Worley v The Secretary of State for Works And Pensions

This is an appeal against the decision of the Upper Tribunal (Administrative Appeals Chamber) (‘UT’) made on 17 January 2017. Permission to appeal was granted by Lewison LJ on 2 February 2018. The issue in this case is whether the appellant’s Personal Independence Payment (‘PIP’) award can be back-dated to the date on which she notified the Secretary of State for Work and Pensions of her claim. Although the issue can be simply stated it has significant implications for those with long term disabilities whose welfare is dependent upon benefits paid by the state.

Although the arguments are relatively straightforward, given the relative complexity of the provisions relied upon I shall indicate at the beginning of my judgment that I would dismiss this appeal for the reasons I now set out.

The welfare reforms that give rise to this case are set out in the UT’s judgment at paragraphs [2] to [6] which I gratefully adopt. In summary:

The facts of this case are set out in the UT’s judgement at paragraphs [14] to [17] which I shall also adopt. In summary:

There are three sets of Regulations that are relevant. They are lengthy in nature and for that reason I shall attach to this judgment the version of each relevant regulation that was in force at the time. They are the Personal Independence Payment (Transitional Provisions) Regulations 2013/387, the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013/380 and the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013/381.

The appellant has two grounds of appeal:

The UT rejected the appellant’s submission that regulation 20(2)(b) of the Transitional Provisions Regulations when read together with regulation 38 of the Claims and Payments Regulations treats the DLA award as a PIP award. Had the appellant been right, the application for supersession would have taken effect as if it was a PIP award (in this case from the date of the claim) and the 28-day rule provided for by regulation 17 would not apply. The UT held that if this had been the draftsman’s intent, the draftsman would have qualified regulation 3(5) and not required a person to make a claim to which regulation 17 applies, when by notifying a change of circumstances that person was implicitly applying for supersession.

The UT noted that the appellant accepted that the provisions for terminating an award of DLA and awarding PIP from the date 28 days after the decision on PIP entitlement is justified in relation to PIP losers (whose PIP is less than their entitlement under DLA) and PIP neutrals (whose entitlement is the same). The issue is whether the provisions are justified in relation to PIP winners (whose entitlement under PIP is higher than their entitlement under DLA). The UT noted that there would be an administrative cost in backdating PIP awards for PIP winners in addition to the cost of the payment of the arrears which itself would be substantial.

The UT held that the difference in treatment was justified and that as regards PIP winners the aim of the legislation is justified. A legitimate effect of the Transitional Provisions Regulations, given the enormity of the task, is that DLA entitled claimants will be transferred to PIP on different dates and to that extent will be treated differently from one another. That provides a primafacie justification for fixing the date of transfer for a DLA entitled person who is a PIP winner on a different date from that fixed for a new PIP claimant.

The UT held that there can be no objection to the Secretary of State fixing the date of transfer for most PIP winners in the same manner as for other DLA entitled claimants of PIP, rather than on the date fixed for new PIP claimants. The Secretary of State had financial reasons for doing so, both because of the lower administrative cost and because back-dating awards for PIP winners would reduce the savings that are a legitimate aim of the 2012 Act, particularly as the effective transfer date for PIP losers is not being back-dated. This, it was said, tends to show that PIP winners are not in the position analogous to a new PIP claimant.

The UT went on to consider a narrower class of PIP winners who are those who not only claimed PIP following an invitation issued under regulation 3(5) as a result of having notified the Secretary of State of a change in circumstances relating to their awards of DLA, but also would have been awarded more DLA had their awards been superseded in the light of the change of circumstances. The UT concluded that the narrower class of PIP winners were in a more analogous position to successful new PIP claimants. Not only are both types of claimants severely disabled and qualify for PIP but they have both relatively recently become more disabled than they were and are seeking the amount of benefit appropriate to their new level of their disabilities.

The UT was satisfied that even for the narrower class of PIP winners the legislation was justified. The UT held that general aims to reduce public expenditure and better focus social security benefits on the more seriously disabled were legitimate. The more specific aims to ensure an effective and manageable transition from DLA to PIP for DLA claimants and to protect the claimants’ entitlement to DLA until the transition was completed were also held to be legitimate.

