IN THE UPPER TRIBUNAL Case No CI/2005/2009

ADMINISTRATIVE APPEALS CHAMBER

Before UPPER TRIBUNAL JUDGE WARD

Decision: The appeal does not succeed. The decision of the First-tier Tribunal sitting at Leeds on 28 May 2009 under reference 007/09/00812 is upheld.

REASONS FOR DECISION

1. This appeal, made with the permission of the First-tier Tribunal judge, concerns whether a person who has been in receipt of two awards of reduced earnings allowance (“REA”) because he had sustained two industrial injuries is, following retirement, entitled to an award of retirement allowance in respect of each of them.

2. The appellant attained the age of 65 on 28 February 2009. On 15 April 1970 he was involved in his first industrial accident, while working in a coal mine. He was awarded REA and re-deployed to lighter work. On 2 January 1980 he was involved in a second industrial accident. He received a second award of REA and was redeployed to surface work. He left the coal mining industry in 1993 and did not work again up to becoming 65. At the age of 65 his REA was converted into retirement allowance.

3. Only one award of retirement allowance was made to him and this was confirmed on appeal to the First-tier Tribunal.

4. The law relating to retirement allowance is set out in schedule 7 of the Social Security Contributions and Benefits Act 1992, which so far as relevant provides as follows:

“13.(1) Subject to the provisions of this Part of this Schedule, a person who—

(a) has attained pensionable age; and

(b) gives up regular employment on or after 10th April 1989; and

(c) was entitled to reduced earnings allowance (by virtue either of one award or of a number of awards) on the day immediately before he gave up such employment,

shall cease to be entitled to reduced earnings allowance as from the day on which he gives up regular employment.

(2) If the day before a person ceases under sub-paragraph (1) above to be entitled to reduced earnings allowance he is entitled to the allowance (by virtue either of one award or of a number of awards) at a weekly rate or aggregate weekly rate of not less than £2.00, he shall be entitled to a benefit, to be known as “retirement allowance”.

(3) Retirement allowance shall be payable to him (subject to any enactment contained in Part V or VI of this Act or in the Administration Act and to any regulations made under any such enactment) for life.

(4) Subject to sub-paragraph (6) below, the weekly rate of a beneficiary's retirement allowance shall be—

(a) 25 per cent. of the weekly rate at which he was last entitled to reduced earnings allowance; or

(b) 10 per cent. of the maximum rate of a disablement pension,

whichever is the less.”

5. In my view there is a clear legislative intention that all awards of REA cease on retirement and are replaced by a single award of retirement allowance at the rate set out in sub-paragraph (4). That all awards cease, even if there is more than one of them, is the impact of the words in parentheses in sub-paragraph (1)(c). The wording in parentheses in sub-paragraph (2) indicates that whether it is one award or more than one of REA which is ceasing, the result is a single entitlement to retirement allowance. The words in parentheses in the two sub-paragraphs are included for a reason and the reason is as set out above. That this is so is further confirmed by the provisions in sub-paragraph (2) for aggregation. It is the amount of the two (or more) awards of REA taken together which determine whether the minimum figure is exceeded, so as to give rise to an entitlement to retirement allowance, not each of them separately.

6. The tribunal judge commented that “In my view the legislation is clear. The rate of retirement payable is either 25% of whatever [the appellant] was receiving in aggregate from his REA's or 10% of the [Industrial Injuries Disablement Benefit] payable...”. I agree.

7. In the appeal to the Upper Tribunal it was submitted on behalf of the appellant that the phrase “(by virtue either of one award or of a number of awards)” in sub-paragraph (1)(c) is meaningless unless it was the intention of the legislature to distinguish between claimants who had one award of REA and those who had a number of awards of REA prior to giving up employment. I agree that meaning has to be attributed to the quoted words, but if the intention were as contended for, there would be no aggregation provision in sub-paragraph (2) and, in my view, additional wording would have been included in sub-paragraphs (1) and (4) to make clear that an award of retirement allowance fell to be made in respect of each previous award of REA and to provide for the calculation of its amount in consequence. The more natural reading of the words is therefore that set out in [5] above.

8. For the appellant, it was said before the tribunal that this outcome discriminated between those with one award of REA and those with more than one. The tribunal's answer, quite correctly, was that “the Tribunal must apply the law as it is enacted whatever the outcome. There is no discretion.” The point has been amplified before the Upper Tribunal :

“Reduced earnings allowance subsists during the working life of the claimant up to pensionable age. The facility to claim and establish entitlement to more than one award of reduced earnings allowance recognises that a worker may suffer loss of earnings on more than one occasion during his or her working life as a result of injury sustained in consequence of an industrial accident or disease.

It is submitted that the purpose of retirement allowance is to compensate a claimant who, as a result of an industrial accident or disease suffers a reduction of an earnings related pension which is diminished by reduced earnings during his or her working life. If that analysis is correct it follows that a separate and discrete award of retirement allowance should be made in respect of each award of reduced earnings allowance so as to properly compensate the claimant for each occasion on which his or her earnings related pension is diminished by reduced earnings.”

9. Whatever the merits of this argument, it is an argument based on policy considerations about what the law, it is argued, ought to say. However, like the tribunal, I have to take the statute as it is. The legislature has seen fit to draw the line in one particular place: as sub-paragraph (2) indicates in the case of a person with two very small awards of REA who is able to aggregate them to reach the £2 minimum figure for entitlement to an award of retirement allowance, where the line is drawn in some circumstances may even operate to the advantage of the person with two awards compared with the person with only one. The construction advanced at [5] above does not result in manifest absurdity. Giving effect to the intention as expressed in the statute means this appeal must fail.

CG Ward

Judge of the Upper Tribunal

8 April 2010