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[2008] UKSSCSC CP_3638_2006 (01 July 2008)

DECISION OF THE SOCIAL SECURITY COMMISSIONER

The claimant's appeal to the Commissioner is allowed in part.

(a) The decision of the Sutton appeal tribunal dated 19 April 2006 disallowing the appeal against the Secretary of State's decision dated 22 April 2002, relating to the period from 8 September 2001 to 26 May 2002, is not erroneous in point of law, for the reasons given below, and therefore stands.

(b) The decision of the same appeal tribunal disallowing the appeal against the Secretary of State's decision dated 28 June 2002 is erroneous in point of law, for the reasons given below, and I set it aside. It is expedient for me to give the decision that the appeal tribunal should have made on that appeal on the basis that the construction of the British legislation is not affected by the application of the Human Rights Act 1998 or principles of the European Community law (Social Security Act 1998, section 14(8)(a)(i)). That decision is set out in paragraph 2 below.

My decision under paragraph 1(b) is that the appeal against the decision of 28 June 2002 is allowed and that the substituted decision is that the claimant is entitled to a category B retirement pension from and including 27 May 2002 at the basic rate identified in sections 48A(4) and 44(4) of the Social Security Contributions and Benefits Act 1992 as at 8 September 2001 (£72.50), plus inherited graduated retirement benefit at the weekly rate calculated in accordance with paragraph 35 below. If the mechanics of the calculation are not agreed on behalf of the claimant's estate, the case may be referred back to me (or, if necessary or expedient, to another Commissioner) for further decision.

Introduction

This is a complicated and unusual case, involving highly technical provisions on the circumstances in which a recipient of a category B retirement pension resident in Canada can take advantage of uprating orders of which her deceased husband, through whose contributions she qualified for the pension, had not been able to take advantage in the calculation of his own retirement pension and of which she had not been able to take advantage during his life. The claimant sadly died on 8 January 2008. Her appeal to the Commissioner is being carried on Ms [W] as one of the executors under her will (as is proper in accordance with paragraph 4 of Commissioner's decision R(SB) 8/88 although evidence has not yet been provided of grant of probate in British Columbia). Ms W has authorised the claimant's late husband's son to represent her, as he had been representing the claimant. I refer to him below as the claimant's representative. Because my view of the case took me into questions that had not been raised in the already massive written submissions and because of the practical difficulties of arranging any sort of oral hearing, I issued a draft decision on 10 January 2008 and invited the parties' comments. The claimant's representative in a letter dated 31 January 2008 agreed entirely with my draft decision and indicated that if that decision were maintained (as it has been except to a very small extent) he no longer wished to pursue any human rights or European Community law arguments. There is therefore no need to issue this decision as merely an interim decision, pending further such argument. It is a final decision. The Secretary of State's response, after two grants of extension of time, was dated 19 May 2008. I have taken account of it below, although it has not caused me to alter my view on the main issues of law.

At the hearing before the appeal tribunal in January 2003 the argument proceeded on the basis that the claimant's representative could not dispute the two decisions under appeal within the terms of the British social security legislation. His arguments were that certain provisions of the secondary legislation were inapplicable because they were discriminatory contrary to Article 14 of the European Convention on Human Rights or were inconsistent with European Community law. At that time an appeal against Stanley Burnton J's first instance judgment in R (on the application of Carson) v Secretary of State for Work and Pensions [2002] EWHC 978 (Admin) [2002] 3 All ER 994, in which he rejected a human rights challenge to the difference of treatment between pensioners resident in countries with which the United Kingdom had a reciprocal treaty arrangement (eligible for up-rating on the terms of the relevant treaty) and those resident in other countries outside the European Union (not eligible), was pending before the Court of Appeal. The sole member of the appeal tribunal (who from now on I shall call the chairman) rightly declined to adjourn the hearing, in the light of the claimant's representative having made a special journey from Canada and the Department's having failed to make any meaningful attempt to respond to his human rights arguments. But she ruled that she would defer the making of her decision until the appeal in Carson had been determined. In the event, although the Court of Appeal gave judgment on 17 June 2003 ([2003] EWCA Civ 797 [2003] 3 All ER 577), Ms Carson and the other claimant whose case was heard with hers (Ms Reynolds) appealed to the House of Lords, who gave judgment against the claimants on 26 May 2005 ([2005] UKHL 37 [2006] 1 AC 173). The appeal tribunal's exceptionally detailed statement of reasons (running to 19 typed pages), which seems to have incorporated the notice of decision, was signed on 19 April 2006, with an apology for the long lapse of time.

I am afraid that I have added to that already unfortunate delay. I granted the claimant leave to appeal on 14 November 2006 and directed submissions on some detailed questions of interpretation of the British legislation, in particular the Social Security (Persons Abroad) Regulations 1975. Extensions of time were sought on behalf of the Secretary of State to deal with those questions and further points raised after the completion of the first round of written submissions. There was then some administrative confusion in the Commissioners' office in seeking the claimant's representative's views on the Secretary of State's further submission dated 14 August 2007 (which in the end were to rely on his submission dated 21 March 2007). It was not then until January 2008 that I decided that fairness required the issue of a draft decision to give the parties, and in particular the Secretary of State, the opportunity to comment on new points. I too apologise for the lapse of time since leave to appeal was granted.

The facts and the adjudication history

The essential facts were not in dispute before the appeal tribunal, whose findings I summarise. The claimant's former husband (H) was born on 2 March 1911 in England. On 2 March 1976 he became entitled to a Category A retirement pension, having the contribution record for 100% of the basic rate of pension. In 1976 he emigrated to Canada. It is not in dispute that the rate of H's pension was "frozen" at the November 1975 rate and that he was not allowed to benefit from any up-ratings after that date. On 8 September 2001 H married the claimant, who was born on 29 March 1927 in Canada. She was a Canadian citizen and resided there all her life. She never visited Britain. Following an enquiry by H to the Pensions and Overseas Benefits Directorate (POBD), the claimant completed a retirement pension claim form on 11 November 2001. The claim was treated as made on 8 September 2001. By a decision dated 22 April 2002 the claimant was awarded a Category B retirement pension (described on the decision-making pro forma at pages 4C and 5 as a Category BL pension) from and including the first Monday following 8 September 2001 (10 September 2001) at the rate of £7.90 per week. That was the rate prescribed in the predecessor of paragraph 5 of Part I of Schedule 4 to the Social Security Contributions and Benefits Act 1992 as at November 1975. The rate as at September 2001 was £45.20. The claimant appealed against the decision of 22 April 2002.

On 25 May 2002 H died. In a letter dated 3 June 2002 the claimant informed the POBD of that and asked if she was entitled to any additional benefits. The POBD carried out a "conversion" on widowhood (page 13), showing her entitlement to a Category B retirement pension, rather than a Category BL, at £13.30 per week and the inheritance of half of H's graduated retirement benefit (GRB) of £1.18 per week. A letter dated 28 June 2002 informed the claimant of her entitlement to the increased rate from and including 27 May 2002. She appealed against the decision on the increased rate as well.

