Secretary of State for Work and Pensions v NS

A claimant must comply with a clear and unambiguous instruction identifying the information to be reported. Where an ESA40 booklet requires notification when the claimant starts to receive pension income, notifying the Department for Work and Pensions of an intended retirement and future pension is insufficient.

The claimant cannot transfer the disclosure obligation to the Secretary of State merely because the information could have been obtained from another source. An overpayment is recoverable under Social Security Administration Act 1992, section 71(1), where the claimant’s failure caused the payment and the Secretary of State did not actually know the relevant fact. An honest failure remains a failure to disclose.

The claimant received contributory Employment and Support Allowance and an ESA40 booklet requiring him to report pension income. He wrote to the Department for Work and Pensions before retiring, stating that he would retire and receive a pension from Teachers’ Pensions, but did not later notify the Department when pension payments began.

The Secretary of State subsequently decided that an ESA overpayment of £23,675.55 was recoverable under section 71(1) of the Social Security Administration Act 1992 and imposed a civil penalty. The First-tier Tribunal confirmed entitlement to ESA but allowed the appeals against recovery and the penalty. The central issue before the Upper Tribunal was whether the June letter discharged the claimant’s statutory and booklet-based disclosure obligations.

1. The appeal was allowed. The First-tier Tribunal had materially erred in law concerning both recoverability of the overpayment and the civil penalty, although the Upper Tribunal declined to set aside the civil-penalty decision.
2. The ESA40 booklet used ordinary language. “Get” a pension means receive it. The instruction to report starting to receive pension income therefore required notification when payments began, not merely notification of an intended retirement or future pension entitlement.
3. Under regulation 32 of the Social Security (Claims and Payments) Regulations 1987, read with section 5 of the Social Security Administration Act 1992, the Secretary of State may specify the information required. The claimant must provide the information clearly and unambiguously required. The division of labour described in Kerr does not require the Department to investigate information which the claimant was expressly required to provide.
4. The June letter disclosed the proposed retirement date, pension provider and intended receipt of a pension at an unspecified future date. It did not disclose that the claimant had started receiving pension income. The First-tier Tribunal’s contrary interpretation was not open to it and amounted to an error of law.
5. The overpayment was made in consequence of that failure. The Secretary of State’s ability to obtain information from HMRC, the pension provider or another source did not remove the claimant’s obligation. If the Secretary of State had actually obtained the required information before the overpayment, the causal connection might have been broken.
6. The recoverable overpayment decision was set aside and remade. The overpayment of £23,675.55, made between 3 August 2013 and 6 October 2017, was recoverable under section 71(1) of the Social Security Administration Act 1992. The First-tier Tribunal’s decision on the civil penalty was left undisturbed because further proceedings would not have served the interests of justice proportionately.

• Upper Tribunal (Administrative Appeals Chamber): appeal allowed. The First-tier Tribunal decision was found to contain material errors of law concerning recoverability of the overpayment and the civil penalty. The recoverable-overpayment decision was set aside and remade.
• First-tier Tribunal (Social Entitlement Chamber): on 11 May 2021, confirmed the entitlement decision but allowed the appeals against the recoverable-overpayment and civil-penalty decisions.