SL v The Secretary of State for Work and Pensions

When determining entitlement to benefit, the tribunal must decide for itself whether to exercise a statutory discretion. It must not approach the issue merely by reviewing whether the Secretary of State’s decision was irrational. Where earnings fluctuate, adequate reasons are required for choosing the ordinary calculation method rather than an averaging method intended to produce a more accurate weekly figure. A recognisable work cycle may justify averaging over the complete cycle. A tribunal must also engage with material evidence relevant to whether an overpayment is recoverable.

The Appellant appealed against two First-tier Tribunal decisions dated 5 April 2023. The tribunal had upheld an overpayment of carer’s allowance amounting to £4,953.90 and the decision to recover it.

The first issue concerned the calculation of variable monthly earnings under regulation 8 of the Social Security Benefit (Computation of Earnings) Regulations 1996. The second concerned whether the Appellant had failed to disclose that she had started work. Permission to appeal was granted against both decisions. The Secretary of State supported the appeal concerning recoverability but opposed the appeal concerning entitlement.

1. The appeals were allowed. The First-tier Tribunal’s decisions were set aside under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007. The cases were remitted to a differently constituted First-tier Tribunal for an oral hearing.
2. The First-tier Tribunal materially misdirected itself in applying regulation 8(3) of the Social Security Benefit (Computation of Earnings) Regulations 1996. Its statement that it was not irrational not to apply regulation 8(3) suggested that it was reviewing the rationality of the Secretary of State’s decision. The tribunal instead had to decide afresh, and for itself, whether the discretion in regulation 8(3) should be exercised.
3. The tribunal also failed to give adequate reasons explaining why calculating earnings under regulation 8(1)(b)(i), by reference to the monthly payment, would produce a more accurate figure than averaging under regulation 8(3). The evidence arguably identified a recognisable one-year cycle of work within regulation 8(3)(a). The tribunal had to address why that provision should not be applied.
4. The tribunal separately erred in law when deciding that the overpayment was recoverable. It rejected the Appellant’s evidence that she had notified the Secretary of State in 2016 of her intention to start paid employment, but failed to give adequate regard to material paragraphs of her further submission and grounds of appeal. That initial communication was potentially material to the whole overpayment period.
5. The remitted tribunal was required to consider the cases entirely afresh, at an oral hearing, and was not bound by the earlier tribunal’s decisions or limited to the evidence and submissions previously before it.

• Upper Tribunal (Administrative Appeals Chamber): appeals allowed. The First-tier Tribunal decisions of 5 April 2023 were set aside for material errors of law and remitted for reconsideration by a fresh tribunal.
• First-tier Tribunal (Social Entitlement Chamber): upheld the Secretary of State’s decision that carer’s allowance of £4,953.90 had been overpaid and was recoverable.