The appeal tribunal disallowed both appeals. On the basis mentioned in paragraph 4 above, although the chairman very helpfully went through the British legislation, it was accepted without much discussion that the Secretary of State was right in the conclusion that the effect of regulations 5(3)(aa) and (b) of the Persons Abroad Regulations was that the claimant's Category B retirement pension, both initially and after the conversion on H's death, was frozen at the rates in operation as at November 1975. The appeal tribunal rejected the argument that the amendment introducing regulation 5(3)(aa) was invalid on human rights grounds, as well as the wider human rights arguments for the claimant.

The general structure and application of the legislation

The text of the relevant legislation as in force on 6 April 2002 is set out in an appendix to this decision. The provisions of the Social Security Contributions and Benefits Act 1992 on entitlement to Category B retirement pensions on the contributions of a spouse or former spouse are in a somewhat confusing state because of the gradual coming into force of sections 48A and 48B, replacing sections 49 and 50. In the case of a woman claiming on a husband's or former husband's contributions, sections 48A and 48B were operative by 2001. The claimant satisfied the conditions of entitlement to a Category B retirement pension in section 48A(1) and (2) from 8 September 2001. She had attained pensionable age and was married to a person who had attained pensionable age, was entitled to a Category A retirement pension and satisfied the contribution conditions. By virtue of section 48A(3), the weekly rate payable was that specified in paragraph 5 of Part I of Schedule 4. Although that pension was called in the POBD documents and elsewhere a Category BL retirement pension, that is only a convenient administrative label to distinguish a Category B pension payable at that rate from one paid at a higher rate. In the legislation itself there is only one category of Category B retirement pension as a whole.

Disqualification of persons abroad

However, the claimant was on the face of it disqualified for receiving the retirement pension to which she was entitled because she was absent from Great Britain. That is the effect of section 113(1)(a) of the Contributions and Benefits Act. The claimant's representative has argued, on the basis of ordinary and dictionary meanings of the words, that the claimant was not caught by section 113(1)(a) because she had never been in Great Britain and so could not be absent from it. I need only spend minimal time on this point. As pointed out in the Secretary of State's submission of 14 August 2007, it was firmly established by the 1960s that in its context the phrase "absent from Great Britain" includes persons who have never been in Great Britain (Commissioners' decisions R(U) 18/60 and R(U) 16/62). That basic position has been accepted and applied in many other Commissioners' decisions since and is reflected in Lord Hoffmann's description of the rule in section 113(1) in Carson [2006] 1 AC 173 at [9] as restricting entitlement to "inhabitants of the United Kingdom". The Social Security Act 1975 and the Contributions and Benefits Act both used the same form of words at a time after its meaning had been authoritatively established. There is no possibility of now applying any different meaning.

The Persons Abroad Regulations

Regulation 4(1) of the Persons Abroad Regulations, as authorised by section 113(1), provides that the disqualification in section 113(1)(a) is not to apply to retirement pensions of any category or GRB. But that is subject to regulation 5 and to the rest of the Regulations (not relevant in the present case).

The claimant fell within the general conditions in regulation 5(3), excluding the effect of certain annual orders up-rating benefits from the operation of regulation 4(1). She was not ordinarily resident in Great Britain immediately before the date on which any of the up-rating orders made after November 1975 came into force. It is fundamental to the operation of regulation 5 that in theory each succeeding up-rating order must be looked at in turn to see if the conditions for not applying the general rule in regulation 4 are met, rather than simply identifying a date at which entitlement was frozen. Thus, for instance, if the claimant had by chance come to live and be ordinarily resident in Britain during the 1980s, at a time when both she and H were married to other people, she would have been able to take the benefit of up-rating orders that came into operation during that period, even though her incidental residence here seems to supply little rational reason for treating her better than if she had never set foot here in relation to a claim entirely dependant on her much later marriage to H. The legislation on up-rating (initially section 124 of the Social Security Act 1975, replaced with some modification from 25 July 1986 by section 63 of the Social Security Act 1986 and consolidated from 1 July 1992 into section 150 of the Social Security Administration Act 1992) imposes a duty on the Secretary of State to examine in each tax year whether the sums specified in various provisions, including what are now section 44(4) of and Schedule 4 to the Contributions and Benefits Act, have retained their value in relation to the general level of prices. If not, he is to lay a draft order before Parliament to increase the sums specified by a percentage not less than the percentage increase in prices.

For the present, I shall also assume that the general condition in regulation 5(1) has been satisfied throughout. All the regulations made in consequence of up-rating orders have provided that regulation 5 was to apply to the additional benefit payable by virtue of the order. However, I shall have to come back below to a point about the effect of the specification in regulation 5(1) of up-rating orders under section 63 of the Social Security Act 1986.

In relation to each up-rating order, working backwards from the day of entitlement in question, it must be asked whether any of the circumstances specified in regulation 5(3) applied to the claimant immediately before the date the order came into force (the appointed date). If one did, she is not entitled to the additional benefit that would, but for the effect of regulation 5, have been payable directly or indirectly by virtue of that order. I shall have to come back below to what that test entails given the very long period involved in the present case and the interposition of the consolidating Contributions and Benefits Act.

There has been considerable confusion in the present case, including it seems to me in the Secretary of State's submission of 14 August 2007, about the category within regulation 5(3) into which the claimant fell at various stages. The issue has now been squarely faced in the submission of 19 May 2008. It is simplest for me to state my conclusions without detailing the twists and turns of all the submissions.

The decision of 22 April 2002 and regulation 5(3) of the Persons Abroad Regulations

In relation to the award with effect from 10 September 2001 made by the decision of 22 April 2002, before its supersession by the decision of 28 June 2002, the position is relatively straightforward. The claimant fell within the terms of regulation 5(3)(aa). As from 8 September 2001, she was a married woman. Before the appointed date of all the up-rating orders coming into force after November 1975 and up to and including that coming into force in April 2002, the claimant's husband was entitled to a Category A retirement pension and was not ordinarily resident in Great Britain. Thus, subject to the points that I have already reserved for further examination in paragraphs 13 and 14 above (see paragraphs 40 to 49 below) and to the question of whether the amendment introducing sub-paragraph (aa) into regulation 5(3) was validly made in the light of the procedure adopted in relation to the Social Security Advisory Committee (SSAC) (see paragraphs 37 to 39 below), the claimant could not receive the additional benefit that would otherwise have been paid by virtue of all those up-rating orders.

