UK Social Security and Child Support Commissioners' Decisions

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Cite as: [2008] UKSSCSC CSPC_677_2007

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DECISION OF SOCIAL SECURITY COMMISSIONER

My decision is that the decision of the tribunal given at Kirkcaldy on 1 October 2007 is erroneous upon a point of law. I set it aside. I make the decision that the tribunal ought to have made. It is that the claimant is not entitled to state pension credit, as she does not satisfy the conditions for the credit specified in s.1(1)(c) of the State Pension Credit Act 2002.

This appeal became before me for an oral hearing on 27 and 28 March 2008. I heard it along with 11 other appeals: registered numbered consecutively from CSPC/678/2007 to CSPC/688/2007. The claimant in each of these appeals was represented by Miss Clarke, Advocate, instructed by Mr Sandilands, Solicitor, of Messrs Beveridge, Herd and Sandilands, Kirkcaldy. The Secretary of State was represented by Miss Paterson, Advocate, instructed by Mr Brown, Solicitor, of the Office of the Solicitor to the Advocate General.

The claimant has appealed to the Commissioner against the decision of the tribunal which confirmed the decision of the Secretary of State issued on 9 January 2007 and found that the claimant was not entitled to state pension credit, as she is a member of religious order and is fully maintained by the Order.

Entitlement to state pension credit is set out in s.1 of the State Pension Credit Act 2002. The claimant in this appeal, and the claimants in the other appeals before me, satisfied the conditions contained in s.1(2)(a) that they are resident in Great Britain and (b) that they have attained the qualifying age. The question at issue was whether, in terms of s.1(2)(c)(i) they satisfied the condition contained in s.2(1) for the guarantee credit. It did not appear to have been suggested that the claimant, or any of the claimants in the other appeals, satisfied the conditions for the savings credit.

The conditions for the guarantee credit are set out in s.2 of the Act. Insofar as is relevant for the purposes of the appeals before me, that is in the following terms.

"2. Guarantee credit

(1) The condition mentioned in section 1(2)(c)(i) is that the claimant—

(a) has no income; or

(b) has income which does not exceed the appropriate minimum guarantee.

(2) Where the claimant is entitled to a guarantee credit, then—

(a) if he has no income, the guarantee credit shall be the appropriate minimum guarantee; and

(b) if he has income, the guarantee credit shall be the difference between the appropriate minimum guarantee and his income.

(3) The appropriate minimum guarantee shall be the total of—

(a) the standard minimum guarantee; and

(b) such prescribed additional amounts as may be applicable.

(4) The standard minimum guarantee shall be a prescribed amount.

(5) The standard minimum guarantee shall be—

(a) a uniform single amount in the case of every claimant who is a member of a married or unmarried couple; and

(b) a lower uniform single amount in the case of every claimant who is not a member of such a couple.

(6) Regulations may provide that, in prescribed cases, subsection (3) shall have effect with the substitution for the reference in paragraph (a) to the standard minimum guarantee of a reference to a prescribed amount.

…

(9) Except for the amount of the standard minimum guarantee, the powers conferred by this section to prescribe amounts include power to prescribe nil as an amount."

The State Pension Credit Regulations 2002 provide in regulation 6:

"6.—(1) Except as provided in the following provisions of these Regulations, the

standard minimum guarantee is–

(a) [£181.70] per week in the case of a claimant who has a partner;

(b) [£119.05] per week in the case of a claimant who has no partner.

(2) Paragraph (3) applies in the case of–

(a) prisoners; and

(b) members of religious orders who are fully maintained by their order.

(3) In a case to which this paragraph applies–

(a) section 2(3) has effect with the substitution for the reference to the standard

minimum guarantee in section 2(3)(a) of a reference to a nil* amount; and

(b) except in the case of a person who is a remand prisoner, nil* is the prescribed

additional amount for the purposes of section 2(3)(b)."

