AB v Secretary of State for Work and Pensions (JSA) [2013] UKUT 288 (AAC)

UKUT-AAC
AB v Secretary of State for Work and Pensions (JSA)
[2013] UKUT 288 (AAC) · 2013-06-19
[1]The Appellant was refused contribution-based jobseeker’s allowance (CB-JSA). He had the necessary national insurance record, but he was receiving an occupational pension from his former employment. The effect of the “abatement rule” was that any potential entitlement to CB-JSA he might have had was extinguished. The parties’ respective cases[2]The Appellant’s case, in summary, is that the legislation containing the abatement rule, which means that his occupational pension payments are taken into account when deciding entitlement to CB-JSA, is indirectly discriminatory on age grounds and not justified.[3]The Department’s case, also in outline, is that there is no disproportionate differential and unlawful treatment on grounds of age in the abatement rule and that, in any event, if there is such indirect discrimination, which is denied, it is objectively justified. The original claim for contribution-based jobseeker’s allowance[4]The material background facts can be stated shortly. The Appellant was made redundant at the age of 57. His normal retirement age was 65. He took his occupational pension early, with the inevitable actuarial reduction. He also claimed CB-JSA. The standard weekly rate of benefit at the time in question for a claimant of his age (i.e., aged over 25) was £64.30 a week. The CB-JSA rules provide that a deduction from that entitlement is made, being the amount by which the occupational pension exceeds £50 p.w. The Appellant’s CB-JSA claim was inevitably refused, as the occupational pension in payment was in the order of £24,000 a year, and worked out at £465.94 a week. The relevant legislation The primary legislation[5]Section 4(1) of the Jobseekers Act 1995 (as amended; “the 1995 Act”) provides as follows:
“4 Amount payable by way of a jobseeker’s allowance E+W+S (1) In the case of a contribution-based jobseeker’s allowance, the amount payable in respect of a claimant (“his personal rate”) shall be calculated by— (a) determining the age-related amount applicable to him; and (b) making prescribed deductions in respect of earnings, pension payments, PPF payments and FAS payments.”
The secondary legislation[6]Part VII of the Jobseeker’s Allowance Regulations 1996 (SI 1996/207) makes detailed provision for the amount of JSA payable. The “prescribed deductions”, referred to in section 4(1)(b), representing the nuts and bolts of the abatement rule, are enshrined in Regulation 81(1) (as amended):
“Payments by way of Pensions 81. —(1) The deduction in respect of pension payments, PPF payments or FAS payments from the amount which apart from this regulation would be payable to a claimant by way of a contribution-based jobseeker’s allowance for any week shall be a sum equal to the amount by which that payment exceeds or, as the case may be, the aggregate of those payments exceed £50 per week.”
The First-tier Tribunal’s decision[7]The First-tier Tribunal (FTT) heard the Appellant’s appeal on 11 January 2012. The Tribunal Judge summarised the Appellant’s case as being that section 4(1)(b) of the 1995 Act had a statistically significant adverse effect on those CB-JSA claimants aged over 50 and was therefore age-discriminatory and contrary to European law.[8]The FTT accepted the statistical evidence provided by the Appellant. This demonstrated that at the relevant time just 0.1% of claimants aged under 50 had their CB-JSA claims reduced because they were in receipt of an occupational pension, whereas 8.8% of those claimants aged over 50 had suffered such an abatement. The FTT concluded that this was a statistically significant disparate effect.[9]However, although the FTT accepted there was differential treatment, it also accepted that there was an objective justification:
“5. [The Appellant] sought to argue that because Contribution Based JSA is a national insurance benefit and other forms of unearned income are not taken account of there was no objective justification for the provisions requiring occupational pensions to be taken into account. The tribunal accepted that this was at least an arguable point but on balance decided that a provision that reduced entitlement to an unemployment benefit where the claimant has significant alternative income was objectively justified.”
