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Cite as: [2014] UKUT 42 (AAC)

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Secretary of State for Work and Pensions v RM [2014] UKUT 42 (AAC) (28 January 2014)
Employment and support allowance
the assessment phase

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

As the decision of the First-tier Tribunal (made on 15 March 2012 at Norwich under reference SC142/11/03006) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.

The decision is: the decision of the Secretary of State made on 6 September 2011 was correct in fact and law.

Reasons for Decision

A. The issue

1. The claimant was born on 2 November 1986. He made a claim for an employment and support allowance on 2 August 2011 on the basis of depression, anxiety and insomnia. The Secretary of State made an award on 6 September 2011. The amount payable under the award was £53.45, increasing to £67.50 from 1 November 2011. Those amounts were the contributory allowance payable for someone aged less than 25 and not less than 25 respectively. The claimant exercised his right of appeal to the First-tier Tribunal. His initial ground of appeal was that he should also have received an amount of £26.75 for the work-related activity component from his date of claim until a medical assessment had been carried out. Before the case was heard, the claimant’s representative amended the grounds of appeal to argue that, as the claimant had not been examined before the end of the 13^th week following his date of claim, he was entitled to the work-related activity component from the end of that week. The tribunal accepted that submission. The issue in this case is: was that submission correct?

B. The oral hearing

2. I directed an oral hearing of this appeal. It took place before me on 27 January 2014. Mr Cooper represented the Secretary of State, who brought the appeal with the permission of the First-tier Tribunal, and Mr McKendrick of NORCAS represented the claimant. I am grateful to them for their clear and helpful arguments.

C. The jurisdiction issue

3. At the hearing, I raised an issue that the tribunal had not dealt with. Section 12(8)(b) of the Social Security Act 1998 provides:

(8) In deciding an appeal under this section, the First-tier Tribunal-

…

(b) shall not take into account any circumstances not obtaining at the time of when the decision appealed against was made.

In this case, the decision appealed against was made on 6 September 2011. The end of the 13 weeks following the date of claim did not occur until early November. That was, of course, after the date of the decision, and it was impossible to know at that time whether a determination would be made or a medical would take place before the end of the 13 weeks. In those circumstances, the argument presented for the claimant was outside the tribunal’s jurisdiction.

4. Mr McKendrick pointed out that he had changed the grounds of appeal while the case was before the First-tier Tribunal. I accept that he did and that, as a consequence, the tribunal had notice of his argument and the Secretary of State was not taken by surprise. However, as Mr Cooper pointed out, changing the grounds of appeal could not overcome the limitation on the permissible scope of the appeal imposed by section 12(8)(b).

5. This ground alone is sufficient for the Secretary of State’s appeal to succeed. I will, however, also deal with the other ground as it was fully argued and I was told that approximately 40 cases have been stayed by the First-tier Tribunal to await this decision.

D. The assessment phase issue

6. This was the issue on which the tribunal allowed the appeal. It turns on the interpretation of regulation 4 of the Employment and Support Allowance Regulations 2008 (SI No 794):

4. The end of the assessment phase

(1) Subject to paragraph (2) and regulations 5 and 6, the assessment phase in relation to a claimant ends on the last day of a period of 13 weeks beginning on the first day of the assessment phase as determined under section 24(2)(a) of the Act.

(2) If at the end of the period of 13 weeks referred to in paragraph (1), it has not yet been determined whether the claimant has limited capability for work—

(a) the claimant having been assessed in accordance with a limited capability for work assessment; or

(b) as a result of the claimant being treated as having limited capability for work in accordance with regulation 20, 25, 26, 29 or regulation 33(2) (persons to be treated as having limited capability for work),

the assessment phase will end when the limited capability for work determination is made.

The arguments

7. Mr McKendrick argued that there was a distinction between a determination and an assessment. The former was made by a decision-maker while the latter was made by ATOS, who conduct examinations on behalf of the Secretary of State. In the absence of a medical, he argued that the assessment phase came to an end after 13 weeks and the claimant became entitled to the work-related activity component. He referred to the decision of Upper Tribunal Judge Bano in The Secretary of State v NC [2013] UKUT 477 (AAC), arguing that (i) Judge Bano had misunderstood and misinterpreted regulation 4 and (ii) his decision could be distinguished on the ground that there had been no medical in this case.

