Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Upper Tribunal (Administrative Appeals Chamber)
You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> TA v SSWP (Industrial injuries benefits : reduced earnings allowance) [2014] UKUT 127 (AAC) (20 March 2014)
URL: http://www.bailii.org/uk/cases/UKUT/AAC/2014/127.html
Cite as: [2014] UKUT 127 (AAC)
[New search] [Printable RTF version] [Help]
-
TA v SSWP (Industrial injuries benefits : reduced earnings allowance) [2014] UKUT 127 (AAC) (20 March 2014)
IN THE UPPER TRIBUNAL Appeal No: CI/402/2012
ADMINISTRATIVE APPEALS CHAMBER
Before: Upper Tribunal Judge Wright
DECISION
The Upper Tribunal dismisses the appeal of the appellant.
The decision of the First-tier Tribunal sitting at Leeds on 1 November 2011 under reference SC007/11/01186 did not involve a material error on a point of law. The decision of the tribunal stands.
This decision is given under section 11 of the Tribunals Courts and Enforcement Act 2007
REASONS FOR DECISION
Introduction
1. The issue with which this appeal is concerned is whether a person can be entitled to an award of reduced earnings allowance (“REA”) for a period falling after he has attained pensionable age and after he has given up regular employment in circumstances where he had another award of REA in place prior to those dates.
2. I had thought that the answer to this question may depend upon answering a wider and arguably more important question, namely whether a person may first be awarded REA for a period after he has attained pensionable age and has given up regular employment. However, for the reasons I give below, I have not felt it appropriate to seek to answer this second question.
3. The short answer to the first question raised above is “No”, and that is why the appellant’s appeal fails. However, to understand why that is so, and why the second question arises, it is necessary to navigate through the thicket of the industrial injuries benefit scheme as it has developed and as it now stands.
Relevant background - factual
4. There are three potential awards of REA that are in play. Throughout these proceedings I have termed these, to keep matters simpler, “REA1”, “REA2”, and “REA3”, and continue to do so in this decision. It is the claim for REA3 with which this appeal is concerned but it can only be properly understood in terms of this appeal by having a grasp of the REA1 and REA2 awards.
5. The appellant was born on 28 February 1944 and thus reached the age of 65 (his “pensionable age”) on 28 February 2009. He worked in the mining industry. It is not disputed that he last worked, and in the language of the legislation “gave up regular employment”, in 1993.
6. His first regular occupation in the mining industry, at least for the purposes of this appeal, was as a coal face worker. While working as a coal face worker he unfortunately suffered an industrial accident in April 1970. He made a successful claim for what was then called severe hardship allowance (“SHA”) which then became an award of REA. The award of SHA and then REA ran from 30 September 1970 to 28 February 2009. This is “REA1”. This award ended because the appellant had reached the age of 65.
7. The second award of REA (“REA2”) arose from a second industrial accident the appellant unfortunately suffered from at the beginning of January 1980. He was still then working in the mining industry but now his regular occupation was as a general development worker. This accident also led to an award of SHA/REA, which ran from 2 July 1980 to 28 February 2009. It too stopped because the appellant had reached the age of 65.
8. It is not disputed that the appellant was entitled to have two REA awards to reflect the different losses of earnings arising from his being unable to do two different jobs: per Secretary of State for Social Security -v- Hagan [2001] EWCA Civ 1452 (R(I)2/02).
9. As I have already said, the appellant reached his sixty fifth birthday - his pensionable age - on 28 February 2009. Because of this and because he had “given up regular employment” in 1993, the two awards of REA were “converted” over to one award of retirement allowance (“RA”) from 1 March 2009 under the provisions in paragraph 13 in Schedule 7 to the Social Security Contributions and Benefits Act 1992 (“SSCBA”). The validity of there only being one award of RA was confirmed by Upper Tribunal Judge Ward in TA-v- SSWP (II) [2010] UKUT 101 (AAC), a decision to which further reference is made below.
10. On 24 August 2010 the appellant then made a third claim for REA. This is what I have termed REA3. Given the history set out immediately above, it is apparent (and undisputed) that this claim was made both after the appellant had given up regular employment and after he had reached pensionable age. The claim was made on the basis that the appellant had suffered from prescribed disease PD A11 in Schedule 1 to the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985 (this prescribed disease commonly being referred to as “vibration white finger”) from 1 January 1974. The claim followed a First-tier Tribunal’s decision on 16 August 2010 which had decided that the appellant had been suffering from PD11 from 1 January 1974 and had assessed the resulting disablement at 6% for life from 6 April 1983 (page 4). In the REA claim form that the appellant then completed he made it clear that he wished to claim REA in respect of PD A11 only from 16 August 2010.
11. As is apparent from later correspondence made on behalf of the appellant, the choice of this 16 August 2010 claim date by the appellant was deliberate. In short this was because it was (and remains) accepted that if the award of REA3 was sought for any period prior to 28 February 2009 then it would offend against the rule to which Hagan is the exception, namely that two awards of REA cannot be made in respect of the same occupation (see R(I)2/56).
12. REA was refused on this claim by the Secretary of State on 15 November 2010. The reason for refusal was that both the 2 January 1980 industrial accident and the prescribed disease A11, with its date of onset of 1 January 1974, were attributable to the same regular occupation of general development worker (see page 23), and a second award of REA could not be payable in respect of the same occupation. That decision did not grapple with the appellant’s case that he was only seeking to claim REA from 16 August 2010 nor did the Secretary of State’s written appeal response on the appeal subsequently made by the appellant against this decision.
13. The appeal was heard by a First-tier Tribunal sitting at Leeds on 1 November 2011 (“the tribunal”). The tribunal upheld the Secretary of State’s decision that no award could be made for what I have termed REA3. The core of its reasoning appears in paragraphs 5-10 of its reasoning, in which it said:
“The date of 28.02.09 is significant not because the Appellant ceased to satisfy the conditions of entitlement to REA on that date but because the Appellant then attained the age of 65 and, by operation of the legal provisions in force at that date…the Appellant’s REA was replaced by [RA]….He contends that at the date of his claim for REA in respect of PD A11 he was receiving REA. This, however, is purely as a result of the fact the Appellant attained the age 65 on 28.02.09 and his entitlement to REA, in essence, continued but, as explained above, was replaced by [RA]….it is possible to have two awards of REA….[it was] contended that the Appellant was claiming REA from 24.08.10 but…the Appellant’s entitlement, rather than payability, would have arisen at a much earlier date…….[it was] also stated [on behalf of the Appellant] that there was no claim for the period of the original award (for the accident on 01/01/1980) as that expired when the Appellant attained the age of 65….[t]he Tribunal did not accept this argument. The award of REA for the accident did not expire on the Appellant’s 65th birthday. It simply became a different type of benefit, namely [RA]”.
