations, payment of a retirement pension does not begin until the Monday following the benefit week on which entitlement commences. This is subject to certain exceptions. The only relevant exceptions in this case are (i) that the Department may arrange for a retirement pension to be payable on a different day of the week where payment is by direct credit transfer or "in the circumstances of any particular case" as determined by the Department, or (ii) where a particular day of the week has become the appropriate day of the week for payment of retirement pension that day shall remain the appropriate day for such payment.
9. Therefore, under domestic legislation it is not possible to extend entitlement to IB beyond pensionable age (except in very particular circumstances which are not applicable in the present case). In addition, RP cannot be paid earlier than the Monday following the date of the claimant reaching 65 years of age. However, the Department may exercise its discretion to pay RP from another day. Nevertheless, the decision not to exercise such a discretion is not appealable by virtue of the provisions of regulation 27 of and paragraph 5(h) of Schedule 1 to the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999, unless a successful argument can be advanced in relation to the vires of this legislation.
10. Mr Allamby did point out that the Law Centre had written to the Department asking that it exercise its discretion to pay the RP from the date of the claimant's 65^th birthday. This discretion has not been exercised in favour of the claimant. Mr Allamby raised the interesting point that it was argued in Great Britain decision CP/16974/1996 (paragraph 12) before a Commissioner in Great Britain that the purpose of the exception "is to empower the Secretary of State to alter the retirement pension pay-day on a national basis, should be consider it necessary, without the need to seek amending legislation". Mr Allamby submitted that such a narrow approach unduly fetters the discretion that should be exercised by the Department and therefore is unlawful. However he did concede the only remedy against the failure to exercise this discretion would be by way of judicial review in the High Court in Northern Ireland. Accordingly, the only relevant argument that can be dealt with by me is whether the Regulations governing Schedule 1 are ultra vires, and if they are so, Mr Allamby originally argued that the tribunal ought to have decided to grant entitlement of RP from the day the claimant actually reached pensionable age.
11. The Department in its submissions before me conceded that the tribunal erred in law by not dealing with the ultra vires point, namely, not hearing arguments in relation to the vires of paragraph 5(h) of Schedule 1 to the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999. Paragraph 5(h), substituted by regulation 2(20) of the Social Security and Child Support (Decisions and Appeals (Miscellaneous Amendments) Regulations (Northern Ireland) 2002 -

SR 2002/189 - as from 20 May 2002, and regulation 27 of the same Regulations made it clear that decisions of the Department under regulations 20 to 24 (as to the time and manner of payments) of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 were not appealable.

12. However, the Department conceded that as one of the points being made on behalf of the claimant related to the date of entitlement and the determination of the day from which benefit was to be payable – a matter concerning regulation 16 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987 - the decision of the decision-maker was appealable, and the Department agreed that there was a right of appeal in a regulation 16 case.
13. In addition, during the hearing both parties' representatives were asked to address their minds to the relevance, if any, of the recent decision of the Court of Appeal in England and Wales, namely, Campbell v Secretary of State for Work and Pensions [2005] EWCA Civ 989. This was a case concerning the non-appealability of decisions on incapacity for work under the Social Security (Jamaica) Order 1997.
14. Mr Allamby made a specific concession (and, in my view, rightly) that, in light of the Campbell case, the decision by the Department not to pay benefit is a decision on a claim for a relevant benefit which is covered by Schedule 2, paragraph 9 of the Social Security (Northern Ireland) Order (which states that "such other decisions as may be prescribed" are not appealable) when read with paragraph 5(h) to Schedule 1 of the Social Security and Child Benefit (Decisions and Appeals) Regulations (Northern Ireland) 1999.
15. As a result he accepted that Article 13(1)(a) of the Social Security (Northern Ireland) Order (which states that there is an appeal from a Departmental decision, etc, in relation to an award or benefit as long as it "does not fall within Schedule 2") applies. Accordingly he submitted that the effect of this legislation is to prevent the claimant from having a right of appeal that, in light of the Campbell case, the ultra vires argument in the present case cannot apply to the specific decision in this appeal. Therefore he conceded that the ultra vires argument does not apply to this appeal.
16. However, over and above the vires issues, both parties agreed that there were Human Rights issues arising out of the circumstances of this case. Both parties agreed that it was appropriate to deal with these matters under five headings, which can helpfully be set out in question form:

(i) Does entitlement to and payment of social security benefits fall within the ambit of Article 1 of the First Protocol?

