Upper Tribunal (Administrative Appeals Chamber)

 

IN THE UPPER TRIBUNAL Appeal Nos: CIB/3167/2011 and CIB/3172/2011

 

ADMINISTRATIVE APPEALS CHAMBER

 

Before: Upper Tribunal Judge Wright

 

 

 

DECISION

 

 

The Upper Tribunal disallows the appeals of the appellant.

 

The decisions of the First-tier Tribunal sitting at Cheltenham on 17.06.11 under references 189/10/00892 and 189/10/00893 did not involve any material errors on a point of law and are not set aside.

 

 

This decision is made under section 11 of the Tribunals Courts and Enforcement Act 2007

 

 

 

REASONS FOR DECISION

 

 

Introduction

 

 

1.                This appeal concerns whether a police injury benefit (to use, at this stage, a neutral phrase) payable to the appellant under regulation 11 of the Police (Injury Benefit) Regulations 2006 is a “pension payment” under section 30DD(5) of the Social Security Contributions and Benefits Act 1992  (“SSCBA”).

 

2.               The First-tier Tribunal below held that it was and thus fell to be taken into account in assessing the amount of incapacity benefit payable to the appellant. The effect of this (when taken with the other police awards paid to the appellant, which it is not disputed were pension payments under section 30DD of the SCCBA) was that incapacity benefit was not payable to the appellant from and including 15.07.07.  The reason for this was because 50% of the total of the appellant’s police pension payments (including the injury benefit) exceeded the £85 per week statutory threshold to such an extent that that excess was more than the incapacity benefit the appellant would otherwise have been entitled to. 

 

3.               None of these consequential matters are disputed. Moreover, the effect of the decision that incapacity benefit was not payable to the appellant for a past period from and including 15.07.07 led to a separate recoverable overpayment decision (hence the two Upper Tribunal appeal reference numbers). Again, however, the only basis on which that overpayment decision is challenged by the appellant is, in effect, that the police injury benefit did not fall to be taken into account in calculating the level of incapacity benefit payable. Put another way, the appellant accepted that if the First-tier Tribunal was correct on the police injury benefit being a pension payment then the overpayment decision was correct.  I therefore give no separate attention to the recoverable overpayment decision and say no more about it.

 

The Upper Tribunal’s Decision in Summary

 

4.               In summary, it is my view that the First-tier Tribunal was correct in holding the policy injury benefit to be a “pension payment” and was correct therefore to dismiss both of the appellant’s appeals, and I therefore also dismiss both of his further appeals to the Upper Tribunal. The plain effect of the statutory provisions governing the police injury award and the breadth of the definition “pension payment” under s.30DD of the SSCBA, compel, in my judgment, the conclusion that the police injury benefit is a “pension payment”.

 

Factual background

 

5.               These are two appeals by the claimant from decisions of the Cheltenham First-tier Tribunal (SEC) dated 17.06.11. I will refer to the claimant from now on as “the appellant” and the Cheltenham First-tier Tribunal that decided his appeals as “the tribunal”.

 

6.               The appellant had claimed and been awarded incapacity benefit from September 2006. He was then, sadly, medically retired from the police force on ill-health grounds in July 2007.  (None of the exact dates matter as they are not in dispute and do not affect the issue of principle this decision is concerned with).  The appellant then notified the Secretary of State for Work and Pensions in August 2007 of his receipt of an occupational pension on his retirement from the police service and he provided the First Respondent with details of the level of that pension, whereupon the level of the incapacity benefit payable to him was adjusted under the 50% of pension over £85 rule referred to above. It then came to light, in May 2009, that in addition to this pension the appellant was also in receipt of the police injury benefit - what the pension provider called (page 55 of CIB/3167/2011 bundle) an “injury pension” - and had been since July 2007.

 

7.               The total amount of these two payments was then taken into account by the Secretary of State as “pension payments” and that led to the two decisions appealed by the appellant to the tribunal.  His case was, and remains, that the police injury benefit was not a “pension payment” under section 30DD(5) of the SSCBA. He pointed to the fact that under the Police (Injury Benefit) Regulations 2006 payments of incapacity benefit had to be deducted from his police injury benefit before it was paid to him which, he argued, was at least odd if the amount of the injury benefit also affected the amount of incapacity benefit payable.