14. The appellant then sought permission to appeal against the tribunal’s decision. His argument, in a nutshell, was that the tribunal had erred in law because his REA3 claim was for a period after REA2 had ended and so was not seeking an award of REA for the same period and the fact that he was over the age of 65 when he claimed REA3 was irrelevant.
15. Permission to appeal was granted by Upper Tribunal Judge Powell on 19 March 2012. He did so as he considered it was “appropriate to grant permission in order that the detailed and carefully presented legal submissions can be properly considered”. Judge Powell then passed the appeal to me for consideration and decision.
16. The Secretary of State initially supported the appeal to the Upper Tribunal, in submissions made on 21 June 2012, as he said he agreed with “the argument put forward in support of the appeal”. He submitted that the tribunal had erred in law in saying that the RA award perpetuated entitlement to REA as “[e]ntitlement to [RA] can only come about….on entitlement to [REA] ceasing”: per paragraphs 13(1) and (2) of Schedule 7 to the SSCBA 1992. Based on this error, he submitted that the Upper Tribunal should set aside the decision of the tribunal but, instead of remitting the matter to be re-decided by another First-tier Tribunal, re-decide the matter itself “to the effect that the claimant is not disentitled to [REA] on the grounds that he is in receipt of [REA] in respect of the regular occupation of general development worker”.
17. No substantive observations in reply were filed on behalf of the appellant. However, he did not consent to the Upper Tribunal giving a decision without reasons because, as those then acting for him put it, “[t]his is an important issue which may have implications for other cases in the future. The reasons of the Upper Tribunal Judge will provide helpful guidance to the 1st Tier Tribunal in future cases”.
18. However, I had some difficulties with the Secretary of State’s proposed resolution, difficulties that were highlighted in my considering the appellant’s request to give guidance to the First-tier Tribunal on how it ought to approach such cases. I sought to set out these difficulties in directions on the appeal dated 29 November 2012 where I said:
“I have some difficulties with the Secretary of State’s suggested wording of the decision to be made by the Upper Tribunal, difficulties which go beyond grammar or semantics. I am also unclear about the correct application of the relevant law in this area (that is, to claims for REA made after the age of 65 and when those claims then apply from). These areas need to be addressed by the Secretary of State (and then responded to by those who act for [the appellant] if necessary).
There is no dispute as far as I can see about the facts on this appeal. Accordingly, if it was to be accepted that the First-tier Tribunal had materially erred in law and its decision set aside, and if it was further to be accepted that there was no need to remit the appeal to another First-tier Tribunal for decision, then the Upper Tribunal should decide substantively the appeal from the 15.11.10 decision. That decision is that REA is not payable to [the appellant] from and including 24.08.10 in respect of PD A11. I struggle at present to understand how deciding the appeal in the manner suggested by the Secretary of State affords [the appellant] a positive outcome decision on his appeal against the 15.11.10 decision. All the Secretary of State’s wording tells [the appellant] is that he is not disentitled to REA: it does not tell him he is entitled or that REA is payable.
More fundamentally, on what legal basis would [the appellant] be entitled to REA or that benefit be payable to him from 16.08.10, that is after he had reached the age of 65? It is a necessary feature of [the appellant’s] argument that he does not want to claim REA3 for the period before he was 65 because he then had his REA2 award and another award of REA for that period would fall foul of R(I)2/56. That therefore leads him to argue that his claim for REA3 avoids these problems because it is for a period after he was 65. But do the statutory provisions enable an award of REA to be made, or for REA to be payable, after a person is aged 65?
The following considerations may point against this result.
(i) Under paragraph 13(1) and (2) of Schedule 7 to the SSCBA 1992 a person who was entitled to REA before age 65 shall cease to be entitled to it when he gives up regular employment. As far as I can tell this applies to [the appellant] as he gave up regular employment in 1993 (hence his REA1 and REA2 awards “converting” over to RA when he reached 65). It may be arguable that a claim for REA can be made for the first time after a person has reached age 65, be backdated to before the person was 65, and thus give rise to an award of REA before 65 and RA after age 65 is reached. But that is not what [the appellant] wants. He wants the REA3 to arise for the first time after he has given up regular employment and after he has reached 65. I struggle at the moment to see how this is possible. The legislative intent seems arguably to be that REA and RA cannot arise at the same time, but that is what [the appellant] is seeking, isn’t it?
(ii) Albeit in a slightly different context, Upper Tribunal Judge Ward said in paragraph 5 of TA -v- SSWP (II) [2010] UKUT 101 AAC that
“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)”.
Those words are not consistent with [the appellant’s] argument.
(iii) Lastly, the whole basis of assessing entitlement to REA is that the person is an “employed earner” (per paragraph 11(1) of Schedule 7 to the SSCBA) and because of the accident or prescribed disease he is incapable of carrying out his regular occupation (or a suitable equivalent), and that his earnings have consequently reduced. How can these rules apply to [the appellant] after he has ceased to be an employed earner and has reached pensionable age?”
19. In his submissions in reply to these directions the Secretary of State resiled from his previous support for the appeal. He agreed in principle with the appellant that two different awards for REA could be made even if in respect of the same occupation as long as they were for different periods, but he recognised that this agreement did not address the issue of entitlement to REA and RA in respect of the same regular occupation past pensionable age. In respect of this issue the Secretary of State argued that the case-law in relation to concurrent payments of REA for the same regular occupation could apply by analogy to concurrent payments of RA and REA. He argued that as “the underlying purpose of RA is to provide an appropriate amount of compensation to a person previously entitled to REA for the loss of the opportunity to accrue pension provision because of their reduced earnings capacity” there was no justification for regarding RA as wholly distinct from REA as it is a form of compensation of exactly the same character. He further argued that as paragraph 13(1)(c) in Schedule 7 to the SSCBA prevents entitlement to REA for those who have attained pensionable age, given up regular employment and who have become entitled to REA, a claimant who had lost entitlement to REA could not regain it. An oral hearing was sought.