8. Mr McKendrick also referred me to a passage from Hansard. On 14 November 2008, Lord Taylor of Holbeach asked:

Whether the 13-week wait between lodging an application for employment and support allowance and the Department for Work and Pensions’ decision on eligibility is due to (a) the interval between application and first payment, (b) any back-log within the department, or (c) another reason; and, if the latter, what is that reason.

Lord McKenzie of Luton, the Parliamentary Under-Secretary of State in the Department for Work and Pensions replied:

Claimants to employment and support allowance who are awarded benefit enter a 13-week assessment phase during which the work capability assessment, which determines continued entitlement to benefit, is conducted. We have set the assessment phase at 13 weeks because that is the estimated time taken to complete the assessment process for most claimants.

The 13-week period applies to most claimants for reasons of equity. It would be unfair to move some customers onto the higher main phase rate of benefit earlier than others because of circumstances beyond their control. There are exceptions for people who are terminally ill or for people who have previously claimed and returned to the benefit under the linking rules.

During the assessment phase, the benefit is paid at the same level as jobseeker's allowance, which helps reduce perverse incentives to claim employment and support allowance rather than jobseeker's allowance.

9. Mr Cooper argued that (i) Judge Bano’s decision was (i) correct and (ii) could not be distinguished. On the Hansard extract, he argued that (a) it was not admissible under Pepper v Hart [1993] AC 593 and (ii) in any event, it did not assist on the interpretation of regulation 4.

Secretary of State v NC

10. These are the key paragraphs of Judge Bano’s reasoning:

8 Although regulation 4 is poorly worded and is apparently in the process of being re-drafted, I am unable to accept Mr McKendrick’s submission. If his argument is correct, all claimants would receive the work-related activity component at the end of the three month period, with the exception of those who have been given a limited capability for work assessment during the three month period, but without a limited capability for work determination having been made; or those claimants within paragraph 4(2)(b) who are treated as having limited capability for work without the need for an assessment. I can see no reason why special provision should have been made penalising the small number of claimants who have been medically examined before the end of the three month period, but whose entitlement has not yet been determined. I see still less reason why claimants who are treated as having limited capability for work without the need for assessment, such as the terminally ill, should be in a worse position than other claimants in a similar position if for some reason no limited capability for work determination has been made before the end of the three month period.

9. Although regulation 4(2)(a) refers to a claimant “having been assessed in accordance with a limited capability for work assessment”, in my judgement that condition must be read as obtaining at the time when the limited capability for work determination is made, referred to in the fall-out words of Regulation 4(2), rather than at the time when the three month period comes to an end. Regulation 4(1) has the effect of making the assessment period last for the full three months if a limited capability for work determination has been made before the end of the period, so that all claimants who have been determined as having limited capability for work during the three month period are placed on an equal footing. For all other claimants, the assessment period lasts until a limited capability for work determination has been made, either because they come within regulation 4(2)(a) by virtue of a limited capability for work assessment having taken place as the basis of the determination, or because they come within one of the provisions specified in regulation 4(2)(b) and are therefore exempt from assessment. In other words, subject to exceptions in cases involving appeals, the assessment phase lasts until the end of the three month period, or until the determination that a claimant has (or is to be treated as having) limited capability for work, whichever is the later.

Analysis

11. It may help to follow the details of my analysis if I begin by summarising my reasons for rejecting Mr McKendrick’s argument. They are:

· It produces anomalies between claimants who have to satisfy Schedule 2 and those who are treated as having limited capability for work, and between claimants who are and are not in the support group.

· It is based on a false distinction between the determination and the assessment of capability for work.

· The passage from Hansard does not help.

12. The claimant was paid a contributory allowance, although the argument and my analysis would be the same if he were paid an income-related allowance. His entitlement to the work-related activity component depended on section 2 of the Welfare Reform Act 2007:

2 Amount of contributory allowance

(1) In the case of a contributory allowance, the amount payable in respect of a claimant shall be calculated by-

(a) taking such amount as may be prescribed;

(b) if in his case the conditions of entitlement to … the work-related activity component are satisfied, adding the amount of that component; …

(3) The conditions of entitlement to the work-related activity component are-

(a) that the assessment phase has ended;

(b) that the claimant does not have limited capability for work-related activity …

Section 4(2)(b) and (5)(a) and (b) makes equivalent provision for those receiving an income-related allowance.