 

8.               As noted above, the tribunal was against the appellant on his argument and upheld the Secretary of State’s two decisions. The appellant was then granted permission to appeal against both of the tribunal’s decisions by District Tribunal Judge Walker on 28.09.11, who added:

 

“The appeal raises issues of principle as to the correct treatment of a Police Injury Pension for the purposes of calculating Incapacity Benefit and presumably Employment and Support Allowance. The documentation supplied indicates that there may be local variation in the approach adopted by local DWP office which is not satisfactory”

 

9.               Given the potential wider significance of the point arising on this appeal for police officers who had been required to take ill-health retirement, on 15 March 2012 the Gloucestershire Police Authority applied to the Upper Tribunal to be joined as a party to the appeal. That request was granted by Upper Tribunal Judge Turnbull on 1 May 2012, who also directed that there be an oral hearing of the appeal. That hearing took place before me in London on the 6^th of December 2012.  By then the functions of the Gloucestershire Police Authority had been taken over by the Police and Crime Commissioner for Gloucestershire (the “Commissioner”).  The appellant neither attended nor was represented at the hearing. However his interests were very well covered by the submissions of Mr De Bono of counsel, instructed by Mr Trott as Solicitor to the Gloucestershire Constabulary. The Secretary of State was represented by Mr Cooper, solicitor.  After the hearing I invited sequential written submissions from Mr De Bono and then Mr Cooper on the issue of whether delegated legislation could properly be used to inform the meaning of terms in an Act of Parliament and whether Lady Justice Arden’s minority, and obiter, view on this topic in Campbell –v- SSWP [2005] EWCA Civ 989 had been the subject of any later judicial comment. I am afraid that due to a mix up over receipt of these later submissions at the Upper Tribunal they took far longer than was either intended or needed to reach me, and that has added to the delay in the decision being issued.

 

 

 

 

 

The Statutory Schemes

 

Section 30DD Social Security Contribution and Benefits Act 1992

10.            Resolution of the issue arising on this appeal involves consideration of two different statutory schemes: the scheme governing incapacity benefit and the scheme governing police pensions.  However, the central and  critical  provision is section 30DD(5) of the SSCBA as that defines what a “pension payment” is and it is only those defined pension payments that are caught by the 50% of pension over £85 rule set out in the rest of section 30DD. What section 30DD(5) says is:-

“(5) In this section “pension payment” means–

(a) a periodical payment made in relation to a person under a personal pension scheme or, in connection with the coming to an end of an employment of his, under an occupational pension scheme or a public service pension scheme;

(b) a payment of any specified description, being a payment made under an insurance policy providing benefits in connection with physical or mental illness, disability, infirmity or defect; or

(c) a payment of any other specified description;

and “specified” means prescribed by or determined in accordance with regulations under this section”.

¹

 

11.             The central argument advanced in writing in support of the appellant’s case by Mr De Bono was that the police injury award (I use Mr De Bono’s neutral word “award” at this stage, though it will be necessary to identify the precise characteristics of this award in a moment) is not a “pension payment” as it was not made in connection with a coming to an end of the appellant’s employment.  Instead, so the argument went, it was made on the basis that the appellant was found to be permanently disabled as a result of an injury sustained whilst on duty. As will be seen, that binary approach does not stand up to scrutiny when the terms of the scheme governing the vires for the police injury award are considered. In addition, it was argued that Parliament had shown a clear intention when drafting the Police (Injury Benefit) Regulations 2006 that the police injury award was not a “pension payment”.  This was because those 2006 regulations proceeded on the basis that the police injury award was to be reduced by the amount of incapacity benefit awarded which made little or no sense if in fact the amount of incapacity benefit awarded was itself to first be reduced by an amount based on the amount of the police injury award.

 

12.            In the second written argument, provided before the hearing on 6.12.12, Mr De Bono placed considerable reliance on what he termed the wider significance of the issue. He said that the “normal practice” of the Department of Work and Pension had been not to reduce the incapacity benefit dependent on the amount of the police injury award but instead to reduce the police injury award based on the amount of the incapacity benefit payable. In support of this he prayed in aid: (a) advice given in respect of the police pension scheme that it was said supported his analysis, and (b) the view of an official in the Home Office to the effect that it did not regard a police “injury pension as an occupational pension as eligibility does not depend on a police officer contributing to one of the police pension schemes”.  