20. In the arguments made on his behalf in reply the appellant first argued that the above submission did not address the main argument about him being entitled to claim REA after he had ceased to be an employed earner and had reached pensionable age. He further argued that such a step was permissible and that the provisions relating to REA set out in paragraphs 11 and 12 of Schedule 7 to the SSCBA imposed no age restriction on the making of a claim, and “the DWP currently makes awards of REA on such claims”. The appellant contended that entitlement to RA can only come about upon entitlement to REA ceasing and that RA was a separate and distinct benefit from REA.
21. The crux of his argument in reply was that the provisions in respect of RA as set out in paragraph 13 of Schedule 7 to the SSCBA relate “only to the cessation of an award of [REA] to which the Claimant was entitled immediately prior to attaining pensionable age and giving up regular employment. It does not in our view apply to new claims for [REA] made after the Claimant achieves pensionable age and, with respect, cannot do so since paragraph 14(4) [should read 13(4)] provides that the weekly rate of [RA] shall be directly linked to the award of REA which the claimant was receiving prior to pensionable age”.
22. Given the difficult issues raised by the appeal I granted the Secretary of State’s request for a hearing of the appeal. The appellant attended the hearing and was represented by Mr Eyre of Raleys Solicitors. Mr Robin Hopkins of counsel represented the Secretary of State. I am grateful to both advocates for the submissions, both oral and written, they have made to me, including the further written submissions they provided after the hearing (at my instigation). I apologise to the parties for the time it has since taken me to come to my decision. However, the issues involved have not been easy to separate out, the legislation is not as clearly worded as it might have been expected to be, and in consequence I have not found the issues easy to determine.
Relevant background - law
23. Entitlement to REA and RA is conferred under sections 94 and 108 of the SSCBA: section 94 deals with entitlement arising from personal injuries caused by industrial accident; section 108 deals with entitlement arsing by way of prescribed disease or prescribed injury (not caused by industrial accident). They provide, so far as is material, as follows:
“94.-(1) Industrial injuries benefits shall be payable where an employed earner suffers personal injury caused by accident arising out of and in the course of his employment, being employed earner’s employment.
(2) Industrial injuries benefit consists of the following benefits-
(a) a disablement benefit payable in accordance with sections 103 to 105 below, paragraphs 2 and 3 of Schedule 7 below and Parts II and III of that Schedule;
(b) reduced earnings allowance payable in accordance with Part IV;
(c) retirement allowance payable in accordance with Part V; and
(d) industrial death benefit, payable in accordance with Part VI.”
“108.-(1) Industrial injuries benefits shall, in respect of a person who has been employed in employed earner’s employment, be payable in accordance with this section and sections 109 and 110 below in respect of -
(a) any prescribed disease, or
(b) any prescribed personal injury (other than an injury caused by accident arising out of and in the course of his employment),
which is a disease or injury due to the nature of that employment….” .
The general effect of section 109(1) of the SSCBA is that REA and RA may be payable in respect of prescribed diseases on the same basis as for personal injuries arising by way of industrial accident under section 94.
24. The detail of the statutory scheme relating to REA and RA is found in Schedule 7 to the SSCBA 1992, and, so far as is relevant, is as follows:
“Part IV - Reduced earnings allowance
11(1) Subject to the provisions of this paragraph, an employed earner shall be entitled to reduced earnings allowance if-
(a) he is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assessed at not less than 1 per cent.; and
(b) as a result of the relevant loss of faculty, he is either-
(i) incapable, and likely to remain permanently incapable, of following his regular occupation; and
(ii) incapable of following employment of an equivalent standard which is suitable in his case,
or is, and has at all times since the end of the period of 90 days referred to in section 103(6) above been, incapable of following that occupation or any such employment;…
(4) The Secretary of State may by regulations provide that in prescribed circumstances employed earner’s employment in which a claimant was engaged when the relevant accident took place but which was not his regular occupation is to be treated as if it had been his regular occupation.
(6) For the purposes of this Part of this Schedule a person’s regular occupation is to be treated as extending to and including employment in the capacities to which the persons in that occupation (or a class or description of them to which he belonged at the time of the relevant accident) are in the normal course advanced, and to which, if he had continued to follow that occupation without having suffered the relevant loss of faculty, he would have had at least the normal prospects of advancement; and so long as he is, as a result of the relevant loss of faculty, deprived in whole or in part of those prospects, he is to be treated as incapable of following that occupation.
(8)Reduced earnings allowance shall be awarded-
(a) for such period as may be determined at the time of the award; and
(b) if at the end of that period the beneficiary submits a fresh claim for the allowance, for such further period……as may be determined.
(10)Reduced earnings allowance shall be payable at a rate determined by reference to the beneficiary’s probable standard of remuneration during the period for which it is granted in any employed earner’s employments which are suitable in his case and which he is likely to be capable of following as compared with that in the relevant occupation, but in no case at a rate higher than 40 per cent. of the maximum rate of a disablement pension or at a rate such that the aggregate of disablement pension (not including increases in disablement pension under any provision of this Act) and reduced earnings allowance awarded to the beneficiary exceeds 140 per cent of the maximum rate of a disablement pension.
(11) Sub-paragraph (10) above shall have effect in the case of a person who retired from regular employment before 6th April 1987 with the substitution for “140 per cent.” of “100 per cent.”
(12) In sub-paragraph (10) above “the relevant occupation” means-
(a) in relation to a person who is entitled to reduced earnings allowance by virtue of regulations under sub-paragraph (4) above, the occupation in which he was engaged when the relevant accident took place; and
(b) in relation to any other person who is entitled to reduced earnings allowance, his regular occupation within the meaning of sub-paragraph (1) above.
(12A) The reference in sub-paragraph (11) above to a person who has retired from regular employment includes a reference -
(a) to a person who under subsection (3) of section 27 of the 1975 Act was treated for the purposes of that Act as having retired from regular employment; and
(b) to a person who under subsection (5) of that section was deemed for these purposes to have retired from it……
Supplementary
12(1) A person who on 10th April 1988 or 9th April 1989 satisfies the conditions-
(a) that he has attained pensionable age;
(b) that he has retired from regular employment; and
(c) that he is entitled to reduced earnings allowance,
shall be entitled to that allowance for life……
(7) The reference in sub-paragraph (1) above to a person who has retired from regular employment includes a reference -
(a) to a person who under subsection (3) of section 27 of the 1975 Act was treated for the purposes of that Act as having retired from regular employment; and
(b) to a person who under subsection (5) of that section was deemed for these purposes to have retired from it.
