Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to allow the appeal by the Secretary of State.

 

The decision of the Swansea First-tier Tribunal dated 7 June 2010 under file reference 2044/10/00447 involves an error on a point of law.  The First-tier Tribunal’s decision is set aside.

 

The Upper Tribunal is not in a position to re-make the decision under appeal.  It therefore follows that the claimant’s appeal against the Secretary of State’s decision dated 22 October 2009 is remitted to be re-heard by a different First-tier Tribunal, subject to the Directions below. 

 

This decision is given under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007.

 

 

DIRECTIONS

 

The following directions apply to the re-hearing:

 

(1) The re-hearing should be at an oral hearing. 

 

(2) The new First-tier Tribunal should not involve the tribunal judge or medical member who comprised the tribunal considering this appeal on 07 June 2010.

 

(3) The claimant is reminded that the tribunal can only deal with her health complaints and their effects as they were at the date of the original decision under appeal (namely 22 October 2009).

 

(4) If the claimant has any further written evidence to put before the tribunal, in particular medical evidence, this should be sent to the tribunal office within one month of the issue of this decision.  Any such further evidence should relate to the circumstances as they were at the date of the original decision of the Secretary of State under appeal, i.e. as at 22 October 2009 (see Direction (3) above). 

 

(5) The new First-tier Tribunal is not bound in any way by the decision of the previous tribunal in relation to the findings of fact on the incapacity credits or ESA appeals.

 

 

These Directions may be supplemented by later directions by a Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal.

REASONS FOR DECISION

 

A summary of this appeal to the Upper Tribunal

 

1. The claimant is a single woman now aged 42.  She suffers from back pain, nervous debility and stress.  She had been entitled to income support on the basis of incapacity for work from 2004 until 2009.  In October 2008 a new benefit, employment and support allowance (ESA), was brought in to replace both incapacity benefit and income support paid on the basis of incapacity for work (hence “incapacity credits”). This appeal concerns a technical issue to do with that changeover, or transition.  I allow the Secretary of State’s appeal, set aside the First-tier Tribunal’s decision and send the case back to a different tribunal for a re-hearing.

 

The claimant’s two appeals to the First-tier Tribunal

 

2. The claimant had an incapacity credits appeal and an ESA appeal before the First-tier Tribunal (FTT).  These appeals were heard on the same day at Swansea, but had arrived by different routes.  Only the ESA appeal is before the Upper Tribunal, but the parallel incapacity credits appeal provides part of the context.

 

The incapacity credits appeal

3. The claimant had been awarded incapacity credits from 7 July 2004.  She completed an IB50 questionnaire on 16 March 2009; on that self-assessment basis, she would have scored 115 points on the personal capability assessment (PCA), the test for assessing entitlement to incapacity benefit/credits.  On 20 May 2009 she was examined by a health care professional on behalf of the Secretary of State; that registered nurse completed an IB85 medical report.  The nurse reported minimal functional problems and did not apply the mental health assessment.  On the basis of that report, a decision maker concluded on 8 June 2009 that the claimant scored nil points and did not satisfy the PCA.  On 18 June 2009 the claimant lodged an appeal.

 

4. The claimant’s incapacity credits appeal was first heard by the FTT on 13 January 2010.  That hearing went ahead in her absence.  The FTT dismissed her appeal. The FTT’s decision was subsequently and rightly set aside as a request for postponement had not been put before the tribunal.  The appeal was re-heard by a different FTT on 7 June 2010.  The new FTT also dismissed her appeal, although it revised the Secretary of State’s decision to the extent of awarding the claimant 12 points for various physical problems.  As this was below the 15 point threshold for the PCA, the appeal still failed in substance.  There appears to have been no application for permission to appeal to the Upper Tribunal against that FTT decision.

