The Secretary of State for Work and Pensions v WL

On 07 January 2022, acting on behalf of the Secretary of State, the Department for Work and Pensions (“DWP”) awarded WL income-related employment and support allowance (“ESA”). DWP paid this benefit to WL at a weekly rate of £121.60 from 07 January 2022. At that date, WL’s husband (“AL”) was entitled to an occupational pension. However, AL’s former employers had not yet started paying him his pension, so DWP did not take it into account.

On 27 March 2023, DWP decided WL had a reduced entitlement to ESA from 07 January 2022 onwards because of AL’s occupational pension. DWP maintained that position when WL asked it to reconsider the decision it had made.

On 27 March 2023, DWP also decided WL had been overpaid £543.83 of ESA for the period from 07 January 2022 to 05 May 2022 inclusive. DWP decided WL’s entitlement to ESA was affected by AL’s entitlement to his workplace pension, including the portion of it paid in arrears. DWP decided this overpayment was recoverable from WL under section 74 of the Social Security Administration Act 1992 (“the 1992 Act”). This was because it reflected benefit that would not have been paid to WL had the occupational pension AL was entitled to receive been paid to him on time, rather than in arrears. Asked to reconsider its decision, DWP subsequently revised it, to reduce the recoverable overpayment to £394.06.

On 27 March 2023, DWP also decided that WL had been overpaid £898.82 of ESA for the period from 06 May 2022 to 03 November 2022 inclusive. DWP decided this overpayment was recoverable from WL under section 71(1) of the 1992 Act because she had failed to notify DWP that AL was receiving an occupational pension from 30 April 2022 onwards. DWP maintained that position when WL asked it to reconsider its decision. DWP also decided to impose a £50 civil penalty on WL in respect of this overpayment, for failing to notify a change in her circumstances.

On 25 August 2023, WL appealed against these decisions. Her appeals were allocated the following appeal references by the First-tier Tribunal and / or DWP in its response to the First-tier Tribunal:

On 04 September 2024, a First tier Tribunal (“FTT”) held a telephone hearing of WL’s appeals. The FTT issued individual decision notices for the three appeals. The FTT decided the following:

The FTT provided a Statement of Reasons for its decisions on 16 December 2024. At paragraph 4 of its Statement of Reasons, the FTT wrote that it accepted WL and AL’s evidence that they had notified DWP about the forthcoming change to their circumstances due to AL’s anticipated pension. The FTT wrote that while this did not change WL’s entitlement to ESA, it meant that section 71 of the 1992 Act did not apply to the overpayment recovery decisions, because WL had informed DWP (who then failed to act on that information).

On 14 January 2025, the Secretary of State (“SSWP”) applied to the FTT for permission to appeal against one of the FTT’s decision dated 04 September 2024. At section C of his DMA2 application form, the SSWP listed the appeal decision being challenged as appeal reference 1692-9576-8535-9954. At section D, the form stated:

“I submit that the FTT have erred in law by consider Section 71 of the Social

Security Administration Act 1992 instead of Section 74. I would like to note that this only applies to the overpayment of £543.83 (1692-9576-8535-9954). The overpayment of £898.52 (1692-9586-5816-6574) is governed under s.71 of the Social Security Administration Act 1992 and we are not appealing that decision.”

The statement at section D was incorrect, because the FTT appeal reference for the £543.83 overpayment recovery decision was the one ending in 6574, not 9954. Confusion has arisen as a result of this.

On 21 January 2025, the SSWP submitted an amended DMA2 form asking for permission to appeal. This included an additional appeal ground and stated that the SSWP now wanted to appeal against the FTT’s decision about the appeal ending in reference 6574 as well. The appeal grounds still, however, incorrectly described the £543.83 overpayment recovery appeal as the appeal ending in reference 9954.

Dealing with the SSWP’s first DMA2 form, on 21 January 2025 a salaried First-tier Tribunal Judge decided to set aside the FTT’s decision dated 04 September 2024 about the £543.83 overpayment recovery decision. The FTT Judge stated the FTT had made a material error of law by applying section 71 of the 1992 Act, instead of section 74, to the appeal about the £543.83 overpayment.

Because DWP had indicated the appeal in question was the one ending in reference 9954, the FTT stated that it was setting aside that decision. In their decision notice, the FTT judge wrote that the appeal with the reference ending in 6574 related to the £898.82 overpayment recovery decision, was not reviewed and still stood.

Unfortunately, the FTT’s decision incorporated DWP’s confusion about which appeal reference related to the £543.83 overpayment recovery decision. The effect was that the FTT inadvertently set aside the decision made on 04 September 2024 about the £898.82 overpayment recovery decision (which DWP was not seeking to challenge). I describe this as inadvertent because the reasoning in the FTT’s decision dated 21 January 2025 confirms it intended to set aside its decision about the £543.83 overpayment recovery decision instead.