Part V - Retirement allowance
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) For the purpose of determining under sub-paragraph (4) above the weekly rate of retirement allowance in the case of a beneficiary who-
(a)retires or is deemed to have retired on 10th April 1989, and
(b) on 9th April 1989 was entitled to reduced earnings allowance at a rate which was restricted under paragraph 11(10) above by reference to 40 per cent of the maximum rate of disablement pension,
it shall be assumed that the weekly rate of reduced earnings allowance to which he was entitled on 9th April 1989 was £26.96…..
(8) Regulations may-
(a) make provision with respect to the meaning of “regular employment” for the purposes of this paragraph; and
(b) prescribe circumstances in which, and periods for which, a person is or is not to be regarded for those purposes as having given up such employment.
(9) Regulations under sub-paragraph (8) above may, in particular-
(a) provide for a person to be regarded-
(i) as having given up regular employment, notwithstanding that he is or intends to be an earner; or
(ii) as not having given up regular employment, notwithstanding that he has or may have one or more days of interruption of employment; and
(b) prescribe circumstances in which a person is or is not to be regarded as having given up regular employment by reference to-
(i) the level or frequency of his earnings during a prescribed period; or
(ii) the number of hours for which he works during a prescribed period calculated in a prescribed manner…..”
25. The predecessor to REA was called special hardship allowance (“SHA”). It was not, however, a separate benefit but rather was an increase in the weekly rate of what was called “disablement pension”. Disablement pension was the disablement benefit payable to an “insured person” in cases where the extent of disablement arising from the loss of physical or mental faculty as a result of industrial injury was assessed at 20% or more: see sections 1(1), 7(1), and 12(1) and (7) of the National Insurance (Industrial Injuries) Act 1946 (“the 1946 Act”). Section 14 of that Act dealt with SHA[1] and provided, relevantly, as follows:
“14.-(1) The weekly rate of disablement pension shall, subject to the following provision of this section, be increased by an amount not exceeding [a fixed sum] if as a result of the relevant loss of faculty the beneficiary-
(a) is incapable and likely to remain permanently incapable of following his regular occupation; and
(b) is incapable of following employment of an equivalent standard which is suitable in his case;
or if as a result of the relevant loss of faculty the beneficiary has at all times since the end of the injury benefit period been incapable of following the said occupation or any such employment as aforesaid…
(4) …an increase of pension under this section shall be payable for such period as may be determined at the time it is granted, but may be renewed from time to time, and the amount of the increase shall be determined by reference to the beneficiary’s probable standard of remuneration during the period for which it is granted in the insurable employments, if any, which are suitable in his case and which he is likely to be capable of following as compared with that in his regular occupation (within the meaning of subsection (1) of this section).”
Prior to its amendment by the National Insurance (Industrial Injuries) Amendment Act 1948 (which took effect before the 1946 Act came into effect), the wording in section 14(1) provided for the increase to be by one fixed sum and no comparison was provided for in subsection (4), between the pre-accident “regular occupation” and any (new) suitable employments the insured person was capable of still doing, so as to determine the amount of the increase. That comparative test is now provided for in sub-paragraph (10) of paragraph 11 in Schedule 7 to the SSCBA as supplemented by the Social Security (Industrial Injuries) (Reduced Earnings Allowance and Transitional) Regulations 1987 (“the 1987 Regulations”).
26. It is of note that entitlement to any of the industrial injuries benefits under the National Insurance (Industrial Injuries) Act 1946 arose in respect of the “insured person”, whereas under the SSCBA the phrase used is “employed earner”. I shall return to the phrase “employed earner” further below.
27. By section 1(1) of the Act “all persons employed in insurable employment shall be insured in manner provided by this Act against personal injury caused on or after the appointed day by accident arising out of and in the course of such employment”. The source of the funding for these new post WWII industrial injury benefits was contributions paid by both the employer and the employee (s.2 of the National Insurance (Industrial Injuries) Act 1946); the latter’s contributions usually being paid by the former (s.3(1)).
28. SHA continued under section 14 of the National Insurance (Industrial Injuries) Act 1948 and then under section 60 of the Social Security Act 1975 (“SSA 1975”). Up until 11 April 1989 there was, however, no equivalent to RA in the industrial injuries schemes. With effect from 1 October 1986 REA replaced SHA by virtue of the repeal of section 60 of the SSA 1975 and the insertion of section 59A in that Act under paragraph 5(1) of Schedule 3 to the Social Security Act 1986. Subsequently, under section 2(1) of the Social Security Act 1988, section 59B was inserted into the SSA 1975, which introduced RA as a new benefit.
29. Although the tests for entitlement to REA and RA under sections 59A and 59B of the SSA 1975 are broadly similar to those that now appear in Schedule 7 the SSBA, two differences in the wording of section 59B need mentioning.
(i) First, as originally enacted, the wording under section 59B(1)(b) was “retires, or is deemed under 27(5) above to have retired, from regular employment” but this was amended under the Social Security Act 1989 to become “gives up regular employment”.
(ii) Second, as originally enacted, and even after the amendments under the Social Security Act 1989, it was possible under the closing words of section 59B(1), the opening words of section 59B(3) and the wording of section 59B(4), for a claimant to become entitled to REA again, and entitlement to RA cease, if the claimant (under the originally enacted version of s.59B) elected under section 30(3) of the SSA 1975 to cancel his retirement or (under the version as amended by the Social Security Act 1989) returned to regular employment.
30. It also is worth noting the terms of section 2(4)-(9) of the Social Security Act 1988. These provided as follows:
“(4) A person who-
(a) on 10th April 1988; or
(b) on the day before subsection (1) above comes into force,
satisfies the conditions-
(i) that he has attained pensionable age;
(ii) that he has retired from regular employment; and
(iii) that he is entitled to reduced earnings allowance,
shall be entitled to that allowance for life.
(5) In the case of any beneficiary who is entitled to reduced earnings allowance by virtue of subsection (4) above, the allowance shall be payable………at the weekly rate at which it was payable to the beneficiary on the relevant date or would have been payable to him on that date but for any such enactment or regulations.
(6) For a beneficiary who is entitled to reduced earnings allowance by virtue of subsection (4)(a) above the relevant date is 10th April 1988.
(7) For a beneficiary who is entitled to it by virtue of subsection (4)(b) above the relevant date is the day before subsection (1) above came into force.
(8) After subsection (1) above comes into force no person over pensionable age and retired from regular employment shall be entitled to reduced earnings allowance otherwise than under subsection (4) above.
(9) References in subsections (3), (4) and (8) above to a person who has retired from regular employment include references-
(a) to a person who under subsection (3) of section 27 of the Social Security Act 1975 is treated for the purposes of that Act as having retired from regular employment; and
(b) to a person who under subsection (5) of that section is deemed for those purposes to have retired from it.”