 

The ESA appeal

5. On 7 June 2010 the same FTT also heard the claimant’s ESA appeal.  The FTT found that following the decision that she did not satisfy the PCA, and the consequential termination of her award of income support, the claimant had applied for ESA on 20 July 2009.  There was no copy of either the ESA claim form or the original awarding decision in the papers before the tribunal, but the FTT’s conclusions, as stated above, and arrived at by a process of deduction from other information on the file, were entirely justified.

 

6. What is clear is that on 17 September 2009 the claimant completed an ESA50 questionnaire.  On 16 October 2009 she was examined by a doctor on behalf of the Secretary of State; that doctor completed an ESA85 medical report form.  On 22 October 2009 a decision maker decided that she scored nil points on the limited capability for work assessment (the ESA equivalent of the PCA for incapacity benefit).  As a result, the decision maker superseded the existing ESA award and disallowed the claim with effect from 22 October 2009.  On 4 November 2009 the claimant wrote to Jobcentreplus, stating that “I wish to appeal against the disallowance of my ESA because I disagree with the result of the medical”.  This was the ESA appeal heard on 7 June 2010 alongside the incapacity credits appeal.

 

7. At the hearing on 7 June 2010 the claimant attended, accompanied by her mother.  The Secretary of State was not represented.  The hearing took about an hour and focused on the claimant’s health problems and their effects.  This led to the FTT’s decision to revise the Secretary of State’s decision on the incapacity benefit appeal but not to alter the overall outcome.  At the same time, the FTT decided to allow the claimant’s appeal against the Secretary of State’s decision dated 22 October 2009 on the ESA claim.  However, the ESA appeal was decided on a different and more technical basis.  The FTT did not decide that the claimant scored 15 points or more on the limited capability for work assessment for ESA.  Instead, and in short, the FTT decided that the second appeal did not concern an ESA claim at all.  Rather, the FTT concluded that the claimant had made an as yet undecided new claim for income support on the basis of incapacity.  So, on that basis, the FTT allowed the claimant’s appeal and remitted the matter to the Secretary of State for the outstanding incapacity claim to be decided, observing that this would presumably require a new PCA to be conducted.

 

The FTT’s reasoning on the ESA appeal

 

8. On the face of it, the FTT’s decision on the ESA appeal was puzzling.  The claimant had undoubtedly completed an ESA50.  She had been examined for the limited capability for work assessment and the doctor had completed an ESA85.  The decision maker had made a decision to supersede and disallow her claim to ESA.  The claimant had expressly appealed against what she understood to be the decision to stop her ESA.

 

9. However, the FTT’s decision notice outlined the tribunal’s reasoning.  The award of income support on the basis of incapacity had ended on 8 June 2009.  The claimant had made a new claim, apparently for ESA, on 20 July 2009.  The ESA claim had therefore been made within 8 weeks of the end of the previous award.  On that basis the FTT concluded that the purported ESA claim should have been treated as a further claim for incapacity benefit (or strictly for income support on the grounds of incapacity).  The FTT relied upon regulation 3(2) of the Employment and Support Allowance (Transitional Provisions) Regulations 2008 (SI 2008/795).  The FTT judge subsequently issued a detailed statement of reasons, setting out the respective arguments in full, and summarising the decision thus:

 

“It [the decision of 22 October 2009] purported to be a decision refusing ESA but the claimant had not claimed ESA.  Her claim from 20 July 2009 was, by law, a claim for income support because it was made within 8 weeks of an award of income support which came to an end on 8 June 2009.”

 

10. A District Tribunal Judge subsequently gave the Secretary of State permission to appeal to the Upper Tribunal.

 

Analysis of the issues on this appeal

 

11. Mr Mick Hampton, the Secretary of State’s representative in these proceedings, argues that the FTT’s analysis involved an error of law.  He rightly identifies the issues arising on this appeal as follows: (1) was the claimant excluded by the relevant legislation from making a claim for ESA at the time she made it, and, if so, (2) could the claim for ESA be deemed to be a claim for a benefit for which there was an existing award?