The decision of 28 June 2002 and regulation 5(3) of the Persons Abroad Regulations

In relation to the decision of 28 June 2002 and the claimant's entitlement from and including 27 May 2002, things are not nearly so simple. To clear some ground, I need to say what was the nature of that decision. I have no doubt that it took the form of a supersession of the decision of 22 April 2002 on the ground of a relevant change of circumstances (H's death). I also have no doubt that the relevance of the change of circumstances was that the rate of Category B retirement pension payable to the claimant ceased to be identified by section 48A(3) of the Contributions and Benefits Act and became identified by section 48A(4) and that she became entitled to GRB inherited from him (see the separate discussion in paragraphs 29 to 31 below). The claimant did not acquire a new entitlement to Category B retirement pension under section 48B. In my judgment, section 48B applies only where the claimant's spouse has died before the claim for a Category B retirement pension is made. Here, the claimant had already claimed and been awarded a Category B retirement pension, even though administratively labelled category BL. She was not able to make a further claim for a Category B retirement pension. If a claimant's husband has died before the claim for Category B retirement pension is made, section 48B will apply and section 48A will not be needed at all. Thus section 48A must apply where the husband is alive at the date of the claim. If section 48A(4) is to have any application, it must be interpreted as operating where the rate of pension is initially set by section 48A(3), but the claimant's husband subsequently dies. That is precisely the circumstances of the present case.

As from 27 May 2002 the claimant ceased to be a married woman. She no longer had a husband. Therefore, she could not fall within regulation 5(3)(a) or (aa), since both are restricted to the case of a married woman. She could fall within regulation 5(3)(b), which applies in the case of a widow or widower. But in its terms it only applies where the claimant is a widow or widower immediately before the appointed date of any particular order. In the context, only the status in relation to the deceased spouse whose contributions qualify the claimant for a Category B retirement pension, and not any former spouses, can be relevant. Thus, the claimant would only come within that provision in relation to the up-rating order made with effect from April 2003 and subsequent orders. That effect, on both Category B retirement pension and GRB, is not disputed on behalf of the claimant.

That leaves only regulation 5(3)(c), which makes provision in any other case, ie the case of someone who is not a married woman (regulation 5(3)(a) and (aa)) and is not a widow or widower to whom regulation 5(3)(b) applies in relation to a particular up-rating order. Sub-paragraphs (d) to (f) do not apply to retirement pension of any category or to GRB. In my judgment, as from 27 May 2002 the claimant could only fall, in relation to her Category B retirement pension, within regulation 5(3)(c) in relation to all the up-rating orders taking effect before that date. In paragraphs 16 and 17 of the Secretary of State's submission of 17 August 2007 it was argued that regulation 5(3)(c) had no application to the claimant's case, in effect (if I understood the argument correctly) because all of the up-rating orders prior to 27 May 2002 had been taken care of by the application of regulation 5(3)(aa) in the decision of 22 April 2002. In my draft decision, I expressed the view that that could not be right, for the following reasons. The fundamental question continues to be whether, week by week, the claimant is disqualified for receiving her Category B retirement pension, so that the provisions of the Persons Abroad Regulations must be considered week by week. As from 27 May 2002, the claimant no longer fell within regulation 5(3)(a) or (aa) and sub-paragraph (b) did not apply to past up-rating orders. Therefore, regulation 5(3)(c) has to be considered in relation to the potential disqualification from 27 May 2002 onwards. That is reinforced by the fact that the rate of pension to which the claimant would otherwise have been entitled ceased to be identified in paragraph 5 of Part I of Schedule 4 to the Contributions and Benefits Act and became identified under section 48A(4), effectively by section 44(4) which sets out the weekly rate of the basic pension. As up-rating of different amounts under different provisions is involved, even though all within one award of Category B retirement pension, I do not see how that could all already have been taken care of in the earlier decision.

The Secretary of State's submission of 19 May 2008 put it this way:

"13. I would submit that when [H] died, the claimant was simply getting more of the same i.e. more Category B retirement pension. Indeed, there was a continuous period of entitlement to a Category B pension under section 48A from September 2001 (when the claimant married [H]) until her death. On widowhood, the rate payable simply switched from the married person's rate under subsection (3) to the surviving spouse's rate under subsection (4). Whilst I would agree that regulation 5 must be applied in relation to each successive up-rating, I would submit that once the disapplication has bitten in relation to an individual it cannot then be lifted simply because that individual subsequently falls within a different subparagraph of the regulation.

14. There are only two dates which matter in the claimant's case: 2001 and 2002. On the first of these it was right for the Secretary of State to apply regulation 5(3)(aa) of the Persons Abroad Regulations because [the claimant] was then, on any view, a married woman (she had just married [H] and he did not die until the following year). She could not have fallen into `any other case' (the words which are a precondition for the application of regulation 5(3)(c) at that date).

15. On the second of these dates, the Commissioner appears to be of the view that, when her husband died, [the claimant] then fell within regulation 5(3)(c), because at that date she was a widow, not a married woman, so the words `in any other case' then applied. However, I would submit that the disapplication of annual up-rating had already applied in her case, so that there was no occasion to apply the same regulation again. She did not fall to be treated as `any other case', because she had fallen into regulation 5(3)(aa) when the disapplication first applied to her in 2001.

16. Taking the Commissioner's approach to its logical conclusion, the claimant would fall within regulation 5(3)(b) the following year i.e. in April 2003 (she would be a person who immediately before the appointed date is a widow) and so she would then qualify for the April 2002 rate. That cannot be right. She continued to receive her Category B pension at that stage and the disapplication had already been applied to her. Hence, to use the Commissioner's own words everything had already `been taken care of in the earlier decision' in line with the policy intention."

I do not accept that submission. The essential disagreement with the view that I had expressed in the draft decision is in the second halves of paragraphs 13 and 15 of the submission. In my judgment, the approach there is not consistent with the point in the chain of statutory provisions at which regulation 5(3) of the Persons Abroad Regulations comes to be applied. To get to that point, regulation 4 must have lifted the disqualification for receipt of benefit under section 113(1) of the Contributions and Benefits Act for being absent from Great Britain that would otherwise have been in operation. Although section 113(1) talks of disqualification for a period, the position must be considered week by week, in case the claimant becomes present here. Of course, in practice, once it is established that a claimant is absent from Great Britain, there is no need for the authorities to re-examine the position unless and until information is received about some relevant change, but that does not alter the underlying principle. Thus, when the supersession of the decision of 22 April 2002 was being considered following H's death on 25 May 2002, what was in issue was the rate of benefit that should be paid to the claimant from and including the benefit week commencing 27 May 2002. The chain of statutory provisions had to be applied to her as at that week, which inevitably meant considering whether any, and if so which, sub-paragraph of regulation 5(3) applied to her at that time. The fact that consideration had been given in the past to the same past up-rating orders when applying the chain of provisions as at an earlier date was not relevant.

And paragraph 16 of the submission of 19 May 2008 makes a bad point. The claimant would not, as from April 2003, have been able to take advantage of the April 2002 up-rating order under regulation 5(3)(b). Regulation 5(3)(b) would not apply to her at all in relation to that order because she was not a widow immediately before its appointed date. Thus regulation 5(3)(c) ("any other case") would have continued to apply in relation to the April 2002 order. It has been accepted for the claimant that it is regulation 5(3)(b) that prevented her taking advantage of the April 2003 or subsequent up-ratings.

