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Decision in brief

Where the Secretary of State has made a decision awarding or disallowing disablement pension in respect of a particular prescribed disease, the First-tier Tribunal can only consider that prescribed disease if the claimant has appealed against that decision or it can treat the claimant as having done so, which requires that the claimant had a right of appeal against that decision – that includes that there must have been a mandatory reconsideration of the decision.

Decision in brief

Change of date of hearing notified to claimant at short notice, as a result of which her helper was unable to attend – rule 29 of the Tribunal Rules requires at least 14 days’ notice of the change of date, which was not observed – neither was there evidence that the claimant had consented to the change or that ‘urgent or exceptional circumstances’ applied (there had been an administrative error in setting the date), so no exception to the 14-day period applied – the lack of the supporter desired by the claimant meant the resulting procedural irregularity was material, and so the tribunal’s decision must be set aside.

Decision in brief

Deduction for capital allowance – the claimant had not made a valid claim for capital allowance by the time his appeal was decided – even if he had made such a claim, it could not have succeeded as a matter of law as he was not operating or carrying on any overseas property business at the time of the decision and expenditure on a property could not constitute a permissible capital allowance – therefore, his income was too high to be entitled to tax credits during the relevant period.

Decision in brief

Claimant had an existing award and his submission of Form BI168, even though in respect of a different prescribed diseases, was an application for a supersession of that award and not a new claim - arrears were therefore limited by the relevant rule on date a supersession takes effect – ie, date the change of circumstances was notified)

Decision in brief

Tribunal relied on medical report based on assessment in which (contrary to the claimant’s request) there was no interpreter – no procedural irregularity by the tribunal, and finding to the contrary in BF v SSWP [2019] UKUT 420 (AAC) not followed – First-tier Tribunal is not subject to the formal rules of evidence, and assessment of the report is a matter of fact, not procedure – ie, it needs to be weighed as evidence

Decision in brief

Section 3(4)(a) of Tax Credits Act 2002 provides that entitlement to tax credits on the basis of a joint claim ceases on death of the partner – the award does not continue until the end of the tax year – on the facts of the case, the claimant could not make a new claim for tax credits as a single person due to the introduction of universal credit (UC), and (although able to make a claim) he was not entitled to UC on the basis of his capital – no breach of human rights of claimant as a widower – for discrimination purposes, a widower is not in an analogous position to a couple with both partners alive – loss of entitlement to tax credits and the refusal of UC did not render any difference in treatment as manifestly without reasonable foundation

Decision in brief

Effect of Remedial Order following Reilly (No.2) and TJ and others [2016] EWCA Civ 413; [2017] QB 657; [2017] AACR 14 – claimant lodged an appeal against the sanction decision before 26 March 2013 – appeal decided before coming into force of section 1A into the Jobseekers (Back to Work Schemes) Act 2013 – in such cases, section 1A requires Secretary of State to supersede a First-tier Tribunal decision upholding a sanction (so as to remove the sanction) – this applies even if the decision is under appeal to the Upper Tribunal.

Summary

In this judicial review case in the High Court, it was held that the requirement in the universal credit (UC) rules already to have paid childcare costs (referred to as the ‘proof of payment’ rule) before they can lead to an award of the childcare element was unlawful. The rules were in breach of the claimant’s human rights and were irrational. It was, however, for the Secretary of State to devise a remedy.

The claimant was a single mother who wished to work but was unable to do so without help to cover childcare charges. She was liable for childcare costs that would have been eligible for the childcare costs element, but said that, because of the proof of payment rule (at regulation 33(1) of the Universal Credit Regulations 2013, SI No.376), she could not afford to pay the fluctuating costs of childcare, had incurred debts and ultimately had to reduce the number of hours she works. She argued that, by failing to provide for the payment of childcare charges which have been incurred but not paid, the Secretary of State had: (1) subjected her to unlawful indirect discrimination on grounds of sex, contrary to Article 14, read with Article 8 and/or Article 1 of Protocol 1 to the European Convention on Human Rights, and (2) acted irrationally in the sense described by the Court of Appeal in R (Johnson) v Secretary of State for Work and Pensions [2020] PTSR 1872.

The rules required the claimant to have actually paid the childcare charges before the childcare element became payable. This was in contrast to the rules on the housing costs element, which required liability for relevant housing costs, but not their payment, before the element became payable. Mr Justice Chamberlain approached the issue by deciding it showed that it ‘is conceptually possible to have a system based on liability to pay (rather than actual payment) which is consistent with the principle of payment in arrears’ (paragraph 27(c)).

