IB REASSESSMENT: ARREARS OF ESA(IR)
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1 Memo DMG 2/18 IB REASSESSMENT: ARREARS OF ESA(IR) Contents Paragraphs Introduction 1 Background 2-3 The UT Judge s decision 4-5 Making a conversion decision 6-7 Revision and supersession effective date of decision Relevant determination 8 The LEAP exercise 9-10 Claimant applies for arrears of ESA(IR) non-leap cases 11 Request for mandatory reconsideration 12 Appeals 13 Effect of payment of arrears 14 Contacts Annotations Appendix A: Sample record of mandatory reconsideration Appendix B: Sample appeal response INTRODUCTION 1 This memo gives guidance on a recent decision of the UT 1 about the date from which arrears of ESA(IR) can be awarded in cases where awards of IB or SDA were incorrectly converted to ESA(Cont) only. 1 SK v SSWP; CSE/33/17 BACKGROUND 2 The claimant was entitled to IB, and on the DM decided that her award qualified for conversion to ESA(Cont) effective from , after determining that the
2 claimant had LCW and LCWRA. An invitation to claim ESA(IR) was issued on when the conversion decision was notified, but no response was received. 3 On the claimant asked for ESA(IR) to be included in her award from The DM refused to award arrears of ESA(IR) on the grounds that she had not responded to the claim invitation issued on The decision was not changed following mandatory reconsideration, and was confirmed on appeal to the FtT. THE UT JUDGE S DECISION 4 The claimant s appeal to the UT was allowed, the UT Judge holding that 1. when making the conversion decision, the DM had a duty to consider the claimant s entitlement to ESA as if a claim to ESA had been made 1 2. following an earlier decision of the UT 2 (LH), ESA is a single benefit, and a person is not required to make a separate claim to ESA(IR), so that in the absence of any waiver the DM should calculate entitlement to both ESA(Cont) and ESA(IR) 3. the DM had erred in law in requiring a claim to ESA(IR), and in failing to make the conversion decision correctly, in the light of LH 4. the provision restricting arrears of entitlement to applied 3, even if the DM had not done so in the individual case. 1 ESA (TP, HB & CTB)(EA)(No. 2) Regs, reg 5(3) & 8(1)(a); 2 LH v SSWP [2015] AACR 14; 3 SS Act 98, s 27(3) 5 The UT Judge held that the FtT had erred in law by confirming the decision of He remitted the case to the DM to calculate and decide the amount of ESA entitlement from The conversion decision could be revised for official error 1, taking into account the definition of official error 2 (see DMG ), or superseded for error of law 3. Note: In the claimant s case, the conversion decision should be superseded for error of law, as it was made before the relevant determination (see paragraphs 9-10 below). 1 SS & CS (D&A) Regs, reg 3(5)(a); 2 reg 1; 3 reg 6(2)(b) MAKING A CONVERSION DECISION 6 Where the DM determines that
3 1. an award of IB or SDA qualifies for conversion to ESA and 2. the claimant is not entitled to IS the DM must determine whether the claimant satisfies the financial conditions for ESA(IR) before making the conversion decision. Information should be gathered in the normal way, for example by issuing form ESA3 1. Note: See DMG for further details about obtaining information. 1 SS (C&P) Regs, reg 32(1) & (1A); ESA (TP, HB & CTB)(EA)(No. 2) Regs, Sch 1 para 13 7 If the claimant 1. does not return form ESA3 or 2. states that they do not wish to be assessed for entitlement to ESA(IR) a record of this must be kept (see DMG and 01320). The DM should make the conversion decision on the basis that, on the balance of probabilities (see DMG and 01405), the claimant is not entitled to ESA(IR). REVISION AND SUPERSESSION EFFECTIVE DATE OF DECISION Relevant determination 8 The decision of the UT in LH is a relevant determination 1. The date of the relevant determination is Note: See DMG Chapter 04 for guidance on the meaning of a relevant determination and its effect on decision making. Further guidance can also be found in the Appendix to Memo ADM 30/17. 1 SS Act 98, s 27(1)(a) The LEAP exercise 9 Conversion decisions made in the period 2010 to 2014 are being reviewed in a special exercise (called a LEAP exercise). As part of this exercise the claimant is asked to provide information relating to the financial conditions 1. Where the information indicates that the claimant satisfied the financial conditions from and including the effective date of the conversion decision, that decision should be 1. superseded for error of law if it was made on or before or