[10]The FTT therefore dismissed the appeal but at the same time also gave permission to appeal to the Upper Tribunal. The proceedings before the Upper Tribunal The historical and policy context[11]I observed as follows at an earlier stage in these proceedings:
“8. By way of historical context, I note that the approach taken by Parliament over the years has varied. The predecessor benefit to contribution-based jobseeker’s allowance (JSA) was unemployment benefit (UB). Originally, entitlement to UB was unaffected by receipt of an occupational pension. That changed with section 5 of the Social Security (No. 2) Act 1980, which introduced a tapering rule for claimants aged 60 or over that reduced UB by 10p. for every 10p. that any occupational pension exceeded £35 a week (and see Part III of the Social Security (Unemployment, Sickness and Invalidity Benefit) Regulations 1983 (SI 1983/1598)). That rule survived a legal challenge that it discriminated against the EC Directive on equal treatment for men and women (see Tribunal of Social Security Commissioners’ decision R(U) 10/88 and see also R(U) 3/92). The age 60 threshold was reduced to the age of 55 by section 7 of the Social Security Act 1988. 9. The Jobseekers Act 1995, which replaced UB with contribution-based JSA, provided that entitlement to the new benefit was subject to “prescribed deductions for earnings and pension payments”, with no limit as to age in the primary legislation (section 4(1)(b)). So far as actual earnings are concerned, earnings count in full, subject to a nominal £5 disregard (or £20 in certain special cases – see Jobseeker’s Allowance Regulations 1995 (SI 1995/214), regulations 80, 99, 101 and Schedule 6). Pension payments, on the other hand, are subject to a much more generous £50 a week disregard (regulation 81(1)). Against that, of course, as the appellant’s representative argues, other forms of non-earnings income (e.g. dividends or rental income) have no impact on entitlement to contribution-based JSA. 10. So far as justification is concerned, I accept that this only arises if indirect discrimination is established. The burden would then be on the Secretary of State to show justification. This argument should be fleshed out. One obvious line of argument is that contribution-based JSA is a personal, earnings-replacement benefit which has long been subject (either as UB or in its present form) to adjustment in defined circumstances (see e.g. Social Security (Overlapping Benefits) Regulations 1979 (SI 1979/597)). The principle here, going back to Beveridge, if not before, is that under the wider social security scheme “double provision should not be made for the same contingency” (see Wikeley, Ogus and Barendt, The Law of Social Security (5 th edition, 2002), p.261). It seems that the original 1980 tapering rule was introduced to address the apparent anomaly that those retiring early with occupational pensions would claim UB without any real expectation that suitable work would be available for them (see further The Law of Social Security at p.263 and 516). Of course, the justification now may not be the same as it was then, not least given the changes in the benefits system and of course the replacement of UB by the 1995 Act.”
The parties’ submissions on the substantive issues summarised[12]Mr M. Islam-Choudhury of Counsel, who is acting pro bono for the Appellant (and did not appear before the FTT), has made detailed submissions on his behalf. I hope I do him no disservice by summarising those submissions on the substantive issues thus:(i) CB-JSA is a “possession” within Article 1 of Protocol 1 of the European Convention on Human Rights;(ii) age discrimination falls within “other status” under Article 14 of the Convention;(iii) the Appellant has established a prima facie case of indirect discrimination, so shifting the burden to the Secretary of State to justify the abatement rule;(iv) the group (the under-50s) with which the Appellant compares himself are in a sufficiently analogous situation;(v) the Secretary of State has failed to show that the abatement rule is both appropriate and not disproportionate in its adverse impact; and accordingly(vi) section 4(1)(b) of the 1995 Act and regulation 81 of the Jobseeker’s Allowance Regulations 1996 amount to unlawful indirect age discrimination as regards the Appellant’s Article 1 Protocol 1 rights.