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Summary

The claimant had a conviction for benefit fraud involving failure to declare savings. Subsequently, three applications for housing benefit (HB) by the claimant had been refused by the local authority on the basis of its belief that the claimant had excess capital, despite the claimant saying he had spent the money to get rid of gambling debts, and those decisions had been upheld by appeal tribunals. In September 2019, the claimant made a fourth claim for HB. That was again refused. The First-tier Tribunal noted that the claimant had requested a determination on the papers rather than a hearing, drew an inference that he had something to hide, and in September 2020 (having considered the appeal on the papers) refused his appeal.

Judge Wikeley allowed the claimant’s further appeal, setting the decision aside and referring the case to a new tribunal. This was not on the basis of any finding about the claimant’s capital, which would need to be considered afresh by the new tribunal. Rather, the tribunal had erred in not properly considering the claimant’s reasons for not requesting a hearing and the possible need to facilitate a hearing for example by telephone. In his reasons for appealing to the Upper Tribunal, the claimant said: ‘I had paper tribunal because of COVID not to hide.’ Taking this and other relevant circumstances into account, Judge Wikeley concluded that the tribunal had erred on the basis that it had not been fair to proceed without a hearing. As he told the claimant when granting permission to appeal:

‘The first national lockdown began on 23 March 2020 and was still very much in force when the appellant completed the hearing enquiry form on 20 April 2020. The file made it clear that you were aged 74 at the time and had serious medical conditions including the loss of an eye and PTSD [post-traumatic stress disorder]. On that basis surely the natural and obvious inference was that you were staying at home for your own safety and security (and indeed in accordance with official government advice). It may be the tribunal has not done enough here to justify its reasons for proceeding under rule 27 (see eg, FY v Secretary of State for Work and Pensions (ESA) [2017] UKUT 501 (AAC))’ (quoted at paragraph 7).

There were two further reasons for the unfairness. The first of these also related to the COVID pandemic and in particular the availability of telephone hearings, the second to authority on dealing with the credibility of a witness. Again, the judge had set these out when granting permission to appeal (quoted at paragraph 7):

‘11. First, as the pandemic spread, the First-tier Tribunal office began arranging virtual hearings by using telephone hearings or video-platform hearings. The hearing enquiry form issued here implies the choice was either a face-to-face hearing or a paper hearing and nothing in between. If the appellant had been offered a telephone hearing, it is entirely possible that he may have accepted, but he was not given any such opportunity. Caselaw shows that a tribunal which fails to consider the option of adjourning for a telephone hearing may (not necessarily will) have erred in law: see eg, LO’K v Secretary of State for Work and Pensions (ESA) [2016] UKUT 10 (AAC); [2016] AACR 31.

 

‘12. Second, it was obvious on reading the papers on file that the credibility of the appellant’s account was critical. The council understandably pointed to the fact that there was a prior criminal conviction for dishonest non-disclosure of capital assets and that three previous tribunals had refused similar appeals brought by the appellant. Certainly, the fact that a claimant has been found to have lied in the past may indicate a propensity to lie (see eg, SR (Iran) v Secretary of State for the Home Department [2007] EWCA Civ 460). However, being an inveterate liar does not necessarily mean that the person concerned is not telling the truth on this occasion: see KM (Somalia) v Secretary of State for the Home Department [2009] EWCA Civ 466. Arguably, the central importance of credibility meant that the tribunal needed to hear at first hand from the appellant so his account could be properly tested. It is also unclear whether he had ever been advised as to the type of evidence that he might bring forward to support his case – eg, was there evidence of any counselling for gambling addiction? Had he discussed the problem with his GP? Was there evidence that family members could provide about his gambling addiction and debts?.’

Comment from CPAG

This decision is noteworthy in setting out how a claimant’s choice of a paper determination may have been influenced by the COVID pandemic, and how tribunals should bear that and related matters in mind when deciding whether it is indeed in the interests of justice to dispense with a hearing.

