UK Social Security and Child Support Commissioners' Decisions

 


[2005] UKSSCSC CI_4272_2003 (07 February 2005)

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The claimant gains no advantage from his appeal to the Commissioner. The decision of the Newcastle appeal tribunal dated 16 September 2003 is erroneous in point of law, for the reasons given below, and I set it aside. However, I substitute a decision to the same effect as the decision that the appeal tribunal should have given on its findings of fact (Social Security Act 1998, section 14(8)(a)(i)). That decision is that the claimant's appeal against the Secretary of State's decision dated 20 March 2002 is disallowed.
2. The claimant was entitled to two awards of reduced earnings allowance (REA) for a period from 7 June 1995. I proceed on the basis that the awards were limited to the period down to 1 October 1996, as appears to have been officially recorded from March 1996 onwards. On the view I have taken on the law I do not need to decide whether there should be any further investigation, as suggested on behalf of the claimant, of whether the award was made for life. One award (at the maximum rate) was in respect of an industrial accident suffered on 17 September 1968. The other (at half the maximum rate) was in respect of prescribed disease no D12 (chronic bronchitis and emphysema). The claimant had reached the age of 65 on 6 October 1991. He appears to have given up regular employment before 10 April 1989, so that under the terms of paragraph 13(1) of Schedule 7 to the Social Security Contributions and Benefits Act 1992 he retained entitlement to REA. However, on 24 March 1996 the Social Security (Industrial Injuries and Diseases) (Miscellaneous Amendments) Regulations 1996 (the 1996 Regulations) came into force. Regulation 6 amended regulation 2 of the Social Security (Regular Employment) Regulations 1990, so as, in the case of a REA recipient who was over pensionable age on 24 March 1996 and not then in regular employment, to deem the recipient to have given up regular employment on 31 March 1996. The result in the claimant's case was that under paragraph 13(1) of Schedule 7 his entitlement to REA was terminated as from 31 March 1996, but instead he was entitled to a retirement allowance.
3. Action was first taken by a decision of an adjudication officer on 25 March 1996, reviewing "the" decision awarding REA from 7 June 1995 on the ground of a relevant change of circumstances (the coming into force of the 1996 Regulations). The award of REA was terminated and retirement allowance was awarded from 31 March 1996 for life. An application for review of the decision of 25 March 1996, on the ground of error of law, was made on the claimant's behalf by Durham Welfare Rights. Review was refused on 26 February 1997 and the claimant appealed. It was eventually submitted to the appeal tribunal on behalf of the Secretary of State that the decision of 25 March 1996 was defective, in that it should have reviewed "each of" the decisions awarding REA, but that the defect could be corrected by the appeal tribunal. The appeal was heard on 14 March 2002, after being held back to await test cases in the Court of Appeal and the European Court of Justice on the validity of the 1996 Regulations. As the test cases decided that the Regulations were valid, the appeal tribunaal's decision was to dismiss the claimant's appeal. However, the appeal tribunal declined to correct the decision of 25 March 1996 to remedy what it saw as the omission of any review and revision of the REA decision in respect of PD D12.
4. On 20 March 2002 a decision maker superseded the decision awarding REA in respect of PD D12 on the ground of relevant change of circumstances, terminating entitlement to REA from and including 31 March 1996. Regulation 7(2)(c)(iii) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 was relied on for the superseding decision taking effect from the date of the change of circumstances. The claimant appealed against that decision. The argument made for him was that regulation 7(2)(c)(iii) was not applicable, and that, since regulation 7(2)(c)(ii) was not applicable either (as there had been no change for the better in the claimant's condition), section 10(5) of the Social Security Act 1998 applied. The superseding decision therefore could not take effect before 20 March 2002.
5. The first decision by an appeal tribunal was set aside by a district chairman under section 13(2) of the Social Security Act 1998. The hearing eventually took place on 16 September 2003. The appeal tribunal disallowed the appeal. The appeal tribunal correctly identified the case as turning on the definitions of disability benefit decision and disability determination in regulation 7A of the Decisions and Appeal Regulations and on whether the decision awarding REA fell within the of regulation 7(2)(c)(iii) in the light of those definitions (despite a slip in the statement in referring in one place to the decision under appeal). The appeal tribunal's conclusion was as follows:

"It appeared to the Tribunal that Regulation 7A(c) restricted the definition of disability determination to consideration of whether the existence or extent of any disablement is sufficient for the purposes of section 103 or 108 of the Contributions and Benefits Act (or for the benefit to be paid at the rate which was in payment immediately prior to that decision).