(ii) Is Article 1 of the First Protocol engaged in the circumstances of the present case?

(iii) Has the claimant actually been deprived of any property?

(iv) If deprivation has occurred, can such deprivation be justified on either the grounds of public or general interest?

(v) If such a breach of Article 1 of the First Protocol cannot be objectively justified, what remedy is available?

17. Article 1 of the First Protocol is in the following terms:

"Article 1 – Protection of property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

18. Both parties agreed that entitlement to and payment of RP fell within the ambit of Article 1 of the First Protocol. In my view, this is clearly correct in light of the decision of the House of Lords in R v Secretary of State for Work and Pensions, ex parte Carson [2005] UKHL 37 and Stec v UK ECHR 2005.
19. However, there was disagreement between the parties as to whether Article 1 of the First Protocol was engaged.
20. The Department submitted that in order for Article 1 of the First Protocol to be engaged, a claim for RP from the claimant's 65^th birthday must be deemed to be either an asset or a possession with a sufficient basis in national law, for example, where there is settled case-law of the domestic courts confirming it. Mr McNamara relied on paragraphs 43 to 52 of Kopecký v Slovakia [2004] Application No. 44912/98. He submitted that it was important to remember that the domestic legislation concerning entitlement to RP – ie that entitlement commences from the pay day following the claimant's 65^th birthday – is not open to doubt. In particular he relied on the decisions of Great Britain Commissioners in CP/4762/2001 and R(P) 2/73. Accordingly Mr McNamara submitted that as the claimant's claim for RP from his 65^th birthday has no basis in national law, the claimant does not have a legitimate expectation. If there is no legitimate expectation for receiving RP, he submitted that Article 1 of the First Protocol is not engaged.
21. Mr Allamby submitted to the contrary and, also relying on European jurisprudence, submitted that the claimant had a legitimate expectation that state RP would be paid from the date that he became 65 years of age. In particular he relied on the case of Stretch v United Kingdom [2003] Application No. 44277/98 where the European Court of Human Rights noted at paragraph 32:

"… according to the established case law of the Convention organs, "possessions" can be "existing possessions" or assets, including claims, in respect of which the applicant can argue that he has at least a "legitimate expectation" of obtaining effective enjoyment of a property right …"

In addition he submitted that the case of Kopecký v Slovakia [2004] supported the proposition that the concept of legitimate expectation is not predicated on an actual absolute entitlement, otherwise the concept would be rendered without value. The legitimate expectation must, however, be based on more than a mere hope. An arguable claim or a genuine dispute are not criteria for determining whether there is a legitimate expectation.

22. Mr Commissioner Jacobs, when dealing with the equivalent Great Britain legislation in CP/4762/2001, stated as follows:

"16. Regulation 16(1) provides that if entitlement to a retirement pension would not otherwise begin on the first day of the benefit week, entitlement for the purposes of payment does not begin until the first day of the next benefit week. An earlier provision in the same terms was considered by the Commissioner in R(P) 2/73. He wrote in paragraph 7:

'The effect of the regulations was not merely to make the claimant's pension payable from [the following Monday], but to make it commence from [that date].'

This is important. The law is not that the claimant became entitled to a retirement pension from his 65^th birthday, but was deprived of payment of it until the following Monday. The effect of regulation 16(1) is that the claimant did not become entitled to his retirement pension until 18^th December 2000.

17. Restated in terms of the facts of this case, this means that, as the first day of the claimant's entitlement to retirement pension under section 44(1) was not a Monday, he was not entitled to payment until the following Monday. And when he became entitled, that entitlement began only with effect from that Monday. It did not begin with retrospective effect from his 65^th birthday."