 

13.            Pausing at this point, I would merely make the following comments. First, and of most importance, it is the correct construction of the statutory scheme that ought to dictate the practice and advice given and not the other way around.  Second, advice that certain social security benefits are deductible from the police injury award is not necessarily inconsistent with one social security benefit being reduced by (part of the) police injury award. Third, the Home Office official’s view seems not to have been based on the (wider) definition of “pension payment” in section 30DD(5) SSCBA.

 

14.            It is time then to turn to the legislation governing police pensions and to identify more precisely what type of statutory creature the police injury award in fact is. 

 

 

 

Police Pensions Regulations 1987

 

15.            The award first relevantly appeared as a “policeman’s injury award” in regulation B4 of the Police Pensions Regulations 1987. This provides as follows:

 

“B4.—(1) This Regulation shall apply to a person who ceases or has ceased to be a member of a police force and is permanently disabled as a result of an injury received without his own default in the execution of his duty (in Part V of Schedule B referred to as the “relevant injury”).

(2) A person to whom this Regulation applies shall be entitled to a gratuity and, in addition, to an injury pension, in both cases calculated in accordance with Part V of Schedule B; but payment of an injury pension shall be subject to the provisions of paragraph 5 of the said Part V and, where the person concerned ceased to serve before becoming disabled, no payment shall be made on account of the pension in respect of any period before he became disabled”.

16.            Three points are immediately apparent from this regulation.

 

(a)   First, the obvious one that this award arises under regulations dealing with police pensions: so at first blush this might bring the payments made under the regulations within the definition of pension payment found in section 30DD(5) SSCBA.

(b)  Second, under the terms of regulation B4(1) the injury award only applies “to a person who ceases or has ceased to be a member of a police force and is permanently disabled as a result of an injury received without his own default in the execution of his duty” (underlining and italics both added for emphasis).  Two conditions are created here, the first that the person has ceased to be a member of the police force, the second that he is permanently disabled as a result of an injury caused by his working. This, it seems to me,  cuts quite fundamentally against Mr De Bono’s argument that the injury award was not made in connection with a coming to an end of the appellant’s employment: it can only arise if the employment has ended.

 

(c)   Third, by paragraph (2) of regulation B4 the person to whom the regulation applies “shall be entitled to a gratuity and, in addition, to an injury pension…” (underlining again added for emphasis). So on these 1987 regulations it seems clear that as a matter of terminology at least the injury award is a pension. Paragraph 2 in Part V of Schedule B to the Police Pensions Regulations 1987 then provides that the amount of  the injury pension shall be calculated by reference to the person’s degree of disablement, his average pensionable pay and his years of pensionable service.  It needs to be noted, however that under paragraph 4(1) in Part V of the same Schedule B provision is made for the amount of the injury pension to be reduced on account of any such additional benefit to which the person is entitled in respect of the same week, and by subparagraph (3)(c)(ii) of that paragraph 4 that additional benefit then included invalidity pension.

 

Police Pensions Act 1976

 

17.            The Police Pensions Regulations 1987 were made under the Police Pensions Act 1976.  Section 1 of that Act provides, relevantly, as follows:

“1 Police pensions regulations.

(1)Regulations to be made by the Secretary of State, with the consent of the Minister for the Civil Service and after consultation with the Police Council for the United Kingdom, shall make provision—

(a)as to the pensions which are to be paid to and in respect of members of police forces, whether as of right or otherwise;

(b)as to the contributions in respect of pension rights which are to be made by members of police forces; and

(c)as to the times at which and the circumstances in which members of police forces are or may be required to retire otherwise than on the ground of misconduct.

(2)Without prejudice to the generality of the provisions of subsection (1) above, any such regulations shall provide for the payment subject to the regulations—

(a)of pensions to and in respect of persons who cease to be members of a police force after having served for such period as may be prescribed by the regulations;

(b)of pensions to and in respect of persons who cease to be members of a police force after such shorter period as may be prescribed by the regulations by reason of infirmity of mind or body;

(c)of pensions to and in respect of persons who cease to be members of a police force by reason of injury received in the execution of their duty;

(d)of pensions to and in respect of persons who cease to be members of a police force on the ground of age; and

(e)of pensions in respect of persons who die while serving as members of police forces”.

