UK Social Security and Child Support Commissioners' Decisions

 


[2005] UKSSCSC CP_317_2005 (08 August 2005)

CP 317 2005

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I allow this appeal. For the reasons below, the decision of the appeal tribunal is wrong in law, and must be set aside.
2. I replace it with the decision that the tribunal should have taken. This is:

Appeal dismissed. The tribunal confirms the decisions of the Secretary of State and of the Inland Revenue determining the Appellant's state retirement pension to be payable from 13 October 2003 at the weekly rates of £61.96 (basic retirement pension), £24.20 (additional pension less guaranteed minimum pensions), £2.25 (graduated retirement benefit) and £37.08 (adult dependent increase for the appellant's wife), a weekly total of £114.16.

3. The Secretary of State for Work and Pensions is appealing with permission of a chairman (or, if that is any doubt, my permission) against the decision of the Southampton appeal tribunal on 7 July 2004 in connection with the retirement pension entitlement of the claimant and respondent ("Mr E") under reference U 44 229 2004 00633.

Mr E's pension claim

4. Mr E reached British state pensionable age on 10 October 2003. He claimed a state pension and a dependent's increase for his wife. He was told that his retirement pension entitlement was:

	Basic pension	£ 61.96
	Additional pension	£ 24.20
	less GMP	£11.33
	payable	£ 12.87
	Graduated benefit	£ 2.25
	Adult dependent increase	£ 37.08
	Total ………………………	£114.16

And he was told that this would be paid from 13 October 2003.

5. Mr E objected to the contribution record (including credits) used for that decision (or, to be technically correct, that series of decisions), the offset against his additional pension, the starting date, and the level of the increase for his wife. Explanations were offered by both the Pension Service of the Department for Work and Pensions (DWP) and the National Insurance Contributions Office of the Inland Revenue (now Her Majesty's Revenue and Customs, (HMRC)). Mr E was not satisfied, and appealed. After further correspondence, he clarified his particular concerns as the start date of the pension, the offset against his additional pension, the treatment of his period of employment in Australia, the fact that he paid no contributions while working in three other overseas jurisdictions of the Crown, and the increase for his wife. He also raised points that he considered there had been misrepresentations by government departments, and about his right to make late payments of contributions.

The tribunal decision

6. The matter came before the appeal tribunal as a single appeal. Mr E conceded that he was no longer pursuing his appeal about the level of the offset against his additional pension. And he did not pursue the issues relating to time worked abroad save in Australia. He had specifically asked that the tribunal confirm that the level of the dependent's increase was correct, but the record of proceedings and decision both suggest that he did not raise this point at the tribunal. The tribunal did deal with both the starting date for Mr E's pension and the question of his entitlement to pension in respect of his period of employment and residence in Australia. It allowed his appeal on both questions. It confirmed the decision about the offset of his occupational pension against his entitlement to additional pension.
7. The Secretary of State asked for a statement of reasons. In that statement the chairman noted that he had become aware since the tribunal decision that it was wrong because it had not taken into account a Commissioner's decision to the opposite effect. It set out the arguments adopted by the tribunal in finding in Mr E's favour on the Australian issue. Those arguments involved not only the international agreement between the United Kingdom and Australia but also arguments based on the European Convention on Human Rights.

Grounds of appeal

8. The Secretary of State sought permission to appeal both against the decision about the date of payment of the pension and also against the decision about Mr E's rights from his Australian work. The Secretary of State's representative also indicated that it might be helpful for tribunals to be given guidance about how to handle cases where the tribunal considered that there had been a breach of the rights of an individual as defined by the European Convention on Human Rights and the Human Rights Act 1998.
9. In response, Mr E raised procedural issues about the way in which the Secretary of State asked for the statement of reasons and permission to appeal. But he did not question the other matters raise by him before the tribunal decision, save for issues about misleading advice. Mr E did not raise any issues about the dependent's increase or his periods abroad save for that in Australia. I can see no obvious errors in the decisions taken on either issue, both of which I have considered. As no point was taken on them by Mr E, I am happy to confirm them in so far as they were before the tribunal. I cannot however deal with issues about misleading advice. Those are issues of administration, not law, and any complaint must be taken up directly with the Department and the channels such as the Parliamentary Commissioner, for dealing with alleged maladminstration causing injustice. Turning to the law, I must deal with the procedural points first.

