Anne Dumbreck Robins v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee,Lady Justice Whipple,Lady Justice Asplin |
| Judgment Date | 28 July 2023 |
| Neutral Citation | [2023] EWCA Civ 890 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-000301 |
[2023] EWCA Civ 890
Lady Justice Asplin
Lord Justice Nugee
and
Lady Justice Whipple
Case No: CA-2023-000301
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
Upper Tribunal Judge Ovey
Appeal No: 2020-000635-RP
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir James Eadie KC and Julia Smyth (instructed by the Treasury Solicitor) for the Appellant
Julian Milford KC (instructed by direct access) for the Respondent
Hearing date: 18 July 2023
Approved Judgment
This judgment was handed down remotely at 2 pm on 28 July 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This second appeal from the Upper Tribunal (Administrative Appeals Chamber) concerns the operation of contracting out in relation to pension schemes, and specifically the so-called contracting-out deduction (or COD) under which guaranteed minimum pensions ( “GMPs”) are deducted from state pensions. It raises one point of statutory construction.
The statutory provision under which the contracting-out deduction is made is s. 46(1) of the Pension Schemes Act 1993 ( “PSA 1993”), which provides as follows:
“ 46 Effect of entitlement to guaranteed minimum pensions on payment of social security benefits.
(1) Where for any period a person is entitled both—
(a) to a Category A or Category B retirement pension, a widowed mother's allowance, a widowed parent's allowance or a widow's pension under the Social Security Contributions and Benefits Act 1992; and
(b) to one or more guaranteed minimum pensions,
the weekly rate of the benefit mentioned in paragraph (a) shall for that period be reduced by an amount equal—
(i) to that part of its additional pension which is attributable to earnings factors for any tax years ending before the principal appointed day
(ii) to the weekly rate of the pension mentioned in paragraph (b) (or, if there is more than one such pension, their aggregate weekly rates),
whichever is the less.”
The Respondent to this appeal, Mrs Robins, is a widow and a pensioner. A new state pension was introduced by the Pensions Act 2014 for those reaching pensionable age on or after 6 April 2016, but Mrs Robins attained pension age before then and we are concerned exclusively with the operation of the rules applicable to the old state pension.
Under these she is entitled to a Category A retirement pension by virtue of her own contribution record. She is also entitled to a GMP by virtue of her late husband's membership of an occupational pension scheme. The Secretary of State for Work and Pensions ( “the Secretary of State”) contends that the plain effect of s. 46(1) PSA 1993 is that the weekly rate of her Category A pension is to be reduced by an amount equal to the weekly rate of her GMP (the amount specified under s. 46(1)(ii), this being less in her case than the amount under s. 46(1)(i)).
That was the view taken by Tribunal Judge W J Rolt in the First-tier Tribunal ( “the FTT”) in a decision dated 19 February 2020. On appeal to the Upper Tribunal ( “the UT”), however, Upper Tribunal Judge Elizabeth Ovey allowed Mrs Robins' appeal and held that no such deduction should have been made.
The Secretary of State now appeals to this Court, with the permission of Judge Ovey herself.
We have had the benefit of submissions of very high quality from both Sir James Eadie KC and his junior, Ms Julia Smyth, on behalf of the Secretary of State, and from Mr Julian Milford KC on behalf of Mrs Robins. Despite the latter, however, I have come to the clear conclusion that those on behalf of the Secretary of State are to be preferred and that the appeal should be allowed.
Facts – Mrs Robins' state pension
Mrs Robins was born on 22 September 1943. Her state pension age was 60, so she became entitled to a state pension on 22 September 2003.
Old-style state pensions are payable under the Social Security Contributions and Benefits Act 1992 ( “ SSCBA 1992”). Part 2 of the SSCBA 1992 (ss. 20 to 62) concerns contributory benefits. These are listed in s. 20, and include (by s. 20(1)(f)) two categories of retirement pensions, namely Category A pensions (payable to a person by virtue of their own contributions) and Category B pensions (payable to a person by virtue of the contributions of a spouse (or since 2005 a civil partner)).