There is support for the above approach in the documents presented to the SSAC on behalf of the then Department of Social Security in relation to the seeking of agreement that the proposal to make the regulations that became the Social Security (Persons Abroad) Amendment (No 2) Regulations 1994 ("the 1994 Amendment Regulations") did not need to be referred to the SSAC. Those documents were attached to the Secretary of State's submission of 8 February 2007 and are at pages 249 to 263 of the papers. I shall return to them below when looking at whether the introduction of regulation 5(3)(aa) by those Regulations was valid. However, there was some helpful discussion of the general structure of regulation 5 in the Department's note (Annex B to SSAC 23/94) in relation to a proposal to make a regulation (which became regulation 5(8) and the Schedule) validating what the Department said were overpayments caused by a mistaken interpretation of regulation 5(3)(c) adopted between September 1988 and August 1991.

The problem was said to have arisen particularly in cases where a person already entitled to a pension became entitled to a different category or a higher rate. The note continued:

"6. The most common example of this type of case is a wife with a retirement pension on her husband's insurance who, on being widowed, becomes entitled to a higher rate of pension, still based on the husband's insurance. A hypothetical example is at Annex 2. Regulation 5(3)(c) applies in this case. It disqualifies a person for receiving upratings

`if they had become entitled to a retirement pension or to graduated retirement benefit before the appointed date' (the appointed date being the date of the uprating).

Adjudication advice, which was applied from September 1988 and which was based on legal advice, meant that, for the purposes of deciding which uprating applied to the increased pension on widowhood, the existing entitlement was disregarded. The increased pension award therefore included upratings which had taken effect after the widow first became entitled to retirement pension.

7. The changed interpretation was contrary to the policy intention which is that, where entitlement to a pension derives from a spouse, the disqualification for upratings should apply from the date at which the spouse's pension is frozen, or the spouse's death, if the spouse has not claimed a pension.

8. Because the interpretation was not beyond doubt, the Office of the Chief Adjudication Officer sought Counsel's opinion. Counsel firmly supported the Department's understanding of the regulation. The changed interpretation involved reading the regulation as meaning `become entitled to a retirement pension of the relevant category ...'. Counsel said that she could see no justification for an interpretation which involved importing words into the regulation."

The hypothetical example in Annex 2 was of a Mr and Mrs A who emigrated to Australia in 1987. Mr A became entitled to a UK pension at the full basic rate in December 1988, when Mrs A also became entitled to a pension on her husband's insurance. They were disqualified for receiving subsequent upratings. In May 1991 Mr A died. The example continued:

"Regulation 5(3)(c) applies in this case. It disqualifies a person for receiving upratings `if they had become entitled to a retirement pension or to graduated retirement benefit before the appointed date' (the appointed date being the date of each uprating). To arrive at the correct rate the Adjudication Officer has to look at each uprating and decide whether, when it came into force, the conditions existed for disqualification of payment of the uprating.

Mrs A is disqualified for receiving upratings which came into force after she became entitled to a retirement pension. Her pension as a widow should have been awarded at the full basic rate, but frozen at the 1988 uprating, ie she should have received £41.15.

However, the interpretation used from 1988-1991 treated Mrs A as having no existing entitlement. The award of her new rate took in the upratings from 1989-1991. She received £52.00."

The Department's view in 1994 was thus clearly that someone in the same circumstances as the claimant in the present case would fall within regulation 5(3)(c) on being widowed after a period of receipt of Category B retirement pension on her husband's contributions during his life. The view was also that from the date of widowhood all the past relevant up-rating orders had to be examined afresh by reference to the conditions of regulation 5(3)(c) when they would have to have been examined already in relation to the earlier award of the pension at the lower rate. Of course, I am not bound in any way by that expression of view and must make my own judgment of the proper construction of regulation 5(3). I entirely agree with the author of the Secretary of State's submission of 19 May 2008 that he cannot be estopped by what was said to the SSAC in 1994 from now advancing other arguments as to the true meaning of regulation 5(3). However, those 1994 views seem to me to be consistent with the actual terms of regulation 5(3) and with the overall context of the Persons Abroad Regulations, in contrast to the arguments now made for the Secretary of State.

Regulation 5(3)(c) was not amended in 1994 to incorporate a condition equivalent to that in the new regulation 5(3)(aa). Despite the description of the policy intention in paragraph 7 of Annex B to SSAC 23/94 (paragraph 24 above) and the Department's evident belief in 1994 that the proposed amendments would do everything necessary to bring the Persons Abroad Regulations into line with that policy intention, they patently failed to do so. That is shown by the inconsistency of the hypothetical example set out in paragraph 25 above with the expressed policy intention. The problem was masked in that example by making both Mr A and Mrs A become entitled to their retirement pensions on the same date. But the description of the rule to be applied after Mr A died was entirely accurate, that Mrs A was disqualified for receiving upratings that came into force after she had become entitled to a retirement pension. The example did not grapple with the question of how the application of that rule in a case where Mrs A became entitled to her retirement pension much later than Mr A (as by marriage) could possibly result in the outcome described in paragraph 7 of Annex B. I can see no way in which it could possibly do so.

What then is the effect of regulation 5(3)(c) in the present case? The words are in my judgment clear and have only one possible meaning. They prevent the lifting of the disqualification by virtue of regulation 4(1) only in respect of up-rating orders coming into force after the first day of the claimant's entitlement to retirement pension. Accordingly, the claimant cannot from and including 27 May 2002 be disqualified for receiving any additional benefit payable by virtue of up-rating orders coming into force before that date (10 September 2001). In practice, from 27 May 2002 her Category B retirement pension is frozen at the rate set in section 44(4) of the Contributions and Benefits Act as from 9 April 2001, ie £72.50 per week.

The claimant's representative submitted in the document dated 14 March 2007 that the proper construction of regulation 5(3)(c) should lead to the result that the claimant was only disqualified for receiving additional benefit by virtue of up-rating orders subsequent to the date of H's death. In effect, he submitted that the adjudication advice adopted between September 1988 and August 1991 was correct. That would lead to her pension being frozen at the rate of £75.30 instead of £72.30. I reject that submission. The claimant's representative did not dispute that after reading my draft decision. However, because of the relevance of the argument to the calculation of entitlement to GRB, I set out below the gist of what was said in the draft decision.

The crucial question is the meaning of "if that person had become entitled to a retirement pension ... before the appointed date". On that question, the fundamental argument made for the claimant was that a Category B retirement pension based on a deceased husband's contributions is of a different type from a Category B retirement pension based on a living husband's contributions. Therefore, it was said, because regulation 5(3)(c) concerns only the first type, the reference to a retirement pension should be taken as a reference only to that type of retirement pension. And the claimant only became entitled to that type of Category B retirement pension from 26 May 2002. As indicated in paragraph 17 above, I do not consider that there is such a fundamental difference in the Contributions and Benefits Act. The claimant became entitled to a Category B retirement pension under section 48A from 10 September 2001 and continued to be entitled to a Category B retirement pension under the same section from 26 May 2002. The change was that the rate of the pension became set under subsection (4) of section 48A rather than subsection (3). But even if the claimant had become entitled to a fundamentally different Category or type of retirement pension from 26 May 2002, that would not remove the obstacle of the phrase "a retirement pension". I cannot agree with the claimant's representative that that phrase must in some way be restricted to the particular type of Category B retirement pension to which the claimant became entitled from 26 May 2002. The actual words used are general and unrestricted, and in a provision that deals with a large number of different situations not specifically covered by sub-paragraphs (a) to (b) (or by sub-paragraphs (d) and (e)). By contrast, in other sub-paragraphs there is specific reference to particular Categories of retirement pension. The inescapable result is that sub-paragraph (c) requires the application of the disqualification for absence from Great Britain to up-rating orders in force after the claimant in question becomes entitled to any Category or type of retirement pension or to GRB.