In the Tribunal's finding the award of REA to [the claimant] does not within this definition constitute a disability determination and as such is not exempted from the effect of Regulation 7(2)(c)(iii). This decision is not advantageous to [the claimant] and therefore takes effect from the date of change as defined and agreed above, ie 24 March 1996."

6. The claimant now appeals against that decision with the leave of a district chairman. In the first round of written submissions, the representative of the Secretary of State unfortunately appeared to misunderstand the issues. After a second round in which there was a detailed submission dated 1 July 2004 by Mrs Gratrex on behalf of the Secretary of State, Mr Commissioner Henty directed an oral hearing of the appeal in Doncaster. The hearing took place on 26 January 2005. The claimant was not able to attend, but was represented by Mr M Guy of Durham Welfare Rights. The Secretary of State was represented by Mr H James, solicitor, instructed by the Office of the Solicitor to the Department for Work and Pensions. I am grateful to both representatives for their submissions.
7. I do not need to enter into all the questions raised in Mrs Gratrex's submission, such as whether there was anything defective at all in the adjudication officer's decision of 25 March 1996 and whether some other course might have been taken after the decision of the appeal tribunal of 14 March 2002. The appeal tribunal and I are concerned with the decision that was actually made on 20 March 2002 to supersede the decision awarding REA in respect of PD D12 and, on the assumption that such a supersession was needed, with the date on which the superseding decision could take effect. And I must, contrary to an apparent suggestion in that submission, give full weight to the fact that all disability benefit decisions are excluded from the effect of regulation 7(2)(c)(iii) of the Decisions and Appeals Regulations, not just those that fall within regulation 7(2)(c)(ii).
8. Regulation 7(2)(c)(ii) and (iii) of the Decisions and Appeals Regulations provided as at March 2002 (including only the references to disability benefit decisions):

"(2) Where a decision under section 10 is made on the ground that there has been, or it is anticipated that there will be, a relevant change of circumstances since the decision was made, the decision under section 10 shall take effect--

...

(c) where the decision is not advantageous to the claimant--

(ii) in the case of a disability benefit decision ..., where the Secretary of State is satisfied that in relation to a disability determination embodied in or necessary to the disability benefit decision, ... the claimant or payee failed to notify an appropriate office of a change of circumstances which regulations under the Administration Act required him to notify, and the claimant or payee, as the case may be, knew or could reasonably have been expected to know that the change of circumstances should have been notified, [from the date on which the change ought to have been notified], or

(iii) in any other case, except in the case of a decision which supersedes a disability benefit decision, ... from the date of change."

If regulations do not provide otherwise, a superseding decision takes effect from the date the decision is made (Social Security Act 1998, section 10(5)).

9. In regulation 7A(1) the following definitions are given for purposes including those of regulation 7(2)(c):

"`disability benefit decision' means a decision to award a relevant benefit embodied in or necessary to which is a disability determination,

`disability determination' means--

(a) [applies to awards of attendance allowance or disability living allowance],

(b) [applies to awards of severe disablement allowance],

(c) in the case of a decision as to an award of industrial injuries benefit, whether the existence or extent of any disablement is sufficient for the purposes of section 103 or 108 of the Contributions and Benefits Act or for the benefit to be paid at the rate which was in payment immediately prior to that decision;"

REA is a "relevant benefit" as defined in section 8(3) of the Social Security Act 1998.

10. Mr Guy's submission was that the adjudication officer's decision to award REA from 7 June 1995 was a disability benefit decision, because there could not have been such an award without there having been an assessment of disablement for the purposes of disablement pension covering the period in question. He submitted that such an assessment was a disability determination within sub-paragraph (c) of the definition in regulation 7A. There is of course no doubt that REA cannot be awarded without there being such an assessment in effect in the relevant period. Paragraph 11(1)(a) of Schedule 7 to the Social Security Contributions and Benefits Act 1992 makes it a condition of entitlement to REA that the claimant:

"is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assesses at not less than 1 per cent."