The judge considered that the proof of payment rule was indirectly discriminatory on grounds of sex. The claimant’s evidence (which was a mix of official data and qualitative evidence) showed that the rule ‘has material adverse (and therefore "prejudicial") effects on a significant number’ of those entitled to the childcare element (paragraph 152). Further, that had a disproportionate effect on women, as the evidence showed that those claiming the childcare costs element were overwhelmingly female. This was in contrast to the housing costs element, where the Secretary of State had chosen instead to require liability rather than upfront payment, and there was no evidence of a gender disparity in claimants. Further (because of pay disparity between men and women), the rules meant that ‘women are substantially more likely than men’ to be denied access to the childcare costs element (paragraph 159). This discrimination could not be justified. Applying the test of whether the measure (in this case, the decision to apply the proof of payment rule without exceptions) was ‘manifestly without reasonable foundation’, there was no evidence that ministers had ever considered whether to require liability rather than actual payment. Neither was it immediately apparent that requiring liability would be prejudicial to concerns to avoid fraud and error. The rule therefore lacked a reasonable foundation and was not objectively justified (paragraphs 167–174).

The proof of payment rule was also unlawful because it was irrational. As Rose LJ held in Johnson, the key question is very similar to that which arises when considering objective justification: ‘has a reasonable balance been struck by the SSWP [Secretary of State for Work and Pensions] – or rather is it possible to say that no reasonable Secretary of State would have struck the balance in the way the SSWP has done in this case?’ Rejecting direct payment of childcare charges or vouchers was a rational choice. But the same was not true of the decision to require prior payment rather than liability. There was no evidence that ministers had considered that and no evidence that requiring liability instead would be prejudicial to accuracy or disproportionately expensive, while there was evidence that the prior payment rule had the antithetical result of forcing some claimants to reduce hours of work in order to reduce their childcare costs. The judge concluded that the proof of payment rule, ‘insofar as it precludes a system where eligibility is based on liability to pay, is irrational’ (paragraphs 175–178).

Comment from CPAG

Although the judge held the prior payment rule to be unlawful, he left it for the Secretary of State to devise a remedy. But permission to appeal against the decision has been granted.

Summary

The claimants argued that, by refusing to consider a reduction (on grounds of hardship) in an individual case of the deduction for court fines from an award of universal credit (UC), the Secretary of State unlawfully fetters her discretion under the law. The Secretary of State argued that she has a policy of deducting at a fixed rate; any change must be achieved by the individual applying to the magistrates’ court to vary the rate of payment of the fines.

In the High Court, Mr Justice Kerr allowed the claimants’ applications for judicial review. The Secretary of State was unlawfully fettering her discretion in the way the claimants argued. The possibility of the claimant applying to the court did not alter that. Deductions from court fines for UC were permissible under regulation of the Fines (Deductions from Income Support) Regulations 1992. They allow deductions from a range of rates, from a minimum of 5 per cent of the claimant’s standard allowance to a maximum of £108.35 a month. The Secretary of State insisted that the only factor meaning that the rate selected should be changed was the policy of not making overall deductions of more than 30 per cent of the standard allowance – ie, so that a request for a lower deduction for court fines on the basis of hardship would not be considered if that limit was not engaged. Mr Justice Kerr held that that policy was to fetter the discretion provided, in an individual case, by the regulations: ‘I conclude that the Secretary of State's policy and practice are not lawful in their present form. There would be no legal difficulty if the deductions policy admitted of exceptions, even rare exceptions, in individual cases. The claimants themselves accept that. But it does need revising to enable that to happen’ (paragraph 92).

The judge rejected other arguments made by the claimants. He held that the policy was not unlawful on the basis that it was irrational: ‘The Secretary of State is right to say that it is a matter for her judgment what policy to adopt and how to strike the balance between effective fine collection and any financial hardship that may cause in individual cases’ (paragraph 100). He also rejected an argument by one of the claimants that the policy constituted discrimination against him on grounds of disability under the Equality Act 2010: ‘The evidence is not sufficient to support a finding by this court of “particular disadvantage” for indirect discrimination purposes and “substantial disadvantage” for the purposes of the reasonable adjustments duty’ (paragraph 117). Finally, he rejected an argument by one of the claimants that the policy was unlawful because the Secretary of State, by failing to carry out an equality impact assessment before adopting the policy of an overall 30 per cent limit to deductions, had has failed to perform her duty (regarding disabled people on UC) under section 149 of the Equality Act. It was true that there had not been such an assessment and in that sense the Secretary of State had failed in her duty. But to have done so on this point would not have made a substantial difference to the outcome for the claimant and people in his position. The judge considered it ‘highly likely that the deductions policy would have been adopted anyway’ (paragraph 132).

Comment from CPAG

The judge did not hold that the policy of making deductions from UC for court fines was unlawful. Rather, the policy of not considering requests for variation of the rate of deduction on the grounds of hardship in an individual case was to fetter the discretion that should apply. It is understood that the Secretary of State has permission to appeal.