31. Subsection (1) of section 2 of the Social Security Act 1988 (the RA provision) was brought into force on 10 April 1989. Accordingly, the effect of section 2(4)-(9) of the Social Security Act 1988 was:
(i) that a person who had attained pensionable age, had retired from regular employment, and who was entitled to REA either on 10 April 1988 or 9 April 1989, had his entitlement to REA preserved for life (section 2(4));
(ii) that entitlement to REA was frozen to the rate that was payable on 10 April 1988 or 9 April 1989 (section 2(5)-(7)); and
(iii) to prevent entitlement to REA arising in respect of anyone who attains pensionable age and retires from regular employment on or after 10 April 1989 (section 2(8)).
The provisions of subsections (4) to (7) are now mirrored in paragraph 12 in Schedule 7 to the SSCBA. Section 2(8) was itself amended by paragraph 8(7) of Schedule 1 to the Social Security Act 1989 so as to allow entitlement to REA to continue for people over pensionable age who were still in regular employment. Section 3(8) of the Social Security Act 1990 (to which I return immediately below) then provided for the repeal of section 2(8) of the Social Security Act 1988, but in any event the whole of section 2 of the Social Security Act 1988 was repealed on the coming into force of the SSCBA by virtue of section 3 and Schedule 1 to the Social Security (Consequential Provisions) Act 1992.
32. The final piece of the legislative jigsaw is section 3 of the Social Security Act 1990, the main effect of which by section 3(1) was to abolish entitlement to REA in respect of a loss of faculty resulting from an accident (or prescribed disease) occurring on or after 1 October 1990. It also provided that where a person who was entitled to REA immediately before 1 October 1990 and who lost that entitlement for at least one day could not again become entitled to REA based on the same accident (or disease).
33. Section 3(5) of the Social Security Act 1990 also made amendments to the RA provisions in section 59B of the SSA 1995, the effect of which was to prevent a person entitled to RA from becoming entitled again to REA (and losing his entitlement to RA) if he returned to regular employment. Prior to these amendments, section 59B of the SSA 1975 had provided, so far as is relevant, that:
“59B.-(1) Subject to the provisions of this Part of this Act, person who-
(a) has attained pensionable age; and
(b) gives up regular employment on or after the date on which this section comes into force; and
(c) was entitled to reduced earnings allowance (by virtue either of one award or 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 and may become entitled to it again only if he returns to regular employment.
(3) Unless he returns to regular employment, retirement allowance shall be payable to him…for life.
(4) If he returns to regular employment, his entitlement to retirement allowance shall cease on the day on which he does so; but he may again become entitled to reduced earnings allowance or, if he again gives up regular employment, to retirement allowance.”
I have inserted the underlining to indicate what was removed by the section 3(5) of the Social Security Act 1990.
34. Pausing at this point, it seems tolerably clear that the direction of travel the legislature was seeking to take under its amendments to the industrial injuries schemes under section 2 of the Social Security Act 1988 and section 3(5) of the Social Security Act 1990 was for there to be a sharp edged distinction between entitlement to REA and RA, with neither overlapping and with entitlement to REA being lost, or not arising, for the period after the claimant had reached pensionable age and had given up regular employment. That, or course, is the accepted position in respect of REA1 and REA2 here; the issue is whether the same applies to REA3 or whether it has to be treated differently.
35. Returning however to SHA, the position of those who had retired from employment gave rise to difficulty. There was, it as to be remembered, no equivalent of RA then. Put broadly the difficulty was on what basis could the comparison required by section 14(4) of the National Insurance (Industrial Injuries) Amendment Act 1946 (as amended by the 1948 Act) be made once the claimant had ceased to have any employment on retirement? This was the issue R(I)14/62 sought to address.
36. In R(I)14/62 - decided by a Tribunal of Commissioners - the claimant had been compulsorily retired from employment at the age of 65. When employed he had first been a coal miner (packer), in the course of which employment he suffered an industrial accident to his right knee from which disablement resulted. He was unable to return to his old job as a packer and so he became a conveyor belt attendant instead. He was awarded SHA. The question that arose was whether that could continue or had to end on his compulsory retirement.
37. The Commissioners concern was not with the standard of remuneration payable in the suitable employments the claimant may have been capable of following post accident (even though he had retired) but whether a comparison could be made with “that in his regular occupation” pre-accident when he would by all accounts have retired from that occupation. The Commissioners found that the SHA was still payable despite the retirement as it had to be assumed for the purposes of the comparison under section 14(4) that the claimant was still following his regular occupation notwithstanding his retirement from all work. The test under section 14(4) “as compared with that in his regular occupation” simply meant if he had continued to follow that employment; and seen from that construction his retirement was an irrelevant fact. As the Commissioners put it (in paragraph [21]):
“In assessing the beneficiary’s probable standard or remuneration under section 14(4) it must be assumed …. that the claimant is following his regular occupation, and therefore the fact that (since the accident) he has retired or by the relevant time would have retired or has become too old to work or incapable owing to some supervening unconnected cause are all irrelevant to the calculation.”
Preliminary observations
38. Notwithstanding R(I)14/62, and considering this appeal in the context of a statutory scheme where a separate allowance (RA) is now made for those over pensionable age who have given up regular employment, I have been troubled by at least two features of the REA and RA statutory schemes as they now stand: (i) how can a person who is no longer an “employed earner” (i.e. that is someone who has retired from employment) continue to be entitled to REA, and (ii) relatedly, if a person has retired (i.e. he is no longer earning) on what basis is the reduced earnings allowance to be calculated?
39. I note that in paragraph [24] of R(I)2/99 Mr Commissioner Howell (as he then was), commented, when discussing section 2(4) of the Social Security Act 1998:
“a defined class of existing recipients of reduced earnings allowance already past retirement was given a preserved right to continue getting it, though frozen at the existing weekly rates. A practice had apparently grown up of making continued or repeating awards of the allowance even after the recipients had started drawing retirement pension, and thus beyond the point where the earnings comparison required by the provisions cited in paras. 9-12 above might at first sight have been thought to yield a nil result. This practice had been given approval by a tribunal of Commissioners in decision R(I) 14/62, albeit with some hesitation and without having heard any contrary argument.”