Summary

In this decision, the Court of Appeal unanimously held that the requirement in the ‘proof of payment’ rule in universal credit (UC) (at regulation 33(1)(za) of the Universal Credit Regulations 2013, SI No.376) already to have paid childcare costs before they can lead to an award of the childcare element was not unlawful. In so holding, it reversed the previous decision of the High Court in this case.

The rule was not (contrary to the finding of the High Court) unlawful as indirect discrimination on grounds of sex. Giving the lead decision, Lady Justice Andrews held the possible indirect different treatment of women was objectively justified (and so not unlawful). The High Court had wrongly considered that the Secretary of State needed to justify not adopting an alternative (ie, proof of liability) to the proof of payment rule; rather, the challenge involved focusing on the lawfulness of regulation 33 itself. ‘In fact,’ said Justice Andrews, ‘this was a classic example of a case in which a substantial degree of deference should have been afforded to the judgment of the decision maker, especially as the impugned measure had been subjected to parliamentary scrutiny, notwithstanding that this deference would be tempered to some extent by the fact that the ground of discrimination complained of was on the basis of sex, which would require more cogent reasons to justify it than if the differential treatment were on the basis of some other non-suspect ground’ (paragraph 99). The court considered that the evidence of the Secretary of State, ‘provided ample justification for the adoption of the proof of payment rule. The reimbursement model of payment of costs actually expended on childcare fitted with the overall architecture of UC, it was simple to understand and operate and it significantly reduced the problems that had caused major difficulties with the legacy system. The judge’s critique of the justification put forward for the rule failed to accord the appropriate degree of respect for the measure of judgment afforded to Ministers in this area of policy…’ (paragraph 113).

The rule was also not (again contrary to the finding of the High Court), irrational in the sense described by the Court of Appeal in R (Johnson v Secretary of State for Work and Pensions [2020] PTSR 1872. The court did not accept the analogy with Johnson, which concerned an ‘acknowledged arbitrariness’ in the rules about treatment of monthly earnings paid on a non-banking day, and involved a challenge to the decision not to provide a solution to that acknowledged problem (paragraphs 115–116). The ‘narrow confines’ of Johnson had been highlighted by the recent decision of the court in R (Pantellerisco) v Secretary of State for Work and Pensions [2021] EWCA Civ 1454. The high threshold for an irrationality finding was not met. ‘The challenge in the present case is not to a decision refusing to “fine tune” the UC system to cater for an arbitrary harmful impact of the type identified in Johnson. Rather, as in Pantellerisco, it seeks to stigmatise as unlawful one of the elements of the system which was deliberately chosen, and which potentially gave rise to hardship for those who were unable to comply with its requirements or found it difficult to do so. The proof of payment rule was adopted in order to reduce fraud and error and promote simplicity. It fits within the overall scheme of UC as a benefit to be paid in arrears, akin to a salary, supplementing income from work’ (paragraph 126). In conclusion: ‘This was not a case where there was an obvious straightforward solution which it was irrational for the Secretary of State not to have pursued…it cannot be said that “precluding a system where eligibility is based on liability to pay” struck the balance in a way which no reasonable Secretary of State would have done’ (paragraph 127).

Summary

The clamant was entitled to legacy benefits, including child tax credit. In October 2019, following incorrect advice from the DWP to claim UC pending a mandatory reconsideration of a decision about her employment and support allowance, the claimant submitted a claim for UC. However, having taken further advice, the claimant telephoned the DWP to withdraw her UC claim on 7 October (she was never paid UC). But on 9 October, the DWP issued an electronic ‘stop notice’ to HMRC, advising that the claimant had claimed UC and that the Secretary of State was satisfied that she satisfied the basic conditions of entitlement. HMRC terminated entitlement to tax credits. The First-tier Tribunal allowed the claimant’s appeal, upholding her argument that she had withdrawn her claim for UC by the time the stop notice was issued, so that at that time she had not made a claim for UC her tax credits did not fall to be terminated.