4 2. revised for official error if it was made after Note: If the financial conditions are satisfied from a later date, the normal supersession rules apply. See DMG Chapter 04 for further details. 1 WR Act 07, s 1(2)(b) & Sch 1, Part 2 10 The effective date of the decision, i.e. the date from which arrears of ESA(IR) are due, is, where the conversion decision is 1. superseded, , the date of the relevant determination 1 or 2. revised, the effective date of the conversion decision 2. 1 SS Act 98, s 10(6) & 27(3); SS & CS (D&A) Regs, reg 6(2)(b) & 7(6); 2 SS Act 98, s 9(3); SS & CS (D&A) Regs, reg 3(5)(a) Claimant applies for arrears of ESA(IR) non-leap cases 11 The guidance in paragraphs 9-10 also applies in conversion cases where 1. entitlement to ESA(IR) was not considered when the conversion decision was made and 2. the claimant applies for and is entitled to arrears of ESA(IR) from the effective date of the conversion decision. Request for mandatory reconsideration 12 Where a claimant applies for mandatory reconsideration of a decision made in accordance with paragraphs 9-11, the DM should refuse to revise the decision. This is on the basis that the decision was made in the light of LH, and LH cannot be applied for any period before See Appendix A for a sample record of mandatory reconsideration template. Appeals 13 Where a claimant appeals against a decision made in accordance with paragraphs 9-11, the sample response to the FtT at Appendix B should be completed as appropriate. This explains that the FtT stands in the shoes of the DM, and is therefore bound to apply LH in the same way as the DM. EFFECT OF PAYMENT OF ARREARS
5 14 The payment of arrears may affect whether the claimant satisfies the financial conditions of ESA(IR) in relation to capital and whether it is disregarded 1 see DMG and Further guidance will be issued as soon as possible. 1 WR Act 07, s 17; ESA Regs, Part 10 & Sch 9, para 11 ANNOTATIONS Please annotate the number of this memo (Memo DMG 2/18) against the following DMG paragraph: DMG main heading CONTACTS If you have any queries about this memo, please write to Decision Making and Appeals (DMA) Leeds, 1S25, Quarry House, Leeds. Existing arrangements for such referrals should be followed, as set out in Memo DMG 23/16 - Obtaining legal advice and guidance on the Law. DMA Leeds: March 2018
6 APPENDIX A: SAMPLE RECORD OF MANDATORY RECONSIDERATION My decision: I have reconsidered and refused to revise the supersession decision not to award ESA(IR) from the date your award was converted to ESA. This is because it is correct in law. On [date], a decision was made to convert your award of Incapacity Benefit (IB) to contributory ESA (ESA(C)) only from [date]. On [date] you were issued with form ESA3(IBR) to enable you to provide information so we could consider entitlement to Income Related Employment and Support Allowance (ESA(IR)). On [date] the conversion decision was superseded to award ESA(IR) effective only from 21/10/14. On [date] you/your representative wrote and asked for the supersession decision to be reconsidered and for you to be awarded ESA(IR) from [date ESA award began] when your award of IB was converted to contributory ESA. When an award of IB is converted to ESA, the law requires a calculation of the amount of ESA you would be entitled to as if you had made a claim for it. This requires consideration of whether you are entitled to either contributory or income-related ESA, or both. The conversion decision made on [date] did not consider entitlement to income-related ESA and was therefore erroneous in law. However, the principle that a claim for ESA requires full consideration of both contributory and income-related ESA was established in a decision of the Upper Tribunal dated (this is known as the lead case). The law does not allow the Secretary of State to apply the financial effect of the lead case to any period of entitlement before That approach has been confirmed in a recent decision of the Upper Tribunal. I therefore cannot change the supersession decision dated [date of decision awarding ESA(IR)] so as to award ESA(IR) from [effective date of conversion decision]. The Law Used to Make This Decision The Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No. 2) Regulations 2010, regulation 8(1) The Social Security and Child Support (Decision Making and Appeals) Regulations 1999, regulation 3(1)(b), 6(2)(b) and 7(6)
7 Social Security Act 1998, section 27 Case Law: LH v SSWP (ESA) [2014] UKUT 480 (AAC); [2105] AACR 14 and SK v SSWP; CSE/33/17
