Secretary of State for Work and Pensions v. Nelligan  UKSSCSC CP_3632_2001 (15 April 2003)
CA Kennedy, Scott Baker LJJ, Blackburne J CP/3632/2001
Category B retirement pension – backdating - whether a claim is necessary where Category A pension already in payment
The claimant had been in receipt of a category A retirement pension for six years based on her own national insurance contributions when her husband reached the age of 65 in 1992. He then claimed and received a category A pension. At that time the claimant could have claimed a category B pension based on his contributions, which would have been larger than her category A pension and payable in its place. She was not invited to make a claim then and in fact did not do so until March 2000, when the pension was awarded, but only with effect from 2 December 1999. She appealed to an appeal tribunal, arguing that her claim should have been treated as a request for a correction to her existing pension, and that a claim was not necessary. The tribunal decided that it had no power to backdate the award beyond the three months provided for by regulation 19 of the Social Security (Claims and Payments) Regulations 1987 ("the 1987 Regulations") for the making of claims. The Commissioner allowed her appeal against this decision on the basis of the wording of section 43(5) of the Social Security Contributions and Benefits Act 1992 ("the Benefits Act"), which, in his view, created an express statutory exception to the requirement in section 1 of the Social Security Administration Act 1992 ("the Administration Act") that entitlement to social security benefits was dependant upon a claim having been made.
The Secretary of State appealed to the Court of Appeal.
Held, allowing the appeal, that:
1. the Commissioner was wrong in his conclusion that section 43(5) of the Benefits Act was an express statutory exception to the general rule that entitlement to benefit is dependant on a claim being made (para. 10);
2. section 43(5) had nothing to do with establishing entitlement to a retirement pension, but simply provided a mechanism for choosing between different pensions to which there was entitlement. In particular it was intended to apply where a claim for one category of pension could be treated as a claim for the other under regulation 9 of and Schedule 1 to the 1987 Regulations (paras. 22 and 24);
3. the legislative history illustrated that section 1 of the Administration Act and its predecessor were enacted to make clear that entitlement to benefit is ordinarily dependant on a claim being made for it (para. 25);
4. the claimant's circumstances did not fall within any of the exceptions to section 1 of the Administration Act set out in regulation 3 of the 1987 Regulations and she was not entitled to a Category B retirement pension in respect of any period before 2 December 1999 (paras.18 and 26).
Mr David Forsdick (instructed by Solicitor, Department for Work and Pensions) for the Appellant.
The Respondent did not appear and was not represented.
LORD JUSTICE SCOTT BAKER:
"1.((1) Except in such cases as may be prescribed, and subject to the following provisions of this section and to section 3 below, no person shall be entitled to any benefit unless, in addition to any other conditions relating to that benefit being satisfied...
(a) he makes a claim for it in the manner, and within the time, prescribed in relation to that benefit by regulations under this Part of this Act; or
(b) he is treated by virtue of such regulations as making a claim for it."
"(1) A person shall not be entitled for the same period to more than one retirement pension under this Part of this Act ... .
(3) A person who, apart from subsection (1) above, would be entitled–
(a) to both a Category A and a Category B retirement pension under this Part for the same period ...
may from time to time give notice in writing to the Secretary of State specifying which of the pensions referred to in paragraph (a) ... above he wishes to receive.
(4) If a person gives such a notice, the pension so specified shall be the one to which he is entitled in respect of any week commencing after the date of the notice.
(5) If no such notice is given, the person shall be entitled to whichever of the pensions is from time to time the most favourable to him (whether it is the pension which he claimed or not)."
"27. The proper context for the interpretation of section 43(5) is that of the section of which it forms part, noting the provisions that existed prior to the consolidation of those previous measures into the current section. As it is a section expressly designed to deal with conflicts between other sections, I do not find it of assistance to note those conflicts. Subsection (5) is a default provision that operates in cases where an individual has not given notice in writing of the kind which she is entitled to give from time to time under section 43(3). The effect of a notice is to choose which of the two pensions to which she is entitled the claimant wishes to receive. If notice is given, then subsection (4) provides that it is to have effect. If it is not, then subsection (5) operates.