Judge Mitchell dismissed the further appeal of HMRC. The tribunal had not erred in law. The claimant had undoubtedly submitted a claim for UC. She had also withdrawn it, exercising her right to do so (before the claim is determined) under regulation 31 of the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, SI No.380. But what did that mean for this case? The main provision at issue was regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, SI No.1230. That provides, at subparagraph (2), for the termination of certain existing legacy benefits, including tax credits, in the event of a claim for UC. But that termination is subject to the requirement in subparagraph (1) that a claim for UC ‘is made’ and that the Secretary of State is satisfied that the claimant satisfies the basic conditions of entitlement. The judge considered that meant that the claim for UC must be in existence at the time of the issue of the stop notice indicating the Secretary of State was so satisfied. Construing regulation 8, the judge held that: ‘in order for a valid regulation 8(1) determination to be made that a UC claimant satisfies the UC basic conditions, that is a determination that triggers the cessation of tax credit entitlement provided for by regulation 8(2), there must be a subsisting UC claim at time of the determination’ (paragraph 31).

The judge had reference to the earlier decision of Judge Jacobs in HMRC v LH [2018] UKUT 306 (AAC). In that case, the claimant had also withdrawn her claim for UC, but after the issue of the stop notice to HMRC. That was crucial as it could not then have retrospective effect. Judge Jacobs said at paragraph 11 of his decision: ‘…My reading of regulation 8(1) is that it requires the simultaneous existence of a claim and the Secretary of State’s satisfaction on the basic conditions. In this case, a claim was made and the Secretary of State was satisfied while that claim existed. That is sufficient. The subsequent withdrawal of the [claim] cannot rewrite history by pretending that the claim was never submitted in the first place.’ HMRC argued that that applied in the present case, even though the claim had been withdrawn before the issue of the stop notice. Rejecting that, Judge Mitchell noted that Judge Jacobs had also considered that for termination there needed to be the ‘simultaneous’ existence of the claim and the Secretary of State’s satisfaction on the basic conditions. Further, the judge considered that to be the legislative intention behind regulation 8 for a number of reasons, including the use of the present tense in the words ‘a claim is made’, that it best ‘preserves claimants’ freedom to order their benefit affairs as they see fit’, and that ‘an interpretation that avoids a gap in entitlement to income-related benefits is to be preferred to one that allows such a gap to arise. On HMRC’s argument, recipients of income-related benefits may, by withdrawing a UC claim, unwittingly engineer a gap in entitlement to income-related benefits’ (paragraph 31).

Comment from CPAG

This decision is authority (not undermined by HMRC v LH) that termination of certain legacy benefits under regulation 8 can be avoided where the claim is withdrawn before the issue of a DWP ‘stop notice’. It should be capable of application to the similar arrangements that apply regarding termination of housing benefit and stop notices to local authorities.

Summary

The claimant was entitled to child benefit for her son, and also got the care component of disability living allowance (DLA) for him. The claimant and her husband had worked in the UK. They ceased paid work and went to live in Spain in 2011. Entitlement to the care component of the DLA continued but (as eventually decided by HM Revenue and Customs (HMRC)) entitlement to child benefit was lost due to the national (UK) rules not being satisfied, and the UK no longer being considered the competent state for payment once residence had commenced in Spain. That was reversed by Judge Jacobs in the Upper Tribunal in WC v HMRC (CF) [2019] UKUT 289 (AAC), where it was decided that, under Article 7 (on waiving of residence rules) of EC Regulation 883/04, the UK had remained the competent state for payment of benefit, so that child benefit was ‘exportable’ to another member state of the EU. 

The Court of Appeal unanimously upheld the further appeal of HMRC. Child benefit was not exportable to the EU in this case and consequently the claimant’s entitlement had stopped when the domestic rules on residence ceased to be satisfied on the move to Spain. WF v HMRC had wrongly held that the competent state remained the UK under Article 7 of Regulation 883/04. Instead, the competent state had changed to being Spain, under the default provision (deeming the state of residence to be the responsible or ‘competent’ state for payment of benefit) at Article 11(2)(e). 