Pausing here, I would observe that the First-tier Tribunal’s online administrative appeals system uses a sixteen-digit reference number for appeals. These are not particularly intuitive to use; the digits do not relate to anything specific, and sixteen is a long set of numbers to try to remember. The online appeals system identifies where multiple appeals are brought by the same party and provides a radio button on the “Summary” tab to click through to view them. However, clicking on that button opens a new tab on the computer screen, giving scope for several tabs to be open at any one time without it being clear which appeal they concern. Where HMCTS allocates an appellant several appeal references at the same time, especially for the same benefit matter, there is a risk the wrong appeal reference may be cited.

Historically, First-tier Tribunal appeals in the Social Entitlement Chamber were allocated a shorter reference number, which included letters (“SC”) and used specific numbers to denote the tribunal registration venue (“SCXXX”), the year (“YY”) and the registration number (“ZZZZ etc”). The reference would therefore read something like “SCXXX/YY/ZZZZ” and might prove easier for judges and parties to recall.

On 03 February 2025, the FTT responded to the SSWP’s second DMA2 form. The FTT refused to admit the SSWP’s application for permission to appeal because he had made it more than a month after the date the FTT issued its Statement of Reasons. The FTT therefore refused to admit the SSWP’s application in respect of WL’s appeal decision ending in reference 6574.

On 15 February 2025, the Upper Tribunal received the SSWP’s application for permission to appeal. The UT2 application form listed the decision being challenged as the one with the appeal reference ending in 6574. However, in his detailed appeal grounds, the SSWP repeated the wording quoted at paragraph 8 above. The SSWP therefore once again described an incorrect appeal reference for the £543.83 overpayment recovery appeal.

In summary, the SSWP’s appeal grounds were that he had made the £543.83 overpayment recovery decision under section 74 of the 1992 Act, and this provides a “prevention of duplication of payment” (podop) rule regarding ESA overpayments that have arisen where a payment of an occupational pension that would be taken into account as income, has been paid late. The SSWP argued the FTT had failed to consider the correct legal provision when deciding that appeal.

On 30 April 2025, I admitted the SSWP’s application for permission to appeal against the FTT’s appeal decision ending in reference 6574. This was needed because the FTT’s decision dated 03 February 2025 had refused to admit the application about that appeal decision.

Having admitted the application (which means, I allowed it to be considered), I went on to determine it. I granted the SSWP permission to appeal on the following basis:

The FTT accepted it had made an error of law about the £543.83 overpayment recovery appeal. It had, however, set aside the £898.82 overpayment recovery appeal decision and was now taking steps to decide that appeal afresh. In accordance with my directions, the Upper Tribunal Office therefore sent a copy of my decision granting permission to appeal to the relevant Regional Tribunal Judge by email on 22 May 2025. This was in case they considered it relevant to what the FTT needed to consider when making directions about that appeal.

I had provided a more extensive analysis of how the relevant legislation might work than the SSWP had set out in his UT2 form. I therefore directed the SSWP to provide his submissions first in time and for WL to have the opportunity to respond to them. This allowed the SSWP to confirm whether he agreed with my analysis of how the relevant legislation might work or wanted to put forward a different analysis instead. It meant WL, a litigant in person, was not expected to go first in trying to analyse the complex legislation involved.

Ms Foody has provided the submissions on behalf of the SSWP responding to my decision granting permission to appeal. Ms Foody writes that the SSWP agrees with the analysis I provided in that decision. This relates to the confusion about appeal reference numbers by the SSWP and the FTT. It also relates to my legal analysis below.

Ms Foody also states the SSWP apologises for the confusion caused by incorrect reference having been used in the application for permission(s) to appeal. She confirms the SSWP’s intention with both the FTT and the Upper Tribunal was to appeal the decision the FTT made about WL’s appeal ending in reference 6574 (the £543.83 overpayment decision).

The SSWP’s Response to WL’s appeal ending in reference 6574 referred, at pages D and F, to relying on section 74(1) of the 1992 Act and regulation 7 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988.

The SSWP relied on section 74 of the Social Security Act 1992 (“the 1992 Act”) when making the £543.83 overpayment recovery decision. This provides:

“74.

Income support and other payments

(1)

Where—

(a)

a payment by way of prescribed income is made after the date which is the prescribed date in relation to the payment; and

(b)

it is determined that an amount which has been paid by way of income support, an income-based jobseeker’s allowance, state pension credit or an income-related employment and support allowance would not have been paid if the payment had been made on the prescribed date,

the Secretary of State shall be entitled to recover that amount from the person to whom it was paid.”

The 1992 Act does not define “prescribed income”. This is, however, defined in regulation 7(1)(a) of the Social Security (Payments, Overpayments and Recovery) Regulations 1988. The definition includes income to be taken into account under part 10 of the Employment and Support Allowance regulations 2008 (“the ESA Regulations 2008”).

