Hagan v Secretary of State for Social Security
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SCHIEMANN,LORD JUSTICE MANSE,LORD JUSTICE KEENE |
| Judgment Date | 30 July 2001 |
| Neutral Citation | [2001] EWCA Civ 1452 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A1/2001/0509 |
| Date | 30 July 2001 |
[2001] EWCA Civ 1452
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SOCIAL SECURITY COMMISSIONERS
Royal Courts of Justice
Strand
London WC2
Lord Justice Schiemann
Lord Justice Mance and
Lord Justice Keene
A1/2001/0509
The Appellant did not attend and was not represented
MR J MAURICI (instructed by DSS SOLICITORS) appeared on behalf of the Respondent
Monday, 30th July 2001
This appeal raises a point of considerable general importance in relation to reduced earnings allowance. We have in front of us Mr Maurici for the Secretary of State, who is the appellant. No one appears on the other side. That is totally understandable because the actual amount of benefit which the Secretary of State maintains has been overpaid is small, and the Secretary of State has indicated that he has no intention of seeking to recover it or seeking to obtain any costs in these proceedings. He brings them purely in the public interest in order to maintain what he sees as the purity of the social security scheme.
Reduced Earnings Allowance ("REA") is a Social Security benefit payable where an employed earner cannot continue in his regular occupation because of an industrial accident and suffers a reduction in earnings as a result. Most claimants for reduced earnings allowance suffer only one industrial accident in their working lives and thus have only one change of occupation consequent on an industrial accident. However, a minority of claimants first suffer an industrial injury in Job A and consequently move to Job B with an accompanying reduction in earnings, and then suffer a further industrial accident in Job B, resulting in a further change of regular occupation to Job C and a further reduction in earnings.
We are told by Mr Maurici that there are over a thousand people in that type of situation. This case, we are told in the excellent skeleton argument prepared on behalf of the Secretary of State by Mr Forsdick who unfortunately is unable to argue the case today, raises an important point about the way in which REA is to be claimed by claimants who have over time suffered more than one industrial accident each of which causes a change in regular occupation.
The position of the appellant on this appeal is that (1) a claimant for REA is entitled to make a separate claim for each change of regular occupation caused by each industrial accident if that change of occupation results in a drop in earnings; and (2) there is no rule of law that requires all accidents, whenever they occur, to be considered together on one claim. The Social Security Commissioner held that each claimant could only make one claim which had to cover all accidents and all changes of occupation. The point is of considerable practical importance for a number of claimants.
Prior to the Social Security Commissioner's decision it was accepted practice that claimants who had suffered successive industrial accidents, each of which caused a change in regular occupation and a consequent reduction in earnings, could make a separate claim in relation to each accident. Thus, a person who had suffered three industrial accidents, each of which had individually meant that he could not continue in his regular occupation and suffered a pay cut as a result, could make three separates claims for REA and thus be entitled to up to three times the statutory limits of REA on a single claim.
Thus in this case the Secretary of State for Social Security is in the relatively unusual position of arguing for a more generous interpretation of the law than that adopted by the Social Security Commissioner; although on the facts of this case the interpretation does not assist the claimant.
I take, not merely the foregoing, but also the bulk of what follows from the skeleton argument to which I have referred. By virtue of section 103(1) of the Social Security Contributions and Benefits Act 1992:
"An employed earner shall be entitled to a disablement pension if he suffers as the result of an industrial accident from loss of physical or mental faculty such that the assessed extent of the resulting disablement amounts to not less than 14 per cent."
The amount of disablement pension payable is calculated by reference to the percentage disability assessed (see schedule 4 Part V(1)). So if a person is assessed as 50 per cent disabled he will receive 50 per cent of the maximum disability pension.
The percentage disability is assessed by reference to schedule 6 to the Contributions and Benefits Act 1992 and the Social Security (General Benefit) Regulations 1982 regulation 11 and schedule 2. For example, the percentage disability prescribed for the loss of an eye is 40 per cent.