Giving the lead decision for the court, Sir Launcelot Henderson accepted that Article 7 had a narrower application than that adopted in WF v HMRC, so it applied only in order to prevent the competent state from avoiding payment on the sole basis that the claimant did not reside in the state. It did not in itself provide that for a family benefit the competent state would not change following the start of residence in another state. In this case, Article 11(2)(e) applied so that the competent state for payment of the family benefit was the state of residence. The judge considered that the language of Article 7: 

‘…presupposes the existence of an entitlement to the cash benefits in question, and that its purpose is merely to prevent any reduction etc in those benefits because the beneficiary or members of his or her family “reside in a Member State other than that in which the institution responsible for providing benefits is situated.” That appears to me to be a reference to the competent institution, in a situation where there has been no change in the applicable legislation referred to in the first limb of the article... But if there is a change in the applicable legislation, I agree with HMRC that Article 7 cannot be invoked to provide an independent basis for the continued payment of UK child benefit. The correct analysis in such a case is that the UK child benefit ceases to be payable as a result of national law, and its cessation is not overridden by Article 7 because the underlying reason for the cessation is not the change of residence, but the change in applicable law’ (paragraph 99). 

This was distinguishable from the position regarding the DLA care component, which was exportable as a cash sickness benefit. That position was originally established by the European Court of Justice in Secretary of State for Work and Pensions v Tolley (Case C430/15, reported as [2017] 1 WLR 1261); but that was a case about a sickness benefit, not a family benefit, that turned on the specific provisions of Article 22 of EC Regulation 1408/71, the predecessor of EC Regulation 883/04.

Summary

The claimant was entitled to tax credits. When in 2019 she made an online claim for UC, a ‘stop notice’ was automatically issued to HM Revenue and Customs (HMRC) who then terminated her entitlement to tax credits. In April 2019, the DWP decided that she was not entitled to UC, because as she did not satisfy the right to reside test, she was by therefore treated as not meeting the basic condition to be ‘in Great Britain’, as set out in section 4(1)(c) of the Welfare Reform Act 2012. On appeal, she argued that the decision to terminate her tax credits on receipt of the stop notice was wrong, because the relevant rule on termination (at regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014 No.1230), required the Secretary of State to be ‘satisfied’ that the basic conditions of entitlement to UC were met before termination could occur, and that could not be done without reference to the right to reside test.

Judge Jacobs rejected the claimant’s further appeal. Her tax credits were lawfully terminated, on a correct application of regulation 8. That rule was a transitional provision that provided for the transfer of claimants to UC, and was not dependent on the outcome of the claim. Specifically, regulation 8 only required the Secretary of State to be satisfied that the basic conditions in section 4(1)(a)–(d) were met. Section 4(1)(a) in itself merely required the claimant to be ‘in Great Britain’, and for the purposes of regulation 8 had a freestanding, unqualified meaning. It was only separate rules (specifically at regulation 9 of the Universal Credit Regulations 2013) that created the qualification that a claimant was to be treated as not in Great Britain if s/he did not satisfy the right to reside test. The judge considered that that that qualification did not apply for the purpose of the transitional arrangements created by regulation 8. So applying regulation 8 did not have to await the determination on the right to reside test that applied for the purposes of the separate decision on UC entitlement.