13. Claimants may become entitled to the work-related component in two ways. One is under regulation 19(1), which applies if their physical or mental condition limits their capability for work such that it would be unreasonable to require them to work, which is ‘determined on the basis of a limited capability for work assessment’. This refers to an assessment by reference to regulation 19(2) and Schedule 2 to the Regulations: see regulation 2(1). The other way is by being treated as having limited capability for work under a series of provisions: regulation 20 (terminally ill); regulation 25 (hospital patients); regulation 26 (dialysis); regulation 29 (exceptional circumstances); and regulation 33(2) (disabled students). In either case, the Secretary of State has to make a determination either that the claimant has limited capability for work or that the claimant is treated as having limited capability for work. That difference is reflected in regulation 4(2). Regulation 4(2)(a) applies if the claimant has limited capability, while regulation 4(2)(b) applies if the claimant is treated as having limited capability.

14. Mr McKendrick’s argument produces different results according to whether the claimant has limited capability or is treated as having limited capability. As he accepted, a medical assessment will not be necessary if a claimant is treated as having limited capability for work. For those claimants, the assessment phase will continue beyond the 13 weeks if the Secretary of State has not made a determination. But for other claimants, the assessment phase will end if they have not had a medical. That distinction raises the question: why? On what rational basis might it be appropriate treat claimants differently according to whether they have limited capability or are treated as having it? Mr McKendrick did not suggest a reason and I can think of none. The best that can be said is that this is the unavoidable consequence if his argument is right.

15. There is a further anomaly that was not explored at the hearing. The claimant in this case would, on Mr McKendrick’s argument, secure early payment of the work-related activity component. However, a claimant could not qualify for early payment of the support component. This is because of section 2(2) of the Welfare Reform Act, which provides that the assessment phase must have ended and that the claimant has limited capability for work-related activity. The latter condition could not be satisfied until there had been a determination to that effect. Again, there is no rational reason to explain that difference of treatment.

16. It is time, then, to consider whether that argument is right. It depends on the meaning of assessment. Mr McKendrick argued that this meant the medical examination that is performed on behalf of the Secretary of State by ATOS. I do not accept that. Regulation 19(1) is satisfied if the Secretary of State determines on the basis of a limited capability for work assessment that the claimant is incapable of work. The argument is that there is a difference between the determination and the assessment. I accept that the wording of regulation 4(2) as it stands suggests that there is such a difference. But I do not accept that assessment necessarily equates with a medical. For one thing, it is possible for a person to be assessed without a medical by being waved through. If this were the only point, it would be possible to adjust the argument so that assessment meant assessment by ATOS with or without a medical. But this is not the only point.

17. The fundamental flaw in Mr McKendrick’s argument is not to equate determination with assessment. The key is to identify what the assessment means in the Regulations and how it fits into the decision-making process. Regulation 19(2) tells us what an assessment involves:

(2) The limited capability for work assessment is an assessment of the extent to which a claimant who has some specific disease or bodily or mental disablement is capable of performing the activities prescribed in Schedule 2 or is incapable by reason of such disease or bodily or mental disablement of performing those activities.

This reflects the wording of the enabling power in section 8(2)(b) of the Welfare Reform Act. In order to understand the significance of regulation 19(2), it is necessary to see how it fits into the decision-making structure for social security benefits in general and for employment and support allowance in particular.

18. Decisions on employment and support allowance are made by the Secretary of State: section 8 of the Social Security Act 1998. A decision may be made up of a number of components. Section 17(2) of that Act refers to them as ‘any finding of fact or other determination embodied in or necessary to … a decision’. The Regulations use the same language to draw the same distinction. That is clear from regulation 30(3), which refers to ‘a decision that embodies a determination that the claimant does not have limited capability for work’. This distinction is important, because an appeal lies only against a decision: section 12 of the Social Security Act.

19. Decisions are taken in the name of the Secretary of State by decision-makers. They base their decisions on evidence and information. This is covered by regulation 21:

21 Information required for determining capability for work

(1) Subject to paragraphs (2) and (3), the information or evidence required to determine whether a claimant has limited capability for work is—

(a) evidence of limited capability for work in accordance with the Medical Evidence Regulations (which prescribe the form of doctor’s statement or other evidence required in each case);

(b) any information relating to a claimant’s capability to perform the activities referred to in Schedule 2 as may be requested in the form of a questionnaire; and

Subparagraph (c) is supplemented by section 19 of the Social Security Act, which authorises the Secretary of State to refer a claimant to a health care professional for ‘such examination and report as appears to the Secretary of State to be necessary for the purpose of providing him with information for use in making the decision.’ The report from ATOS is information within subparagraph (c) and section 19. The report consists of matters of fact, such as the clinical findings made on examination, and matters of opinion, such as the health care professional’s identification of the relevant descriptor for each activity. The decision-maker is required to decide whether or not to accept those matters of fact and opinion. If the decision-maker does accept them, they become part of the determination of capability for work and, ultimately, of the decision on entitlement to an employment and support allowance.