Graduated retirement benefit

Graduated retirement benefit (GRB) is relevant only to the decision of 28 June 2002, as the claimant had no entitlement of her own, not having paid any graduated contributions prior to 6 April 1975. Her only entitlement was by way of "inheritance" on H's death. It might be thought that the application of regulation 5(3)(c) of the Persons Abroad Regulations would produce the same result as for the claimant's Category B retirement pension, allowing her the benefit of the effect of up-rating orders prior to 10 September 2001 on the amount of GRB payable for each unit of graduated pension (see regulation 2 of the Social Security (Graduated Retirement Benefit) (No 2) Regulations 1978), even though H had not been able to have those increases paid to him during his life by virtue of regulation 5(3)(c). I conclude that that is the result, the mechanism is different and must be worked through separately.

The difference lies in the way in which a widow's entitlement to "inherited" GRB is defined. It is not defined, as it is for Category B retirement pension, by reference to a particular amount specified in the primary legislation. It is defined, by the preserved section 37(1) of the Social Security Act 1965, as equal to half of the weekly rate of her former husband's GRB. At the date of his death, H was receiving GRB at a weekly rate of £1.18, which would appear to justify the claimant's inheritance of 59p. But the crucial provision in section 37(2) must be examined closely. That defines the weekly rate for the purposes of subsection (1). What, first, does "the weekly rate appropriate to the amount of graduated contributions paid by him" mean? Subsection (2) does not refer to the amount paid or payable to the deceased spouse immediately before his death, or even to the amount to which he was entitled, but to the weekly rate appropriate to the amount of graduated contributions paid. Does that point to a calculation using whatever amount is specified in section 36(1) as most recently up-rated before the date of the spouse's death, regardless of whether the spouse had been able to benefit from the past up-ratings because of absence from Great Britain? The issue is finely balanced, as the word "appropriate" does not supply any hard-edged test. But, second, does the phrase in brackets ("whether or not he or she was receiving or entitled to receive any such benefit") affect the result? In my judgment it does. No doubt the primary purpose was to allow an inheritance where for some reason the deceased spouse was not entitled to GRB at all, as by not having claimed the benefit. But if that is allowed, why should the claimant in the present case not be allowed to receive her half-share of the amount that H was not entitled to receive because of his absence from Great Britain from 1976 as well as her half-share of £1.18?

I concluded in my draft decision that the claimant's entitlement to GRB from 27 May 2002 should not have been half of £1.18, the amount actually in payment to H immediately before his death, but should have been half of the amount generated by the graduated contributions he had paid and the amount specified in the preserved section 36(1) of the Social Security Act 1965 as at that date. I still consider that that is the "appropriate" rate under section 37(2). But, taking account of the Secretary of State's submission of 19 May 2008, I now think that I stopped at too early a point. Taking the rate of GRB identified above as appropriate, it is necessary to go on to look at the effect of regulation 5(3)(c) of the Persons Abroad Regulations. That is because the adoption of that appropriate rate to calculate the claimant's inherited GRB involves the identification of additional benefit that would be payable to her indirectly by virtue of the up-rating orders enacted since H became entitled to GRB. However, as I have decided above, regulation 5(3)(c) bites only on up-rating orders whose appointed date falls after the claimant became entitled to a retirement pension or GRB. For the reasons given in paragraph 30 above, although the context is the calculation of GRB, I am satisfied that the crucial date is that at which the claimant first became entitled to retirement pension of any kind, ie 10 September 2001. Accordingly, since no other sub-paragraph of regulation 5(3) applied to her as at 27 May 2002, she was able to take advantage of the appropriate rate for each unit of H's graduated contributions as specified in section 36(1) of the National Insurance Act 1965 down to April 2001 (9.06 pence). But she was not able to take advantage of the increase in that amount to 9.21 pence by the up-rating order whose appointed date was 6 April 2002.

Did the appeal tribunal err in law?

The appeal against the decision of 28 June 2002

The appeal tribunal's failure to apply the meaning of regulation 5(3) of the Persons Abroad Regulations and to calculate the amount of Category B retirement pension to be paid to the claimant from and including 27 May 2002 (regardless of whether or not it should have spotted the GRB point) requires me to set aside the appeal tribunal's decision on the appeal against the Secretary of State's decision of 28 June 2002 as erroneous in point of law. Although there was agreement on behalf of the claimant that the Secretary of State had accurately applied the provisions of regulation 5(3) of the Persons Abroad Regulations, that agreement was based on the erroneous assumption (indeed an assertion on behalf of the Secretary of State: see page 76) that the relevant provisions were sub-paragraphs (aa) and (b). Those were the only provisions mentioned by the appeal tribunal in the statement of reasons. In my judgment, the limited scope of those provisions and the need to apply sub-paragraph (c) as from 26 May 2002 in relation to earlier up-rating orders emerges sufficiently clearly from a proper reading of regulation 5(3) that it was an error of law for the appeal tribunal to fail to consider and apply sub-paragraph (c) despite the effects of section 12(8)(a) of the Social Security Act 1998.

I can then substitute a decision on the undisputed facts as to the amount of the claimant's Category B retirement pension to be paid from and including 27 May 2002. But I am not in a position to carry out the calculation of one-half of the appropriate rate of H's GRB using April 2001 figures, so as to produce the precise amount of the claimant's GRB entitlement with effect from that date. The calculation adopting the principles set out in paragraphs 31 to 33 above will have to be carried out by the Secretary of State. If the mechanics of the calculation are not agreed on behalf of the claimant, the case may be referred back to me or to another Commissioner for further decision. It is not in dispute that the claimant is not entitled to subsequent up-ratings of whatever is the right weekly rate of GRB.

The appeal against the decision of 22 April 2002

My conclusion in paragraph 16 above does not in itself enable me to say whether or not the appeal tribunal went wrong in law in disallowing the appeal against the Secretary of State's decision of 22 April 2002. I need to consider the particular questions reserved in paragraphs 14, 15 and 17 above.