23. Mr Commissioner Jacobs went on to hold that the tribunal did not have jurisdiction to hear an appeal against a decision. However, this aspect of his decision has no longer any relevance to the issues in this case. The reason for this is that there has been a change in legislation from 20 May 2002, concerning decisions to which no right of appeal lies in respect of those decisions made under the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987. The change came into effect by the amendment by way of substitution of Schedule 1 to the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999 by regulation 20 of the Social Security and Child Support (Decisions and Appeals) (Miscellaneous Amendments) Regulations (Northern Ireland) 2002. When Mr Commissioner Jacobs made his decision, in accordance with regulation 27 of, and Schedule 2 paragraph 5 to the Social Security and Child Support (Decision and Appeals) Regulations 1999, there was no provision for a right of appeal against a decision under regulation 16 or 22 of the Social Security (Claims and Payments) Regulations 1987. The equivalent legislation in Northern Ireland was regulation 27 of, and Schedule 1 paragraph 5 to the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999 and regulation 16 and 22 of the Social Security (Claims and Payments) Regulations (Northern Ireland) 1987. Under the current legislation the relevant Schedule now lists all decisions against which no appeal lies and sets out a list of the relevant regulations. A decision under regulation 16 is no longer a decision against which no appeal lies. This is the same in Northern Ireland as it is in Great Britain. Accordingly, the actual decision of Mr Commissioner Jacobs in relation to jurisdiction is no longer applicable in the present case as it has been superseded by a change in statute law.
24. However, I agree with Mr Commissioner Jacobs that a claimant's entitlement in domestic law in such circumstances does not begin with retrospective effect from a claimant's 65^th birthday.
25. The European Court of Human Rights in Kopecký makes it clear, at paragraph 54, that:

"… the principal question for the Court is whether there was a sufficient basis in domestic law, as interpreted by the domestic courts, for the applicant's claim to qualify as an "asset" for the purposes of Article 1 of Protocol No.1. …"

As the domestic law position is, in my view, entirely clear that the claimant does not have an "asset" until the RP is actually paid, I conclude that Mr Allamby's attractive legitimate expectation argument must fail. In addition I find it very difficult to categorize the claimant's expectation of receiving a pension as a legitimate expectation, in circumstances where long standing legislation and case-law (R(P)1/73 - now confirmed by CP/4762/2001) - does not grant a right to a pension before it is paid in fact.

26. Mr Allamby accepted that if Article 1 of the First Protocol is not engaged, no deprivation has occurred. This is logically correct. However, in my view, even if it was engaged, there has been no actual deprivation as the claimant's claim for RP for the period from 14 January 2004 to 18 January 2004 has no basis in domestic law.
27. In light of my findings, the issues relating to justification of deprivation and to remedy no longer arise.
28. The tribunal erred in law by holding that no appeal was available in this case, as, for the reasons stated at paragraph 12 herein, the claimant had a right of appeal. (If there had been no right of appeal, the tribunal ought to have stated that it had no jurisdiction to hear the appeal, rather than dismissing the appeal.) The tribunal also erred in law by not considering submissions on behalf of the claimant that paragraph 5(h) to Schedule 1 of the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999 was ultra vires. However, whilst the tribunal ought to have considered the submission, I have held, for the reasons stated herein, that the legislation is not ultra vires. In addition, the tribunal erred in law by not considering the Human Rights Act arguments being put on behalf of the claimant but, for the reasons stated herein, those Human Rights Act submissions would have failed in any event.
29. However, the tribunal was correct to hold that the claimant was not entitled to a retirement pension until 19 January 2004, the Monday following his 65^th birthday. The tribunal's reasoning supporting that conclusion is defective but the decision itself is correct. Nevertheless, I am content to hold that the tribunal's decision itself is not in error of law, although my reasoning is very different to the reasoning of the tribunal. Accordingly, I affirm the decision of the tribunal although for different reasons. In the circumstances I dismiss the appeal.

(signed): John A H Martin QC

Chief Commissioner

22 May 2006