8 APPENDIX B: SAMPLE APPEAL RESPONSE Section 5: The response The sole issue in this appeal is whether the supersession decision dated [date of supersession decision] correctly limited arrears of income-related employment and support allowance (ESA(IR)) to because the law restricting entitlement to benefit applies, or whether arrears are payable from [effective date of conversion decision] as contended by the claimant. Social Security Act 1998, section 27 Social Security and Child Support (Decisions and Appeals) Regulations 1999, regulations 6(2)(b) and 7(6) The law requires that when it is determined that a claimant s award of [Incapacity Benefit (IB) or Severe Disablement Allowance (SDA)] qualifies for conversion to ESA, the amount of ESA is determined by 1. calculating the amount of ESA to which the claimant would be entitled if, on a claim, it had been determined that they were entitled and the assessment phase had ended 2. determining whether the claimant is entitled to a transitional addition, and if so the amount 3. aggregating the amounts at 1. and 2.. The Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No. 2) Regulations 2010, regulation 8 In LH v SSWP (ESA) [2014] UKUT 480 (AAC), reported as [2015] AACR 14, the Upper Tribunal (UT) Judge held that ESA is a single benefit and separate claims are not required for the contributory or income related allowances. It is not disputed that [name of claimant] was awarded only contributory ESA on conversion from [IB/SDA]. The Secretary of State did not consider whether [name of claimant] was entitled to ESA(IR). The conversion decision is therefore erroneous in law. The UT decision in LH v SSWP was accepted in SK v SSWP as a relevant determination. The effect of LH v SSWP is that other decisions that incorporate the previous interpretation of the law are wrong in law. The date of the relevant determination is
9 Section 27(3)(a)of the Social Security Act 1998 says that where a decision falls to be made on a date after a relevant determination was made In so far as the decision relates to a person's entitlement to a benefit in respect of (a) a period before the date of the relevant determination; or (b), it shall be made as if the adjudicating authority's decision had been found by the Upper Tribunal or court not to have been erroneous in point of law. This means that when making a decision after , the DM cannot apply the financial effect of LH v SSWP to any period before Any award or increase that the claimant is entitled to on account of LH v SSWP can only be effective from When a First-tier Tribunal (FtT) decides an appeal, they make a decision that the Secretary of State could have made. This was explained by a Tribunal of Commissioners (now Upper Tribunal Judges) who said the following in paragraph 25 in R(IB) 2/04: Taking the simple case of an appeal against a decision on an initial claim, in our view the appeal tribunal has the power to consider any issue and make any decision on the claim which the decision-maker could have considered and made. The appeal tribunal in effect stands in the shoes of the decisionmaker for the purpose of making a decision on the claim. It follows that if the DM was bound by section 27 when making a decision, the FtT are bound by it when standing in the DM s shoes. This was confirmed by UT Judge (then Commissioner) Jacobs in CH/0532/06. In considering the equivalent provision to section 27 for Housing Benefit, he said the following in paragraph 14: As the decision-maker was bound by paragraph 18, the tribunal must be also. The same result is produced by the consideration that, were it otherwise, the effect of paragraph 18 could be avoided by the simple expedient of lodging an appeal against the local authority s decision. In SK v SSWP (CSE/33/17), in a similar case where the issue was the date from which arrears of ESA(IR) could be paid, the Upper Tribunal Judge held that 1. LH v SSWP was a relevant determination
10 2. the conversion decision fell to be revised or superseded in accordance with LH v SSWP 3. section 27(3) applied to limit arrears to , and 4. the FtT had erred in failing to do so. I therefore respectfully submit that the supersession decision dated [date of supersession decision] is correctly made. I invite the FtT to strike out the proceedings on the grounds that the appeal has no reasonable prospect of success. Alternatively, I invite the FtT to dismiss the appeal. The Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008, rule 8(3)(c) and 27(3)
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