PJ v Secretary of State for Work and Pensions

Withdrawals from a self-invested personal pension are treated as income under regulation 46(3) of the Universal Credit Regulations 2013 only where they are paid regularly and by reference to a period. Regularity requires a discernible principle, such as steady or uniform payments, or payments recurring at fixed times or uniform intervals. A series of withdrawals that fluctuates in number and timing, without a discernible pattern, does not satisfy that requirement. Such withdrawals retain their capital nature for Universal Credit purposes.

The claimant appealed against six decisions reducing his Universal Credit entitlement by treating withdrawals from his self-invested personal pension as unearned income. The First-tier Tribunal dismissed the appeals on 4 April 2024, finding that the withdrawals formed a constant and steady stream of income and were regular and paid by reference to a period.

The Upper Tribunal granted permission to appeal on the issue whether regulation 46(3) of the Universal Credit Regulations 2013 had been correctly interpreted and applied. The Secretary of State supported the appeals and accepted that the First-tier Tribunal had made material errors of law.

1. The appeals were allowed. The First-tier Tribunal had erred in law by treating the claimant’s SIPP withdrawals as income under regulation 46(3) of the Universal Credit Regulations 2013.
2. The ordinary meaning of “regular” requires payments to be characterised by a definite principle. Relevant features include steadiness or uniformity, recurrence at fixed times, or recurrence at short uniform intervals.
3. The withdrawal schedule disclosed no discernible pattern. The number of withdrawals varied between months and assessment periods. The withdrawals were neither steady nor uniform, and were not made at fixed times or uniform intervals.
4. The payments were not obviously referable to a period. They represented amounts drawn according to the claimant’s needs or investment strategy. They were therefore capital in nature and could not properly be treated as income under regulation 46(3).
5. The errors were material because, without them, the outcome might have been different. The First-tier Tribunal’s decisions were set aside under section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007.
6. Given the narrow issue and the risk of further delay, the Upper Tribunal exercised its discretion to remake the decisions under section 12(2)(b)(ii), rather than remit them. Each appeal was allowed, the Secretary of State’s decisions were set aside, and entitlement was to be recalculated without treating the specified SIPP withdrawals as income.

• First-tier Tribunal (Social Entitlement Chamber): On 4 April 2024, dismissed the claimant’s appeals and confirmed the Secretary of State’s decisions.
• Upper Tribunal (Administrative Appeals Chamber): Allowed the appeals, set aside the First-tier Tribunal’s decisions for material errors of law, and remade the decisions.