Malekout v Secretary of State for Work & Pensions

For a payment to be disregarded under paragraph 15(5A)(e) of the Income Support (General) Regulations 1987, the agreement or court order under which it is received must itself be made in consequence of personal injury and post-date that injury. The payment must also result from the injury. A pre-existing employment contract incorporating a pension scheme is not such an agreement. An early occupational pension does not qualify merely because retirement was caused by injury. Absent express provision, it remains income for income-support purposes.

The appellant, a former NHS dental surgeon, suffered a work-related neck injury and retired early on medical grounds. He received payments described as a pension under the National Health Service Pension Scheme Regulations 1995. On 1 September 2008, Deputy Commissioner Mrs A Ramsay decided that the payments were income and were not disregarded under Schedule 9 paragraph 15(5A)(e) of the Income Support (General) Regulations 1987. The appeal concerned whether the pension arose under an agreement and was paid in consequence of personal injury, and whether that agreement had to post-date the injury.

1. Appeal dismissed. Sir David Keene delivered the judgment, with the Chancellor of the High Court and Lord Justice Moses agreeing. The Commissioner had reached the correct conclusion that the payments were not to be disregarded for income-support purposes.
2. Contextual construction. Regulation 40(1) of the Income Support (General) Regulations 1987 defines income, subject to the disregards in Schedule 9. Paragraph 15(1) requires relevant payments made at regular intervals to be disregarded. Paragraph 15(5A)(e) must be construed in the context of the preceding categories, particularly payments placed in trusts or used to purchase annuities after personal injury. Subparagraph (e) addresses a similar payment made outside those mechanisms.
3. Agreement and timing. The phrase agreement or court order indicates an agreement reached instead of a court order after the injury has occurred. The words in consequence of any personal injury govern the agreement or court order as well as the payment. Both must therefore post-date the injury. The appellant’s contract of employment was not the type of agreement contemplated by the provision.
4. Occupational pension. Schedule 9 expressly identifies certain pensions for disregard. A normal occupational pension is not disregarded. An early retirement pension, subject to adjustments, is the normal pension paid earlier. The Court found no rational basis for disregarding it merely because retirement followed personal injury. The payments therefore remained income.

• Court of Appeal (Civil Division): appeal on a point of law dismissed. [2010] EWCA Civ 162.
• Upper Tribunal (Social Security), Deputy Commissioner Mrs A Ramsay: decision dated 1 September 2008 held that the payments were income and were not within the applicable disregards.