 

12. As to issue (1), the starting point is section 29 of, and Schedule 4 to, the Welfare Reform Act 2007 (“the 2007 Act”), which makes extensive provision for transitional provisions (and see especially paragraph 3 of Schedule 4 as regards post-commencement claims).  Regulation 3(1) of the Employment and Support Allowance (Transitional Provisions) Regulations 2008 then provides as follows:

 

“Claim by person entitled or potentially entitled to existing award

This section has no associated Explanatory Memorandum

3.—(1) A person who is entitled to an existing award is excluded from making a claim for an employment and support allowance.”

 

13. The expression “an existing award” is defined by paragraph 11 of Schedule 4 to the 2007 Act to include an award of incapacity benefit and an award of income support on the basis of incapacity.  Plainly as at 20 July 2009 the claimant in this case was not entitled to either of those benefits – her award of income support on the basis of incapacity had ended on 8 June 2009 and indeed she had appealed against that decision.  Accordingly she was not excluded from claiming ESA by virtue of sub-paragraph (1), as she did not fall foul of its mutual exclusivity rule.  However, the heading to regulation 3 makes it clear that it deals with claims both by persons actually entitled to an existing award (regulation 3(1)) and also by those “potentially entitled to [an] existing award” (emphasis added, and see regulation 3(2)).  This was the provision relied upon by the FTT.

 

14. As to issue (2), regulation 3(2) provides that:

 

“(2) A claim for an employment and support allowance made by a person who would be entitled to an existing award if that person made a claim described in regulation 2(2), is to be treated as a claim for that award.”

 

15. The drafting of this provision is unlikely to win any awards from the Plain English Campaign.  Its intent, however, is tolerably clear to those versed in the dark arts of interpreting social security legislation.  Regulation 3(2) is designed to extend the exclusionary rule to those people who claim ESA but who would be entitled to an “existing award” (as defined above) if they made what is known as a “linked claim” within the terms of regulation 2(2).

 

16. It then becomes necessary to examine regulation 2.  This lays down the general rule that a claim for an “existing award”, for a period of incapacity since 27 October 2008, is to be treated as a claim for ESA.  There are, however, exceptions to this principle, as specified in regulation 2(2).  In particular, regulation 2(2)(a) provides that the general rule does not apply where there is a claim “for incapacity benefit … relating to a period of incapacity for work which is one of two periods treated as one period of incapacity for work under section 30C(1)(c) of the Contributions and Benefits Act (linking rules)”.

 

17. The FTT took the view that regulation 2(2)(a) applied in this case, with the effect that what appeared at first sight to be an ESA claim was actually a claim for income support on the ground of incapacity, applying regulation 2(2) in conjunction with regulation 3(2).  As the FTT sought to explain on its decision notice, there were “two linked periods of incapacity under section 30C(1)(c) Social Security Contributions and Benefits Act [SSCBA] 1992 – i.e. the old award and, within less than 8 weeks of its end, a new claim.”

18. Mr Hampton argues to the contrary.  In his submission, where an incapacity claim is ended following the application of the PCA, then the superseding decision necessarily incorporates a decision that the person concerned is not incapable of work (irrespective of whether any appeal is lodged against that decision). Furthermore, for the linking envisaged by regulation 2(2)(a) to apply, then the conditions in section 30C(1)(c) (of SSCBA 1992) must be met and a period of incapacity for work must also be established on the new claim.  In order to meet this condition, a claimant must be treated as incapable of work (pending a fresh PCA).  However, Mr Hampton argues, the claimant could not satisfy that requirement because of the operation of regulation 28(2)(b) of the Social Security (Incapacity for Work) (General) Regulations 1995 (SI 1985/311) (“the 1995 Regulations”). This provision prevents a claimant from immediately establishing a new period of incapacity for work for these linking purposes where she has already been found to be capable of work within the last 6 months – as had been the case here.  On that basis, Mr Hampton contends, regulation 2(2)(a) could not apply and so also regulation 3(2) likewise did not apply so as to convert a new ESA claim into a claim for an existing award of benefit.