For the purpose of determining what a claimant's income is, regard has to be had to s.15 of the State Pension Credit Act 2002. That Act lays down what constitutes income and, for the purposes of this appeal and the other appeals before me, the only relevant part of that section is sub-section 15(1)(b), namely prescribed social security benefits other than retirement pension income and state pension credit. The benefits prescribed are set out in regulation 15 of the State Pension Credit Regulations 2002. Winter fuel allowance is not included in the list of prescribed benefits. The claimant in CSPC/688/2007 had no income whatsoever. The claimants in CSPC/678, 679 and 683/2007 received only winter fuel allowance.

The principal question in this appeal and the other appeals was whether the claimant and each of the claimants in the other appeals are members of a religious order who are fully maintained by their order. If they are, then in s.2(3) of the Act the reference to the standard minimum guarantee is nil. The effect in all the cases before me is that, if the standard minimum guarantee is nil, then the conditions for the guarantee credit are not met.

That is what the tribunal decided.

In the instant appeal, the findings in fact were:

"1.The appellant is a member of the religious order of Carmelite Nuns, of the Carmelite Monastery in Dysart, Fife. She is one of 12 nuns whose cases are considered in this statement.

2. The appellant's income, if any, is disclosed in the appendix to this decision, with the document headed – 'Details of Members and Pensions'. The income of individual members of the community is paid into the Monastery Account. The specific needs of each member of the community, in regard to personal items such as apparel and toiletries, are met from the common fund. The members of the community do not have sole access to the funds paid into the Monastery Account from any individual pension or allowance entitlement.

3. The Community at Dysart is a closed order of nuns, who engage in a communal life of prayer and meditation. They enter the order on making vows of poverty, chastity and obedience. The order has an obligation to provide housing, food, and care for the nuns, for their lifetime, or as long as they are members of the order.

4. Reference is made to the factual elements of the submissions from the Secretary of State and from the appellant. In so far as these are not in controversy, they are adopted as repeated herein."

The facts set out in a memorandum prepared by the Department do not seem to be in dispute and are in the following terms:

"Each sister pays all their own income into the monastery's account. although there are only certain people who can withdraw the money from the bank, each sister retains the right to their share of the money. If anything is needed, they may request the cash, or it is paid for out of the account.

The monastery is autonomous. If they were unable to run the monastery or support themselves, it would have to close. If any of the sisters cannot contribute to the funds, her expenses are covered by the others' contributions."

The claimant's principal argument proceeded upon the basis that a tribunal had awarded another sister in the monastery in the same circumstances as the claimant and each of the other claimants in the appeals before me a state pension credit. That was a matter which was before the tribunal, as can be seen from the statement of reasons for the decision in that appeal at pages 38 – 41. The tribunal in the instant appeal had noted in paragraph 6 of their statement:

"There had been in prospect an appeal in the case of [Sister B …], to the Social Security Commissioner, but this had been withdrawn by the Secretary of State."

I did not get a satisfactory explanation from Miss Paterson as to why the appeal to the Commissioner in that case had been withdrawn, but as I understood it, it seems as though the Secretary of State did not wish to be drawn into arguments in that case on a subsidiary argument relating to the application of the European Convention on Human Rights. It was Miss Clarke's submission that it was not open to the Secretary of State to take a different view in relation to the case in which he withdrew the appeal to the Commissioner and the cases before me. It was her submission that it was a general principle that "like must be treated as like" and that justice must be seen to be done. It was her submission that the attitude of the Secretary of State offended against the principles of fairness that any fair-minded person would have. Further, Miss Clarke pointed out there was reference made before the tribunal to an undated letter written by Mr James Purnell MP, who is now the Secretary of State but at the material time was Minister of State for Pensions Reform, to Karen Buck MP. He said:

"Pension Credit is an income-related benefit paid out of general taxation and designed to help the poorest pensioners meet their day-to-day living expenses. The rules relating to eligibility do not exclude all members of religious orders. They do, however, exclude those who are fully maintained by their order.

When an application for Pension Credit is received from a member of a religious order, the Pension Service will consider the case on its own merits to determine whether the member is fully maintained. A general distinction is made between orders that are fully committed to providing all that its members need for their maintenance and those that are 'self-maintaining' and as such rely on income from their members' work or pensions, and other sources of income, such as donations, for example, to maintain the order and its members. A person the Pension Service may not consider to be fully maintained by their order is generally someone who has some financial means of their own, such as a Basic State Pension or savings."