Mrs Robins had made her own contributions and so was entitled to a Category A pension. By s. 44(3) SSCBA 1992 a Category A pension consists of (a) a basic pension payable at a fixed weekly rate and (b) an additional pension if the pensioner qualifies for it. The additional pension is earnings-related. Provision for the additional pension was first made by the Social Security Pensions Act 1975 ( “SSPA 1975”) with effect from 6 April 1978, which introduced the state earnings-related pension scheme (or SERPS). Changes were made to SERPS from 6 April 1997, and from 6 April 2002 SERPS was replaced by a new form of additional pension, known as the state second pension or S2P. Mrs Robins qualified for not only a basic pension but also an additional pension. She was also entitled to a benefit called graduated retirement benefit, an earlier form of supplement to the basic state pension, which resulted in a comparatively small increase in her overall entitlement.
Mrs Robins married her husband in 1971. He had been born on 5 December 1932, and his state pension age was 65, and he therefore attained pension age in 1997. He too was entitled to a Category A Pension, consisting of the basic pension and additional (SERPS) pension, and to a comparatively small graduated retirement benefit.
By s. 48A of the SSCBA 1992 (as it stood in September 2003) Mrs Robins also qualified for a Category B retirement pension on attaining 60 because (i) she had attained pension age; (ii) she was then married; (iii) her husband had attained pensionable age and become entitled to a Category A pension; and (iv) he satisfied the contribution conditions: see s. 48A(1) and (2). But so long as her husband was alive the Category B retirement pension was payable at a fixed rate (see s. 48A(3)) that was considerably less than Mrs Robins' own Category A pension. Thus in September 2003 the weekly rate of a Category B pension payable to a pensioner whose spouse was alive was £46.35 (see sch 4 part 1 para 5 SSCBA 1992), whereas the weekly rate of Mrs Robins' basic pension alone was then £75.50 (see s. 44(3)). By s. 43(1) SSCBA 1992 a person could not be entitled at the same time to both a Category A and a Category B pension, and by s. 43(3)-(5) a person who would otherwise be entitled to both a Category A and a Category B pension was given a right to specify by notice to the Secretary of State which they wished to receive, but otherwise would be entitled to whichever was the most favourable to them. There is no suggestion that Mrs Robins gave a notice under s. 43(3) and when she turned 60 she therefore received her Category A pension and not the Category B pension.
Mr Robins died on 13 May 2018. By the time of his death the weekly Category A pension payable to Mrs Robins was as follows:
| Basic state pension | £125.95 | |
| Additional pension | ||
| 6 April 1978 to 5 April 1997 | £152.68 | |
| 6 April 1997 to 5 April 2002 | £ 34.53 | |
| From 6 April 2002 | £ 6.92 | |
| £194.13 | ||
| Graduated retirement benefit | £ 7.18 | |
| £327.26 |
Following her husband's death, Mrs Robins became entitled to a Category B pension as his widow. This was the effect of s. 48B(1) SSCBA 1992. By s. 48B(2) the rate of such a pension was (a) the weekly rate of the basic pension (then £125.95) and (b) the weekly rate of her husband's additional pension. (On the wording of s. 48B(2) itself, the second element was only half her husband's additional pension, but this was increased to 100% by reg 2(1) of the Social Security (Inherited SERPS) Regulations 2001 SI 2001/1085 as he had attained pensionable age before 6 October 2002.) At the date of his death the Category A pension payable to him was as follows:
(I explain the GMP deduction below.)
| Basic state pension | £125.95 | ||
| Additional pension (pre 6 April 1997) | £162.68 | ||
| Less: pre 88 GMP | £51.67 | ||
| post 88 GMP | £54.74 | ||
| £106.41 | |||
| £ 56.27 | |||
| Graduated retirement benefit | £ 11.59 | ||
| Age addition | £ 0.25 | ||
| £194.06 |
It can be seen that Mrs Robins' entitlement to a widow's Category B pension was therefore less than her own Category A pension, as her husband's additional pension of £162.68 was less than her own of £194.13. As already explained, the effect of s. 43 SSCBA 1992 was that she could not receive both but only the more favourable one. She therefore continued to receive her Category A Pension. She did receive a small uplift to her graduated retirement benefit which was increased from £7.18 to £12.98, the increase of £5.80 representing half her husband's graduated retirement benefit.
Under s. 52 SSCBA 1992 special provision is made for surviving spouses who would, but for s. 43, be entitled to both a Category A pension and a Category B pension by virtue of their deceased spouse's contributions. The effect of this is to enable the surviving spouse to top up their Category A pension by reference to their deceased spouse's pension in certain cases, that is if either the basic pension in their Category A pension falls short of the full amount (s. 52(2)), or the additional pension in their Category A pension falls short of the maximum specified in regulations (s. 52(3))....
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