The validity of regulation 5(3)(aa) of the Persons Abroad Regulations

When granting leave to appeal I raised the question of whether, in the light of the decision of the Court of Appeal in Howker v Secretary of State for Work and Pensions [2002] EWCA Civ 1623, R(IB) 3/03, and of the Tribunal of Commissioners in CSIB/803/2005 and CSIB/818/2005, now reported as R(IB) 2/07, there had been any defect in the procedure by which the SSAC agreed that the proposal for the regulations that became the 1994 Amendment Regulations should not be referred to it. As noted in paragraph 23 above, copies of the relevant documents were attached to the Secretary of State's submission of 8 February 2007. In relation to the introduction of the new regulation 5(1)(aa), document SSAC 23/94 made it clear to the SSAC that the proposal would be:

"adverse to the small number (about 50 a year) of women marrying a man whose pension is already frozen but restores the policy intention that they should be treated in the same way as other women who were already married to such a pensioner when his pension was frozen."

The covering letter and Annex B setting out the background explained that the existing terms of the regulation only froze a newly married woman's pension at the rate in force at the date of the marriage and that the introduction of the new sub-paragraph (aa) would, for subsequent claims, substitute a freezing at the date of freezing of the husband's pension. There was also a list of the countries with which reciprocal agreements were in force allowing residents the benefit of up-ratings and a mention in the minutes of discussion with the SSAC of the absence from that list of Australia, New Zealand, South Africa and Canada.

I have no doubt that the SSAC was not misled about the nature and geographical scope of that particular amendment and that the amendment was validly made in accordance with the procedure in sections 170 to 174 of the Social Security Administration Act 1992. In particular, the proposal did not need to be formally referred to the SSAC for report as there was nothing to undermine the SSAC's agreement under section 173(1)(b) that the proposal should not be referred.

The claimant's representative has submitted that the Department got the interpretation of regulation 5(3)(c) wrong in explaining its proposals for the new provisions validating what it saw as past overpayments. He objected to the terms of the minutes of the discussion with the SSAC, in the reference to the payments having been found to be contrary to the law, when all that had happened was that the Department had changed its view on a question of interpretation that almost by definition was open to different answers. I can now add to that that the Department seems to have been mistaken in its suggestion that it was bringing the Persons Abroad Regulations entirely into line with the policy intention expressed in paragraph 7 of Annex B to SSAC 23/94. The claimant's representative submitted that those misunderstandings tainted the SSAC's agreement not to have the proposals as a whole referred to it. That argument does not work. R(IB) 2/07 shows clearly that each particular provision within a set of proposed regulations must be considered separately. There was no misleading in relation to the provision introducing the new regulation 5(3)(aa) and that is the end of the argument relying on Howker.

The interposition of the Contributions and Benefits Act

The argument raised here, very briefly, turns on the fact that, with effect from 1 July 1992, paragraph 5 of Part I of Schedule 4 to the Contributions and Benefits Act, as yet untouched by any up-rating orders, specified the rate of Category B retirement pension where the predecessor of section 48A(3) (section 50(1)(a)(i)) applied as £32.55. Applying regulation 5 of the Persons Abroad Regulations as at 8 September 2001 and looking back at the up-rating orders that had come into force after November 1976 down to April 1992 by reference to the definitions in regulation 5(2), could it be said that the additional benefit in the form of the excess of £32.55 over £7.90 (the November 1975 rate) would have been payable in September 2001 "by virtue of (either directly or indirectly)" those up-rating orders?

The claimant's representative said that the answer is no. He said that the £32.55 would be payable by virtue solely of the original provision in the Contributions and Benefits Act. Primary legislation must prevail over inconsistent secondary legislation. The Secretary of State's representative said that the answer is yes. He pointed out that the Contributions and Benefits Act was a consolidating provision and that the most recent up-rating order before 1 July 1992 (the Social Security Benefits Up-rating (No 2) Order 1991) had changed the amount specified in paragraph 9 of Part I of Schedule 4 to the Social Security Act 1975 to £32.55. The up-rating orders throughout have operated by altering the amounts specified in whatever primary legislation was in force at the relevant time. I agree in substance with the Secretary of State's representative on this question. There is no inconsistency between primary legislation and secondary legislation. Since the Contributions and Benefits Act merely adopted the amount specified in the Social Security Act 1975 as at 1 July 1992 (after the operation of successive up-rating orders from 1976 to 1991), I conclude that the additional benefit otherwise payable in the excess of £32.55 over £7.90 was payable indirectly by virtue of those up-rating orders. Therefore, the interposition of the Contributions and Benefits Act made no difference to the normal operation of regulation 5 of the Persons Abroad Regulations.

The specification of orders under section 63 of the Social Security Act 1986 in regulation 5(1)

I put the question in this way in my directions of 14 November 2006:

"Does it matter that regulation 5(1), after its amendment in 1988, restricts the operation of regulation 5 as a whole to cases where regulations have been made in consequence of an up-rating order under section 63 of the Social Security Act 1986, when the up-rating orders in the present case prior to April 1988 would have been made under section 124 of the Social Security Act 1975, or does section 17(2)(b) of the Interpretation Act 1978 have the effect that the earlier orders are to be regarded as having been made under section 63 of the 1986 Act?"

I must confess at once that that question incorporates a mistake that may be significant. Section 63 of the Social Security Act 1986 was one of its provisions that came into force on the passing of the Act on 25 July 1986 (section 88(5)). Therefore, up-rating orders made after that date, rather than those from April 1988, were made under the 1986 Act. I have checked the up-rating orders that came into force in April 1987 (SI 1987 No 45, made on 20 January 1987) and April 1988 (SI 1987 No 1978, made on 19 November 1987). Both were made in exercise of the powers in section 63 of the Social Security Act 1986. There was no up-rating order made in 1988. The order in force from April 1989 was made in 1989. The amendment to regulation 5(1) of the Persons Abroad Regulations by regulation 3 of the Social Security Benefit (Persons Abroad) Amendment Regulations 1988 (SI 1988 No 435), substituting "section 63 of the Social Security Act 1986 (up-rating of benefits and increments in guaranteed minimum pensions)" for "section 124 or 126A of the [Social Security Act 1975] (up-rating of benefits and increments in guaranteed minimum pensions) as the case may be", came into force on 11 April 1988.

There is no problem in relation to the up-rating orders made after 11 April 1988, even after section 63 of the Social Security Act 1986 became section 150 of the Social Security Administration Act 1992. Before the consolidation in 1992, the orders were made in exercise of the power in the section expressly identified in regulation 5(1) of the Persons Abroad Regulations. From the consolidation onwards, the reference in regulation 5(1) is, by virtue of section 17(2)(a) of the Interpretation Act 1978, to be construed as a reference to section 150 of the Administration Act. The Administration Act repealed and re-enacted section 63 of the Social Security Act 1986. I can see nothing in the Administration Act, or in the Persons Abroad Regulations, to indicate any contrary intention. As a matter of straightforward practicality, the reference in regulation 5(1) as in force at 18 September 2001 is to be construed as a reference to section 63 of the Social Security Act 1986 in relation to up-rating orders made after 11 April 1988 in exercise of the power in that section and to section 150 of the Administration Act in relation to subsequent orders.

