Incapacity benefit to employment and support allowance and backdated payments

R (Smith) v SSWP JR/1249/18

On 29 March 2018, CPAG issued judicial review proceedings challenging the decision of the DWP to limit backdated payments to those disabled people who had been underpaid when they transferred from incapacity benefit (‘IB’) to employment and support allowance (‘ESA’) to a 21 October 2014 date.

Update: On 16 July 2018, with the final deadline for filing their response to the judicial review proceedings approaching on 18 July 2018, the Secretary of State wrote to the three judge panel of the Upper Tribunal dealing with the case, to whom the case had been transferred from the Administrative Court and indicated that she was amenable to revising for official error in this case. She further indicated that she would do so for all the affected individuals.

Update: On 10 August 2018, a three judge panel of the Upper Tribunal issued a consent order in which it granted permission for the judicial review and allowed the claim. This now clears the way for the other claimants affected to receive arrears of income related ESA for the period between when their ESA awards commenced, following migration from IB (or severe disablement allowance), and 20 October 2014, in addition to the arrears from 21 October 2014 onwards.

Background to the case

In December 2017, the Secretary of State for Work and Pensions accepted that some 75,000 individuals may have been underpaid when transferred from IB to ESA due to the failure to consider whether they qualified for income-related ESA and not just contribution based ESA. However, while the IB to ESA transfer process began in 2011 and therefore many of the underpayments will date back to before 2014, DWP says it will only make backdated payments to 21 October 2014, the date of a Upper Tribunal decision it claims establishes that it was making the wrong decisions. CPAG is representing one particular claimant whose underpayments date back to 14 September 2012. It is being argued on his behalf that the DWP is wrongly relying on the anti-test case rule (s27 Social Security Act 1998) and that the error resulting in underpayments arose from an official error which is required to be corrected in its entirety rather than arising from an error of law which was only shown to be such from a subsequent Tribunal decision.

The National Audit Office has said that the decision not to make backdated payments for periods prior to 21 October 2014 will result in disabled claimants, as a group, losing out on between £100 and £150 million pounds.