 

19. So can any of the other provisions of regulation 2(2) operate so as to bring the claimant within the category of persons “potentially entitled to existing award” under regulation 3(2)?  Regulation 2(2)(b) and (c) are further variants on the linking rule exception and are not applicable.  Regulation 2(3) – certain claims treated in the alternative – also has no relevance in the present case.

 

20. That leaves only regulation 2(2)(d) and (e), which are concerned with certain claims for “income support on the grounds of disability”, an expression defined by regulation 1(4).  This category provides no assistance here, as the only basis for establishing disability would be if the claimant were incapable of work.  However, that option – under paragraph 7 of Schedule 1B to the Income Support (General) Regulations 1987 (SI 1987/1967) – is in effect ruled out by the operation of section 171C(3) of SSCBA 1992 and regulation 28(2)(b) of the 1995 Regulations, referred to above.

 

21. Mr Hampton’s approach is consistent with the analysis of Judge May QC in CG v Secretary of State for Work and Pensions (ESA) [2011] UKUT 167 (AAC).  In that case an FTT had also heard an incapacity benefit and ESA appeal together, although the outcome had been different – the FTT had allowed the claimant’s incapacity benefit appeal, and had then disallowed the ESA appeal on the basis that the ESA claim had “become invalid as the Appellant was successful in his Incapacity Benefit/Credit appeal today”.  Judge May QC ruled that the FTT’s decision involved an error of law as (i) it was inherently contradictory, in that the FTT had both confirmed the Secretary of State’s decision on the ESA claim and had held the claim for ESA to be “invalid” (at paragraph 4); and (ii) it had wrongly assumed that the success of the incapacity benefit appeal necessarily invalidated the ESA claim (at paragraph 5).  Further, the Secretary of State’s representative argued, in a submission accepted by the claimant’s representative in that case, as follows:

 

“8. As far as Employment and Support Allowance (ESA) is concerned, where a person is entitled to Incapacity Benefit (IB), Severe Disablement Allowance (SDA) or Income Support (IS) on the grounds of disability, or who can make a linked claim for that benefit, that person is prevented from claiming ESA by regulation 3 of the Employment and Support Allowance (Transitional Provisions) Regulations 2008.

 

9. However, a person who has had their IB disallowed and is appealing against that decision is not prevented by reg 3 of the ESA (TP) Regs 2008, or by any provision of the Welfare Reform Act or the ESA Regulations 2008, from making a claim for ESA. If ESA is awarded before the IB appeal is heard, then there is no provision to prevent the payment of that award, whether it is contributory-based or income-related.”

 

22. I have, of course, considered the detailed arguments of the FTT judge in the present appeal to the contrary.  With respect, however, those arguments do not actually support the conclusion which the FTT arrived at.  Those arguments are for the most part a critique of the transitional provisions governing the changeover from incapacity benefits to ESA, and in particular how those regulations unintentionally created a situation where a claimant who failed the PCA, and could not show a new medical condition, or a deterioration in an existing complaint (so as to come within the exception to regulation 28(2)(b) of the 1995 Regulations), was not precluded from claiming ESA.

 

23. However, social security law is full of examples of the law of unintended consequences, and shortly after the FTT hearing in this appeal the Secretary of State brought forward amending regulations which in effect admitted that the original regulations had created an unintended loophole.  Regulation 30(2) of the Employment and Support Allowance Regulations 2008 (SI 2008/794) was amended by regulation 9(8) of the Social Security (Miscellaneous Amendments) (No. 3) Regulations 2010 (SI 2010/840) with effect from 28 June 2010.  These changes  prevented a claim for ESA, and the consequential payment of the assessment phase rate of that benefit, where, within the previous six months, there had been a disallowance of Incapacity Benefit following a PCA (unless, of course, there was clear evidence of a deterioration in a person’s medical condition or where a new condition arose).