20. Against this background of the decision-making process, it is possible to see how regulation 19(2) fits in. An assessment is, to summarise, an assessment of the extent to which a claimant’s physical and mental condition restricts or prevents performance of the activities in Schedule 2. That is something that requires findings of fact and they can only be made by the decision-maker. This leads to the conclusion that the assessment is undertaken, or at least completed, by the decision-maker, not the health care professional. It therefore follows that the determination on the basis of a limited capability for work assessment, to which regulation 19(1) refers, does not involve two separate stages. One analysis is that the assessment is made, and only made, by the decision-maker, on the basis of evidence and information provided by, amongst others, the health care professional. This is the analysis I prefer. Another analysis is that the assessment is a process that is only completed by the decision-maker. Either way, it is not possible to sever the assessment and the determination in the way that Mr McKendrick argued.

21. What does this mean for the interpretation of regulation 4. The natural way to read that regulation is to treat it as covering the two different ways in which a claimant may qualify for the work-related component. Paragraph (2)(a) relates to an assessment of capability for work under regulation 19, while paragraph (2)(b) deals with claimants who are treated as having limited capability. If Mr McKendrick’s reading were correct, it would produce anomalies: see paragraphs 14 and 15. More fundamentally it is based on a misconception of the nature of an assessment. Regulation 4 in general has to be read as a whole in order to make coherent sense and to avoid anomalies. I respectfully agree with Judge Bano’s opinion that it is ‘poorly worded’. It is, though, possible to make the provision coherent by reading it as if the word by were inserted at the beginning of subparagraph (a):

(2) If at the end of the period of 13 weeks referred to in paragraph (1), it has not yet been determined whether the claimant has limited capability for work—

(a) by the claimant having been assessed in accordance with a limited capability for work assessment; or

the assessment phase will end when the limited capability for work determination is made.

This produces the results that: (i) determination and assessment are not severed; (ii) the distinction between the two ways of establishing limited capability for work is maintained; and therefore (iii) no anomalies arise between classes of claimant.

22. Finally as to the Hansard, I accept Mr Cooper’s arguments. The content of Lord McKenzie’s answer does not help in understanding the precise meaning to be attributed to regulation 4. It is a general statement of the underlying policy and assumptions on which the assessment phase is based. It casts no light on the precise time at which the assessment phase ends, which is what I have to decide. And ultimately that is why it does not satisfy the Pepper v Hart criteria.

E. The 2013 Regulations

23. Mr McKendrick referred me to regulation 5 of the Employment and Support Allowance Regulations 2013 (SI No 379). It deals differently with the ending of the assessment phrase:

5. The end of the assessment phase

(1) Subject to paragraphs (2) and (3) and regulation 6, the assessment phase in relation to a claimant ends on the last day of a period of 13 weeks beginning on the first day of the assessment phase as determined under section 24(2)(a) of the Act.

(2) Where paragraph (3) applies, the assessment phase is to end when it is determined whether the claimant has limited capability for work.

(3) This paragraph applies where, at the end of the 13 week period referred to in paragraph (1)—

(a) the claimant has not been assessed in accordance with a limited capability for work assessment; and

(b) the claimant has not been treated as having limited capability for work in accordance with regulation 16, 21, 22 or 25.

24. I accept Mr Cooper’s argument that this regulation was not in force at the time in question and cannot affect the interpretation of regulation 4.

F. Conclusion

25. Having rejected the analysis on which the tribunal’s decision was based, the only appropriate decision is to confirm the decision of the Secretary of State. I do understand the claimant’s sense of grievance. As he was never assessed before his claim ended, he was deprived of the chance to show that he was entitled to the additional work-related activity component from early November 2011. However, that is the effect of the way that the legislation is drafted.

Signed on original
on 28 January 2014

Corrected on 5 February 2014

Edward Jacobs
Upper Tribunal Judge