Lloyd v London Borough of Lewisham

For means-tested housing and council tax benefit, the personal-injury disregard for payments made under an agreement or court order applies where the agreement or order follows the injury. It does not extend to payments made under a pre-injury employment scheme, even if payments begin after the injury and compensate lost earnings. The provision must be read in its statutory context, including finite public resources, protection for post-injury compensation, the risk of double recovery and practical administration. A later acceptance form implementing the pre-injury scheme does not create a qualifying agreement. The appeal was dismissed.

The appellant was injured while working as a parking warden and later received an annual income loss award under the terms of her pre-injury employment scheme. She applied for housing benefit and council tax benefit without disclosing the award. Lewisham later terminated the benefits and claimed overpayments.

The First-tier Tribunal dismissed her appeal, and the Upper Tribunal also dismissed it, relying on the reasoning in Malekout v Secretary of State. The appeal concerned whether the award fell within the personal-injury disregard in the Housing Benefit Regulations 2006 and the corresponding council tax benefit provisions, and whether a later acceptance form created a new agreement.

The appeal was dismissed unanimously. Lady Justice Arden gave the principal judgment. Lord Justice Jackson and Lord Justice McCombe agreed.

1. Paragraph 14(1)(e) of Schedule 5 to the Housing Benefit Regulations 2006 was construed in context. The words referring to payments made in consequence of personal injury qualify the agreement or court order, so the agreement or order must have been made after the injury. Payments made under a pre-injury employment scheme are therefore included in income. The corresponding council tax benefit provisions have the same effect.
2. Malekout v Secretary of State [2010] EWCA Civ 163 was not strictly binding because it concerned a different statutory benefit, although its reasoning was highly persuasive. The court independently construed the relevant provision and reached the same conclusion. The argument that Malekout was decided per incuriam failed. Under Morelle v Wakeling [1955] 2 QB 279, overlooking a provision would have to make the conclusion reached incapable of standing.
3. The narrower construction was rational. Post-injury compensation commonly includes pain, loss of amenity and expenses, which should not ordinarily be treated as income. A pre-injury income loss award replaces income and, unlike compensation paid by a liable person after injury, is not subject to the recovery mechanism under section 1 of the Social Security (Recovery of Benefits) Act 1997. Excluding it could produce double recovery. Administrative difficulty and finite public resources were also relevant considerations.
4. The later acceptance form did not create a new qualifying agreement. It merely implemented the pre-existing employment scheme, and the award remained payable in substance under that scheme.
5. The court observed, without deciding, that a different treatment of injury benefits might engage Article 1 of the First Protocol read with Article 14 of the Convention. It also stated obiter that pre-injury compensation for other losses would likewise be treated as income.

• Court of Appeal (Civil Division) ([2013] EWCA Civ 923): dismissed the appeal.
• Upper Tribunal (Administrative Appeals Chamber): dismissed the appeal from the First-tier Tribunal and held that the income loss award had to be taken into account.
• First-tier Tribunal: dismissed the appeal against Lewisham’s decision to terminate housing benefit and council tax benefit.