And then further commented (in paragraph 39]:
“Whether repeated fixed period awards of reduced earnings allowance should ever have continued to be made to people well past pensionable age, despite the terms of s. 59A(8) SSA 1975 and paragraph 11(10) of Schedule 7 SSCBA 1992 which link the benefit to likely earnings apart from the accident, seems to me open to much more doubt.”
40. I shall return to these issues below once I have summarised the submissions of the parties.
The parties’ submissions
Appellant
41. It was argued on behalf of the appellant first that had he not been awarded REA2 he would qualify for REA3 based on the reduced earnings capacity caused to him by having contracted PD11. It was emphasised that paragraph 11 of Schedule 7 to the SSCBA placed no restriction on when the claim for REA was to be made, and it was said that the respondent did make awards of REA on such claims. It was further argued that the fact he was in receipt of RA and was over the age of 65 was no obstacle to his being entitled to REA3 for the period after he was aged 65. And it was emphasised that the prohibition on getting two awards of REA arising out of the same regular occupation did not apply as REA3 was for a different period to REA2.
42. The appellant’s key argument was that the provisions of paragraph 13(1)(c) in Schedule 7 to the SSCBA - “was entitled to [REA] (by virtue either of one award or a number of awards) on the day immediately before he gave up such employment” - did not apply as those words only apply to the cessation of an award of REA to which a claimant was as a matter of fact entitled immediately prior to attaining pensionable age and giving up regular employment. It therefore did not apply to new claims for REA made after the claimant had attained pensionable age and this, it was argued, was reinforced by the fact that under paragraph 13(4) in Schedule 7 to the SSCBA the weekly rate of RA was to be directly linked to the award of RA the claimant was receiving prior to pensionable age.
43. As for the questions of “employed earner” and “entitlement” - raised by me at the hearing - the appellant agreed with the Secretary of State’s submissions.
Secretary of State
44. The Secretary of State’s argument was that there was no entitlement to REA3. This was for two reasons.
45. First, the incapacity in respect of which the REA3 claim was made was not “as a result of the relevant loss of faculty” under paragraph 11(1)(b) in Schedule 7 to the SSCBA arising from the appellant having prescribed disease PD11, but rather was as a result of the (second) industrial injury for which he had already been and continued to be compensated. The causal condition provided for in paragraph 11(1)(b), it was argued, could not therefore be satisfied in respect of REA3 without providing the appellant with concurrent double compensation.
46. The Secretary of State was keen to stress that this approach was not to deny that the prescribed disease had led to a loss of faculty which, if viewed in isolation, would have affected the appellant’s capacity to follow his regular occupation. However, he argued that the effects of the prescribed disease could not be viewed in isolation because the conditions under paragraph 11(1) in Schedule 7 to the SSCBA were already satisfied with respect to that occupation by REA2. To this point this argument seems to me to amount to no more than a reiteration of the argument, accepted by the appellant following R(I)2/56, that two awards of REA could not arise for the same period in respect of the same regular occupation. However, the additional step in the argument made by the Secretary of State here was that the appellant continues to be compensated for the consequences of the second industrial accident by the RA award and so ought not to be compensated again by the award of REA3. An important part of this argument was the Secretary of State’s view that whilst REA and RA are formally distinct benefits they are not substantively distinct or free-standing and, in substantial terms, are “different phases in the life cycle of the same benefit”. The argument is encapsulated in paragraphs 21 and 22 of his first skeleton argument.
“[The appellant] was compensated for the consequences of the injury of 2 January 1980 during the “working life” stage of the “life cycle” referred to above. Had he tried to claim REA 3 while he was in receipt of REA 2, such a claim would rightly have been refused: he would otherwise have received concurrent compensation in respect of the same occupation, i.e. he would have received double compensation.
[The appellant] continues to be compensated for the same impact, i.e. an incapacity for carrying out the same regular occupation of general development worker. That compensation now (i.e. since his attainment of pensionable age) takes the form of RA rather than REA, but it is still compensation for the same impact and in relation to the same occupation. That compensation now focuses on the pension shortfall rather than the earnings shortfall - but it remains in place as compensation for the ongoing loss of faculty and capacity occasioned by the injury of 2 January 1980.”
47. The second argument was that the terms of paragraph 13(1)(c) in Schedule 7 to the SCCBA meant that no entitlement to REA could arise on REA3 because the appellant was entitled to REA on the day immediately before he gave up regular employment in 1993 (that being REA1 and REA2), and the closing words of paragraph 13(1) - “shall cease to be entitled to [REA] as from the day on which he gives up regular employment” - therefore applied to defeat REA3 as those words meant ceasing to be entitled to any and all REA.
48. The Secretary of State in his second skeleton argument, filed after the hearing, addressed two issues I had raised at the hearing.
49. The first issue was what was meant by “employed earner” in paragraph 11 of Schedule 7 to the SSCBA in a context where by the time of his third claim for REA the appellant on the face of it had cessed to be an employed earner (having given up regular employment and reached pensionable age).
50. Similarly, I had asked why, setting the other arguments to one side for the moment, if the appellant had made a claim for REA3 and could meet the conditions of paragraph 11 of Schedule 7 to the SSCBA in respect of prescribed disease A11 for the period up to the date he reached pensionable age, he was not then “entitled” to REA before pensionable age and so would have been caught by the “was entitled to [REA] on the day immediately before he gave up such employment” wording of paragraph 13(1)(c) in Schedule 7 to the SSCBA?
51. On the issue of “employed earner” the Secretary of State argued that the phrase “an employed earner shall be entitled to [REA]” in paragraph 11(1) of Schedule 7 to the SSCBA meant a person who is or was an employed earner. Relying on the decision of Mr Justice Lightman in RCI (Europe) Ltd -v- Wood (Inspector of Taxes) [2003] EWHC 3129 (Ch), he argued that the above wording included a person who was an employed earner at the time of the industrial injury or contraction of the prescribed disease and resultant loss of faculty.
52. On the issue of whether the appellant would have been entitled to REA3 (setting REA 1 and REA2 to one side for the sake of the argument) on the day immediately before he gave up regular employment, the Secretary of State argued he would not. This, he argued, was because “entitled” in the context of paragraph 13(1)(c) required both that the eligibility conditions were met and that a claim for REA had been made before the relevant date. He relied in this respect on the obiter remarks made by Lord Justice Schiemann on behalf of the Court of Appeal at paragraphs [47] and [48] in SSWP -v- Whalley [2003] EWCA Civ 166; R(I)2/03, that:
“47. “Entitlement” in the social security field has had a specific meaning since the predecessor to section 1 of the SSAA 1992 was introduced as section 165A of the 1975 Act in 1985 (to reverse the effect of the House of Lords decision in Insurance Officer v. McCaffrey [1984] 1 WLR 1353). By virtue of that provision, no person shall be entitled to any benefit unless in addition to any other conditions relating to that benefit being satisfied, he makes a claim for it.