The UT held there was proportionality between the aims and the means employed to pursue them because the transition aimed at protecting all those who would lose out when being transferred from DLA to PIP and it would be disproportionate and impractical to identify those who might have benefited from a DLA supersession and make the necessary payments only to them.

It is convenient to take each ground of the appeal separately. Ground one is a question of statutory interpretation of the Regulations.

The appellant submits that ordinarily benefit claimants who notify the Secretary of State of a change of circumstances resulting in an increased entitlement to their existing benefit have their benefit decision superseded from the date of the change of circumstances or (if the date of notification is more than one month later) from the date of notification. That was the case under DLA and is the case under PIP. There is no challenge to this proposition for the purposes of the subject matter of this appeal and I need not set out the statutory provisions that lead to that conclusion because nothing turns on them.

The Secretary of State submits that this is not the case when individuals with valid supersession claims are transitioning from DLA to PIP. She submits that regulation 17 applies to ‘transfer claimants’ transitioning from DLA to PIP and that precludes backdating of claims because the regulation sets the date of payment of PIP 28 days after the decision about entitlement to PIP is made.

The appellant submits that the Secretary of State is in error in treating the appellant as a ‘transfer claimant’ to whom regulation 17 applies. The appellant submits that she is a ‘change of circumstances claimant’ which is a subset of ‘transfer claimants’ to whom regulation 20 applies. The purpose of regulation 20(2)(b) is, she says, to enable all DLA entitled persons notifying a change of circumstances to be treated as if they were PIP supersession claimants. ‘Change of circumstance claimants’ are, therefore, to be treated differently from other

The appellant submits that regulation 20(2)(b) is accordingly a deeming provision that treats a DLA supersession claim “as if it were” a PIP supersession claim. Regulation 20 states that the notification of a change in circumstances, “must be treated in all respects as if it was a notification under paragraph (4) of regulation

Regulation 38(4) of the Claims and Payments Regulations obliges a person awarded PIP to notify the Secretary of State of any change of circumstances that she might reasonably be expected to know might affect the continuance of entitlement to PIP, the amount of PIP awarded or the payment of PIP. It is relied upon in determining the date of supersession in regulation 35 and Schedule 1, Part 2 of the Decisions and Appeals Regulations. The appellant submits that the words “continuance of entitlement to personal independence payment” support the submission that once a DLA claimant notifies a change of circumstances, regulation 20(2)(b) requires that they be treated as if they were already entitled to PIP.

The UT, having accepted that the appellant fell within regulation 20(5) of the Transitional Provisions Regulations, erred in concluding that nevertheless the appellant fell to be governed by Regulation 17. This conclusion, it is said, would render regulation 20(2)(b) unnecessary.

The appellant submits that her interpretation of the Regulations does not undermine the ‘cliff edge’ protection intended by regulation 17. Only ‘change of circumstance claimants’ are taken outside of regulation 17. This is a small proportion of those being transferred from DLA to PIP. It is not just a change in law that affects their entitlement but a change in fact. If the change of circumstance is for the better then ordinarily such claimants are entitled to the higher rate up to the date of the decision reducing (or removing) the entitlement to the benefit. The claimants would not require the higher rate payment for an additional 28 days because their situation has improved. If, however, the person’s ‘change of circumstances’ are for the worse, then it is right than an enhanced entitlement is backdated to the time when the claimant’s needs in fact became greater.

The parties agree that the appellant satisfies the definition of ‘transfer claimant’ in regulation 2(1) of the Transitional Provisions Regulations. A ‘transfer claimant’ is “a notified person who claimed personal independence payment in response to a notification sent by the Secretary of State under regulation 3(1)…”. The appellant notified the Secretary of State of a change in her circumstances and she, under regulation 3(1), notified her that she should make a claim for PIP, as regulation 3(5) requires him to do. In response to this notification the appellant made a claim for PIP. This puts the appellant clearly within the definition of a ‘transfer claimant’.