I consider that there is also no problem in relation to the up-rating orders that came into force in April 1987 and April 1988. Those orders were made in exercise of the power in section 63 of the Social Security Act 1986, as specified in regulation 5(1) in force as the relevant date (8 September 2001). It does not matter that, at the time the orders were made, regulation 5(1) still referred to sections 124 and 126A of the Social Security Act 1975. And, in any event, for the period from 25 July 1986 to 10 April 1988 that reference would, by virtue again of section 17(2)(a) of the Interpretation Act 1978, have been construed as a reference also to section 63 of the Social Security Act 1986.

The problem arises in relation to the up-rating orders made in exercise of the power in section 124 of the Social Security Act 1975, ie those from 1976 to 1986 in the present case. Regulation 5(1) does not specifically refer to those orders. Is the reference to section 63 of the Social Security Act 1986 to be construed as a reference also to section 124 of the Social Security Act 1975? The representative of the Secretary of State said that the answer is yes. The claimant's representative said that the answer is no. The arguments have revolved around the interpretation of section 17(2)(b) of the Interpretation Act 1978:

"(2) Where an Act repeals and re-enacts, with or without modification, a previous enactment then, unless the contrary intention appears,--

...

(b) in so far as any subordinate legislation made or other thing done under the enactment so repealed, or having effect as if so made or done, could have been made or done under the provision re-enacted, it shall have effect as if made or done under that provision."

There is a case for avoiding all those arguments by a process of interpretation of regulation 5(1) of the Persons Abroad Regulations, as amended in 1988, without the need for assistance from any rules in the Interpretation Act 1978. If the amendment to regulation 5(1) had come into force on the same date as, or closely following, that on which the Social Security Act 1986 came into force, I would have been inclined to say that the substitution should be taken as referring both to section 63 of the Social Security Act 1986 and to section 124 of the Social Security Act 1975 according to which section was in force when the order in question was made. The amendment could be regarded as merely up-dating the references as appropriate to the date of each order. But the amendment did not come until nearly two years later. In the meantime, regulation 5(1) would have operated quite happily on orders under section 63 by virtue of section 17(2)(a) of the Interpretation Act 1978. What was the purpose of making the substitution at that stage? It could be argued that the same result follows, because it is inconceivable that the Secretary of State intended, by the mere change of the statutory reference in regulation 5(1), henceforth to allow in the calculation of all retirement pensions for persons ordinarily resident abroad the benefit of all the up-rating orders made before 25 July 1986. However, that result does not follow quite so easily and I ought to consider the Interpretation Act 1978.

It must be common ground that the repeal of sections 124 to 126A of the Social Security Act 1975 by Schedule 10 to the Social Security Act 1986 did not affect the validity of any of the up-rating orders made under those provisions. That would follow from section 16 of the Interpretation Act 1978 regardless of the precise scope of section 17(2)(b). Then the claimant's representative argued that section 124 of the Social Security Act 1975 cannot be regarded as having been repealed and re-enacted with modifications in section 63 of the Social Security Act 1986, because the pre-July 1986 up-rating orders could not have been made under the re-enacted provisions. Therefore, those orders are not, under section 17(2)(b) of the Interpretation Act 1978, to have effect as if made under section 63 and cannot be regarded as referred to by the reference to orders made under section 63. The representative submitted that the old orders could not have been made under section 63 because the procedure in both Acts was specific to each year in question, given the necessary basis of a review of general price increases in each year and the need for an individual provision each year providing that regulation 5 of the Persons Abroad Regulations was to apply to the up-rating. The procedure is summarised in paragraph 12 above.

I do not accept those submissions. First, I have no doubt that section 124 of the Social Security Act 1975 was repealed by the Social Security Act 1986 and re-enacted as section 63. The question whether that condition is met is to be answered before looking at the consequences of the re-enactment. Second, the claimant's representative sought to give too narrow a meaning to "could have been made" in section 17(2)(b) of the Interpretation Act 1978. By definition, in a case to which section 17(2)(b) could potentially apply, secondary legislation has been made in exercise of a legislative power that no longer exists in the sense that the specific section giving the power has been repealed. Thus, if section 17(2)(b) is ever to be able to apply, the question that it poses must be taken as whether, if the re-enacted provision had been in force at the date on which the relevant piece of secondary legislation was made, that secondary legislation could have been made in exercise of the power in the re-enacted provision.

Asking that question in the present case, I cannot see why the facts that the extent of the Secretary of State's obligation to up-rate benefits depended on the increase in the general level of prices in the particular period under review and on the point in each tax year in which the Secretary of State chose to carry out his review mean that the up-rating orders actually made could not have been made if section 63 of the Social Security Act 1975 had been in force at the time. The essential process and the extent of the duty and power to lay an up-rating order before Parliament was the same under both Acts. By 1986, the original scheme of the Social Security Act 1975 had been amended by section 1 of the Social Security and Housing Benefits Act 1983 and section 16 of the Social Security Act 1985 so that the level of price increases was calculated historically over the tax year and did not involve a prospective estimate in the review of what the increase would be by the time of the next up-rating order. Accordingly, I conclude that the pre-July 1986 up-rating orders could have been made under section 63 of the Social Security Act 1986 within the proper meaning of section 17(2)(b) of the Interpretation Act 1978. Therefore, they are to have effect as if made under section 63. One consequence of that is that they are included within the reference in regulation 5(1) of the Persons Abroad Regulations to orders under section 63.

Accordingly, my conclusion in relation to the claimant's appeal against the decision of 22 April 2002, as no challenge is now made to the appeal tribunal's conclusions against the human rights arguments for the claimant, is that the appeal tribunal came to the correct result in law on the effect of the British legislation and the rate of the claimant's Category B retirement pension for the period from 10 September 2001 to 21 May 2002.

The Commissioner's decisions on the appeal

In relation to the appeal against the Secretary of State's decision of 22 April 2002, in the light of the conclusion in the previous paragraph, even if it were said to be an error of law for the appeal tribunal not have investigated the difficult issues of law that I have explored (which I doubt), the error was not a material one. It did not make any difference to the outcome. Accordingly, the appeal to the Commissioner against that decision of the appeal tribunal is dismissed.

In relation to the appeal against the Secretary of State's decision of 28 June 2002, I have already concluded in paragraphs 27 and 34 above that the appeal tribunal erred in law and that its decision disallowing the appeal has to be set aside. It is plainly expedient for me to substitute the decision that the appeal tribunal should have made, as there is no dispute as to the facts. That decision is set out in paragraph 2 above.

(Signed) J Mesher

Commissioner

Date: 1 July 2008

APPENDIX TO DECISION CP/3638/2006

RELEVANT LEGISLATION AS AT 6 APRIL 2002

The Social Security Contributions and Benefits Act 1992

Section 44(4)

(4) The weekly rate of the basic pension shall be £75.50 ... .

Section 48A

48A.--(1) A person who--

(a) has attained pensionable age, and

(b) on attaining that age was a married person or marries after attaining that age,

shall be entitled to a Category B retirement pension by virtue of the contributions of the other party to the marriage ("the spouse") if the following requirement is met.

(2) The requirement is that the spouse--

(a) has attained pensionable age and become entitled to a Category A retirement pension, and

(b) satisfies the conditions specified in Schedule 3, Part I, paragraph 5.

