Secretary of State v. Hagan  UKSSCSC CIS_4478_1999 (30 July 2001)
(Secretary of State v. Hagan)
CA (Schiemann, Mance and Keene LJJ) CIS/4478/1999
Reduced earnings allowance - more than one industrial accident each causing a change in regular occupation - whether there can be a reduced earnings allowance claim for each accident
The claimant had two industrial accidents, in 1982 and 1984. On different dates in 1998 he made two claims for reduced earnings allowance (REA). The first claim, made in respect of the first accident, was disallowed, but he was awarded REA on the second claim, made in respect of the second accident, from a date three months before that claim. The claimant's appeal against the disallowance was dismissed by a tribunal and he appealed to the Commissioner. The Commissioner held inter alia that there could be only one award of REA and that loss of earnings from all accidents should be taken into account in that one award made on one claim, subject to the maximum of 40% of the maximum rate of a disablement pension as provided in paragraph 11(10) of Schedule 7 to the Social Security Contributions and Benefits Act 1992. The Commissioner therefore decided that the second claim had been unnecessary and that the claimant was entitled to REA from a date three months before the first claim. The Secretary of State appealed.
Held, allowing the appeal, that:
- there can be multiple claims for and awards of REA where there are successive industrial injuries each of which makes the claimant incapable of following his current regular occupation;
- on each claim the maximum amount of REA payable is 40% of the maximum disablement pension;
- the maximum total amount of disablement pension and reduced earnings allowance payable in respect of all the accidents is the 140% referred to in the last part of paragraph 11(10);
- the claimant was not entitled to REA for the period more than three months before the second claim.
DECISION OF THE COURT OF APPEAL
Mr. J. Maurici (instructed by the Solicitor to the Department of Social Security) appeared for the Appellant.
The respondent did not attend and was not represented.
LORD JUSTICE SCHIEMANN:
"An employed earner shall be entitled to a disablement pension if he suffers as the result of an industrial accident from loss of physical or mental faculty such that the assessed extent of the resulting disablement amounts to not less than 14 per cent."
"In the determination of the extent of an employed earner's disablement for the purposes of this section there may be added to the percentage of the disablement resulting from the relevant accident the assessed percentage of any present disablement of his-
(a) which resulted from any other accident after 4 July 1948 arising out of and in the course of his employment ... "
Section 106 provides for other benefits consequential upon industrial injuries including REA. The provisions in relation to REA are contained in Schedule 7(11) of the Social Security Contributions and Benefits Act 1992.
Paragraph 11(1) of this provides:
"Subject to the provisions of this paragraph, an employed earner shall be entitled to reduced earnings allowance if-
(a) he is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assessed at not less than 1 per cent; and
(b) as a result of the relevant loss of faculty he is either-
(i) incapable, and likely to remain permanently incapable of following his regular occupation; and
(ii) incapable of following employment of an equivalent standard which is suitable in his case ...
but a person shall not be entitled to reduced earnings allowance to the extent that the relevant loss of faculty results from an accident happening on or after 1st October 1990."
"Reduced earnings allowance shall be payable at a rate determined by reference to the beneficiary's probable standard of remuneration during the period for which it is granted in any employed earner's employments which are suitable in his case and which he is likely to be capable of following as compared with that in the relevant occupation, but in no case at a rate higher than 40 per cent of that maximum rate of a disablement pension or at a rate such that the aggregate of disablement pension ... and reduced earnings allowance awarded to the beneficiary exceeds 140 per cent of the maximum rate of the disablement pension."
"(1) Subject to the provisions of this Part of this Schedule, a person who-
(a) has attained pensionable age; and
(b) gives up regular employment on or after 10 April 1989; and
(c) was entitled to reduced earnings allowance (by virtue either of one award or of a number of awards) on the day immediately before he gave up such employment,
shall cease to be entitled to reduced earnings allowance as from the day on which he gives up regular employment."
"... I accept Ms. Main Thompson's alternative submission that, where a person has a cumulative loss of earnings due to a number of industrial accidents each of which has made him or her incapable of following a different "regular occupation", he or she is entitled only to one award of reduced earnings allowance in respect of all the accidents and that award must be subject to the statutory maximum. Otherwise, a person disabled in three separate accidents might be entitled to three times the amount of benefit payable to a person similarly disabled and suffering the same consequent loss of earnings as a result of a single accident. That cannot have been intended. It is true that there is no specific provision for aggregation of disablement for reduced earnings allowance purposes as there is in section 103 of the 1992 Act for disablement pension purposes but in my view that is unnecessary because reduced earnings allowance is linked to disablement pension by paragraph 11(1)(a) of Schedule 7 to the 1992 Act. Aggregation means that there should be only one award of disablement pension however many accidents there may have been and in paragraph 11(1)(b) the singular "relevant loss of faculty", "relevant occupation" and "employment" must be taken to include the plural (section 6(c) of the Interpretation Act 1978) so that an award of reduced earnings allowance reflects the cumulative loss of earnings from all the disabilities taken into account in the award of disablement pension.
10. The consequence of taking this approach is that it is unnecessary to make separate claims for reduced earnings allowance in respect of each accident. Loss of earnings in respect of all accidents should be taken into account in one award made on one claim. It follows that, in the present case, the loss of earnings due to the second accident should have been taken into account in the first claim and the second claim was not necessary at all. As the second claim has in fact been made and adjudicated upon, the period remaining in issue on the first claim is just the one week from 7 January 1998 to 13 January 1998. Benefit cannot be awarded in respect of any earlier period because the claim was late."
"For the reason given in paragraph 7 above, I set aside the decision of the Bolton social security appeal tribunal dated 29 March 1999. For the reason given in paragraph 10, I substitute my own decision which is that the claimant is entitled to reduced earnings allowance at the maximum rate from 7 January 1998 to 13 January 1998. To that limited extent, the claimant's appeal succeeds."
LORD JUSTICE MANCE:
LORD JUSTICE KEENE:
Order: Appeal allowed; no order for costs.