 

 

A noticeable feature of section 1(2) of this Act is that, save for pensions payable on death in service, the pensions payable all arise on the person  ceasing to be member of the police force.  That it seems to me is a very powerful pointer to the injury award being a pension and being a pension payment within the terms of section 30DD(5) SSCBA.

Police (Injury Benefit) Regulations 2006

 

18.            The Police Pension Regulations 1987 were then amended by the Police (Injury Benefit) Regulations 2006. As the explanatory memorandum to these 2006 regulations sets out, the reason for these regulations was to provide for the system of police injury awards to be set out in a separate set of regulations.  The core vires for the Police (Injury Benefit) Regulations 2006 remains section 1 of the Police Pensions Act 1976.

 

19.            Regulation 11 of these 2006 regulations is titled Police officer’s injury award and, like regulation B4(1) of the Police Pensions Regulations 1987, applies to a “person who ceases or has ceased to be a member of the police force and is permanently disabled as a result of an injury received without his own default in the execution of his duty”. It is not disputed that the police injury award payment in issue on this appeal was made to the appellant under this regulation.  Again, it is of importance to note that the injury award can only arise if the person (here the appellant) has ceased to be a member of the police force. Consistent with this, Mr De Bono and his instructing solicitor confirmed to me that such an injury award could not be paid to a police officer who remained working for the police force (say on reduced duties).  In addition, regulation 11(2) of the Police (Injury Benefit) Regulations 2006 sets out that the injury award is made up of a gratuity and an injury pension.

 

20.           Taking stock at this point, it seems to me that the statutory scheme governing the police injury award that lies at the heart of this appeal provides very powerful pointers in favour of it being a pension payment within the meaning of section 30DD(5) SSCBA. The key pointers being: (i) it is a pension and, ignoring the gratuity, calls itself as such (“injury pension”); (ii) it arises under an Act that is concerned exclusively with police pensions; and (iii) it is a pension that can only arise (and indeed only has the power to arise under the parent Act) if the police officer ceases to be a member of the police force. In these circumstances it is, at least at first blush, difficult to see why the injury pension award is not a “periodical payment made in relation to a person …… in connection with the coming to an end of an employment of his… under an occupational pension scheme or a public service pension scheme”.

 

21.            I should add for the sake of completeness and because it is a central part of the argument made on behalf of the appellant, that the effect of paragraph 7(1) and (3)(c)(i) of Schedule 3 to the Police (Injury Benefit) Regulations 2006 is to reduce the amount of injury pension in respect of a week by the amount of incapacity benefit to which the person is entitled in respect of the same week. This is to the same effect as paragraph 4(1) in Part V of Schedule B to the Police Pensions Regulations 1987. 

 

The Arguments

 

22.           The Secretary of State, through Mr Cooper, adopts in shorter form  the powerful pointers I have referred to above and the takes the straightforward line that the injury pension award paid to the appellant was a “pension payment” under section 30DD(5) SSCBA as it (a) was a periodic payment, (b) of a pension, (c) made in connection with the coming to an end of the appellant’s employment with the police service.  He further argues, in response to an argument made by Mr De Bono for the Commissioner on behalf of the appellant, that the fact the pension may have been made in consequence of an injury to the appellant did not preclude it from also being made in connection with appellant’s employment ending. Further, he argued that it was legally impermissible to use delegated legislation in the form of paragraph 7(1) and (3)(c)(i) of Schedule 3 to the Police (Injury Benefit) Regulations 2006  as an aid to interpreting the words used in an entirely different Act of Parliament, namely section 30DD(5) SSCBA.

 

23.           I have already canvassed and commented on some of the arguments made by Mr De Bono, in effect, on behalf of the appellant. However, his key starting point was paragraph 7(1) and (3)(c)(i) of Schedule 3 to the Police (Injury Benefit) Regulations 2006. He argued that this provision had to be read as aiding the construction of the meaning of “pension payment” in s.30DD(5) SSCBA. This was because it was plain from the provision in the former that the draughtsperson, and thus the legislator, had proceeded on the basis that the police injury award was not a pension payment to be taken into account in calculating the level of incapacity benefit payable because paragraph 7 of Schedule 3 actually works the other way around and reduces the amount of the police injury award by the incapacity benefit entitlement. 