The judge considered that: ‘Regulation 8(1)(b) refers to “the basic conditions as specified in section 4(1)(a) to (d)”. That excludes cases in which a person is treated as not being in Great Britain under section 4(5)(a). In other words, it excludes cases in which section 4(1)(c) is qualified by deeming provisions. The words used are capable of bearing that meaning and it is the appropriate meaning in the context of the 2014 Regulations. My analysis provides a clear and rational basis for adopting an interpretation that limits the reference to the basic condition to the language of the section consistently with the omission of any reference to the financial conditions’ (paragraph 22). Also, if the claimant’s argument were correct: ‘… the result is an arbitrary distinction between the basic conditions and the financial conditions. Furthermore, it leaves decision makers and claimants uncertain, potentially for months, while information and evidence is gathered and enquiries made. From an administrative perspective, it is inefficient and far from the way that transitional provisions usually operate’ (paragraph 23). Instead, the judge held that the reference to the basic conditions in section 4(1)(a)–(d) entailed merely requiring an answer to three questions: ‘(a) what is your date of birth; (b) are you in Great Britain; and (c) are you receiving education?’ (paragraph 34). The fact that the stop notice was issued (legitimately) by a computer on receipt of the UC claim did not affect this reasoning. The decision of Judge Mitchell in HMRC v AB [2021] UKUT 209 (AAC) was not followed, as it was distinguished as being about a different issue and with different explanations offered about how the UC system works.

Comment from CPAG

Arguably, this decision is wrong in holding that the Secretary of State can be properly ‘satisfied’ regarding the basic conditions when, given the full statutory tests, they have only been partially considered – eg, without even a preliminary consideration of right to reside. It may be that such arguments are to be made in a future case before the Upper Tribunal. However, for the moment at least, this decision is authoritative (and is binding on First-tier Tribunals) on this issue. See also JL v Calderdale Metropolitan Borough Council and SSWP.

Summary

In this decision the High Court held that, in cases of ‘natural’ migration to UC by claimants entitled to the severe disability premium in legacy benefits, the failure to provide any relief for the additional loss of the EDP and the lower rate of the disabled child element in CTC was unlawful as it was in breach of anti-discrimination law

The claimants in TP and AR were severely disabled claimants who had undergone natural migration to UC, having moved to a different local authority area and so lost housing benefit. The claimant in AB and F was a severely disabled person who had undergone natural migration to UC having formed a couple with another claimant, also severely disabled, and so lost entitlement to CTC. In both cases, relief for the loss of the severe disability premium (SDP) (following earlier litigation also undergone by TP and AR) was now included, via inclusion of the transitional SDP amount, and no challenge was made about that. But they argued that the failure also to include relief for the loss of the EDP in legacy benefit and (in AB’s case) the loss caused by loss of her disabled child element in CTC constituted discrimination in breach of Article 14 of the European Convention on Human Rights, read together with Article 1 of Protocol 1 (protection of property) and also, in AB’s case, with Article 8 (right to family life).

In the High Court, Mr Justice Holgate agreed, and allowed both applications for judicial review. The Secretary of State had not justified the differential treatment applied to them compared with people in a similar or analogous position but who had not naturally migrated to UC – ie, SDP-entitled people who had remained on legacy benefits and had therefore not also lost the EDP of the disabled child element of CTC. In considering justification, the judge had regard to a test of proportionality, and (regarding AB and her son F) accepted that the emphasis on the best interests of the child in Article 3(1) of the UN Convention of the Rights of the Child was ‘a relevant consideration in determining whether differential treatment is justified under Article 14’ (paragraph 214). Regarding TP and AR, ‘a fair balance has not been struck’ between the effects of their loss and the official aims (‘of promoting phased transition, curtailing public expenditure or administrative efficiency’) in providing for migration to UC (paragraph 196). Regarding AB and her son F, the judge similarly held: ‘the firm conclusion that the material before the court does not establish that, on the issue of whether no transitional protection should be provided to SDP natural migrants in respect of the cliff-edge effect of reducing the disabled child addition, a fair balance has been struck between the substantial harm caused to the persons concerned and the aims which have been advanced in the defendant’s legal submissions…’(paragraph 233).