(3) During any period when the spouse is alive, a Category B retirement pension payable by virtue of this section shall be payable at the weekly rate specified in Schedule 4, Part I, paragraph 5 [£45.20].

(4) During any period after the spouse is dead, a Category B retirement pension payable by virtue of this section shall be payable at a weekly rate corresponding to--

(a) the weekly rate of the basic pension, plus

(b) half of the weekly rate of the additional pension,

determined in accordance with the provisions of sections 44 to 45B and Schedule 4A below as they apply in relation to a Category A retirement pension, but subject to section 46(2) above and the modification in section 48C(4) below.

Section 48B(1)

48B.--(1) A person ("the pensioner") whose spouse died--

(a) while they were married, and

(b) after the pensioner attained pensionable age,

shall be entitled to a Category B retirement pension by virtue of the contributions of the spouse if the spouse satisfied the conditions specified in Schedule 3, Part I, paragraph 5.

Section 48C(1)

48C.--(1) Subject to the provisions of this Act, a person's entitlement to a Category B retirement pension shall begin on the day on which the conditions of entitlement become satisfied and shall continue for life.

Section 113(1)

113.--(1) Except where regulations otherwise provide, a person shall be disqualified for receiving any benefit under Parts II to V of this Act, and an increase of such benefit shall not be payable in respect of any person as the beneficiary's wife or husband, for any period during which the person--

(a) is absent from Great Britain; or

(b) is undergoing imprisonment or detention in legal custody.

The Social Security (Persons Abroad) Regulations 1975

Regulation 4(1)

4.--(1) Subject to the provisions of this regulation and of regulation 5 below, a person shall not be disqualified for receiving widow's benefit, bereavement benefit, child's special allowance, a guardian's allowance, a retirement pension of any category or graduated retirement benefit by reason of being absent from Great Britain.

Regulation 5 (application of disqualification in respect of up-rating of benefits)

5.--(1) Where regulations made in consequence of an order under section 63 of the Social Security Act 1986 (up-rating of benefits and increments in guaranteed minimum pensions) provide for the application of this regulation to any additional benefit becoming payable by virtue of that order, the following provisions of this regulation shall, subject to regulation 12 below and the provisions of those regulations, have effect in relation to the entitlement to that benefit of persons absent from Great Britain.

(2) In this regulation and in regulation 5A--

(a) references to additional benefit of any description are to be construed as referring to additional benefit of that description which is, or but for this regulation would be, payable by virtue (either directly or indirectly) of the said order; and

(b) "the appointed date" means the date appointed for the coming into force of the said order.

(3) Subject to paragraph (8) and the Schedule below,

where a person is not ordinarily resident in Great Britain immediately before the appointed date the provisions of these regulations (except this regulation) shall not, unless and until he becomes ordinarily resident in Great Britain, affect his disqualification while he is absent from Great Britain for receiving--

(a) in the case of a woman who immediately before the appointed date was a married woman and was not entitled to a Category B retirement pension, any additional Category B retirement pension,if immediately before that date her husband was entitled to a Category A retirement pension and was not ordinarily resident in Great Britain;

(aa) in the case of a married woman, any additional Category B retirement pension if immediately before the appointed date her husband was entitled to a Category A retirement pension and was not ordinarily resident in Great Britain (whether or not she was married to him immediately before that date);

(b) in the case of a person who immediately before the appointed date is a widow or widower, any additional Category B retirement pension, if the former spouse had died before the appointed date;

(c) in any other case, any additional retirement pension of any category or any additional graduated retirement benefit, if that person had become entitled to a retirement pension or to graduated retirement benefit before the appointed date;

[(d) to (f) and paragraphs (4) to (7) not relevant]

(8) The Schedule below shall have effect in relation to disqualifications for receiving additional benefit in the circumstances specified in that Schedule (being certain case in which a person was awarded a widow's benefit or a retirement pension or a higher rate of retirement pension between 1st September 1985 and 7th August 1991.

Sections 36(1) and 37(1) and (2) of the National Insurance Act 1965 as continued in force by the Social Security (Graduated Retirement Benefit) (No 2) Regulations 1978 (Schedule 1)

36.--(1) Subject to the provisions of this Act, graduated retirement benefit shall be payable to any person who is over pensionable age and who is entitled to a retirement pension, and shall be an increase in the weekly rate of his retirement pension equal to 9.21 pence for each unit, ascertained in accordance with subsections (2) and (3) of this section, of the graduated contributions properly paid by him as an insured person, the result being rounded to the nearest whole penny, taking ½p as nearest to the next whole penny above.

37.--(1) Subject to the provisions of this section--

(a) where a man, having paid graduated contributions as an insured person, dies leaving a widow, and she either has attained pensionable age at the time of his death or remains his widow when she attains that age; or

(b) where a woman, having paid graduated contributions as an insured person, dies after 5th April 1979 leaving a widower, and she and he have both attained pensionable age at the time of her death,

then section 36 of this Act shall apply as if the increase in the weekly rate of the retirement pension of the widow or widower as the case may be, provided for by subsection (1) thereof were the amount there specified by reference to his or her graduated contributions with the addition of one-half of the weekly rate of the graduated retirement benefit of his or her former spouse (any amount including ½p being rounded to the next whole penny above); and where a man, having paid graduated contributions as an insured person, dies after 5th April 1979 leaving a widow and she has attained pensionable age at the time of his death, section 36 shall apply as if the increase in the weekly rate of her retirement pension provided for by subsection (1) thereof were one-half of the weekly rate of the graduated retirement benefit of her former husband (any amount including ½p being rounded to the next whole penny above).

(2) For the purposes of subsection (1) of this section, the weekly rate of the deceased spouse's graduated retirement benefit shall (whether or not he or she was receiving or entitled to receive any such benefit) be taken to have been the weekly rate appropriate to the amount of graduated retirement contributions paid by him or her (determined as if any orders which have come into force under section 124 of the [Social Security Act 1975] (increases in rates of benefit) since the date of the deceased spouse's death had come into force before that date), excluding any addition under section 37(1) of this Act, but including any addition under section 36(4) thereof (and for the purpose of calculating the addition under section 36(4) taking into account any addition under section 37(1); and where at his or her death he or she had attained pensionable age but had not become entitled to graduated retirement benefit, that addition shall be computed as if he or she had become entitled to graduated retirement benefit immediately before his or her death.

Social Security (Graduated Retirement Benefit) (No 2) Regulations 1978, regulation 2

2. The provisions of sections 150 and 155 of the Social Security Administration Act 1992 (annual up-rating of benefits and effect of alterations of rates of benefit) shall apply to--

(a) the amount of graduated retirement benefit payable for each unit of graduated contributions;

(b) increases of such benefit under the provisions of Schedule 2 to these Regulations; and

(c) any addition under section 37(1) of the 1965 Act (addition to weekly rate of retirement pension for widows and widowers) to the amount of such benefit,

as if that amount, those increases and that addition were included in the sums mentioned in section 150(1) and (3) and graduated retirement benefit were a benefit referred to in section 155(2).