Secretary of State for Work & Pensions v Doyle

When entitlement to invalidity benefit depends on whether earnings exceed a statutory limit, the method of computation is determined by the regulation-making purpose, not by which method appears fairer or produces fewer anomalies. Regulation 3 of the Social Security Benefit (Computation of Earnings) Regulations 1996 requires earnings to be calculated under those Regulations for the purposes of Parts II to V of the Social Security Contributions and Benefits Act 1992. That includes the Part II entitlement gateway for invalidity benefit, although the incapacity-for-work provisions in Part XIIA contain the earnings limit. Accordingly, the averaging rules for self-employed earnings govern the assessment. A week-by-week calculation is unavailable merely because the limit operates by reference to particular weeks.

Mrs Doyle appealed to Social Security Commissioner Angus from an Appeal Tribunal's finding that her self-employment earnings showed that she was capable of work and disentitled to invalidity benefit. The Commissioner accepted that her doctor's subsequent approval satisfied the relevant exemption and held that the 1996 Computation Regulations did not govern the earnings question. He calculated her net earnings week by week and substituted a decision disentitling her for eight weeks in 2002. The Secretary of State appealed, contending that regulation 3 required the self-employed claimant's earnings to be averaged under regulation 11. The central issue was whether those Regulations applied to the earnings limit in the incapacity-for-work regime.

Appeal allowed. Sedley LJ gave the judgment, with Staughton and Waller LJJ agreeing. Mrs Doyle's appeal from the Appeal Tribunal was remitted to the Commissioner for determination in accordance with the Court of Appeal's judgment.

1. The statutory entitlement to invalidity benefit is found in Part II of the Social Security Contributions and Benefits Act 1992. The provisions in Part XIIA govern the determination of incapacity for work and authorise the making of the incapacity-for-work regulations. They are ancillary to the Part II entitlement provisions.
2. Regulation 3 of the Social Security Benefit (Computation of Earnings) Regulations 1996 expressly applies to calculations made for the purposes of Parts II to V of the 1992 Act. It therefore governs a calculation needed to determine entitlement to invalidity benefit, notwithstanding that the Social Security Incapacity for Work (General) Regulations 1995 were made under Part XIIA.
3. Regulation 11 of the Computation Regulations requires the net weekly earnings of a self-employed claimant to be averaged over one year, or such shorter period as circumstances may dictate. That averaging requirement applies when assessing the earnings condition in regulation 17 of the incapacity-for-work regulations. The fact that the earnings threshold operates by reference to a particular week does not authorise a separate week-by-week calculation.
4. Neither competing method is so irrational that the court should strain the statutory language to avoid it. Averaging may create windfalls or exclusions, while weekly calculation may involve uncertainty, including in allocating overheads. Certainty and policy considerations therefore cannot displace the wording of regulation 3.

• Court of Appeal (Civil Division) allowed the Secretary of State's appeal and remitted Mrs Doyle's appeal from the Appeal Tribunal to the Social Security Commissioner for determination in accordance with the judgment. [2006] EWCA Civ 466
• Social Security Commissioner (Mr Commissioner Angus) allowed Mrs Doyle's appeal to the extent of substituting a decision that she was disentitled to invalidity benefit for eight weeks in 2002, having calculated her earnings week by week. CIB/4174/2003
• Appeal Tribunal had found that Mrs Doyle's earnings from self-employment showed that she was capable of work.