The judge was at pains to point out that the challenges, and his judgment on them, did not involve wider challenges to UC or the natural migration arrangements: ‘In view of the wide-ranging nature of some of the criticisms of the UC scheme contained in the evidence before the court, I should clarify what this case is and is not about. Both claims are essentially concerned with alleged discrimination against members of the SDP natural migrants group. They are not concerned with any disadvantages flowing from natural migration to UC more generally. The challenges do not relate to the decisions made not to replicate EDP and the full amount of the CTC element for a disabled child in the UC scheme. Instead, they relate solely to the lack of transitional protection in cases of natural migration to UC against the cliff-edge effect of suddenly experiencing the loss of the EDP element and, the reduced amount of the UC’s lower rate for a disabled child compared with the CTC scheme. In that respect, the claimants do not argue for a complete indemnity against these losses. They accept that a fixed payment approach could be lawful as a way of overcoming the unlawful discrimination they allege. There is also no legal criticism of the rules for tapering or erosion of transitional elements of a UC award’ (paragraph 74).

Comment from CPAG

This judgment does not strike down the rules found to be discriminatory, and it will be for the Secretary of State to respond. That said, once again (this is the third successful challenge by TP and AR), a court has found that natural migration to UC by severely disabled claimants has involved unlawful discrimination. Whether the response is founded in acceptance, qualification or denial of that stark position remains to be seen.

Summary

The claimant was an adult with severe disabilities, in receipt of DLA. In 2016 he was admitted to hospital, and after 28 days there, his DLA fell to be suspended under the so-called ‘hospitalisation rule’ (at relevant regulations 8–12B of the Social Security (Disability Living Allowance) Regulations 1991 No.2890). The claimant’s challenge to that was refused both by the First-tier Tribunal and the Upper Tribunal. His challenge was based on the argument that the hospitalisation rule was in breach of the anti-discrimination rule, and his rights as a disabled adult who currently lacked capacity at Article 14 of the European Convention on Human Rights (read with Article 1 of Protocol 1).

The Court of Appeal unanimously dismissed the claimant’s further appeal. In the preceding Upper Tribunal decision, Judge Ward had been right to hold that that the question of the claimant’s capacity as such is not a relevant ‘status’ for the purpose of Article 14. Secondly (even assuming that the claimant had a relevant status), no evidence that the hospitalisation rule affected a disproportionate number of people in that group had been advanced before the Upper Tribunal.

In any case, any differential treatment was justified. Applying a ‘conventional proportionality’ test for justification, the court considered that the rule did have an objective and reasonable basis, so that it satisfied the principle of proportionality. Relevant factors here were that public spending was at issue; this was not a case of direct discrimination; the alleged status of the claimant was not a ‘suspect ground’ such as ‘race, sex or disability as such’; the rule had been in place for many decades and had been approved by parliament, and: ‘This is a context in which a “bright line” rule is appropriate and necessary…The fact that a particular case may fall on the wrong side of the line simply illustrates that there are sometimes hard cases but that does not mean that the rule itself is unjustified’ (paragraph 74).

Summary

In this decision, the Inner House of the Scottish Court of Session rejected HM Revenue and Customs’ (HMRC) appeal against the decision of the Inner House (see Bulletin 283, p12), which had held that it is still possible for claimants awarded refugee status to backdate a tax credit claim to the date of their claim for asylum, where that was made before the introduction of universal credit (UC). The claimants were entitled to rely on the refugee backdating rule at regulation 3(6) of the Tax Credits (Immigration) Regulations 2003 No.653. Because their asylum claim had been made before the introduction of UC in their area, they were not prevented from claiming tax credits by Article 7 of the Welfare Reform Act 2012 (Commencement No.23 and Transitional and Transitory Provisions) Order 2015 No.634.

HMRC’s submission that Article 7 excluded the claim had three major difficulties. Firstly, it treated regulation 3 as being of no force or effect. The 2015 Order neither expressly revoked nor repealed the rule nor did it (as HMRC accepted) implicitly revoke or repeal it. The ‘clear language’ required for such an effect was absent here (paragraph 14).

Secondly, since the 2015 Order came into force, regulation 3 had been amended on three occasions: HMRC had failed to explain why amendments were being made to an allegedly redundant regulation. Thirdly, HMRC’s argument yielded an arbitrary result. A refugee’s ability to claim backdated child tax credit would turn on a random event – whether UC has been rolled out in a particular area. ‘In other words,’ held the court, ‘it would truly be a “postcode lottery”’ (paragraph 16).