It was Miss Clarke's submission that, in these circumstances, the tribunal erred in law by making the decisions which they did in the appeals before them upon the basis that neither the Secretary of State nor the tribunal were entitled to do this, standing the different approach adopted in the other case and the position adopted by Mr Purnell in his letter. Miss Clarke did not, however, produce any authority to support the proposition which she was asserting, other than to make reference to Carson and Reynolds v Secretary of State for Work & Pensions [2005] UKHL 37, paragraph 10. However, in that case, Lord Hoffman in his speech was dealing with the scope of Article 14 of the European Convention of Human Rights. He said in the course of his speech:

"The principle that everyone is entitled to equal treatment by the state that like cases should be treated alike and different cases should be treated differently, will be found, in one form or another, in most human rights instruments and written constitutions."

This speech does not, on any view, set forth that what is asserted by Miss Clarke is a general principle of law.

Miss Paterson described Mr Purnell's letter as being "unhelpful". I can understand why she says this from her perspective. However, the fact that the Secretary of State chose not to continue with an appeal against an adverse decision in the case of Sister [B], or that a minister in his ministerial capacity expresses a view in a letter to a Member of Parliament which can be construed as supporting the view of the claimants in the instant appeal, does not, in my view, debar the Secretary of State from reaching a contrary view on a claim for benefit and arguing such a contrary view before the tribunal or the Commissioner, nor does the tribunal err in law by applying its own judgement to the issues before them and coming to a conclusion on the merits. Thus, insofar as what the claimant is attempting to do is to make a submission that the Secretary of State was personally barred from taking the attitude in the appeals before the tribunal and myself which he did, and in making the decisions which he did which gave rise to the appeals, I can say only that the doctrine of personal bar or estoppel has no place in administrative law jurisdictions and in that connection I refer to the decision of a Tribunal of Commissioners in CP/1425/2007 at paragraph 37, where it was said:

"The argument on estoppel is hopeless, it being well establish that the doctrine cannot be used in this statutory jurisdiction to create an 'entitlement' outside the terms of the legislation itself …"

The claimant's subsidiary argument was that, on the facts, they are not disputing the argument that the claimant in this appeal, and those in the other appeals, were members of a religious order. It was, however, submitted that they were not fully maintained by the order but that they are self-funding. It was accepted that only the claimant in CSPC/688/2007 provided no funds to the order, albeit that the claimants in CSPC/678, 679 and 683/2007 contributed minimal amounts, consisting of the winter fuel allowance. It was, however, submitted that even in these cases, membership of the monastery meant that the claimants were not fully maintained. It was submitted that in paragraph 14 of their reasons the tribunal took irrelevant considerations into account in reaching their conclusion and that they failed to apply the test properly. In Miss Clarke's submission, as the claimants provide their own funding, they are not fully maintained. She submitted that it is said in the memorandum at page 13 that each sister retains the right to their share of the money and, if anything is needed, they may request the cash or it is paid for out of the account. In making her submission, Miss Clarke also made reference to Hansard in the text for 24 January 2002 [220 124-126] where Baroness Hollis of Heigham, in response to an amendment moved by Lord Higgins, said:

"The intention is that, taken together, those clauses will provide powers to ensure that prisoners and members of religious orders who are fully maintained by their order will be excluded from entitlement to Pension Credit. We intend that prisoners and members of religious orders fully maintained by their order will be excluded. That is because the cost of maintaining those groups is met by other organisations."

It was submitted that the intention behind the legislation was that claimants would not receive what was, in effect, double support, both from the state and from their order. In the instant cases, she submitted, the cost of maintaining was not met by the order or by other organisations but by themselves.

Miss Paterson submitted that the tribunal did not err in law and that they made a reasonable judgement on the issue before them in accordance with the principles set out in Moyna (R(DLA)3/07). It was her submission that, in determining whether the claimant in this appeal and the other claimants were fully maintained, it was necessary to ignore the income. It was her submission that, in the context of whether a claimant is fully maintained by a religious order, neither the Acts nor the regulations make reference to contributions by members. It was her submission that, on the facts of the case, everything was held in common in the monastery and that, although it was accepted that a member may seek money for their own purposes, there is no right of ownership by an individual to the funds, which are held in common.