Procedure

10. Mr E contended that the Secretary of State was given special treatment when the request for the statement of reasons was made late. The decision was signed on 7 July 2004. The request for the statement was received on 16 August 2004. That was probably late, as the tribunal states that the decision was issued on the date it was signed. The form signed by the chairman extending the time limit states that this can only be done if one of the grounds in regulation 54 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 is present. The chairman who directed that time be extended gave no reason. Mr E contended that the statement was therefore invalid. I raised this issue with the Secretary of State. It became clear at that stage that an application in time had been made, and that the application on which action was taken was a "reminder". On those facts, Mr E's objection does not arise. If there had been no earlier application then I might have agreed that the request for the statement of reasons was too late unless proper grounds were shown for extending the time limit. But that would not have helped Mr E block this appeal. That is because the tribunal's error of law (or, at any rate, at least one of them) is clear from the decision of the tribunal itself.
11. Mr E also objected to the form of the notice of application to appeal from the Secretary of State. The regulations require that the application should have annexed to it a copy of the written statement of reasons (regulation 58(1)(b) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. No copy was annexed. I do not agree with Mr E on this. There was a statement of reasons and the failure to attach it to the form could easily be remedied. Further, unlike the expiry of a time limit, a fault in an in time application is not fatal to the application. It can be renewed before a Commissioner and the Commissioner has the power to waive a procedural requirement. There is no injustice in allowing a fault of this kind to be made good. The statement had been made and copied to both parties, so both had notice of its contents. It is available to me. And, in any event, I could have granted permission in this case even without a statement being produced. No issue of either fairness or effectiveness arises from the absence of the statement from the application in this case.
12. I conclude that there is no procedural bar to the appeal being decided by me based on the statement of reasons given by the tribunal.

The date of first payment

13. Most state pensioners receive their first entitlement to retirement pension a few days after reaching state pensionable age rather than on the day they reach that age. This is regularly raised before tribunals and Commissioners as unfairness. It happens because state retirement pensions are paid, by reference to weekly entitlements, from the first day of the first full pension week after entitlement starts (usually, but not always, the claimant's pensionable birthday). That is in accordance with the powers given to the Secretary of State by Parliament.
14. For myself, I see no substantive unfairness in saving public expenditure on the myriad small payments that would otherwise be necessary. The practice is applied without discrimination in the sense that the rule is applied without regard to individuals but merely by reference to dates and on publicly published criteria. I completely disagree with the view of the tribunal that this rule is "no more than an arbitrary lottery" and has "no apparent benefit in the public interest". For example, in many cases the gap is covered by benefit payments of pre-retirement benefits, so that a second adjustment would also have to be made in the opposite direction. However, my views of the rule are irrelevant. The weekday on which any individual pensioner's pension starts is a matter for the Secretary of State. And, as the Commissioner made clear in CP 4762 2001 (and as this tribunal belatedly acknowledged) there is no appeal against that decision. The only challenge possible would be an application for judicial review. Neither the tribunal nor a Commissioner has any power to consider the question. The appeal by the Secretary of State must be allowed on this ground.

Entitlement arising from time in Australia

15. Mr E complained that he was given no contribution record for the time he worked in Australia between August 1984 and December 1986. He considered that he had rights to contribution credits under the Social Security Agreement between Australia and the United Kingdom ("the Australia Agreement"). He contended that the fact that the Agreement had subsequently been terminated in 2001 did not remove those rights.
16. The submission from the Pension Service to the tribunal accepted that

there was provision under the Australia Agreement for a person permanently resident in the United Kingdom to be treated as having paid contributions for periods of residence in Australia. That provision was now terminated. Nonetheless, it was accepted for the Secretary of State that "rights acquired prior to that date continue to be observed, albeit on an extra-statutory basis in the case of claim arising after the cessation of the agreement".

17. The tribunal took a different view. It found as fact that Mr E had made "due and continuous contribution to the pension systems of either this country or Australia throughout his working life". He had therefore purchased a full retirement pension. The refusal of the Secretary of State to recognise Mr E's rights regarding the period in Australia engaged Mr E's rights under Article 1 of Protocol 1 to the European Convention on Human Rights (property rights). No argument had been advanced justifying this breach of rights. The tribunal concluded that the contribution record should be made good.