Comment from CPAG

This decision has been applied and followed by the Court of Appeal in R (on the application of DK) v HM Revenue and Customs and Secretary of State for Work and Pensions, [2022] EWCA Civ 120 (8 February 2022). The case arose from an appeal against the decision on the High Court (Bulletin 282, p12) and involved in essence the same question as in Adnan and Adnan. Giving the lead judgment in the Court of Appeal, Lord Justice Singh said there was a well-established practice that the courts in the England and Wales jurisdiction will follow the decisions of courts in Scotland on the same point of interpretation in revenue matters, subject to there being a ‘compelling reason’ not to follow the Scottish decision. But there was no such compelling reason here. Indeed, Lord Justice Singh held (at paragraph 48) that: ‘the purpose of the 2003 Regulations was a benevolent one, to recognise that, in the meantime, a person had not received payments of child tax credits to which they were otherwise entitled…I can understand the reasoning that, if the intention of legislation is to remove that entitlement for the past and not merely to set out the legal position for the future, that could and should be made clear’. See also the article in Bulletin 287, p4.

Summary

The claimants were a couple employed by a company that they owned and of which the appellant was the managing director and his wife the sales director. The company’s income was derived from commissions based on fees paid by subscribers, the number of which had been in decline. In 2013, the HMRC made a decision that the claimants were not entitled to WTC during the tax year 2012–13, and that they were required to repay an overpayment (described by Upper Tribunal Judge Rowland as ‘very considerable’). The crucial part of the First-tier Tribunal decision, which dismissed the appellant’s appeal, was that it found that he had not worked ‘in expectation of payment’ during that year as ‘by 2012’ he had resigned himself to the fact that no profit was going to be made.

Judge Rowland set the tribunal decision aside and remitted the case to a new tribunal. The tribunal had erred in not giving adequate reasons, as the timing and nature of the appellant's resignation had not been investigated or explained (paragraph 10). The finding that he had resigned ‘by 2012’ did not mean that he might not have been working in expectation of payment for at least part of 2012–13. More generally, the judge accepted that ‘work may be done in expectation of payment notwithstanding that no profit is in fact made. Moreover, work may be done in expectation of payment even if it is known that no profit will be made for some time but it is expected that the relevant business will become profitable in the future…’ (paragraphs 11–12).

Summary

The claimant suffered from several medical conditions, including gynaecological problems and difficulties with bowel movements. She had been refused employment and support allowance (ESA) on a repeat claim (having already had a previous award terminated). Following an unsuccessful mandatory reconsideration, she appealed. She said that she found discussing her medical issues very distressing/embarrassing, and requested an all-female panel, a female clerk and a female presenting officer. That request was refused, and when on the day of the hearing the claimant did not turn up, the tribunal decided to proceed in her absence, and dismissed the appeal.

Judge Wikeley allowed the claimant’s further appeal and remitted the case to a new tribunal. The tribunal had erred by proceeding in the claimant’s absence when, due to the absence of the self-assessment questionnaire (ESA50) from the appeal papers, the tribunal had very little idea of what the claimant’s case was. Fairness required that she should have been alerted to that and given the chance to attend a hearing.

Strictly speaking, that meant the judge did not have to decide on whether the tribunal was wrong to proceed without agreeing to the claimant’s request regarding (among other things) an all-female panel. However (having noted the observation that the First-tier Tribunal rules do not give parties the right on demand to an all-female panel or even a single member of the same sex), he agreed that ‘the decisions in CIB/2620/2000 and CIB/2811/2008 are plainly authority for the proposition that, even in the absence of a request for at least one member of the panel to be of the same gender as the claimant, “a tribunal will nevertheless be under a duty to raise the matter of its own motion if there is a genuine reason to believe that in the circumstances of the particular case the absence of such a member may lead to injustice”’ (paragraph 20). There may be ‘exceptional cases’ in which fairness required that every member of the tribunal, and the clerk and presenting officer, be female as well (paragraph 21). In practice, such cases were likely to involve either appeals involving ‘sensitive and uniquely female’ medical conditions, or ‘cultural issues about the giving of evidence’. The common thread was the need, under rule 2 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008, to apply the overriding objective of dealing with cases fairly and justly (paragraph 23).

