Upper Tribunal (Administrative Appeals Chamber)

Decisions of the Upper Tribunal
(Administrative Appeals Chamber)

As the decisions of the appeal tribunals held at Stoke on 7 December 2006 under reference 049/06/00011 and at Leeds on 28 June 2007 under reference 007/07/00750 each involved the making of an error in point of law, they are SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decisions are RE-MADE.

The decision in each case is that the claimant is not entitled to a state pension credit as she is a member of a religious order who is fully maintained by the order.

 

Reasons for Decision

1.           These cases began as appeals to the Social Security Commissioner. The social security jurisdiction of the Commissioners has now been transferred to the Upper Tribunal and, from 3 November 2008, these proceedings continued before that tribunal. Nothing turns on this.

A.          The issues and how they arise

2.           The claimants are both nuns who made claims for state pension credit. The claims were refused on the ground that regulation 6(2)(b) and (3) of the State Pension Credit Regulations 2002 (SI No 1792) applied.

3.           Sections 1(2)(c)(i) and 2 of the State Pension Credit Act 2002 provide that a guarantee credit is payable to a claimant whose income is less than the appropriate minimum guarantee. The amount of the credit is the difference between the claimant’s income and the appropriate minimum guarantee. The appropriate minimum guarantee is the total of the standard minimum guarantee and any applicable additional amount. However, section 2(6) provides that regulations may substitute a different figure for the standard minimum guarantee. Regulation 6(2) and (3) is made under that authority:

‘6      Amount of guarantee credit

(1)     Except as provided in the following provisions of these Regulations, the standard minimum guarantee is-

(a)     £189.35 per week in the case of a claimant who has a partner;

(b)     £124.05 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).’

4.           The result is that, if they are members of a religious order who are fully maintained by that order, their entitlement to a state pension credit is nil. This is so regardless of the actual amount of their income or their other circumstances.

5.           Two issues arise. First an interpretation issue as to the position without regard to the Human Rights Act 1998: what is meant by ‘religious order’ and ‘fully maintained’? Second a human rights issue: if regulation 6(2)(b) would otherwise apply, is it discriminatory under Article 14 of the European Convention on Human Rights when read in conjunction with Article 1 of Protocol 1 to the Convention?

B.          The proceedings in CPC/1343/2007

6.           These proceedings concern Sister S. She was born on 21 February 1936 and claimed state pension credit on 21 April 2005. She owns no property and has no personal income, including no retirement pension or social security benefit. On appeal to the appeal tribunal, she argued that she was not maintained by a religious order but by a self-maintaining religious community. The appeal tribunal accepted that argument, but Mr Commissioner Rowland gave the Secretary of State permission to appeal against the decision.

7.           Sister S is a Benedictine. She is a member of a house that lives at an Abbey and receives no financial support from the Archdiocese in which it is located or from the Benedictine Order. The Order has no system of centralised authority; each house is autonomous. The house is not the same as the Abbey. The Abbey is merely the physical place in which the house is based. There may be more than one house based at the same location for convenience, especially as numbers have declined. The claimant’s house derives income from a nursing home, a small playgroup and payments received from another house that shares the Abbey. 

8.           The tribunal’s reasoning was:

‘11.   It would be flying in the face of history to suggest that the Benedictines are not a religious order. The appellant appends to her signature the letters, OSB, indicating her membership of the Order of St Benedict. I find as a fact that the appellant is a member of a religious order. However, I am satisfied that the term order when applied to the Benedictines is used in a sense which differs from that in which it is applied to other religious orders. The common meaning of the term implies a complete religious family. This family would be made up of a number of monasteries all of which are subject to a common superior or “general” who lives either in Rome or in the Mother house of the order. There may be divisions into various provinces with each provincial head being immediately subject to the general and the superior of each house subject of his own provincial. This structure does not exist for the Benedictines. There is no system of centralised authority and no common superior. Rather there are a number of houses observing the Benedictine rule which together comprise the Benedictine order.