The question then is whether ‘transfer claimants’ are one group who are all to be treated in the same way or, as is submitted by the appellant, a group who include a subset of claimants who are ‘change of circumstance claimants’ who are to be treated differently because regulation 17 does not apply to them. If regulation 17 does not apply, their claims would be treated as supersession claims under regulation 20 which the appellant says has the effect that a claimant, if entitled to PIP, would receive their award from the date on which they made their claim for PIP.

I have come to the conclusion that the UT was right in its interpretation of the Regulations. It is accepted that the appellant is a ‘transfer claimant’ and in my judgement regulation 17 is clear. It applies to all ‘transfer claimants’. Regulation 3(5) requires the Secretary of State to notify a person in the appellant’s position, under regulation 3(1) that they must make a claim for PIP. Regulation 3(5) accordingly brings a person in the appellant’s position (notifying the Secretary of State of a change of circumstances) within the definition of a ‘transfer claimant’.

As the UT recognised, if the draftsman had intended people in the appellant’s position to be a subset, treated differently to other ‘transfer claimants’, he would have qualified regulation 3(5) and not required a person who was implicitly applying for supersession to make a claim to which regulation 17 would apply.

Further, there is no cross-reference to regulation 20(2)(b) in regulation 17. If regulation 20(2)(b) was intended to override regulation 17 I would expect to see some explicit acknowledgement of this in the Regulations. It strains the plain language of regulation 17 to create a subset of claimants that can only be identified by cross-referencing two clauses in two different sets of Regulations and thereby inferring an intended effect. There is no need to do that given the plain language of regulation 17.

In my judgement it matters not that if the appellant’s interpretation of the Regulations is rejected regulation 20 has little significance. All that regulation 20 seems to provide is that when a person notifies the Secretary of State of a change of circumstances the Regulations relating to a DLA decision superseding an earlier DLA decision will not apply and the notification will be taken as satisfying the requirement of notifying the Secretary of State of a change of circumstances for the purposes of PIP. It may be unnecessary for a claimant to notify the Secretary of State of a change in her circumstances for the purposes of adjusting her benefit entitlement before an assessment to determine her entitlement to PIP has taken place, but it is too great a leap to conclude from that proposition that regulation 20 has a different purpose not supported by the language of the Regulations viewed as a whole.

The reference to Regulation 38(4) of Claims and Payments Regulations makes it clear that by notifying a change of circumstances for DLA, the claimant has thereby discharged any obligation to do so for the purposes of PIP. Regulation 20(2)(b) is included for the avoidance of doubt by making something implicit in the Regulation explicit. The appellant’s skeleton argument does not attempt to explain how the language of these provisions bears in anyway upon the date from which a PIP award should take effect.

Finally, the appellant’s argument undermines the “cliff-edge” protection. Putting to one side the assertion that ‘change of circumstance claimants’ is a very small subset, a change in factual circumstances complicates the assessment and increases the uncertainty for claimants. People deemed to be better off are equally in need of the certainty of maintaining their benefit for 28 days after the decision in relation to PIP is made.

The UT was correct in rejecting the interpretation of the Regulations argued for by the appellant. I would dismiss ground one of this appeal.

The appellant originally submitted in writing that the UT erred in failing to adopt the structured approach to article 14 ECHR set out in Michalak v London Borough of Wandsworth [2003] 1 WLR 617. Specifically, it was submitted that the UT erred in not identifying the correct comparator before proceeding to the question of objective justification. In oral submissions the argument from Michalak was not pursued and it was acknowledged that later case law, which I need only summarise, has moved away from an overly structured approach.

The appellant did however maintain that the Transitional Provision Regulations are discriminatory under article 14 ECHR when taken together with article 1 of protocol 1 because they treat her less favourably than an otherwise similar claimant who makes a new claim for PIP without having previously claimed DLA.