 

Discussion and Conclusion

 

24.           I accept that on the face of it section 30DD of the SSCBA and paragraph 7 of Schedule 3 to the Police (Injury Benefit) Regulations 2006 may fit oddly together. I also accept that the draughtsperson of the Police (Injury Benefit) Regulations 2006 and paragraph 4(1) in Part V of Schedule B to the Police Pensions Regulations 1987 seems to have assumed that there would be enough incapacity benefit left to deduct from the police injury award pension whereas the effect of section 30 DD(5) of the SSCBA 1992 (if it covers such a pension) makes that very unlikely. The argument that issues of priority may arise (that is, who reduces what first) is less convincing. It seems to me at least tolerably clear that the reduction in any police injury award pension under paragraph 7 of Schedule 3 to the Police (Injury Benefit) Regulations 2006 only arises after entitlement to incapacity benefit has been established under, inter alia, section 30DD of the SSCBA (though I accept that section 30DD is itself unclear on whether the reduction provided for in section 30DD(1) is part of the entitlement decision), and therefore the police injury award pension does not stand to be reduced before s.30DD of the SSCBA has applied.

 

25.           However, I do not consider that these arguments as to odd consequences, or the terms of the Police (Injury Benefit) Regulations 2006, can be used as an aid to construing the words used in section 30DD of the SSCBA, especially where, as here, those words are clear. I say this for a number of reasons.

 

26.           First, the issue for the social security decision making process is simply  whether the police injury award pension the appellant undoubtedly received was a “pension payment” within the meaning of that phrase in s.30DD(5) of the SSCBA.  That involves applying the words in that section to the payment in issue. The terms of the police pension statutory scheme may inform  whether it is  pension and one that falls within the s.30DD(5)(a) (and as I have indicated above those terms point strongly in favour of the award being such a pension), but it is another thing altogether to say they must act as an aid to construction of statutory words in ss.30DD(5) of the SSCBA.

 

27.            Second, as Hanlon –v Law Society [1981] AC 124 and Campbell –v- SSWP [2005] EWCA Civ 989 show, there are clear limits to whether delegated legislation can inform the meaning of words used in an Act of Parliament. I had intended in giving the parties the opportunity to make further submissions on Campbell, for them to look into whether matters had moved on jurisprudentially since Campbell , but regrettably neither party has taken this course.  However, taken at its highest, and ignoring the fact that Lady Justice Arden was in the minority on this issue and the discussion on this point was obiter in any event, the most that can be squeezed from Lady Justice Arden’s judgment in Campbell is that recourse may be had to delegated legislation as an aid to construing the meaning of words in an Act of Parliament where (a) the Act in question is the parent Act (i.e. the Act the regulations were made under), and (b) the words in issue in the Act are ambiguous.  Neither of these conditions applies here.  The Police Pensions Regulations 1987 and the Police (Injury Benefit) Regulations 2006 were not made under the Social Security Contributions and Benefits Act 1992. Further, for the reasons I will come to, the words used in s.30DD(5) are not ambiguous.

 

28.           Third, even if I was to ignore Hanlon and Campbell, there is nothing in the terms of paragraph 7 in Schedule 3 to the Police (Injury Benefit) Regulations 2006 that gives a clear aid to what is meant by the words in s.30DD(5) of the SSCBA, which is unsurprising given the said paragraph 7 is dealing with consequences and calculation and not meaning.   

 

29.           Fourth, and related to the last point, it seems to me likely that the draughtsperson of the Police (Injury Benefit) Regulations 2006 carried forward the reduction of the injury award by invalidity pension/incapacity benefit from the Police Pensions Regulations 1987 into the 2006 regulations without understanding the fundamental change that had been brought about to the incapacity benefit scheme by the insertion of section 30DD into the SSCBA from 6 April 2001 under the Welfare Reform and Pensions Act 1999.  That was the change that brought in the reduction in a persons “entitlement” to incapacity benefit if he was in receipt of certain pension payments. Prior to this change, however, there was no such reduction and therefore what was then paragraph 4(1) in Part V of Schedule B to the Police Pensions Regulations 1987 had plenty to bite on (in the sense that the full level of entitlement to invalidity pension/incapacity benefit would stand to be deducted from the police injury award pension).  But this statutory oversight (if it was such), which may now need to be remedied, cannot affect in my judgment what is meant the words in s.30DD(5) of the SSCBA.