The Australia Agreement

18. Any rights that Mr E had from his period in Australia would derive in law from the Australia Agreement. It does not appear that the tribunal saw the text of the Australia Agreement when it reached that decision. It is to be found conveniently in the Social Security (Australia) Order 1992 (SI 1992 No 1312). The relevant article is article 3. I need quote only part of it:

"3 Retirement pensions

(1) For the purposes of determining entitlement to retirement pension under the legislation of any part of the territory of the United Kingdom, a person who is permanently resident in that part of the territory shall be treated as if he or she … had paid contributions under the legislation of that part of the territory for any period during which that person …

(a) was resident in Australia and had attained the age of 16 years …"

19. It is clear from this wording that in order to claim the benefit of article 3 of the Australia Agreement in respect of any period of residence in Australia, the claimant must be permanently resident at the time of that claim in some part of the United Kingdom. Mr E was living in Portugal at the time he made his claim. His claim form shows that he had been living there (or at least outside the United Kingdom) since 1997. In reply to the standard question about time spent in the United Kingdom he replied: "Couldn't say. Frequent visits since 1997". There is no United Kingdom address or other basis for suggesting any continued United Kingdom residence, let alone permanent residence. The tribunal failed to note either these facts or this issue notwithstanding that the position is accurately summarised in the submission to it from the Pension Service. It decision must be set aside on that ground also.
20. As Mr E was not permanently resident in any part of the United Kingdom at the time of his claim (or the decision on it), I see no basis for him to make a claim by reference to the Australia Agreement. The Secretary of State was right to note that, even if the Australia Agreement was still in force, Mr E did not meet this precondition. I do not therefore need to consider the tribunal's argument reinstating Mr E's supposedly lost contributions on the assumption that they were lost because of the termination of the Agreement. There are no relevant property rights of which he has been deprived, so the human rights arguments are not engaged.
21. I am puzzled about the finding of fact (quoted in paragraph 17) on which the tribunal premised its argument. I cannot see on what evidence the tribunal concluded that Mr E paid contributions either here or in Australia towards a state pension throughout his working life. On this I must declare an interest, as I have rights under an Australian superannuation scheme from past employment there. The nature of the Australian pension systems (past and present) makes the tribunal's finding of fact most unlikely. This is because there is no state retirement pension in Australia. Any contributions Mr E made there would be to a separate scheme, and he has possibly retained those rights. Separately, his British contribution record contains a number of other gaps, for example when he was a student and when he worked in other jobs overseas. I must allow that aspect of the appeal by the Secretary of State also.

Human rights issues in pension and similar cases

22. In response to the Secretary of State's representative's invitation I make three comments about the tribunal's handling of the human rights issues in this case.
23. (1) The tribunal considered the human rights arguments without giving notice to the Secretary of State that it was doing so. There is nothing in the submission to the tribunal, or the correspondence, raising the issue before the hearing. There was no secretary of state's representative at the hearing. It follows that the tribunal failed to give the Secretary of State any opportunity to defend or justify the alleged breaches. That may itself be a breach of the European Convention on Human Rights. A right to a fair hearing under Article 6 of that Convention applies to all parties.
24. (2) The tribunal must be clear about what the claimed rights are and precisely how those rights are violated by the relevant law. This tribunal attempted to override, on the basis of the European Convention on Human Rights, the effect on an individual of the revocation of an international agreement between the United Kingdom and Australia, and also the terms of the international agreement that it thereby apparently assumed still to be in force. It did so with only a passing reference to the relevant human rights law and no reference either to the text of the international agreement or the mechanisms by which it considered that the European Convention on Human Rights could override it (and its termination) to fill a gap in a claimant's contribution record. How is the Secretary of State fairly to give effect to the tribunal's decision not only for this claimant but any other in a similar position?
25. (3) The European Convention on Human Rights and Fundamental Freedoms deals with civil and political rights. The Council of Europe adopted a parallel European Convention on Social Security in 1972 (and subsequently a Code of Social Security). This division of approach to fundamental rights of individuals in their societies reflects the two parallel international statements of fundamental rights agreed by all the member states of the United Nations. These are the United Nations Covenant on Civil and Political Rights and the United Nations Covenant on Economic, Social and Cultural Rights. The rights asserted for Mr E are essentially economic and social rights. In United Kingdom law, they are not directly covered by the Human Rights Act 1998 and are not expressly part of the law of the United Kingdom. United Kingdom governments have never signed the European Convention on Social Security or its successor, and it binds the United Kingdom neither internationally nor internally. For this reason also someone who contends that an economic or social right is also a civil or political right protected by the Human Rights Act 1998 must make it clear how that result is to be achieved.

David Williams

Commissioner

08 August 2005

[Signed on the original on the date shown]