Summary

In this immigration case, the Court of Appeal rejected an argument that a right of residence for extended (or 'other') family members can exist where the dependence of the family member on the European national with a right to reside did not exist in the country from which the family member has come. The argument put for the claimants that the fact that their dependence arose only In the country in which they were now located (in these cases, the UK), and not in the country from which they came, should be irrelevant was contrary to the overall purpose of the rules, which was not to deter freedom of movement and residence of European nationals.

Giving the lead decision to the Court rejecting the claimants' argument, Lord Justice Beatson observed that the 'plain and natural' meaning of the relevant European rule, at Article 3(2) of EC Directive 2004/38 EC ('the Directive'), was clear, addressed as I was towards those extended family members, '...who, in the country from which they have come, are dependants or members of the household of the Union citizen having the primary right of residence...'. If such a meaning was given, on the facts of these cases he claimants' appeals could not succeed paragraph 45-6). That such a meaning was indeed the correct legal approach was leant powerful support by the decision of the European Court of Justice in Secretary of State for the Home Department v Rahman and others, EUECJ [2012] Case C083/11 (5 September 2012 Bulletin 230, p11). At two points in that decision the Court stated in terms that the dependence cited must exist in the country from which the family member concerned comes. so indicating, said Lord Justice Beatson, 'a requirement that the necessary relationship of dependency or membership of the household must have existed in another country as well as in the host Member State' (paragraph 47).

Furthermore, it was clear that under Article 3 of the Directive the protection conferred on extended (or 'other') family members was much more restricted than that conferred on family members under Article 2. The Court was unable to identify any policy which would require a wider reading of Article 3 than that indicated by the plain and natural meaning of the words and the decision in Rahman. In addition, it had also been held by the European Court of Justice in Metock and others [2008] EUECJ C-127/08 (25 July 2008) that the policy of the Directive was not one of family reunion: That, taken with the 'clear language and structure' of Article 3(2), was enough to justify the Court of Appeal's approach in the present decision, including in declining to make a reference to the European Court of Justice (paragraphs 51-61).

Summary

In this decision, the European Court of Justice (ECJ) held that in deciding whether someone has the right to reside on the basis of self-sufficiency with comprehensive sickness insurance, the mere fact that s/he has claimed a social assistance benefit is not enough to hold automatically that s/he is not self-sufficient.

The claimant was a German national in receipt of a German pension who lived in Austria and claimed an Austrian 'compensatory supplement' (ie, an Austrian means-tested benefit) to supplement that. He was refused on the basis that he did not satisfy the rules for the supplement, that a European national claimant has a right of residence under Article 7(1 )(b) of EC Directive 2004/38/EC - ie, that s/he has 'sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness cover in the host Member State'. This was despite the fact that he had been issued in Austria with a European Economic Area (EEA) citizen registration certificate.

The Court held that the fact that the Austrian supplement was a 'special non-contributory benefit' under EC Regulation 883/2004 (and so had characteristics not only of 'social assistance' but also of social security) was not in itself a barrier to Austrian law requiring the claimant to satisfy a right to reside test in order to get it. That was so even though the claimant had a certificate of residence under other law (paragraphs 26-44). The fact that a national of another member state who was not economically active to qualify for the supplement 'could ' be an indication he did not have sufficient resources to avoid becoming an unreasonable burden on the national social assistance system as a whole (paragraph 63). However, held the Court, 'the competent national authorities cannot draw such conclusions without first carrying out an overall assessment of the specific burden which granting that benefit would place on the national social assistance system as a whole, by reference to the personal circumstances characterising the individual situation of the person concerned' (paragraph 64). In taking such an approach, the following applied: recourse to social assistance in another member state was not automatically precluded; states must take account of the 'personal situation' of the claimant including ifs/he was experiencing temporary difficulties, the duration of her/his residence and the amount of aid granted to her/him; s/he must not impose a minimum income level to qualify; and the test of self-sufficiency in Article 7(1 )(b) must be construed narrowly (paragraphs 67- 70). This meant when applying the test taking into account among other things, the amount and regularity of the claimant's income, the period for which the benefit applied for is likely to be granted and, as in the case, the fact that the claimant had been granted a certificate of residence (paragraph 78).

Note: for more on this decision and its implications, see the article in Bulletin 236, p7.

Decision in brief

‘Prompting’ in this test is different from ‘explanation’ where the claimant actually does not read or understand the information – reference to signs and symbols in definition of ‘basic information’ does not mean the test does not require ability to read and understand words – prompting can relate to requirement that the activity is carried out to a reasonable standard – not being able to do it ‘at all’ does not require inability to read/understand literally no words – re Activity 10 (budgeting) there is also a need to consider the need for assistance/prompting – merely paying bills is not conclusive evidence of ability to ‘make decisions’, and to ‘know’ the price of an item is not the same as knowing how to calculate the price.