I find myself persuaded by Miss Paterson's argument. I do not think that the distinction sought to be made by Miss Clarke, between orders which are self-maintaining and those which are not, can properly be made. I consider that the weakness in Miss Clarke's argument is that once funds are held in common for their application for the accommodation and maintenance of the members, it is difficult to advance the proposition that the members who benefit from this are not fully maintained, albeit that they themselves have, in some instances, made a contribution towards the funds of the order. I think Miss Paterson is right when she says that, for the purposes of whether a sister is maintained fully, her income, and the contribution of that income to the order, must be ignored. Miss Clarke's position is, I think, demonstrated to be wrong when she submitted that even a sister who has made no contribution is not fully maintained and that membership of the order somehow takes her outwith such maintenance. I cannot accept that this is correct. As the arrangements for the maintenance of the sisters is the same, I do not consider that it is possible to distinguish between a sister who make contributions and one who does not. Furthermore, the legislation itself makes no distinction between orders which are self-maintaining and those which are not. It is unfortunate that the Government have, through letters from the Minister and their approach in the case of [Sister B], given the impression that there is a distinction to be made between self-maintaining and other religious orders, when the statutory language does not permit of such a distinction. It may, on the face of it, seem unfortunate that, by virtue of the manner in which the monastery was financed, the claimant and the other claimants in the appeals before me do not have the advantage of the credit. However, I would note that in the papers before me it is apparent that the monastery does have investments and income over and above what is contributed by the members. I refer in that connection to the corporation tax computation for the year ended 31 December 2003 at pages 16 – 28. Whilst that does not appear to have been a factor which was taken into account by the tribunal, it perhaps demonstrates that the monastery was not entirely self-maintaining from the income of the members and had other sources of funds such as legacies. That is sufficient to dispose of the appeal.

However, the claimant, in the event that her appeal was unsuccessful in relation to the issue of whether she was fully maintained as a member of a religious order, presented, along with the other claimants, an argument that the provisions contained in Regulation 6(2)(b) were contrary to the European Convention on Human Rights, Article 1, Protocol 1, Article 8 and Article 14.

The tribunal's position, in relation to this issue, is set out in paragraph 16. What the tribunal said was:

"16. I refer to the arguments in the Submission as to the impact of the Convention on Human Rights (ECHR). The argument put is that the sisters suffer a specific religious discrimination in not being entitled to SPC. I am content, for the purposes of considering the ECHR argument to accept on an esto basis, that in point of fact there may be discrimination in not awarding SPC. I refer to my comments above as to the nature and extent of the monastic relationship between the sisters and the Convent, and amongst the sisters themselves. On account of this specific circumstance, in my judgement, the discrimination present is on an appropriate and proportionate basis. Thus the terms of the ECHR do not in my judgement assist to the extent of permitting the appeals by the sisters to succeed. In this regard, I consider that the difference in treatment of the sisters, compared with other members of the female population of their age, is objectively justified, in that it has a legitimate aim, recognising the special and specific attributes of the monastic situation, and bears a reasonable relationship of proportionality, specifically on account of the monastic relationship to which I have referred above."

In relation to Article 14, it is necessary to link that article to another substantive convention right. Not only did the tribunal fail to do this, but it also sought to apply the discrimination issue to a comparator which was not put before them and which ignored the case which was put to them which was that an appropriate comparator was those who were in care homes. In these circumstances, the tribunal decision on this issue errs in law.

In relation to Article 1, Protocol 1, the fundamental question is whether state pension credit, which is a non-contributory benefit, is a possession. A number of authorities were cited to me Campbell and Others v. Northamptonshire District Council & Another [2004] EWCA Civ 409 concluded that it was not, though, for the purposes of this appeal, Miss Clarke submitted that the basis set out at paragraph 39 meant that it could not be relied upon. That was because, as is stated in paragraph 39, on the date when the Act came into force, there was no entitlement to Housing Benefit under the amended Regulation and so there could be no "possession" for the purposes of Article 1 Protocol 1. I think that there is some substance to this submission and that as such Campbell is obiter, thus only persuasive.

