Secretary of State for Work and Pensions v Adams

Sections 12 to 14 provide for appeals against decisions of the Secretary of State.

Section 17 provides:

By regulation 17 of the Social Security (Claims and Payments) Regulations 1987:

In the Overlapping Benefit Regulations, regulation 4 provides:

It is common ground that both the suspension and the restoration of Mr Adams’ invalid care allowance involved a decision, not merely (as was argued at one point below) an administrative step. It is central to the argument of Mr Richard Drabble QC for Mr Adams that it was a decision that could lawfully go only one way. This Mr Ward, for the Secretary of State, accepts; but he does not accept Mr Drabble’s corollary that Mr Adams was entitled by operation of law to incapacity benefit from 12 May 2000.

Mr Ward argues that just as a decision is the only mechanism provided by law for the award or discontinuance of benefit, so a decision is the only recognised mechanism for restoring it. The modes of restoration are themselves dictated by the 1998 Act: revision (s.9), supersession (s.10) and appeal (ss. 12-14). The decision taken here was a decision, pursuant to s.10, that payment of incapacity benefit was to supersede non-payment, and by virtue of regulation 7 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 such a decision could not be backdated further than it was.

Mr Drabble does not take issue with any of these propositions except the first. He contends that a decision relating to payment under an extant award is distinct from a decision on its duration, its revision or its supersession. This is because none of the three latter powers is relevant where the entitlement to invalid care allowance has been established all along and the only question is whether “for any period” (to quote regulation 4 of the Ovelapping Benefits Regulations) something inhibits payment of it. While therefore he accepts that a decision is required to restore a now unblocked non-contributory benefit (to argue otherwise would be to strip such questions of the right of appeal), he contends that the decision is made under s.8 and so is not inhibited by the fetter on retroactivity which affects supersession decisions. The decision itself, he submits, could perfectly well have been phrased: “The amount of your ICA is adjusted to nil for as long as you are receiving incapacity benefit.” If it had been, the decision would have been a formality and would have operated from the date of cessation of incapacity benefit.

There is another aspect of the case which deserves attention. What triggered the restoration of Mr Adams’ invalid care allowance was the Department’s becoming aware, from his answer to an inquiry form, that his incapacity benefit had come to an end the previous year. But the Department had known of this ever since it stopped the benefit in May 2000, although it had clearly not acted on it. In Hinchy v Secretary of State for Work and Pensions EWCA [2003] Civ. 138, a case – unlike the present – turning on the statutory obligation to notify the Department of material facts, Aldous LJ held that there was “no failure to disclose if the fact is known to a relevant official”, and that maladministration could not alter this. Carnwath LJ agreed, but went further by holding that “the Secretary of State cannot disclaim knowledge of his own decisions”. Sir Denis Henry agreed with both judgments.

The single question we have to answer is whether the decision to resume payment of Mr Adams’ invalid care allowance was a supersession decision under s.10 or a decision under s.8 either on a claim for a benefit or under or by virtue of a relevant enactment.

Everything in the phraseology of the initial decision letter cited in paragraph 3 above indicates that, if a time were to come when Mr Adams’ incapacity benefit ceased, the invalid care allowance to which he was entitled would become payable. This in my judgment accurately reflects the law. An “award” of invalid care allowance signifies an extant decision that the claimant is entitled to it. Unless there is some legal inhibition on payment of it, payment follows as of right. Here there was such an inhibition until 12 May 2000. Thereafter there was none.

What then was the nature of the decision, when it was finally made in March 2001, to restore payment of the allowance? It is not impossible to regard it as a decision to pay which superseded the decision not to pay. But it is more in conformity with the legislative scheme to regard it simply as a decision on a claim for a relevant benefit, or as a decision falling to be made under the enactments which had so far created an entitlement but had inhibited payment. The decision to restore payments after May 2000 was predetermined by the decision notified in February 1996.

What then of the requirement in the 1996 letter that Mr Adams should notify the Department’s invalid care allowance section if his incapacity benefit ceased? As good advice it cannot be faulted: in any large organisation it is understandable that from time to time its left hand does not know what its right hand is doing. It helps everybody if claimants ensure that changes in their entitlement to be paid are not missed. But, as Mr Ward accepts, nothing in this branch of social security law (in contrast to other branches, such as overpayment) entitles the Secretary of State to place on the claimant the onus of telling him what he himself has done or to proceed as if he had not stopped a claimant’s incapacity benefit when he, of all people, ought to know that he has. Moreover, it is accepted that (again in contrast to other areas of social security law) there are no circumstances in which incapacity benefit can cease to be payable except at the Department’s instance.

There are two other reasons why it seems to me right to allocate the decision to resume payments of Mr Adams’ invalid care allowance to s.8 rather than s.10. Regulation 4 of the Overlapping Payments Regulations is an accounting provision designed to ensure that parallel entitlements do not result in excessive payment. It does not deal with entitlement, and its operation involves no judgment or fact-finding of any description. Secondly, the result of allocating a decision to resume payment of Mr Adams’ invalid care allowance to s.10 is to penalise him, by denying him the possibility of backdating the decision, for the Department’s failure to readjust the payments according to law upon its decision to terminate his incapacity benefit, and places upon him an onus which cannot be found in the legislation. To do this would tend to defeat the objectives which Parliament and the rule-maker can be seen to have had in mind when assembling the present scheme.

The Commissioner’s impressively reasoned decision is focused on regulation 4 of the Overlapping Benefits Regulations. He took the view that the Secretary of State’s power to make an adjustment continued only for as long as the two benefits were payable simultaneously. The view I have come to is not inconsistent with this, but it derives from statutory construction rather than from the public law approach taken by the Commissioner, and by doing so recognises – as the Commissioner pointed out was wise – the need for a decision at each stage.

Mr Adams was entitled to resumption of payment of his invalid care allowance with effect from 12 May 2000 because the decision to resume payment was made under s.8. Mr Commissioner Howell accordingly came to the right decision and Secretary of State’s appeal against it fails. It follows that the payment already made ex gratia is to be regarded as made as of right.

Lord Justice Clarke: I agree.

Dame Elizabeth Butler-Sloss P.: I agree.