Part 10 of the ESA Regulations 2008 deals with income that may reduce a claimant’s entitlement to ESA. It includes a partner’s income. See, for example, regulation 83(1) of the ESA Regulations 2008 and paragraph 6(2) of Schedule 1 to the Welfare Reform Act 2007.

Section 74(1) means that where prescribed income is paid in arrears and would reduce or remove a claimant’s entitlement to income-related ESA (and other specified benefits), the SSWP can recover any overpayment of that benefit. Recovering an overpayment under section 74 therefore does not depend on proving the claimant misrepresented or failed to disclose a material fact.

Applying this to WL’s circumstances, AL was entitled to an occupational pension from at least 07 January 2022 but was paid it at a later date, in arrears. AL’s occupational pension appears to represent prescribed income for the purpose of WL’s ESA claim. Had AL been paid his occupational pension on time, it arguably would have been taken into account in calculating (and reducing) WL’s ESA entitlement. In principle, this might satisfy the conditions in section 74(1)(a) and (b) of the 1992 Act, allowing the SSWP to recover the overpaid ESA from WL.

WL did not provide any reply to my grant of permission to appeal or to SSWP’s submissions dated 27 May 2025. The Upper Tribunal office sent subsequent correspondence to WL about this, but without receiving a response.

On 06 February 2026, a representative for the SSWP wrote to the Upper Tribunal asking for permission to withdraw the SSWP’s appeal because the SSWP now considered the decision being challenged had already been set aside by the First-tier Tribunal.

On 13 February 2026, I made directions for the SSWP to clarify his position. This was because:

My directions also explained to WL that the Upper Tribunal had not received any submissions from her and gave her a further 21 days to re-send anything she had previously provided.

My directions were issued on 20 February 2026. The SSWP’s representative, Ms Holmes, responded on 20 February 2026, confirming the SSWP agreed with my analysis summarised at paragraph 32 above. Ms Holmes confirmed the SSWP wants to continue with his appeal against the FTT’s decision about the appeal ending in reference 6574. On behalf of the SSWP, Ms Holmes apologises to WL for the continued confusion and the significant delay this has caused in progressing appeals to the Upper Tribunal and the First-tier Tribunal.

The Upper Tribunal has received no response from WL to my directions dated 13 February 2026, and the 21 days for her to respond has now ended.

Neither party requested an oral hearing of the appeal. I took this into account. I considered the appeal file. I decided the interests of justice did not require an oral hearing. The SSWP considers the FTT made material errors of law. WL has not responded to the appeal. I do not require further information from the parties to decide whether there was a material error of law. I decided it was proportionate to determine the appeal on the papers.

There were some earlier delays in this appeal progressing through the Upper Tribunal’s administrative system to be referred back for a decision to be made. On behalf of the Upper Tribunal Office, I apologise to the parties for this.

At the permission stage, I only needed to be persuaded that it was arguable with a realistic (as opposed to fanciful) prospect of success that the FTT had made an error of law in a way that was material.

At this substantive stage, I need to be satisfied on the balance of probabilities that the FTT did make an error (or errors) of law that was material.

I am satisfied the FTT made material errors of law in its decision about WL’s appeal 1692-9586-5816-6574, as set out in paragraph 19(a) and (b) above.

The Statement of Reasons confirms the FTT only considered section 71(1) of the Social Security Administration Act 1992, when deciding whether the SSWP was entitled to recover the two ESA overpayments from WL. This did not reflect the basis on which the SSWP had made the £543.83 overpayment recovery decision. The FTT therefore misdirected itself in law by applying section 71(1) of the Social Security Administration Act 1992, instead of section 74, when deciding the appeal ending in reference 6574.

As a result, the FTT’s Decision Notice and Statement of Reasons for the appeal ending in reference 6574 also failed to provide adequate reasons for its decision. It provided reasoning that was relevant to section 71 but failed to address what the FTT needed to consider under section 74.

These errors of law were material. Had the FTT applied section 74 of the Social Security Act 1992 to WL’s appeal ending in reference 6574, it might have reached a different conclusion about whether the overpayment was recoverable from her.

Having decided the FTT’s decision about WL’s appeal 1692-9586-5816-6574 involved material errors of law, it is appropriate to exercise my discretion to set aside the Tribunal’s decision dated 04 September 2024 about that appeal, using section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007.

Having done so, section 12(2)(b) of that Act provides that I must either remit the case to the First-tier Tribunal with directions for their reconsideration or remake the decision.

No party has asked me to remake the FTT’s decision. In the circumstances, and given the absence of any reply from WL, I do not consider it appropriate to remake the FTT’s decision.

I therefore remit WL’s appeal 1692-9586-5816-6574 to be considered by a new First-tier Tribunal.

Although I have set aside the FTT’s decision dated 04 September 2024, I am not making any findings, or expressing any view, about the substance of WL’s appeal 1692-9586-5816-6574. The next Tribunal will need to address all relevant matters itself and reach a decision about whether section 74 of the 1992 Act applies.