Dealing first with the approach to be taken. In Ghaidan v Godin-Mendoza [2004] 2 AC 557 at [134] Baroness Hale said that a “rigidly formulaic approach is to be avoided”. In R (Carson) v SSWP [2006] 1 AC 173 at [3] Lord Nicholls said that “The essential question is whether the alleged discrimination, that is, the difference in treatment of which complaint is made, can withstand scrutiny… the court’s scrutiny may best be directed at considering whether the differentiation has a legitimate aim and whether the means chosen to achieve the aim is appropriate and not disproportionate in its adverse impact.” And in AL (Serbia) v Secretary of State for the Home Department [2008] 1 WLR 1434 at [23] Baroness Hale said “… The law requires that their circumstances are the same or not materially different from one another.” And at [24]: “… the classic Strasbourg statements of the law do not place any emphasis on the identification of an exact comparator. They ask whether “differences in otherwise similar situations justify a different treatment”.” To put it in simple terms: what are the reasons for the differences in treatment and do they amount to objective and reasonable justification?

The approach set out in the case law was that adopted by the UT and no serious submission has been made to the contrary. The UT did identify a comparator, new PIP claimants, but focused its analysis on whether the difference in treatment between DLA entitled persons and new PIP claimants was justified. That approach is consistent with the Strasbourg jurisprudence and with the domestic case law that I have summarised above.

The appellant submits that whether or not the general approach of the UT was correct, the comparator should have been a successful PIP supersession claimant

That calls for further analysis. The appellant asks the court to consider three aspects of the purported justification while keeping the principal complaint in mind. Those aspects are i) avoiding the cliff edge, ii) practical difficulties, and iii) cost. I shall take each in turn.

As to avoiding the cliff edge: the appellant says that in relation to claimants who have had a change in condition, it is their condition and potentially their needs that have changed such that persons could reasonably anticipate a change of benefit entitlement (in either direction) as a result of that change. Those whose conditions have improved can expect a reduction in benefit anyway so no cliff-edge protection is needed. Those whose conditions have deteriorated and have had their supersession claims allowed will not need cliff edge protection. If the person’s benefit is reduced the reduction only takes place from the point of determination (this always having been a risk in any supersession claim). The cliff edge rational could only apply to PIP losers but they are not the relevant comparator. The UT erred in relying on the treatment of PIP losers to justify the treatment of PIP winners.

As to practical difficulties: the appellant says that the UT relied, by way of objective justification, on the fact that different DLA claimants will be transferred to PIP on different dates as providing a primafacie justification for fixing the date of transfer for a DLA entitled person who is a PIP winner on a different date from that fixed for a new PIP claimant. She submits that she did not complain about different dates of transfer. She accepts that there needed to be a phased transition given the number of transitioning claimants but maintains that this should not have determined the date from which her claim was paid to her disadvantage, and that is it is not a justification in fact.

As to cost saving: the UT accepted that the cost of backdating would be in the hundreds of millions of pounds sterling. The appellant submits that this justification is flawed. A discriminatory rule of practice can only be justified by reference to a legitimate aim other than the simple saving of cost. In any event, the appellant says that the Secretary of State has wildly overstated the cost to the public purse of backdating claims for people in the appellant’s position. It is submitted that on the Secretary of State’s figures only 1.4% of all DLA entitled persons who will receive more by way of PIP than DLA will fall to be considered under Regulation 20(5).

The Secretary of State submits that the transitional scheme as a whole, and the 28 day rule, is manifestly objectively justified in relation to any difference in treatment between ‘transfer claimants’ and new PIP claimants. The whole point of the Transitional Provisions Regulations is to address the difference in starting points between DLA entitled persons who have a DLA award on which they are likely to place financial reliance, and new PIP claimants who have no such award, and where the transitional scheme operates for a limited period of time precisely so that, at the end of the process, both groups are subject to the same rules under PIP, accordingly there are limits to the extent to which comparison between these groups is meaningful.

The difference in situations and the policy aims of the transitional scheme, including the protection of PIP losers from the cliff-edge, are such that it was objectively justifiable to subject transfer claimants as a whole to the 28 day rule. The Secretary of State submits there was absence of suitable alternatives which do not either (a) defeat the policy aim of avoiding the cliff-edge, (b) give advantages to transfer claimants which are not more generous than for new PIP claimants and/or (c) have unacceptable costs implications.