28. Subsection (3) is itself an exception to the rule in subsection (2) if the claimant chooses to use it. A claimant does not have to give a notice under subsection (3). Subsection (2) allows an individual to receive both a Category A pension and a Category B pension at the same time, but makes provision (by reference to section 73 of the Social Security Administration Act 1992) to remove any overlap caused by the double entitlement. Section 73 is brought into effect by the Social Security (Overlapping Benefits) Regulations 1979. The effect of subsection (2), read with this regulation, is to stop an individual receiving more than the specified maximum amount of pension despite the double entitlement. Subsection (3) does not allow this capping to be sidestepped. It merely provides that the claimant could decide, say, to receive her Category B pension entitlement without reference to her Category A entitlement.
29. Subsection (5) is not drafted in limited terms. Nor was its predecessor in section 27(2). In my view, subsection (5) means what it says. [The respondent] was entitled from the date of her husband's claim to both a Category A pension and a Category B pension. Subsection (2) stopped her being entitled to more than the higher of them. Subsection (3) allowed her to choose whether she received the Category A pension topped up by Category B entitlement or simply the Category B entitlement. As she did not make any option under subsection (3) the Secretary of State, under subsection (5), awarded her the Category B entitlement. Before that date, she also had given no notice and she had not made a claim. But she was entitled to the Category B pension if this was from time to time the most favourable to her whether she had claimed it or not."
Section 27(6) of the Social Security Act 1975 (the predecessor of section 43(5) of the 1992 Benefits Act) provided:
"No person shall be entitled for the same period to more than one retirement pension; but where under the following sections in this Part (whether Chapter I or Chapter II) a person would otherwise be entitled to more than one such pension, he shall be entitled (whichever pension he may apply for) to whichever one is from time to time the most favourable to him." ...my emphasis)
The words [emphasised] were repealed by the Social Security Pensions Act 1975 (see section 65(3) and schedule 5), and replaced by section 25 of that Act in materially the same terms as section 43 of the 1992 Benefits Act which was passed as a consolidating statute.
Section 25(1) of the Social Security Pensions Act 1975 provided:
"(1) Where under Part II of the [Social Security Act 1975] … a person would, but for section 27(6) of that Act, be entitled to more than one retirement pension, he may give notice in writing to the Secretary of State from time to time stating which of the pensions he wishes to receive; and that pension shall then be the one to which he is entitled in respect of any week commencing after the date of the notice.
(2) If no such notice is given, the person shall be entitled (whichever pension he may have claimed) to whichever one is from time to time the most favourable to him."
"Subject to the following provisions of this Chapter, and, in the case of retirement pensions, to section 27(6), it shall be a condition of a person's right to any benefit that he makes a claim for it in the prescribed manner and within the prescribed time."
Lord Scarman rejected the insurance officer's argument that this modified the provision so that there was no entitlement until a claim was made, saying the section should not be construed so as to place any restriction on entitlement but rather as dealing with the administration of benefit and the right to be paid.
"It shall not be a condition of entitlement to benefit that a claim be made for it in the following cases...
(d) in the case of a Category A or B retirement pension...(i) where the beneficiary is a woman over the age of 65 and entitled to a widowed mother's allowance or widowed parent's allowance, on her ceasing to be so entitled; or(ii) where the beneficiary is a woman under the age of 65 and in receipt of widow's pension or bereavement allowance, on her attaining that age"
The respondent in the present case falls into neither category.
Regulation 9 of the 1987 Regulation deals with interchange with claims for other benefits. Regulation 9(1) provides:
"Where it appears that a person who has made a claim for benefit specified in column (1) of Part 1 of Schedule 1 may be entitled to the benefit specified opposite to it in column (2) of that Part, any such claim may be treated by the Secretary of State or the Board as a claim alternatively, or in addition, to the benefit specified opposite to it in that column."
"(1) Subject to the provisions of this Chapter, it shall be for the Secretary of State–
(a) to decide any claim for a relevant benefit.…
(2) Where at any time a claim for a relevant benefit is decided by the Secretary of State –
(a) the claim shall not be regarded as subsisting after that time; and(b) accordingly, the claimant shall not (without making a further claim) be entitled to the benefit on the basis of circumstances not obtaining at that time."
This simply translated into statutory form the law as it was previously understood to be.
Order: Appeal allowed, Respondent be not entitled to category B retirement pension until 2 December 1997; no order for costs.