In a decision of the European Court of Human Rights in the case of Stec 2005 [ECHR 924] it was said:

"53. In conclusion, therefore, if any distinction can still be said to exist in the case law between contributory and non-contributory benefits for the purposes of the applicability of Article 1, Protocol 1, there is no ground to justify the continuing drawing of such a distinction."

That contradicts the view expressed in Campbell.

In Kay & Another v. London Borough of Lambeth & Others [2006] UKHL 10, I was referred to the speech of Lord Bingham of Cornhill, paragraph 28, where he said:

"The mandatory duty imposed on domestic Courts by Section 2 of the 1998 Act is to take into account any judgement of the Strasbourg Court and any opinion of the Commission. Thus, they are not strictly required to follow Strasbourg rulings, as they are bound by Section 3(1) of the European Communities Act 1972 and as they are bound by rulings of superior Courts in the domestic curial hierarchy."

Thereafter, I was referred to Couronne & Others v. Bontemps & Others [2007] EWCA Civ 1086. In that case, at page 110, Lord Justice Wall said:

"110. After a detailed consideration of the authorities, the judge concluded in relation to Article 1-1, that he was bound by the decision of this court in Campbell. In paragraphs 50 to 52 of his judgment, he said:-

'50. In Campbell, the issue in question arose under Regulation 7 of the Housing Benefit (General) Regulations 1987. The Social Security Commissioner had held that the agreements pursuant to which the appellants occupied their dwellings were "not on a commercial basis" (see Regulation 7), so they were to be treated as if they did not have to pay rent and thus were not entitled to housing benefit. Mr Goudie QC, for the appellants contended that their removal from their previous entitlement to housing benefit amounted to a "deprivation of possession" within Article 1-1.

51. The Court of Appeal rejected that submission – see paragraphs 31 to 39 of the judgement of Jacob LJ and paragraphs 61 of the judgement of Peter Gibson LJ. Thus, in my judgment, unless this case can be distinguished, it is binding upon me as to non-contributory benefit schemes not being with the ambit of Article 1 FP; and that is despite Stec – see Kay v. Lambert LBC [2006] UKHL 10. 2006 2 WLR 570 where the House of Lords held that a court must follow a binding domestic authority even if inconsistent with an ECHR authority. Mr Howell accepts that Stec has abolished the distinction between contributory and non-contributory social security benefits.

52. Mr Cox was bold in his submission. He said that Stec had swept Campbell away. I am not so sure. As Carnwath LJ pointed out in Esfandiari there are problems with Stec. Furthermore, the dicta of Lord Hoffmann in Carson and the dicta of Lord Hope and Lord Scott in Wilson are very strong. I do not think it is therefore possible to say that Stec has swept all before it. In my judgment, I, as a first instance judge, am bound by Campbell. That case may have been dealing with different regulations but the crucial point is that housing benefits and income based JSA are non-contributory and thus do not come within Article 1-1. I further agree with Mr Howell that homelessness assistance does not fall within the ambit of Article 1FP. In any event that issue is of no practical significance since the Claimants were found not to be in priority need.'

111. In relation to ECHR Articles 8 and 14, the judge, after another detailed consideration of the authorities, and an extensive citation from the judgement of Sedley LJ in Langley v. Bradford MBC [2004] EWCA Civ 1343, [2005] 2 WLR 730 concluded in paragraph 60 of his judgment -

'Thus, in the instant case, one must look at the regulations and/or legislation in the instant case and seek out the particular provision i.e. the habitual residence test. That test has nothing to do with promoting respect for private and/or family life. The schemes of JSA and homelessness assistance may generally be intended, at least in part, to respect private or family life. But the particular provision is not and cannot be said to be so intended. Accordingly, Mr Cox cannot bring this case within the ambit of Article 8 of the ECHR.'

112. If it is necessary for me to do so for the purposes of these appeals, I respectfully agree with the judge's analysis."

That decision appears to accept the obiter position adopted in Campbell in relation to Article 1, Protocol 1.