[13]The Secretary of State’s representatives have yet to engage fully with these arguments. In the proceedings before the FTT, the decision-maker’s initial written submissions might loosely be summarised as being to the effect that “this is all too difficult” (see pp. 39-40, 08 June 2010). Having sought advice from HQ, the decision-maker then argued that the abatement rule was age neutral, and the Appellant had produced no evidence of indirect discrimination (see pp.65-67, 19 November 2010). When the Appellant produced some statistical evidence, the decision-maker’s further submissions were that the differential treatment was not disproportionately prejudicial and that in any event was unrelated to age discrimination and was objectively justified (see p.122, 29 July 2011). The final submission conceded that, whatever the outcome before the FTT, the matter would be going to the Upper Tribunal and for that reason (although I am struggling to see the causal connection) a presenting officer would not attend the FTT hearing (see p.131, 25 August 2011).[14]In the proceedings before the Upper Tribunal, the Secretary of State has made two written submissions. The first, by Mr A. Myers (see pp.152-155, 12 July 2012), addresses a number of points made in my original observations on the appeal. This appears to concede the potential relevance of both Article 1 of Protocol 1 and Article 14. However, the Secretary of State’s representative argues that the under 50s and the over 50s are not sufficiently analogous groups. Mr Myers also argues that no disproportionate effect was shown, and so strictly justification did not arise. However, if it did, he referred “in a broad way” to the principle of deference (or the discretionary area of judgement) and to the interlocking features of the social security system. The subsequent submission on behalf of the Secretary of State, by Mr N. Walker (see p.339, 15 March 2013), does little other than provide rather more of the policy context. The parties’ submissions on the procedural issues summarised[15]Mr Islam-Choudhury accurately describes the Upper Tribunal as being in a “jurisprudential straitjacket” as regards any remedy. He correctly concedes that section 4(1)(b) of the 1995 Act can only be read one way. If he is right on the substantive issues, then the only worthwhile remedy open to the Appellant is a declaration of incompatibility under section 4 of the Human Rights Act 1998. However, the Upper Tribunal has no power to grant such a declaration (see section 4(5)). Mr Islam-Choudhury, relying on Whittaker v P&D Watson [2002] ICR 1244 (at paragraphs 16 and 17), therefore invites me(i) to dismiss the Appellant’s appeal on paper, but(ii) to give the Appellant permission to appeal to the Court of Appeal.[16]Mr Myers agrees that section 4(1)(b) admits of only one reading and that, assuming the Appellant makes out his case, the only remedy of any value would be a declaration of incompatibility. He refers me to the decision of Judge Turnbull in SH v Secretary of State for Work and Pensions (JSA) [2011] UKUT 428 (AAC) . That was a case in which a self-employed person sought to argue that the denial of CB-JSA to contributors other than employees (the only earners who pay the necessary Class 1 national insurance contributions) amounted to unlawful discrimination. The primary legislation, as here, was clear (see paragraph 3 of Judge Turnbull’s decision). Judge Turnbull also explored the nature and implications of the “jurisprudential straitjacket” (see paragraphs 16-20 of his decision). His conclusion was as follows:
“21. The extent to which it is appropriate for the Upper Tribunal, in a case where the only possible remedy would be a declaration of incompatibility, to enter into the merits of the claimant’s contentions that legislation infringes the Convention must in my judgment depend on the circumstances of the particular case. In the present case full consideration of the justification argument is likely to require evidence from the Secretary of State. I see no point in my making directions for the filing of such evidence, with a view to my expressing an opinion on whether the alleged discrimination is justified, when (a) the Claimant may not be prepared to incur the risk of liability for costs which would be involved in appealing to the Court of Appeal, and (b) the Court of Appeal might hold that the claim fails in any event for want of a sufficient ‘personal characteristic’. It does not seem to me that there is any point in my purporting to decide points which are arguable, when I would have no jurisdiction to grant any remedy. I therefore dismiss the appeal without further ado. 22. Nor would I presently be inclined to give permission to appeal to the Court of Appeal, were the Claimant to make an application for permission. It seems to me that it should be left for the Court of Appeal to decide whether it is appropriate for it to entertain the case, and what directions for the filing of evidence by the Secretary of State should be made. However, if the Claimant wishes to apply for permission, he should make the application, and I will formally consider and decide it.”