I note that the appellant presents a narrower argument before this court than the argument put to the UT. Before the UT she submitted that all PIP winners should benefit from backdating. In her skeleton argument she now argues that only a subgroup of transfer claimants who have notified a change of circumstances should have their claims backdated.

It is perhaps important to reflect that in considering justification in the context of social security benefits, a court will only find that a measure lacks a legitimate aim or is disproportionate to that aim if it concludes that the justification advanced by the Secretary of State is “manifestly without reasonable foundation” (see, for example Baroness Hale in Humphreys v HMRC [2012] 1 WLR 1545 at 1552 and

In my judgment the Secretary of State has objectively justified the difference in treatment that is provided for in the Regulations. The appellant submits that cliffedge protection offered to ‘transfer claimants’ who are entitled to less money under PIP than DLA (PIP losers) cannot be used to justify the treatment of the claimant because she was a PIP winner. I am not persuaded by this submission. The Transfer Provisions Regulations apply to all DLA entitled persons whether they be PIP winners or PIP losers. It is correct that at the end of the process PIP winners are left worse off financially than they would be if their entitlement was backdated. However, as the Secretary of State submits, the cliff-edge justification is not just about the end of the process. It is about providing certainty to all claimants, whether or not they are ultimately winners or losers, about their income for the assessment period.

Moreover, the appellant submits that those who notify the Secretary of State of a change of circumstances do not need cliff-edge protection, whether they are PIP winners or losers, because their change in factual circumstances should lead them

PIP made major changes to the criteria governing the award of benefit. It could be the change of law or the change of factual circumstances that affect the benefit awarded. Even for DLA entitled persons who notify a change of circumstances there is a need to provide certainty by providing cliff-edge protection. Accordingly, I agree that the Secretary of State had a legitimate aim in treating DLA entitled persons who notify a change of circumstances differently to new PIP claimants, who are not already in receipt of a benefit.

Before this court, the Secretary of State has not submitted that her case rests largely on practical concerns or that is that this factor provides a sufficient justification in itself. The practical concerns were an additional factor, relevant to the overall proportionality of the Transitional Provisions Regulations scheme. I agree that the UT was entitled to take them into account when assessing the overall justification in the difference of treatment.

One of the patent aims of introducing PIP was to save public expenditure. Before this court, the Secretary of State accepts there are limits to which cost-savings in and of themselves can be a legitimate aim to justify the discriminatory effect of a measure. The Secretary of State submits that her aim in introducing the Transitional Provisions Regulations was not solely to save costs. It is accepted that the 28-day rule was also introduced to give cliff-edge protection to those already entitled to DLA. Again, in that context the general aim to reduce public expenditure is a factor that can be taken into consideration.

I have therefore come to the conclusion that the UT was correct in its approach to the article 14 ECHR question. The appellant has not undermined the justifications advanced by the Secretary of State that were accepted by the UT. I would dismiss ground two of the appeal.

For the reasons that I have given, I would dismiss this appeal.

I agree.

I also agree.

Regulation 2

“transfer claimant” means a person who is either-

(a)

A notified person who has claimed personal independence payment in response to a notification sent by the Secretary of State under regulation

3(1), or

(b)

…

This regulation, apart from paragraph (7), applies to any person entitled to benefit, other than a jobseeker’s allowance, and any other person by whom, or on whose behalf, payments by way of such a benefit are receivable.

Subject to regulation 8 of the Personal Independence Payment Regulations, a person to whom this regulation applies must supply in such manner as the Secretary of State may determine and within the period applicable under

A person to whom this regulation applies must supply in such manner and at such times as the Secretary of State may determine such information or evidence as the Secretary of State may require in connection with payment of the benefit awarded.

A person to whom this regulation applies must notify the Secretary of State of any change of circumstances which the person might reasonably be expected to know might affect –

Schedule 1 (effective dates for superseding decisions made on the ground of a change of circumstances) makes provision for the date from which a superseding decision takes effect where there has been, or it is anticipated that there will be, a relevant change of circumstances since the earlier decision took effect.

In calculating the time within which an application may be made under regulation 5 (revision on any grounds) for a decision to be revised, no account is to be taken of any day falling before the day on which notice of the correction was given.