11. However, in my judgment, the precise terms of paragraph 11(1)(a) of Schedule 7 show that a decision awarding REA is not a disability benefit decision. The necessary condition for entitlement is not that a claimant has an assessment of disablement that is sufficient for an award of disablement benefit (normally 14%) under section 103 (accidents) or 108 (prescribed diseases) of the Contributions and Benefits Act. It is, looking behind the expression in terms of entitlement or hypothetical entitlement to disablement pension, that a claimant has an assessment of at least 1%. Thus, while a determination as to the assessment of disablement is necessary to the decision to award REA, that is not a determination whether the existence or extent of disablement is sufficient for the purposes of section 103 or 108. A determination as to the existence or the extent of disablement is a different thing from a determination whether the existence or extent of disablement is sufficient to allow an award of disablement pension. In the full chain of determinations that would be necessary to lead to such an award or to a disallowance, a determination as to the existence and extent of disablement resulting from the relevant accident or disease (a determination of fact on an evaluation of the evidence) is logically distinct from and comes before a determination whether the extent of disablement is sufficient to meet whatever the legal test is for the award of disablement pension (a mixed question of fact and law that requires the identification of the right test). In my judgment, only the first sort of determination is necessary to a decision to award REA, and not the second sort, and the first sort is not a disability determination within paragraph (c) of the definition in regulation 7A(1).
12. That is a refinement of one of the arguments put forward in Mrs Gratrex's submission, that emerged at the oral hearing. Mr James adopted it for the Secretary of State. Mr Guy submitted that it was over-technical and unrealistic to distinguish between different types of determination in the way that I have done above. He said that in reality a decision maker would ask, usually following advice from an approved doctor who had examined the claimant, whether or not the extent of disablement was sufficient to meet the threshold for the award of disablement pension. There would be one combined determination, within which one could not distinguish between the purposes of sections 103 and 108 of the Contributions and Benefits Act and the purposes of paragraph 11 of Schedule 7. I do not accept that submission. I acknowledge that there can only be one assessment of disablement for the purposes both of disablement pension and of REA, as was decided by the Court of Appeal in Secretary of State for Work and Pensions v Whalley [2003] EWCA Civ 1666, R(I) 2/03. That is marked in the rules in paragraphs 6(3) and 7 of Schedule 6 to the Contributions and Benefits Act about the form of assessments where the percentage is less than 14%. However, there is still a distinction in the legal structure between that assessment of disablement and a determination whether, for the particular purposes of disablement pension, the existence and extent of disablement is sufficient. For REA, a different question has to be asked under paragraph 11(1)(a) of Schedule 7 and only the answer to that question is necessary to the decision as to an award of REA.
13. For those reasons, I conclude that the appeal tribunal reached the only possible result in law. The adjudication officer's decision to award the claimant REA from 7 June 1995 was not a disability benefit decision, so that the case is not excluded from the operation of regulation 7(2)(c)(iii) of the Decisions and Appeals Regulations and the superseding decision under appeal took effect from 31 March 1996, the date on which the amending 1996 Regulations bit on the claimant's entitlement to REA.
14. At the oral hearing, there was an element of agreement between Mr Guy and Mr James that the appeal tribunal had asked itself the wrong question in law. Therefore, Mr James's view was that, if I accepted his submissions, the appeal tribunal's decision should be set aside and a decision to the same effect substituted. After some hesitation, I agree. In the passage set out in paragraph 5 above, the appeal tribunal appeared to ask itself whether the decision to award the claimant REA was a disability determination, which is not the right question. Even if the appeal tribunal intended to ask itself whether the decision to award the claimant REA was a disability benefit decision, by virtue of a disability determination having been necessary to it, and in substance did ask that question, it did not explain why it rejected Mr Guy's submissions and reached that conclusion. The rest of the statement of reasons does not help to supply an explanation. In those circumstances, the appeal tribunal's decision is to be set aside as erroneous in point of law. In accordance with paragraph 13 above, a decision to the same effect is substituted, that the claimant's appeal against the Secretary of State's decision of 20 March 2002 is disallowed.

(Signed) J Mesher

Commissioner

Date: 7 February 2005