‘12.   It follows from the lack of centralised structure within the Benedictine order and the autonomous nature of each house, including … Abbey, that no funds are provided by the order for the appellant. The community at … abbey must be self-supporting and insist it is for that reason that the appellant works in the nursing home and playgroup. I accept that the proceeds of her effort are received by the community generally and used to provide her with maintenance and accommodation. However, I find there is a qualitative difference between funds which are earned by the appellant’s own efforts which are subsequently applied to her maintenance and funds which come from an outside source sufficient for her complete maintenance, which are available to her by reason only of her membership of the order.’

C.          The proceedings in CPC/3725/2007

9.           These proceedings concern Sister M. She was born on 9 December 1920 and claimed state pension credit on 18 April 2006. She owns no property. At the time of her claim, she was receiving a retirement pension; she has since been awarded an attendance allowance. On appeal to the appeal tribunal, she argued that she was not maintained by her religious order but by a self-maintaining religious community. The appeal tribunal accepted that argument, but the chairman gave the Secretary of State permission to appeal against the decision.

10.        Sister M is a member of the Order of Discalced Teresian Carmelites. Like some, but not all, of the Order, she lives in an independent autonomous and self-maintaining religious community, supported by its earnings, savings, pensions and donations. All sums received by the members are paid into a pool for the benefit of all. In support of her appeal, the claimant produced a letter written to Karen Buck MP by James Purnell, who was at the time Minister of State for Pension Reform in the Department for Work and Pensions:

‘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.’

11.         The tribunal’s reasoning was:

‘The question is whether the Appellant is wholly maintained by the Order of which she is a member. I think that the approach by Mr Purnell, there should be a distinction between Orders which are able and do maintain their members from their own funds including funds generated by commercial activity and on the other hand Orders which rely on income from members’ separate work or pension. It is perfectly clear that this convent … could not support its members without their contributions which are predominantly derived from State Pension. The position is dramatically different now to what it used to be when their commercial activities made them self-supporting. Where so many of them rely on State benefit, it seems to me to be impossible to say that the Appellant is wholly maintained by the Order of which she is a member, whether that is given a broad or narrow meaning.’

D.          The oral hearing

12.        We held an oral hearing of this appeal. It was delayed while we awaited the decision of the House of Lords in R(RJM) v Secretary of State for Work and Pensions [2008] 1 AC 311. The hearing was held on 3 July 2009. The Secretary of State was represented by Ms Marie Demetriou of counsel. The claimants were represented by Mr Simon Cox and Mr Desmond Rutledge, both of counsel. At the end of the hearing, we directed further written submissions, which have now been received. We are grateful to all counsel for their written and oral submissions.

E.          The interpretation issue

The parties’ arguments

13.        Ms Demetriou argued that the tribunals had misinterpreted regulation 6(2)(b). She argued that the claimants’ communities were religious orders for the purpose of the provision, that they were fully maintained from funds held by their orders, and that it did not matter from what source the funds originated.

14.        Mr Cox and Mr Rutledge argued that the tribunals had correctly interpreted the provision, as Benedictines and Carmelites have no central authority or control. They also argued that the claimants were not being maintained by their communities, as they themselves were in part the source of the funds of the community.

Two preliminary points

15.        First, there is Mr Purnell’s letter. Both claimants relied on this in respect of both elements of the interpretation issue. However, we do not accept that it is permissible so to rely. It is not admissible as an aid as an aid to the interpretation of the legislation. It is at best a statement of Departmental practice, although it was not the approach taken by the decision-makers in these cases.

16.        Second, there is the different language of the council tax legislation.

17.        Reference was made in Sister M’s case to the different language used in respect of council tax. Regulation 3(1) of the Council Tax (Additional Provisions for Discount Disregards) Regulations 1992 (SI No 552) contains this provision:

‘Religious Communities

Class B a person who-

(a)     is a member of a religious community the principal occupation of which consists of prayer, contemplation, education, the relief of suffering, or any combination of these; and

(b)     has no income or capital of his own (disregarding any income by way of a pension in respect of former employment) and is dependent on the community to provide for his material needs’.

