CIS/4511/2002

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.  My decision is that the decision of the tribunal is erroneous in point of law.  I set aside the decision of the tribunal, but substitute for it my own decision to the same effect, that is, a decision superseding the decision awarding the claimant income support at the rate of £71.45 per week from 23 August 2000 on the ground of a relevant change of circumstances, and awarding the claimant income support at the rate of £6.62 weekly from 31 October 2000.

2.  Regulation 42(2A) of the Income Support (General) Regulations 1987 provides for income from a personal pension scheme which is available to a person aged over 60 to be  treated as notional income in determining entitlement to income support.   In this appeal the claimant contends that that provision contravenes the right to peaceful enjoyment of his possessions accorded to him by Article 1 of Protocol 1 of the European Convention on Human Rights.  He also contends that, because of the difference in the retirement ages of men and women, the provision is more likely to affect men than women and is therefore in breach of Article 14, when read with Article 1 of Protocol 1 of the Convention.  I held an oral hearing of the appeal on 6 June 2003, at which the claimant was represented by Miss Kate Smith, of the Citizens’ Advice Bureau Specialist Support Unit, and the Secretary of State was represented by Miss Deborah Heywood, of the Department for Work and Pensions Solicitor’s Department.

3.  The claimant is a divorced man, born on 20 March 1939, who claimed income support from 23 August 2000.  He had capital of £4,416.23, and also a personal pension plan under which he was entitled to £280.97 per month, amounting to £64.83 per week, from 1 November 2000.  However, the claimant took no steps to secure payment of the income to which he was entitled or to purchase an annuity with the funds available in the scheme.  On 17 October 2000 a decision was therefore made  purporting to reduce the income support payable to the claimant from  £71.45 to £6.62 per week from 31 October 2000 (the first day of the relevant benefit week), on the ground that he was to be treated under regulation 42(2A) as having notional income of  £64.83 per week from that date.  The decision was not revised on reconsideration, and the claimant appealed on 29 December 2000.

4.  The claimant was directed by a chairman to provide a written statement of his arguments under the Human Rights Act.  Although he provided an extremely detailed and clear submission in response to that direction, the tribunal chairman who dealt with the case at a ‘paper’ hearing on 22 January 2002 dismissed the appeal on the basis that the tribunal had to apply the law as enacted, and had no power to override either primary or secondary legislation.  That decision was set aside on 9 May 2002 under section 13(2) of the Social Security Act 1998 because it was considered that insufficient consideration had been given to the Human Rights Act questions arising in the appeal and on the ground that the decision was erroneous in law in stating that there was no power to override secondary legislation.

5.  The appeal was again dismissed when it was re-heard on 5 June 2002.  On that occasion the chairman dealt with the Human Rights arguments as follows:

 “The appellant argues that the legislation is in breach of  human rights but does not set out the nature of the breach.  I accept that a pension is property for the purposes of the Convention.  The legislation in question is clear in its terms and does not admit of a more favourable interpretation to assist the appellant; this tribunal cannot in any event make a declaration of incompatibility even if it thought one appropriate.

The legislation applied is not discriminatory as between men and women.”

I granted leave to appeal on 23 December 2002 because I considered it arguable that the tribunal gave inadequate reasons for rejecting the claimant’s Human Rights arguments.  The Secretary of State, in a submission dated 10 February 2003, supported the appeal to that extent, but submitted that the actual decision of the tribunal was correct in law.  That remained the Secretary of State’s position at the oral hearing of the appeal before me.

5.  Regulation 42(2A) of the 1987 Regulations provides:

“Where a person, aged not less than 60, is a member of, or person deriving entitlement to a pension under, a personal pension scheme, or is a party to, or person deriving entitlement to a pension under, a retirement annuity contract, and-

(a)  in the case of a personal pension scheme, he fails to purchase an annuity with the funds available in that scheme where-

(i)	he defers, in whole or in part, the payment of any income which would have been payable to him by his pension fund holder;
(ii)	he fails to take any necessary action to secure that the whole of any income which would be payable to him by his pension fund holder upon his applying for it, is so paid; or
(iii)	income withdrawal is not available to him under that scheme; or

(b)  in the case of a retirement annuity contract, he fails to purchase an annuity with the funds available under that contract,

the amount of any income foregone shall be treated as possessed by him, but only from the date on which it could be expected to be acquired were an application for it to be made.”