Section 103(2) provides for the aggregation of assessments of disability from earlier accidents:
"In the determination of the extent of an employed earner's disablement for the purposes of this section there may be added to the percentage of the disablement resulting from the relevant accident the assessed percentage of any present disablement of his -
(a) which resulted from any other accident after 4th July 1948 arising out of and in the course of his employment ".
Section 106 provides for other benefits consequential upon industrial injuries including REA. The provisions in relation to REA are contained in schedule 7(11) of the Social Security Contributions and Benefits Act 1992. Paragraph 11(1) of this provides:
"Subject to the provisions of this paragraph, an employed earner shall be entitled to reduced earnings allowance if -
(a) he is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assessed at not less than 1 per cent; and;
(b) as a result of the relevant loss of faculty he is either -
(i) incapable, and likely to remain permanently incapable of following his regular occupation; and
(ii) incapable of following employment of an equivalent standard which is suitable in his case but a person shall not be entitled to reduced earnings allowance to the extent that the relevant loss of faculty results from an accident happening on or after 1st October 1990."
It is to be noted that there is no aggregation provision equivalent to section 103(2) in respect of disablement pension.
Paragraph 11(8) provides that REA shall be awarded for such period as may be determined at the time of the award and thereafter on any renewal claim for such further period as may be determined. These are hereafters referred to as successive claims for REA.
The rate at which REA is to be paid is determined pursuant paragraph 11(10) of schedule 7.
A number of challenges faced the draughtsman. The first of these was to determine the basis upon which reduced earnings were to be calculated. The answer arrived at was to compare, on a prescribed basis, what the claimant would have earned but for the injury, with what in fact he was earning.
The second arose out of the relationship between the disablement pension and REA. It was desired to put a cap on the amount of REA paid. This cap was to be determined by reference to two factors. The first was that the weekly amount of REA was not to exceed 40 per cent of the amount of the pension; the second was that the aggregate of the REA and the disablement pension was not to exceed 140 per cent of the pension. The limpid style developed after years of drafting social security legislation payments does not favour short sentences. Instead, all these considerations are reflected in the following long long sentence which appears in paragraphs 11(10):
"Reduced earnings allowance shall be payable at a rate determined by reference to the beneficiary's probable standard of remuneration during the period for which it is granted in any employed earner's employments which are suitable in his case and which he is likely to be capable of following as compared with that in the relevant occupation, but in no case at a rate higher than 40 per cent of that maximum rate of a disablement pension or at a rate such that the aggregate of disablement pension and reduced earnings allowance awarded to the beneficiary exceeds 140 per cent of the maximum rate of the disablement pension."
In short, the assessment of REA is carried out by comparing the likely future earnings in the occupation which the claimant has had to move to by reason of the accident with the likely earnings from his occupation prior to the accident. The maximum amount of benefit payable under REA in each case must not exceed 40 per cent of the maximum possible disablement pension, and in any case the total REA and disablement pension payment must not exceed 140 per cent of the maximum possible disablement pension. So if the maximum rate of disablement pension is £100 per week, and if the reduction of earnings caused by the relevant accident is £80 per week, the amount of REA payable in respect of that accident should be limited to £40 per week. If, however, the reduction of earnings caused by the relevant accident is £30 per week, then that sum would be payable as REA.
Paragraph 13 of schedule 7 relates to a further benefit known as retirement allowance. It is relevant for reasons which follow, and provides:
"(1) Subject to the provisions of this Part of this Schedule, a person who -
(a) has attained pensionable age; and
(b) gives up regular employment on or after 10th April 1989; and
(c) was entitled to reduced earnings allowance (by virtue either of one award or of a number of awards) on the day...
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TA CI 402 2012
...losses of earnings arising from his being unable to do two different jobs: per Secretary of State for Social Security –v- Hagan [2001] EWCA Civ 1452 As I have already said, the appellant reached his sixty fifth birthday – his pensionable age - on 28 February 2009. Because of this and becaus......