48. Parliament, submitted Mr Forsdick, would have been aware of this requirement underpinning “entitlement” (introduced in 1985) in enacting in 1986 the REA provisions. “Entitled” in paragraph 11(1)(a) of the 7th Schedule to the SSCBA 1992 (cited in paragraph 26 above) therefore must mean satisfying the conditions for DB and making a claim for it. It is clear that in order to be entitled to REA, one must establish that the only thing stopping one receiving DB is an assessment of disability of less than 14%. If Parliament had wished to do so it could have inserted a provision in Schedule 7 that entitlement to REA could be established by a Schedule 6 assessment for the purposes of REA rather than for the purposes of DB. It did not do so.”
Analysis and conclusions
53. I start with the two matters I raised at the hearing.
“Employed earner”
54. I accept the submissions of the Secretary of State on this issue, which were agreed with by the appellant.
55. It is important to note that the main provision conferring entitlement to industrial injuries benefits - section 94 of the SSCBA - locates the importance of the “employed earner” at the point at which the personal injury is caused by the accident at work and not the period for which the benefits are claimed. Moreover, the phrase is being used to draw a distinction between an “employed earner” and a “self-employed earner” (see, further, section 2(1) of the SSCBA); the latter not qualifying for industrial injuries benefits. The wording of section 108 of the SSCBA arguably strengthens this perspective, referring as it does to industrial injuries benefits being payable in respect of prescribed disease or injuries “in respect of a person who has been in employed earner’s employment” (my underlining added for emphasis). I therefore respectfully concur with Mr Justice Lightman’s view in RCI, when considering section 2(1) of the SSCBA (albeit in a different context to the REA and RA rules), that it is a “definition section with no specific temporal requirements” and that it is concerned with the status of the person concerned (here, the employment status of the claimant for industrial injuries benefits).
56. This reading of “employed earner” also makes sense when considered against the statutory predecessor to REA, SHA, where under sections 12 and 14 of the National Insurance (Industrial Injuries Act) 1946 the relevant test was whether the claimant was an “insured person”. That was a form of status that, in my judgment, plainly encompassed the person who was no longer employed but who had been insured in the past when he was employed. Indeed section 13 of the 1946 Act would make little sense otherwise, conferring as it did an additional entitlement on account of unemployability on someone who, as a result of the relevant loss of faculty arising from the industrial injury, was likely to remain permanently incapable or work.
57. Accordingly, I accept that the phrase “employed earner” in paragraph 11(1) of Schedule 7 to the SSCBA did not act to exclude the appellant from entitlement to REA3. That, however, does not remove the more difficult question of whether the appellant could qualify for REA for the period after he had reached pensionable age and had given up regular employment.
“Entitled”
58. I am less certain about the Secretary of State’s answer to whether, all other matters standing in the appellant’s favour and ignoring REA1 and REA2, a successful late claim for REA would not be caught by the wording of paragraph 13(1)(c) in Schedule 7 to the SCCBA. However given I consider that paragraph 13(1)(c) does act to exclude entitlement to REA3 arising because of REA2, and given therefore anything I said on this would be obiter, I will only dwell on this issue for a little longer.
59. The issue arose because at the oral hearing I asked what the position would be if REA3 had in fact been the appellant’s first claim for REA. I raised the questions:
(i) whether a person who is over pensionable age and having given up regular employment can make a successful late or “backdated” claim for REA for the period before he had attained pensionable age or had given up regular employment, and,
(ii) if he can, would the backdated award of REA not then end from the date he had reached pensionable age and had given regular employment?
At least intuitively it seemed to me that any successful backdated award
of REA (if such could be made) might end under the terms of
paragraph 13(1) in Schedule 7 to the SSCBA.
60. I can see the force of the Secretary of State’s argument set out in paragraph 52 above. Moreover, it may be said to be given added force by the actual language used in paragraph 13(1) in Schedule 7, with its emphasis on what may arguably be said to be the factual circumstance of having been (“was”) entitled to REA on the day immediately before he gave up regular employment.
61. On the other hand, the statutory effect in social security is usually that if a late claim is successful for a past or backdated period the entitlement is backdated to that date. Moreover, if the Secretary of State’s argument is correct it gives rise to the odd result that REA may continue for some people after they have given up regular employment and reached pensionable age notwithstanding the seeming statutory intendment as set out in section 2(8) of the Social Security Act 1988 (see paragraph 30 above) and the amendments made under section 3(5) of the Social Security Act 1990 (paragraph 33 above)
62. However, as I have said, it is not necessary to resolve this issue on this appeal. Moreover, the Secretary of State who is responsible for running the scheme and paying out money under it is arguing for the result that REA may still be awarded for the first time on a backdated claim made after the claimant has given up regular employment and reached pensionable age and accepts that this award can then continue, in effect, for life. Despite my concerns as to this result, I do not consider my inquisitorial function ought to lead me to possibly deciding a point against the views of the Secretary of State and against the interests of claimants generally save in the clearest of cases (which this is not).
R(I)14/62
63. These same considerations have also led me away from seeking to decide this appeal on the wider and potentially more important basis, which once appealed to me, that, save for the particular category of person dealt with under paragraph 12 in Schedule 7 to the SSCBA, paragraph 11 of Schedule 7 to the SSCBA should be construed as not allowing entitlement to REA to arise in respect of someone who has reached pensionable age and has given up regular employment.
64. Broadly speaking my thinking on this issue arose from my struggling with how a person who, to use deliberately loose language (but which mirrors paragraph 13(1)(a) and 131(b) in Schedule 7), had retired from work and was over pensionable age might be said to have any reduced earnings in the comparative sense now dictated by paragraph 11(10) in Schedule 7. It was that concern that led to my questions to the parties on “employed earner” and “entitled”.
65. I recognise that the answer to this concern may be said to be provided (at least in part) by R(I)14/62 and the fiction it creates of the “relevant occupation” continuing, in effect, past pensionable age and past the person being in any meaningful sense employed in fact. However, as noted above, R(I)14/62 does not address the post-accident/disease comparator employment and how that may be said to meaningfully continue once the person has retired from all employment and is over pensionable age.
