DB v Secretary of State for Work and Pensions

A reciprocal social-security agreement can affect entitlement only to the benefits and in the circumstances provided by the agreement or legislation preserving it. Section 299 of the Pensions Act 2004 preserves recognition of certain pre-1 March 2001 Australian residence, but only for the specified benefits. It does not extend that recognition to the new state pension’s Step 2 calculation under the Pensions Act 2014. A claim under Article 14 read with Article 8 requires the circumstances to fall within the ambit of a Convention right, a relevant status-based difference, analogous situations and absence of objective justification. Financial restriction alone did not bring the claim within Article 8, and residents of countries with different reciprocal arrangements were not relevantly analogous. Class 3 contributions treated as paid under an agreement were not actually paid contributions for the appropriation rule.

The appellant challenged a First-tier Tribunal decision concerning his entitlement to a new state pension. The First-tier Tribunal had increased his entitlement from £115.63 to £120.23 from 21 October 2016, but rejected his argument that residence in Australia and New Zealand should produce further entitlement. Permission to appeal was granted by the Upper Tribunal. The appeal was determined on the papers.

The central issues were whether section 299 of the Pensions Act 2004 required pre-March 2001 Australian residence to be counted in the Step 2 calculation, whether excluding it breached Article 14 read with Article 8 of the Convention, and whether credited Class 3 contributions relating to residence in New Zealand could be appropriated to another tax year.

1. Appeal dismissed. The First-tier Tribunal’s decision of 26 June 2021 was not made in error of law and was confirmed.
2. The Upper Tribunal adopted the analysis in FE v SSWP [2019] UKUT 61 (AAC). The UK-Australia reciprocal agreement had terminated, and section 299 of the Pensions Act 2004 preserved its effect only for the benefits specified there. Parliament had not extended section 299 to the new state pension under the Pensions Act 2014. Pre-March 2001 Australian residence could therefore be taken into account in Step 1, which examines the old-style pension position, but not in Step 2, which applies the new state pension rules.
3. The Convention claim failed. Applying the four requirements identified in R (Stott) v Secretary of State for Justice [2020] AC 51, the purely financial effect of the pension calculation had too tenuous a connection with private or family life to fall within Article 8. In any event, former residents of Australia were not in a relevantly analogous position to former residents of Canada or New Zealand, because the reciprocal arrangements differed. The distinction was also objectively justified, given the State’s wide margin of appreciation in social-security policy.
4. Section 13(3) of the Social Security Contributions and Benefits Act 1992 and regulation 2 of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001 required actual payment of Class 3 contributions for appropriation between tax years. Contributions which the appellant was treated as having paid under Article 9 of the Social Security (New Zealand) Order 1983 did not satisfy that requirement.
5. The First-tier Tribunal’s typographical error concerning the appellant’s year of birth was immaterial. Its factual findings, statutory interpretation and application of the law were sound.

• Upper Tribunal (Administrative Appeals Chamber): appeal dismissed; the First-tier Tribunal decision was confirmed.
• First-tier Tribunal (Social Entitlement Chamber): decision made on 26 June 2021 under number SC0/268/18/03290. The appeal was allowed in part, with the appellant’s pension entitlement assessed at £120.23 from 21 October 2016.