Miss Clarke also cited R (RJM) v The Secretary of State for Work and Pensions [2007] EWCA Civ 614. I was referred to a concession made in paragraph 24 by Counsel appearing on behalf of the Secretary of State for Work and Pensions in that appeal. It was said by Miss Clarke that Campbell cannot survive Stec and that Campbell was not, in any event, applicable due to the basis upon which the decision was made. However, that was not the view which was taken by the Court of Appeal in Couronne, as outlined above. That is the latest authority, the date of the decision being 2 November 2007. In these circumstances, I consider myself bound by it. The Court of Appeal appears not to have taken the view that the views expressed in Campbell are not sustainable following upon Stec. In these circumstances, I am satisfied that I can properly conclude that state pension credit is not a possession.

Miss Clarke also submitted that Article 8 was engaged. This is the article which concerns the right to respect for private life. In that connection, Miss Clarke referred me to Niemietz v Germany 16 EHRR 97. She directed me to paragraph 29, where the Court said:-

"29. The Court does not consider it possible or necessary to attempt an exhaustive definition of the notion of "private life". However, it would be too restrictive to limit the notion to an "inner circle" in which the individual may live his own personal life as he chooses and to exclude therefrom entirely the outside world not encompassed within that circle. Right to respect for private life must also comprise, to a certain degree, the right to establish and develop relationships with other human beings."

It was said that the deprivation of benefit in the instant cases amounts to a breach of Article 8, as it compromised the right to establish and develop relationships with other human beings. Miss Paterson submitted that the absence of entitlement to Pension Credit does not conflict with the right of respect that the article provides for and does not interfere with it in any way. I fully accept Miss Paterson's submission thereon. In no way does the statutory provision affect the claimant or the other members of the order in relation to their right to establish or develop relationships with other human beings. The regulation concerned simply sets out a basis upon which pension credit shall be calculated in the circumstances applying to the claimants in the appeals before me. It may affect the level of contributions that the claimants are able to make to the monastery. Their relationship to each other as members are already established and the refusal of pension credit does not inhibit the development of their relationship.

As neither Article 1, Protocol 1 nor Article 8 is engaged, then Article 14 cannot be said to be breached, as it does not operate independently of these other articles. I am not satisfied that the discrimination asserted could bring the matter within the ambit of Article 1, Protocol 1, nor Article 8. The discrimination alleged is asserted to be upon a religious basis and the comparator sought to be used by the claimant was those who live in care homes. It was said by Miss Clarke and I accept that special scrutiny is required to be made upon the basis that the discrimination alleged is religious. It was said by her in relation to care homes that in Scotland there is provision for state subsidy for those in care homes. Those in care homes are dependent for their accommodation and services on the provision of their income to the care homes. It was not necessary for the comparator to be identical. She submitted that it is required only that it is sufficiently relevant and analogous. Miss Paterson did not accept that those in care homes were sufficiently analogous. It was her submission that, as placement in a care home is an arrangement which will subsist only as long as the person concerned can pay for it, there was not the same mutuality of obligation that was referred to by the tribunal in respect of the members of the order. Further, those in a care home required to pay only the costs of the care home and that any money left over was kept by them. I am satisfied that these differences pointed out by Miss Paterson mark up a sufficient difference to demonstrate that the comparator is not sound. Thus, even if Article 14 had been engaged, the claimant would have failed to make a case out for it. I am also not satisfied that, in any event, the asserted discrimination arose on a religious basis. It was rather related to the arrangements made by religious orders for a mutuality of obligations between the order and its members, as fully described in the tribunal statement in the organisation of their affairs. Any difference in approach to the State Pension Credit contained in the legislation was directed to the organisation of religious orders rather than religion itself. In any event, it appears to me that, even if there had been discrimination, it was, as Miss Paterson suggested, proportionate.

In relation to disposal, I have set the decision of the tribunal aside upon the basis of its inadequate treatment of the human rights issues. However, on the facts stated, the tribunal came to the correct decision and accordingly, I have made the decision that they ought to have made. That decision also applies to the other cases.

The appeal succeeds to a limited extent, but that success is of no benefit to the claimant.

(Signed)

D J MAY QC

Commissioner

Date: 4 April 2008