 

30.           I therefore reject the argument that the terms of paragraph 7 of Schedule 3 to the Police (Injury Benefit) Regulations 2006 can inform what is meant by “pension payment” in s.30DD of the SSCBA. 

 

31.            That then leaves, and rightly leaves, the words of definition of “pension payment” in section 30DD(5) of the SSCBA  and whether they apply to the police injury award pension. I can see no good reason why they do not. The words themselves are, in my judgment, fairly straightforward and of quite wide application.  What the words require is first that there is “a periodical payment made in relation to a person”, which there was no dispute applies to the police injury award pension; and second, that those periodical payments are made “in connection with the coming to an end of an employment of [the person]”and “under a public service pension scheme”.  Again it was not disputed, nor could it rationally be disputed given the terms of the Police Pensions Act 1976 and s.1 of the Pensions Scheme Act 1993, that the police injury award pension was made under a public service pension scheme.  The issue then narrows to whether the injury award was made in connection with the coming to an end of the appellant’s employment with the police.

 

32.           On this last issue Mr De Bono argues, for the Commissioner and thereby in effect for the appellant, that what marks the injury award out is the fact that it was paid in consequence of any injury received in the course of the appellant’s duties. That, as I understood the argument went, gave the award/pension its essential characteristic and that defining characteristic was not found in s. 30DD(5) of the SSCBA.

 

33.           I do not accept this argument. I have no doubt that the injury award was due because the appellant had suffered an injury due to his work.  Indeed that much has to be the case as it is part of the statutory basis for the award arising under regulation 11(1) of the Police (Injury Benefit) Regulations 2006 – see its wording “and is permanently disabled as a result of an injury received …. In the execution of his duty”. However the underlined “and” makes it plain that another condition needs to be satisfied before the injury award can apply, namely that the “person ceased or has ceased to be a member of the police force”. These words are in my judgment plainly covered by the phrase “in connection with the coming to an end of an employment of his” in s.30dd(5) of the SSCBA. The reason why the employment  has ended matters not for the purposes of this part of the definition of “pension payment” in s.30DD(5) of the SSCBA: what is necessary is that the employment has ended and that the payment is made in connection with that event.  Here the appellant’s employment had ended and he was (only) paid the injury award on it ending.  That it seems to me counts as a payment under a public service pension scheme in connection with the coming to an end of an employment.

 

34.           I therefore agree with Mr Cooper when he argues that “[t]he fact that a payment was made ‘in consequence of’ one thing does not preclude the possibility that it was also paid or made ‘in connection with’ something else”. See also, to similar effect, the view of Mr Commissioner Jacobs (as he then was) in paragraph 11 of CIB/3019/2004.  

 

35.           The words “in connection with the coming to an end of an employment of his” are, in my judgment, the critical words. They act to limit the pension payments that may be taken into account under s.30DD of the SSCBA under occupational pension schemes and public service pension schemes to payments made in connection with the ending of employment and not any wider payments that may be made under such schemes which may still arise even where the employment has not ended.  By way of contrast any payment made under a personal pension scheme is caught by the rule in s.30DD(5) even those that have nothing to do with the ending of employment. That, to answer a point made by Mr De Bono, is why the in connection with the ending of employment words are in s.30DD(5) of the SSCBA. 

36.           It is for all of these reasons that I dismissed both of the appeals. Whether a legislative amendment is required and, if so, where it should be placed is not a matter for me but may be a matter which the respective Secretaries of State responsible for social security and police pensions may wish to consider.

37.            The Commissioner applied for his costs as second respondent. Even had the appeals been successful I would have had no power to award costs given the terms of rule 10 of the Tribunal Procedure (First–tier Tribunal) (Social Entitlement Chamber) Rules 2008 and rule 10(1)(b) of the Tribunal Procedure (Upper Tribunal) Rules 2008. 

 

 

 (Signed) S. M. Wright

Judge of the Upper Tribunal

 

Dated 6^th June 2013