Because the decision reducing the amount of income support payable to the claimant was made after the commencement of  section 6 of the Human Rights Act 1998 on 2 October 2000, it was unlawful for the Secretary of State to act in a way which was incompatible with a Convention right.  By section 1(1) of the 1998 Act, those rights include the rights conferred by Article 1 of Protocol 1 and Article 14 of the Convention, which provide:

“Article 1-Protection of Property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions.  No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.  The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems to be necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or the contributions or penalties.”

“Article 14-Prohibition of Discrimination

The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language religion political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

6.  The claimant has stated that he did not intend drawing his pension before reaching the age of 65.  He contends that by drawing his pension before then his pension fund will not benefit from any growth in the period before he reaches his intended retirement age, and that his monthly pension payments will be less than they would have been if he had deferred receiving payments of income under the scheme until reaching the age of 65.  Furthermore, he will be deprived of the opportunity of making additional contributions to the fund if he should return to work before reaching his intended retirement age.  The claimant did not contend that his entitlement to income support was a right of property, but he submitted that his rights under his personal pension scheme constituted a ‘possession’ under Article 1 of Protocol 1 and that,  since he cannot live on £6.62 per week, the effect of regulation 42(2A) is to oblige him to exercise his rights under his personal pension scheme in a way which he regards as disadvantageous.  He therefore contends that the regulation interferes with the peaceful enjoyment of his property rights arising from his contributions to his personal pension scheme.

7.  Miss Smith did not pursue this argument at the oral hearing, and in my judgment it is not well founded.  Although contributions to a private pension scheme certainly create rights of property within the scope of Article 1 of  Protocol 1, the claimant has not shown that by drawing his pension before the age of 65 the value of the benefits resulting from his contributions will be reduced in any way.  Regulation 42(2A) is concerned with entitlement to income support and, although it requires entitlement to income from a personal pension scheme to be brought into account in determining entitlement to income support, it does not deprive a claimant of any of the benefits of the scheme.  I therefore agree with the Secretary of State’s submission that the claimant’s rights under Article 1 of Protocol 1 were not contravened by treating the income to which the claimant was entitled under his pension scheme as notional income for income support purposes.

8.  The principal argument advanced by Miss Smith was that regulation 42(2A) contravenes Article 14, when read with Article 1 of Protocol 1 of the Convention.  Miss Smith submitted that the regulation engages Article 1 of Protocol 1 for the purposes of Article 14 because it interferes with a claimant’s ability to leave funds in a pension scheme to accumulate, and therefore hinders the claimant’s  ability to use and develop his property as he wishes.  Miss Smith contends that the provision  discriminates against men because the entitlement of women to a state retirement pension between the ages of 60 and 65 means that a smaller proportion of women than men are on income support, so that a greater proportion of men than women with personal pension schemes have to draw income from those schemes before the age of 65.  Although Miss Smith accepts that any such discrimination must be indirect, she submits that indirect discrimination may nevertheless fall within Article 14 on the authority of Jordan and others v United Kingdom (The Times 18 May 2001) and the recent decision of Mr Commissioner Jacobs in CH/5125-5130/2002.  In answer to the point that regulation 42(2A) is justified by the need to ensure that claimants make use of their own resources before having recourse to income support, Miss Smith submits that there is little room for any margin of appreciation where discrimination is on grounds of sex, and that the discriminatory effect of  a cut-off age for disregarding pension scheme benefits could be avoided by making that age 65 during the period until the retirement ages of men and women are finally harmonised.

