UK Social Security and Child Support Commissioners' Decisions

[2005] UKSSCSC CI_3224_2004 (21 April 2005)

CI/3224/2004

Decision

1. Leave to appeal having been granted by the chairman of the tribunal on 6^th August 2004, this appeal by the Secretary of State succeeds. Both parties are agreed, as am I, that the decision of the tribunal was made in error of law. However, the claimant will not be prejudiced by that fact.
2. In accordance with the provisions of section 14(8)(a) of the Social Security Act 1998 I set aside the decision of the Southampton tribunal of 10^th May 2004 made under reference U/03/203/00063. I substitute my own decision to similar effect as that given by the tribunal, but for different reasons. My decision is to the effect that the claimant remains entitled to reduced earnings allowance from and including 5^th October 2003. I remit to the Secretary of State questions relating to the calculation and payment of any arrears and any consequential decision in relation to retirement allowance. The Secretary of State will also wish to consider the position from 1^st February 2004 when the claimant's part time employment ended.

Background and Procedure

3. I held an oral hearing of this appeal on 30^th March 2005. The Secretary of State was represented by Jeremy Heath from the office of the Solicitor to the Department for Work and Pensions The claimant attended in person and was represented by Fiona Seymour from the CAB Special Unit. I am grateful to all of them for their assistance.
4. The claimant was born on 9^th July 1938. For over 18 years, including much of the relevant period, he was employed by a University in its alarm and security control room. As the result of an industrial accident on 17^th May 1977 he was assessed as being 10% disabled for life by loss of faculty. He was awarded special hardship allowance, which became reduced earnings allowance at the maximum rate. He reached the age of 65 on 9^th July 2003 and left his employment with the University on 30^th September 2003. He had been intending to take up employment with another employer from 6^th October 2003, but this did not happen. However, he was employed part time as a caretaker by a local authority from 3^rd November 2003.
5. On 30^th October 2003 the Secretary of State decided that the claimant was not entitled to reduced earnings allowance as from 5^th October 2003, but was entitled to retirement allowance of a much smaller amount as from that date. The claimant appealed to the tribunal against that decision of the Secretary of State.
6. The tribunal considered the matter on 10^th May 2004 and allowed the claimant's appeal on the basis that the claimant had not given up employment because he always intended to carry on working and did what he could to find another job. In reaching this decision the tribunal considered the law as it was before 24^th March 1996 and failed to take account of subsequent changes in the law, with which I deal below.
7. On 6^th August 2004 the chairman of the tribunal granted the application made by the Secretary of State for leave to appeal against the decision of the tribunal and on 8^th February 2005 I directed that there be an oral hearing of the appeal.

The Relevant Law

8. So far as is relevant, paragraph 13 of schedule 7 to the Social Security Contributions and Benefits Act 1992 provides as follows:

13(1). Subject to the provisions of this part of this schedule, a person who –

(a) has attained pensionable age [65 in this case]; and

(b) gives up regular employment on or after 10^th April 1989; and

(c) was entitled to reduced earnings allowance … 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.

13(8). Regulations may –

(a) make provision for the meaning of "regular employment" for the purposes of this paragraph; and

(b) prescribe circumstances in which, and periods for which, a person is or is not to be regarded for these purposes as having given up such employment.

13(9). Regulations under sub-paragraph (8)m above may, in particular –

(a) provide for a person to be regarded -

(i) as having given up regular employment, notwithstanding that he is or intends to be an earner; or

(ii) as not having given up regular employment, notwithstanding that he has or may have one or more days of interruption of employment; and

(b) prescribe circumstances in which a person is or is not to be regarded as having given up regular employment by reference to –

(i) the level or frequency of his earnings during a particular period; or

(ii) the number of hours for which he works during a prescribed period calculated in a prescribed manner.