Comment from CPAG

Although strictly obiter (not formally binding), the judge’s observations on when a tribunal should consider an all-female panel are likely to be persuasive authority. They may also be applied, in relevant cases, to contemplation of an all-male panel.

Summary

In this decision, the Court of Appeal reversed a decision of the Upper Tribunal which had held that the alleged spare bedroom in the bedroom tax rules had to be capable of use by the particular category of occupant or ‘family unit’ – eg, siblings of the same sex. Rather, ‘bedroom’ should be interpreted as meaning a room capable of being used as a bedroom by any of the listed categories (paragraphs 40–41).

The claimant lived with her husband and two sons in a property described as having three bedrooms. However, two of the bedrooms were small and awkwardly shaped, and not capable of being shared by the boys. The relevant rules were in regulation B13 of the Housing Benefit Regulations 2006, No.213. In Nuneaton and Bedworth Borough Council v RH and SSWP [2017] UKUT 471 (AAC), the Upper Tribunal held that the relevant issue was the ‘connection’ issue (ie, whether the room had to be capable of occupation by the particular individual or class of individual who may occupy it) and concluded that it did have to be so capable. Before the Court of Appeal, the claimant accepted that the individual characteristics of the occupants could not be taken into account, but their classification in the rules (in this case, as children of the same sex neither of whom were aged under 10) had to be taken into account, so that the suitability of the bedroom for that category of occupant was relevant. It was also argued that the differential treatment in the rules of children of the same sex and of those aged under 10 was unlawful discrimination under the European Convention on Human Rights (‘the Convention’).

Rejecting those arguments, the Court of Appeal held that the fundamental difficulty with the discrimination arguments was that the decision in R (Carmichael and others) v Secretary of State for Work and Pensions [2016] UKSC 58 had held that the rules were compatible with the Convention. Regarding the regulations, they were to be applied ‘in respect of a notionally vacant house’ and the ‘characteristics of the particular individuals are irrelevant’, with the result that the assessment was an ‘objective’ one (paragraph 38). Further, there is nothing in the regulations to indicate the assessment is required to take account of how the bedrooms would be used ‘by a particular family unit’. If they did, the underlying purpose of the regulations would be frustrated as a tenant could decide to use the property so as to reduce the relevant number of bedrooms. The Upper Tribunal had wrongly ‘introduced a subjective element’ into the assessment, supported neither by the words of the regulation nor the intention of the legislation (paragraphs 39–40).

Summary

The claimant was treated as having notional income from money available for withdrawal in a personal pension fund, but that he had not withdrawn. He had not withdrawn the money because the value of the plan fund was less than his contributions, and following a complaint he had been advised by the Financial Services Compensation Scheme not to withdraw available income from the fund. In the Upper Tribunal, it had been held that where the pension funds were less than the claimant’s contributions, the notional income rule at regulation 18 of the State Pension Credit Regulations 2002, No.1792 should not be applied, as any available money should in fact be treated as capital.

The Court of Appeal ruled that the Upper Tribunal judge had failed to apply the correct legal principles to the construction of regulation 18 and that the Secretary of State’s appeal should be allowed. The claimant’s original appeal against the notional income decision was dismissed (paragraph 36). The wording in regulation 18, including references to pension schemes and income withdrawal, have a clear and technical statutory meaning relating to pensions and tax legislation. In that context, ‘income’ was unconnected with the financial performance of a pension fund. To find, as the Upper Tribunal did, that it was so connected would require continuing examination of the financial performance of personal pension schemes, and it was unlikely that such a complex and unpredictable approach was intended (paragraphs 24–34).