Secretary of State for Work and Pensions v Adams

An extant award of a non-contributory benefit becomes payable when the statutory inhibition caused by an overlapping contributory benefit ends. Restoring payment in those circumstances is a decision under section 8 of the Social Security Act 1998, not a supersession decision under section 10. The overlapping-benefit adjustment is an accounting mechanism and does not determine entitlement. The Secretary of State cannot place on a claimant the burden of reporting the cessation of a benefit which the Department itself stopped and knew had stopped. Payment is therefore due from the date the overlapping benefit ceased, subject to the established entitlement and other statutory conditions.

Mr Adams held an award of invalid care allowance, but payment was reduced to nil while he received incapacity benefit under regulation 4 of the Social Security (Overlapping Benefits) Regulations 1979. The Secretary of State stopped the incapacity benefit with effect from 12 May 2000 but did not restore the allowance until the Department learned of the cessation in March 2001. An appeal tribunal upheld the refusal to backdate payment. Social Security Commissioner P L Howell overturned that decision. The Secretary of State appealed, raising the question whether restoration was a supersession decision under section 10 or a decision under section 8 concerning an existing entitlement.

Unanimous disposition. Sedley LJ delivered the leading judgment. Clarke LJ and Dame Elizabeth Butler-Sloss P agreed. The appeal was dismissed, and the payment made ex gratia was to be treated as made as of right.

1. Existing award and payment. An award of invalid care allowance recorded an extant decision that Mr Adams was entitled to the allowance. The initial decision had merely inhibited payment while incapacity benefit was payable at an equal or higher rate. Once that benefit ceased, the inhibition ended and payment followed as of right.
2. Section 8 rather than section 10. Although restoration could be characterised as payment superseding non-payment, the legislative scheme better treated it as a decision on a claim for a relevant benefit or under or by virtue of the relevant enactments. The restoration was predetermined by the original decision because entitlement had already been established and only payment had been inhibited. It was therefore a decision under section 8 of the Social Security Act 1998, rather than a supersession decision under section 10.
3. Effect of the overlapping-benefit provision. Regulation 4 of the Social Security (Overlapping Benefits) Regulations 1979 was an accounting provision. It adjusted parallel payments but did not determine entitlement and involved no judgment or fact-finding. Treating restoration as supersession would unfairly deny backdating because of the Department’s failure to readjust payment when it stopped incapacity benefit.
4. Claimant’s notification. The request that Mr Adams notify the Department if incapacity benefit stopped was practical advice only. The legislation imposed no obligation enabling the Secretary of State to treat the claimant as responsible for reporting a decision made and known by the Department itself. The reasoning in Hinchy v Secretary of State for Work and Pensions [2003] EWCA Civ 138 was relevant to that conclusion.
5. Result. Mr Adams was entitled to resumed payment from 12 May 2000. The Commissioner had reached the correct result, although the Court’s reasoning rested on statutory construction rather than the public law approach adopted by the Commissioner. The Secretary of State was ordered to pay the respondent’s costs.

• Court of Appeal (Civil Division) — In [2003] EWCA Civ 796, dismissed the Secretary of State’s appeal and held that invalid care allowance was payable from 12 May 2000.
• Social Security Commissioner — P L Howell overturned the Cardiff appeal tribunal’s decision and held that payment could not lawfully be withheld for the disputed period.
• Appeal tribunal, Cardiff — On 5 September 2001, upheld the refusal to backdate restoration of the allowance.