9. With effect from 24^th March 1996 regulation 2 of the Social Security (Industrial Injuries) (Regular Employment) Regulations 1990 was amended to read as follows:

For the purposes of paragraph 13 of schedule 7 to the Social Security Contributions and Benefits Act 1992, "regular employment" means gainful employment –

(a) under a contract of service which requires a person to work for an average of 10 hours or more per week in any period of five consecutive weeks … or

(b) which a person undertakes for an average of 10 hours or more per week in any period of five consecutive weeks.

10. Regulation 3 provides that in circumstances such as those of the present case, a person who has attained pensionable age shall be regarded as having given up regular employment at the start of the first week in which he is not in regular employment after the week during which he attains pensionable age. This has the effect that, once lost, entitlement to reduced earnings allowance cannot be established for a later period. However, entitlement is not lost while a claimant can take advantage of the provisions of regulation 2.
11. For the purposes of all the provisions to which I have referred, a week is the period of 7 days beginning with a Sunday (section 122(1) of the Social Security Contributions and Benefits Act 1992).
12. It has never been doubted that the word "average" refers to the arithmetic mean. The use of the phrase "any period of five consecutive weeks" means that weeks after a particular job comes to an end can be included, and that weeks in which no work is done or expected to be done can also be included. In so deciding, I agree with the conclusions of the Commissioner in paragraphs 20 to 22 of CI/2517/2001. Further, I see no reason why a five week period under consideration cannot include some weeks calculated with reference to regulation 2(a) and some calculated with reference to regulation 2(b). Although 2(b) can only be assessed or calculated retrospectively, because it must be established for those purposes whether gainful employment has in fact been undertaken, future weeks can be considered from any particular vantage point. The calculation of rolling five week averages, as I show below, is a convenient way of assessing continuing entitlement.

The Hours of Gainful Employment

13. The claimant told me about his employment history, which evidence Mr Heath did not dispute. For the lat six months of his employment with the University he was on shift work. For the period 5^th to 12 September 2003 he worked 84 hours (7 night shifts of 12 hours each). For each of the weeks beginning Sunday 14^th September and Sunday 21^st September he worked for 38 hours. On Monday 29^th September he worked for 12 hours. Tuesday 30^th September was his last day of employment by the University but he took it as a day's leave. From 3^rd November 2003 he was employed by the local authority (under a written contract) to work at least 15 hours weekly, which he did. This employment came to an end on 1^st February 2004.
14. In tabular form, the consideration of regulation 2(b) gives the following results:

Running 5 week average

To end of Week Forward from Beginning of Week

Previous Weeks 38 Hours

Week of 21^st September 2003 38 Hours at least 38 hours

Week of 28^th September 2003 38 Hours at least 38 hours

Week of 5^th October 2003 0 Hours at least 30.4 hours

Week of 12^th October 2003 0 Hours at least 22.8 hours

Week of 19^th October 2003 0 Hours at least 15.2 hours

Week of 26th October 2003 0 Hours at least 7.6 hours at least 12.0 Hours

Week of 2^nd November 2003 15 Hours at least 3.0 hours at least 15.0 Hours

Week of 9^th November 2003 15 Hours at least 6.0 hours at least 15.0 Hours

Week of 16^th November 2003 15 Hours at least 9.0 hours at least 15.0 Hours

Week of 23^rd November 2003 15 Hours at least 12.0 hours

Subsequent Weeks 15 Hours at least 15 Hours

15. It has not been necessary to do the forward calculation for those weeks in which the running average to the end of the week is at least 10 Hours, and it has not been necessary to consider the operation of regulation 2(a). In respect of each relevant week, it is sufficient to secure entitlement that the figure in at least one of the running average columns is at least 10 Hours.

Conclusion

16. It is clear that there was no single week in the relevant period in which it can be said under the applicable law that the claimant had given up regular employment. Thus, although the Secretary of State succeeds in this appeal to the Commissioner, the claimant succeeds in overturning the original decision made by the Secretary of State.

H. Levenson

Commissioner

21^st April 2005