8.  As is well-known, Article 14 does not create a free-standing prohibition against discrimination, but requires equality of access to other Convention rights.  Although it is not necessary for there to have been a breach of some other Convention right, the facts of the case must fall within the ‘ambit’ of one or more other Articles-see Abdulaziz Cabales v United Kingdom (1985) 7 EHRR 471.  In CDLA/3908/2001 Mr Commissioner Jacobs held that entitlement to a benefit is not within the ambit of Article 1 of Protocol 1 if  the benefit has no connection with the payment of contributions, and the correctness of that proposition was recently confirmed by the Court of  Appeal in Carson and Reynolds v Secretary of State for Work and Pensions [2003] EWCA Civ 797 (per Laws LJ at paras. 42-50).   The payment of income support may possibly in some circumstances constitute a demonstration by the State of respect for family life and therefore fall within the scope of  Article 8, and in CIS/3280/2001 I held that the provisions for the making of social fund funeral payments came within the ambit of that Article.  However, I can see no basis for arguing that entitlement to income support always engages Article 8, and it has not been submitted that it is engaged on the facts of this particular case.

10.  Even if Article 1 of Protocol 1 or Article 8 are engaged in this case for the purposes of Article 14, I consider that the claimant has failed to establish a sufficient basis of comparison of  his position with that of women for Article 14 to be invoked.   Article 14 requires that the claimant and those in the comparator group are in “an analogous or relevantly similar situation”- see Stubbings  v United Kingdom (1996) 23 EHRR 213.  Regulation 42(2A) applies equally to men and women, but the claimant argues that it is nevertheless discriminatory because it has a disproportionate adverse impact on men, in compelling a greater proportion of men than women under the age of 65 to draw income from personal pension schemes.   Miss Smith accepted at the hearing that that premise depends on the proposition that women are less likely than men to claim income support between the ages of 60 and 65 because some women will be in receipt of retirement pension between those ages.  However, even if that is the case, in my view men and women are not in a “relevantly similar situation” if the position of men in receipt of income support is compared with that of women who are not in receipt of income support because they are in receipt of retirement pension.  The Article 14 argument therefore fails because the differential impact of the regulation on which the claimant relies itself fatally undermines the basis for comparison which is necessary for Article 14  to apply.

11.  I therefore hold that the Secretary of State did not act in breach of any rights conferred on the claimant  by the Human Rights Act in treating the income available to him under his personal pension scheme as notional income.  In the light of that conclusion, I do not regard it as necessary to consider whether the claimant’s treatment was justified on the basis that claimants should so far as possible be expected to maintain themselves from their available resources before having recourse to income support.  I also do not consider it necessary to express a view on whether Article 14 extends to indirect discrimination.

12.  I have considered whether to allow the appeal on the ground that there is no effective supersession decision.  In the submission to the tribunal, the Secretary of State claims to have ‘revised’ the amount of benefit payable to the claimant, but the correct basis for altering the amount of benefit was a supersession of the decision awarding benefit, on the ground of a relevant change of circumstances.  Although the decision at pages 19 and 20 of the case papers makes no reference to supersession, it does record that the claimant became entitled to income from his personal pension scheme from 1 November 2000 and records a decision to take that income into account as notional income from that date under regulation 42(2A).  The decision therefore records all the matters necessary to justify supesession on the ground of a relevant change of circumstances, and I therefore propose to treat it as  a valid supersession decision.

13.  Finally, it is necessary to consider the adequacy of the tribunal’s reasons.  I agree with the Secretary of State that a tribunal’s lack of any power to make a declaration of incompatibility is not a good reason for not dealing fully with Human Rights issues, particularly since a tribunal may have power in some cases to declare subordinate legislation to have been invalidly made-see Chief Adjudication Officer v Foster [1993] 1 All ER 705.  The claimant in this appeal clearly went to considerable trouble to set out his arguments under the Human Rights Act clearly and comprehensively in response to the chairman’s direction, and I consider that he was entitled to a much fuller explanation of the tribunal’s reasons for rejecting his arguments than the very short passage at the end of the statement of reasons set out above.  The reasons for the tribunal’s rejection of the claimant’s discrimination arguments are not apparent from the statement, and I therefore consider that, in all the circumstances, the tribunal’s reasons were inadequate.

14.  I therefore allow the appeal on that ground alone but, for the reasons I have given, I make a decision to the same practical effect as that made by the tribunal. 

						(Signed)	E A L BANO
								Commissioner

			9 October 2003