GAM v The Secretary of State for Defence

A payment within universal credit for limited capability for work-related activity may constitute “compensation” under article 52 of the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 2006. It is a periodical payment made under an enactment in respect of disablement or incapacity. The Secretary of State may therefore reduce unemployability supplement to prevent duplicate public compensation for the same inability to work.

Article 52 governs prospective abatement. Article 56 instead concerns a war-pension award for a past period during which specified social-security benefits were paid. The provisions address distinct situations. Article 12(10)(b) does not apply to United Kingdom benefits, but an error in relying on it is immaterial where article 52 independently authorises the abatement.

The claimant received a war disablement pension, comforts allowance and unemployability supplement. His universal credit included a limited capability for work-related activity component. The Secretary of State reduced the unemployability supplement from February 2022 on the basis that the component overlapped with it.

The First-tier Tribunal upheld that decision on 11 July 2023. It considered articles 12 and 52 of the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 2006. The claimant appealed, contending that article 56 was the exclusive statutory route for any abatement involving universal credit and that article 52 could not be used.

The central issue was whether article 52 authorised prospective abatement of unemployability supplement by reference to the limited capability for work-related activity component of universal credit.

1. Appeal dismissed. The First-tier Tribunal made no material error of law. Its decision upholding the abatement was therefore maintained.

2. The Tribunal was wrong to rely on article 12(10)(b). That provision concerns eligibility for public-fund benefits under the law of a place outside the United Kingdom. Whether the claimant’s universal-credit component was analogous to a former benefit under the Social Security Act 1975 did not arise. The error was immaterial because article 52 independently authorised the reduction.

3. Under article 52, “compensation” includes a periodical payment, provided under an enactment, in respect of disablement or incapacity. The limited capability for work-related activity component satisfied each element. It was paid periodically under Part 1 of the Welfare Reform Act 2012, and was payable only where a physical or mental condition made work-related activity unreasonable. The Secretary of State consequently had discretion to withhold or reduce unemployability supplement.

4. The construction accords with the purpose of avoiding duplicate public compensation. Unemployability supplement is paid where disablement makes a person unemployable. The universal-credit component addresses materially the same contingency: inability to undertake work-related activity because of physical or mental condition.

5. Articles 52 and 56 do not compete as alternative routes for the same case. Article 52 concerns compensation already paid or to be paid and permits prospective adjustment. Article 56 concerns a war-pension award made for a past period when specified social-security benefits had also been paid. Although universal credit falls within article 56(3), the present reduction operated going forward; article 52 was therefore the correct provision.

6. Information given by the Department for Work and Pensions, a benefits factsheet and website guidance could not override the statutory scheme. The fact that war-pension payments did not reduce entitlement to universal credit did not prevent abatement of unemployability supplement under the Service Pensions Order.

• Upper Tribunal (Administrative Appeals Chamber): appeal dismissed; the First-tier Tribunal’s decision was upheld: [2024] UKUT 10 (AAC).
• First-tier Tribunal (War Pensions and Armed Forces Compensation Chamber): sitting at Edinburgh, it upheld the Secretary of State’s decision to abate unemployability supplement on 11 July 2023.