The Upper Tribunal’s analysis The outcome of this appeal to the Upper Tribunal[17]The FTT’s treatment of the issues arising on this appeal in its decision notice (which stood as its statement of reasons) was limited. This is no criticism of the Tribunal Judge concerned – he was faced with extensive submissions from the Appellant, a litigant then acting in person, which perhaps understandably strayed into areas (e.g. the supremacy of European law) that were not directly in point. Equally, the decision-maker readily admitted, in effect, to being out of his depth and saw no point in attending the hearing.[18]It is certainly arguable that the FTT’s decision involves an error of law. Both representatives now argue as much. Mr Islam-Choudhury argues that the FTT failed to deal with the proportionality aspect of the alleged justification and that this was an error of law. Mr Myers argues that the FTT was wrong to make the comparison between over 50s and under 50s and this too was an error or law as the groups lacked sufficient similarity.[19]I could allow the Appellant’s appeal, decide that the FTT’s decision involves an error of law (e.g. as regards inadequacy of reasoning) but then decline to set its decision aside, exercising the discretion that I have under section 12(2)(a) of the Tribunals, Courts and Enforcement Act (TCEA) 2007. However, I am not inclined to rule formally that the FTT’s decision involves an error of law. That would be an empty exercise in the circumstances of this case and would not give the Appellant the remedy that he seeks.[20]The better view, I conclude, is that the FTT’s decision involves no material error of law. The reason for that conclusion is that section 4(1)(b) of the 1995 Act (and the regulations made thereunder) meant that the FTT could only come to one decision, which was the outcome it reached. I therefore dismiss the Appellant’s appeal to the Upper Tribunal. The Appellant’s application for permission to appeal to the Court of Appeal[21]Mr Islam-Choudhury has made a prospective application for permission to appeal to the Court of Appeal. The structure of the TCEA 2007 and the relevant procedural rules assumes that such an application must be made after the promulgation of the Upper Tribunal’s decision on the substantive appeal. However, this will just cause unnecessary delay. In those circumstances it is in accordance with the overriding objective for the application for permission to appeal to be treated as having been made immediately after the decision.[22]There is no doubt that the Appellant’s case raises a matter of principle. However, I take the view that it is for the Court of Appeal itself to decide whether it raises an important point of principle (or indeed whether there is some other compelling reason to hear the appeal). I therefore refuse permission to appeal to the Court of Appeal. Any such application should now be made direct to that Court, which would also be better placed to make any appropriate directions.[23]In doing so I take into account the considerations identified by Judge Turnbull in SH v Secretary of State for Work and Pensions (JSA) (at paragraph 22). It seems to me that the present case is perhaps a rather stronger one on its substantive merits than SH . That said, however, there is clearly scope for considerable debate, not least over the validity of the over 50s/under 50s comparison and the complex and multi-faceted issues around justification, in the event that indirect age discrimination is shown. The decision on permission is therefore best left to the Court of Appeal.[24]I simply note an unfortunate consequence of the inability of the Upper Tribunal to consider an application for a declaration of incompatibility, as a result of its omission from section 4(5) of the Human Rights Act 1998. This is that the Court of Appeal, if it gives permission, has to consider the indirect discrimination and justification issues in detail from a standing start and without the benefit of the Upper Tribunal’s jurisprudential spadework and analysis. This hardly seems a sensible use of judicial resources at the level of either the Upper Tribunal or the appellate court, especially given the increasing significance attached to specialist tribunals. Conclusion[25]For the reasons above, I dismiss the Appellant’s appeal and refuse permission to appeal to the Court of Appeal. Signed on the original Nicholas Wikeley on 19 June 2013 Judge of the Upper Tribunal

Cited in 2 later judgments