GEA v The Secretary of State for Work and Pensions

Where a claimant’s earned income fluctuates without an identifiable cycle, monthly earnings for the purposes of the Universal Credit Regulations 2013 must be averaged over three months or another period that enables a more accurate monthly average. A single assessment period should not be used in isolation where the averaging provision applies. If the average is below the relevant threshold, the restriction on carrying out a work capability assessment does not apply. The decision also gives guidance on how an earnings threshold affects an assessment already under way and how that interacts with the waiting period before the limited capability for work and work-related activity element is included in an award.

GEA received Universal Credit and, on 3 June 2021, notified the Department for Work and Pensions that she had limited capability for work and supplied medical evidence. After assessing her, the Secretary of State decided that she had limited capability for work-related activity, but included the corresponding element in her award only from 3 March 2022. The First-tier Tribunal partly allowed her appeal. It awarded the element from 3 September 2021, but treated one assessment period’s earnings as exceeding the threshold, removed the element and applied a further three-month waiting period.

GEA appealed to the Upper Tribunal. The parties agreed that her earnings should have been averaged across assessment periods because they fluctuated without an identifiable cycle. The appeal also raised questions about the relationship between the earnings restriction in regulation 41 and the waiting period in regulation 28 of the Universal Credit Regulations 2013.

1. Appeal allowed. The First-tier Tribunal made a material error of law by deciding that GEA’s earnings exceeded the regulation 41(3) threshold on the basis of one assessment period. The evidence showed that her income fluctuated without an identifiable cycle. Regulation 90(6)(b)(ii) therefore required a monthly average over three months or another period that would produce a more accurate average. The agreed nine-period average was £177.08 per assessment period, below the £617.76 threshold. Even a shorter three-month average remained below the threshold. Regulation 41(2) did not apply.

2. The judge’s further analysis was intended to guide future cases. It distinguishes the statutory determination whether a claimant has limited capability for work from the assessment on which that determination is based. The assessment examines the claimant’s ability to perform the prescribed activities; it is not itself the determination.

3. Where regulation 41(2) applies and neither exception is met, the Secretary of State may not carry out an assessment. The judge interpreted this to prevent an assessment from being completed after it has begun as well as from being started. The claimant must be treated as not having limited capability for work, subject to the provision’s closing exemption. The judgment also explains that the exemption for being treated as having limited capability does not extend to the risk and life-threatening disease categories that require a prior assessment and determination.

4. The judgment sets out a practical sequence for applying regulation 41. The decision-maker should first consider categories that permit a claimant to be treated as having limited capability without an assessment, then calculate monthly earnings under regulation 90(6), and, if the threshold is met, consider the statutory exceptions. If no exception applies, an assessment cannot proceed. A later fresh claim may be assessed if earnings have fallen below the threshold; regulation 41(4) does not bar that assessment where there was no earlier determination based on an assessment.

5. An appeal against a decision under regulation 41(2) may challenge whether the earnings threshold or an exception applies, or whether the claimant falls within an applicable treated-as category. It cannot rely on treated-as categories that require an assessment where the Secretary of State could not have applied them.

6. Regulation 28 does not permit a claimant to move in and out of entitlement to the LCWRA element by applying a second waiting period after an intervening period when regulation 41(2) applies. For a fresh declaration after the restriction has prevented an assessment, the relevant period is determined under regulation 28(2)(b). The judge also concluded, as guidance not required to dispose of the appeal, that this period starts when evidence is supplied to the Department, not at an earlier date mentioned in that evidence.

The Upper Tribunal set aside the First-tier Tribunal’s decision and remade it. The Secretary of State’s decision was set aside, and GEA was entitled to the LCWRA element from 3 September 2021 onwards.

• First-tier Tribunal (Social Entitlement Chamber): On 14 February 2023, partly allowed GEA’s appeal, awarding the LCWRA element from 3 September 2021 but removing it for one assessment period and applying a further waiting period.
• Upper Tribunal (Administrative Appeals Chamber): Allowed GEA’s appeal, set aside the First-tier Tribunal’s decision and remade it. The Secretary of State’s decision was set aside and GEA was held entitled to the LCWRA element from 3 September 2021 onwards.