 

24. I therefore agree with the submissions made by Mr Hampton on behalf of the Secretary of State.  In this case there was no existing award and also no potential for an existing award.  It followed that regulation 3 did not operate so as to convert the claimant’s ESA claim of 20 July 2009 into a claim for e.g. income support on the grounds of incapacity.  The claim of 20 July 2009 was a claim for ESA, pure and simple.  The FTT was wrong to hold otherwise and in particular erred in law in holding that the claim of 20 July 2009 was a claim for income support on the basis of incapacity which had to be remitted to the Secretary of State for decision.

 

25. Consideration of the decision of Judge May QC in CG v Secretary of State for Work and Pensions (ESA) [2011] UKUT 167 (AAC) demonstrates that there is a further problem with the FTT’s decision in the present case.  The claimant’s appeal was against the Secretary of State’s supersession decision dated 22 October 2009, withdrawing her entitlement to ESA.  The FTT did not actually decide that appeal at all – instead, it attacked the original decision by the Secretary of State to award ESA (the decision which it had correctly found to have been made on 20 July 2009), and yet that decision was not under appeal.  As such the FTT acted outside its jurisdiction.

 

26. I therefore conclude that the decision of the First-tier Tribunal involves an error of law.  I allow the appeal by the Secretary of State and set aside the decision of the tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)).  The case must be remitted for re-hearing by a new tribunal subject to the directions set out above (section 12(2)(b)(i)) and the guidance that follows. 

 

Directions and guidance for the new First-tier Tribunal

 

27. Although I am allowing the Secretary of State’s appeal, and setting aside the FTT’s decision, I should make it clear that I am making no finding, nor indeed expressing any view, on whether or not the claimant meets the conditions of entitlement to ESA.  That is obviously the issue which concerns the claimant on this appeal, rather than the technical issues discussed above, but that is a matter for the good judgement of the new tribunal.  That tribunal must review all the relevant evidence and make its own findings of fact. 

 

28. In more technical terms, the tribunal must satisfy itself as to whether or not the Secretary of State has established grounds for supersession of the existing award of ESA on the basis of regulation 6(2)(r) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (SI 1999/991), and, if so satisfied, to make a decision on the merits of the appeal. 

 

29. In doing so, the tribunal will, of course, have regard to section 12(8)(b) of the Social Security Act 1998.  This states that a tribunal “shall not take into account any circumstances not obtaining at the time when the decision appealed against was made” (emphasis added).  This means that the new tribunal will have to focus on the claimant’s circumstances as long ago as at 22 October 2009, the date of the Secretary of State’s original decision superseding her entitlement to ESA, and not the position as at the date of the new hearing. 

 

30. I accept, of course, that it is difficult to think back to the position over two years ago.  However, that is the requirement as laid down by statute.  If there has been no real change in the claimant’s condition over the intervening period, this may pose less of a difficulty both for the claimant in giving her evidence and for the new tribunal in assessing that evidence.

 

31. The tribunal should note that regulation 30(2)(c) of the Employment and Support Allowance Regulations 2008 (as inserted by regulation 9(8) of the Social Security (Miscellaneous Amendments) (No. 3) Regulations 2010; see paragraph 23 above) did not come into force until 28 June 2010.  The tribunal should also bear in mind the other Directions listed at the head of this Decision.

 

32. The claimant may also wish to seek advice and assistance from an organisation such as a Citizens Advice Bureau (CAB) or law centre in preparing his appeal.  They may be able to advise, for example, on how to get further medical evidence to support her case.  They may possibly also be able to help with advice for, or representation at, the hearing. 

 

Conclusion

 

33. The Secretary of State’s appeal is allowed.  The claimant’s appeal to the First-tier Tribunal will need to be re-heard by a different tribunal.

 

 

 

 

Signed on the original Nicholas Wikeley

on 12 October 2011 Judge of the Upper Tribunal