18.        Comparative reasoning from different legislation is dangerous unless there is something to indicate that the provisions are deliberately drawn in contrasting terms. There is no such indication here. State pension credit is a social security benefit that is the responsibility of the Department for Work and Pensions. The council tax legislation was the responsibility of the Department of the Environment. The regulations were drafted by lawyers in different Departments, working in different legislative contexts, and perhaps with different policy objectives. Moreover, there was no direct link between these two areas of legislation. Accordingly, we derive no assistance from this comparison.

Our analysis

19.        As regards the expression ‘religious order’, the claimant argued that this connoted the existence of centralised authority and control. If this is right, it would dispose of these appeals. We do not accept that it is right. As Lord Hoffmann said in Moyna v Secretary of State for Work and Pensions [2003] 1 WLR 1929 at [24]: ‘meaning … depends not only upon the conventional meaning of the words used but also upon syntax, context and background.’ As to conventional meaning, ‘religious order’ may be used in the narrow, technical sense relied on by the claimants. But it is also used in a broader, less technical sense, as dictionary definitions (in so far as they are relevant) confirm. So Chambers 21^st Century Dictionary gives: ‘a religious community living according to a particular rule and bound by vows’. And the Shorter Oxford English Dictionary gives: ‘A society of monks, nuns or friars living under the same religious, moral and social regulations and discipline’. As to context and background, regulation 6 is concerned with financial matters. The focus is on the body that provides for the maintenance of its members. It has to be a religious body, but there is nothing to suggest that it is limited to those religious bodies that are religious orders within the narrow, technical sense. If there is a natural meaning of 6(2)(b), it is, in our view, that ‘religious order’ is used in the broader sense found in the dictionaries. There may be some logic in distinguishing certain types of community from others. But it is difficult to see why centralised authority or control should be a distinguishing feature when identifying communities whose members may not be entitled to a guarantee credit. We consider that this would introduce a distinction without any discernible rationale to explain or justify it.

20.        At various stages of their argument, the claimants appeared to suggest that ‘religious order’ connoted financial support. This seemed to us to elide with the arguments on the meaning of ‘fully maintained’. To the extent that there was a separate argument in this regard on the meaning of ‘religious order’, we do not accept it. It is clear from the face of regulation 6(2)(b) that it contemplates that a ‘religious order’ may or may not be one which fully maintains its members. The purpose of the latter part of (b) is to make it clear that subparagraph (b) will only have effect in those cases.

21.        Accordingly, to the extent that the appeal tribunals accepted the claimant’s contentions on the meaning of ‘religious order’, they made an error in point of law in doing so.

22.        That brings us to the claimants’ contentions on the meaning of ‘fully maintained by their order’.

23.        We accept that the claimants by their own work (or any entitlement to benefits) contribute to the funds that support their orders. But that does not prevent the claimants being fully maintained by their orders. The focus is who it is that maintains the claimants, not where the money comes from. Both claimants are bound by vows of poverty and take no personal benefit from the income they generate (or any benefits they may receive). That money is held by the community for the use of the community as a whole. Leaving aside the niceties of legal ownership of the funds at particular stages, the claimants have no power of their own to meet any of their needs and are maintained by their religious orders. Neither claimant maintains herself nor is either maintained by anyone other than her religious order. 

24.        Sister S does not receive a statement retirement pension. Sister M does. It appears that this is paid into the community’s bank account, no doubt to comply with her vow of poverty. Accordingly, there is no distinction between income that Sister M generates by her work and income that she generates by her state pension. Neither form of income maintains Sister M; she is wholly reliant on her religious order for her maintenance.

25.        Accordingly, the appeal tribunals made an error in point of law in deciding that regulation 6(2)(b) applied to the claimants.

F.           The human rights issue

The parties’ arguments

26.        Ms Demetriou conceded that the cases fell within the scope of Article 1 of Protocol 1, but argued that there was no discrimination. We accept that that concession was rightly made on the basis of RJM. It is not necessary to decide whether the cases also fall within the scope of Article 9.