66. Sub-paragraph 10 of paragraph 11 in Schedule 7 to the SSCBA refers to the comparison being between the relevant occupation (i.e. the old, pre-accident/disease job) and “the [claimant’s] probable standard of remuneration during the period for which [REA] is granted in any employed earner’s employment which are suitable in his case and which he is likely to be capable of following”. In what sense does a person who has given up regular employment and reached pensionable age have employment which is “suitable” in his case; equally, in what sense is his “probable standard of remuneration” to be assessed when he has left the employment market for good?
67. I appreciate that sub-paragraph (11) in paragraph 11 of Schedule 7 does contemplate that a person who has retired from regular employment (before a certain date) may continue to be entitled to REA. However, this does not address the twin state of the person having given up regular employment and having reached pensionable age. I also recognise that, pursuant to sub-paragraph (13) of paragraph 11 in Schedule 7, the Social Security (Industrial Injuries) (Reduced Earnings Allowance and Transitional) Regulations 1987 provide for the comparison to be made where the claimant is not at the time employed or is in unsuitable employment and where there has been a previous award of REA (under regulation 2(5) of those Regulations). However, that does not necessarily address the situation of the person who has left all employment and reached pensionable age.
68. I therefore have considerable sympathy with Mr Commissioner Howell’s view in paragraph 39 of R(IB)2/99 (set out in paragraph 38 above).
69. On the other hand, as I have already noted, the Secretary of State positively argued for a person who claims REA for a past period for the first time after he or she has reached pensionable age and has given up regular employment from being able to continue to get REA past those dates. Moreover, I can see the force in the submission (one which compliments the Secretary of State’s argument here) that the RA provisions in what is now paragraph 13 of Schedule 7 are the sole method by which an award of REA may be brought to end (the other conditions of entitlement to REA being met), and therefore prior to the RA provisions coming into effect there was nothing to stop REA continuing past pensionable age and after the person had given up regular employment. And that argument is given added force by R(I)14/62 (indeed any contrary argument would arguably have to find R(I)14/62 as being wrong or no longer being applicable).
70. It is for all of these reasons, together with the fact that the appeal can be disposed of another ground, that I have concluded not to try and decide this appeal on what I have termed this wider argument.
Why the appeal fails
71. The appeal fails, in short, because I can see no good answer to the Secretary of State’s argument that the appellant’s prior awards of REA (REA1 and REA2) are caught by paragraph 13(1)(c) in Schedule 7 to the SSCBA and have the effect of meaning that the appellant ceases to be entitled to REA as a benefit for good.
72. The terms of paragraph 13(1)(a) and (b) were not disputed as having been met: the appellant gave up regular employment in 1993 (so after 10th April 1989) and he reached pensionable age (65) on 28 February 2009.
73. That then leaves paragraph 13(1)(c) and the closing words of 13(1):
“was entitled to [REA] (by virtue either of one award or of a number of awards) on the day immediately before he gave up regular employment, shall cease to be entitled to [REA] as from the day on which he gives up regular employment”.
74. At first glance it would appear that an issue may arise as to the sequencing under 13(1)(a) and 13(1)(b) (given that the appellant gave up regular employment before he reached pensionable age), and a further issue may arise as to how the closing words of 13(1) are to apply given that the appellant was entitled to REA well past his having given up regular employment in 1993. However, the answer to these two potential problems is provided for by regulation 3 of the Social Security (Industrial Injures) (Regular Employment) Regulations 1990, the effect of which here is to deem the appellant as having given up regular employment in the week during which he attained pensionable age.
75. Reverting then to paragraph 13(1)(c), the appellant’s argument, as has already been noted, is that the words only apply to the award(s) of REA the appellant in fact had in place before he gave up regular employment and had reached pensionable age (though here those dates coincide given the deeming effect of the regulation 3 referred to in the immediately preceding paragraph). Given my comments in paragraph 56-60 above, I accept this. However, with respect, all that does is show that the appellant was entitled REA on the day immediately before he reached pensionable age, and so shows that 13(1)(c) is met.
76. Why then do the closing words of 13(1) - “shall cease to be entitled to reduced earnings allowance” - not then also apply, 13(1)(a), (b) and (c) having all been met? The appellant’s answer was that the closing words were met but only in respect of the REA award in fact in place before pensionable age. I do not see why that is so. All the closing words refer to is “reduced earnings allowance” and not any particular award of REA or the award in place on the day immediately before the person reached [pensionable age]. Had that been the intention, and assuming as seems to be common ground (despite my doubts) that the Secretary of State was aware and accepted that a backdated claim for REA could be claimed and awarded to a person even after the person had reached pensionable age, then the closing words of paragraph 13(1) could plainly have been drafted so as to make clear that they only applied to the REA award in fact in place immediately before the person gave up regular employment/reached pensionable age. That this was not done it seems to me is telling and conclusive against the appellant’s argument.
77. Moreover, as the Secretary of State submits, this reading of the closing words fits more naturally with the straightforward reading of them: the person shall cease to be entitled to any and all REA; he shall cease to be entitled REA simpliciter. The appellant’s reading, on the other hand, requires the closing words to be restricted in a manner which is not obvious from the statutory context and not required by that context either. Nor do I see why the terms of paragraph 13(4) in Schedule 7 act to alter this conclusion: sub-paragraph (4) simply creates a mechanism for calculating the quantum of entitlement to RA and says nothing about other awards of REA continuing.
78. Furthermore, the conclusion I have arrived at is consistent with the view of Judge Ward at paragraph 5 of TA -v- SSWP (II) [2010] UKUT 101 (AAC), where he said, by way of reminder:
“there is a clear legislative intention that all awards of REA cease on retirement and are replaced by a singe award of retirement allowance”.
And it is a view which in my judgment better accords with the legislative intent to bring REA to an end once a person has reached pensionable age.
79. In the circumstances, I have not found it necessary to address the Secretary of State’s alternative argument on double compensation. At first glance it is an argument that has some similarities to the First-tier Tribunal’s reasoning. I do not need to consider whether that reasoning is correct or not. The terms of paragraph 13(1)(c) in Schedule 7 to the SSCBA show that the First-tier Tribunal made no material error of law in deciding that there could be no entitlement to REA3.
(Signed) S. M. Wright
Judge of the Upper Tribunal
Dated 20th March 2014
[1] SHA is to be contrasted with what was termed unemployability supplement, which arose as a supplement to the disablement pension under section 13(1) of the National Insurance (Industrial Injuries) Act 1946 when as a result of the relevant loss of faculty the claimant was incapable of work and likely to remain permanently so incapable.