27.        Mr Cox and Mr Rutledge argued that it was unnecessary to identify a comparator and that it was the Secretary of State’s responsibility to ensure that none existed before making legislation that dealt differently with a class of persons on religious grounds. But by way of possible comparators, they suggested: (i) those over pensionable age with no income or savings and who cannot work with health problems related to age; and (ii) prisoners who have reached retirement age and are not required to work. They argued that regulation 6(2)(b) was disproportionate as it contained a blanket exclusion rather than a test based on the claimants’ actual income.

28.        In reply, Ms Demetriou argued that it was the claimants’ responsibility to identify a comparator, which they had not done and that none existed. Alternatively, she argued that any discrimination was justified, because the State had a wide margin of appreciation in social matters. 

29.        At the hearing we referred the parties to the decision of the Court of Appeal in Langley v Bradford Metropolitan Borough Council reported as R(H) 6/05. There Sedley LJ had reasoned that the housing benefit claimant was not a victim under the Human Rights Act 1998, because the discriminatory effect of a provision could be removed without conferring any advantage on her. We allowed counsel a chance to make written submissions on that decision.

30.        Mr Cox and Mr Rutledge argued that in Langley there had been no challenge in principle to the housing benefit provision and it was clear that the legislator would remove the discrimination in a way that was not to the claimant’s advantage. Only Sedley LJ reasoned that the claimant was not a victim and that this had not been explored in argument. Moreover, victim status is only relevant to a claim under section 6 of the Act, whereas the claimants here were arguing for an application of section 3. Finally, they argued that Sedley LJ’s analysis did not show that there was no discrimination.

31.        In response, Ms Demetriou argued that Sedley LJ’s analysis applies to the Secretary of State’s advantage.

Our analysis

32.        Section 3(1) of the Human Rights Act 1998 requires us ‘So far as it is possible to do so’ to read and give effect to legislation ‘in a way that is compatible with the Convention rights.’ Mr Cox argued at the hearing that regulation 6(2)(b) was discriminatory because it was limited by reference to religion. He thereby relied on the claimants’ Convention rights in legal proceedings, which is only permissible if each claimant ‘is (or would be) a victim of an unlawful act’ (section 7(1)(b)). Mr Cox took as his starting point at the hearing that, under the Strasbourg jurisprudence, any discrimination on the basis of religion required close scrutiny.

33.        We are not persuaded that the claimants’ contentions summarised above provide a principled basis for reliance upon article 14. It is correct that Sedley LJ was the only judge to rely on the victim analysis, but it was dealt with in argument and Neuberger LJ thought it ‘a rather more elegant way of arriving at the [same] conclusion’. We find Sedley LJ’s analysis compelling in the circumstances of these cases. It is, in our view, possible to remove any element of religious discrimination (if there is one) by removing the reference to religion. That would leave the provision to apply to ‘members of religious orders who are fully maintained by their order.’ That makes sense as it stands. An order is as appropriate a description for a secular self-maintaining body as for a religious one. And it removes any element of different treatment. Accordingly, even if the claimants’ were able to show that regulation 6(2)(b) was discriminatory, that would do no more than lead us to conclude that the regulation should be read as omitting the word ‘religious’. All that section 3(1) authorises and requires is the interpretation of legislation to remove incompatibility with Convention rights. That is what this interpretation achieves. It is faithful to the legislative purpose of the provision, which is evidently to bar entitlement to those who are fully funded by a body of which they are a member. It is also realistic to assume that this is the approach that would be taken by way of amendment if another similar body were identified, since no one has been able in practice to identify such a body other than in somewhat fanciful terms. It follows that the claimants are not victims for the purposes of section 7(1)(b) of the 1998 Act.

34.        As the claimants were not victims, it is unnecessary to consider any other human rights issues that were raised in argument.

G.         Disposal

35.        We allow the appeals, set aside the tribunals’ decisions and re-make them to confirm that the claimants are not entitled to a state pension credit.

 

Signed on original on 8 October 2009

Mr Justice Walker Chamber President   Stephen Pacey Upper Tribunal Judge   Edward Jacobs Upper Tribunal Judge