SK v Revenue and Customs Commissioners and another
| Jurisdiction | UK Non-devolved |
| Neutral Citation | [2022] UKUT 10 (AAC) |
| Year | 2022 |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
2022 Jan 19
Upper Tribunal Judge
Social security - Welfare benefits - Universal credit - Claimant in receipt of tax credits making online claim for universal credit - Claim accepted online and stop notice sent to tax credits decision-maker resulting in tax credit award ending - Universal credit claim refused on basis claimant not meeting basic conditions imposed by statutory scheme - Appeal against decision to end tax credit award - Effect of transitional provisions governing move from legacy benefits to universal credit - Whether basic conditions triggering move to universal credit regime limited to those set out in statute or including qualifications set out in regulations - Whether move to universal credit regime triggered by stop notice -
The claimant, who was in receipt of tax credits, submitted an online claim for universal credit. Her claim was accepted online and an electronic notification, known as a “stop notice”, was sent to the decision-maker at HM Revenue and Customs, which was responsible for tax credits. Subsequently the Secretary of State for Work and Pensions, who was responsible for universal credit, notified the claimant that she was not entitled to universal credit. The basis for that decision was that the claimant did not have a right to reside in Great Britain and thus, by virtue of regulation 9 of the Universal Credit Regulations 2013 made under section 4(5) of the Welfare Reform Act 2012, was not to be treated as being “in Great Britain” for the purpose of fulfilling the basic condition of entitlement in section 4(1)(c). As recorded in a further revenue decision the claimant’s award of tax credits came to an end. The claimant’s appeal against that decision was dismissed by the First-tier Tribunal. On the claimant’s further appeal, the central issue concerned the correct interpretation of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, pursuant to which, as part of the transition from “legacy” benefits to the system of universal credit, the claimant’s entitlement to tax credits would cease where she made a claim for universal credit (regulation 8(1)(a)) and the Secretary of State was satisfied that she met the “basic conditions specified in section 4(1)(a) to (d)” of the 2012 Act (regulation 8(1)(b)). The question was whether the “basic conditions” were to be read as they stood for that purpose or whether, as the claimant contended, they were to be read subject to the qualifications set out in regulations made under the 2012 Act which applied to govern entitlement, so that where she did not meet the condition of being “in Great Britain” as so qualified, the Secretary of State could not be satisfied that she met the basic conditions and her award of tax credits ought to continue. Both the revenue and the Secretary of State contended that the only issue on the appeal was whether the tax credits decision-maker had received a stop notice.
On the appeal—
Held, dismissing the appeal, (1) that the effect of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, if it applied, was to terminate the claimant’s existing award of tax credit on the day before the effective date of the universal credit decision; that it was thus regulation 8 which operated to terminate the tax credit award, not the stop notice; that the stop notice was purely an administrative step conveying information that a determination had been made, to ensure co-ordination between the departments involved or at least their computer systems, and was not an adjudicative step or part of an adjudication process; and that as the tax credit award was only terminated if the conditions in regulation 8 were satisfied, the appeal turned on the issue of what that regulation required and whether it had been properly satisfied (post, paras 19, 20).
(2) That regulation 8 of the 2014 Regulations was concerned only with the basic conditions as “specified in” section 4(1)(a) to (d) of the Welfare Reform Act 2012 and thus excluded cases in which a person was treated as not being in Great Britain under section 4(5)(a), or in other words cases in which section 4(1)(c) was qualified by deeming provisions; that, therefore, for the purposes of regulation 8 the words of section 4(1)(c) of the 2012 Act were freestanding and had to be read without regard to the qualifying regulations; that it was notable that without regulation 8(1)(b) of the 2014 Regulations cases would be transferred from the old tax credit regime to the new universal credit regime at the moment a claim was made, regardless of the outcome of the claim, and regulation 8(1)(b) thus provided a qualification which operated to the benefit of claimants by providing that universal credit claims which did not meet the most basic conditions had no effect on the tax credit award; but that, consistently with the way that transitional provisions operated by picking circumstances that existed at a moment in time and stipulating the changes that happened thereafter, regulation 8(1) focused on the time when the claim was made and did not have the effect of aligning the operation of regulation 8 with the outcome of the claim for universal credit; that, in particular, it took no account of the financial conditions for entitlement which had to be met and did not include the basic condition in section 4(1)(e) of the 2012 Act regarding the making of a claimant commitment, leaving open the possibility that the claimant might be refused an award despite satisfying the other basic conditions, however they were defined; and that where regulation 8 applied, the effect was to terminate the award of tax credit on the day before the decision on universal credit took effect (which would usually be the date of claim), regardless of whether the Secretary of State made an award of universal credit or ultimately refused the claim (post, paras 1, 22, 23, 27, 28, 29, 32, 35, 40).
(3) That by virtue of section 2 of the Social Security Act 1998 the Secretary of State was entitled to rely on a computer program to identify cases in which the transitional condition was satisfied; and that what the computer produced, while not a “decision” or an “assessment” for that purpose, was a “determination” within the meaning of section 2 (post, para 39).
The following cases are referred to in the judgment:
CG/0953/1999 (unreported) 15 February 2000,
Carpenter v Secretary of State for Work and Pensions; R(IB) 6/03
JL v Calderdale Metropolitan Borough Council
R (Johnson) v Secretary of State for Work and Pensions
Revenue and Customs Comrs v AB
Revenue and Customs Comrs v LH
APPEAL from the First-tier Tribunal (Social Entitlement Chamber)
By a decision dated 21 August 2019 the First-tier Tribunal (Social Entitlement Chamber) dismissed an appeal by the claimant, SK, against a decision of HM Revenue and Customs Commissioners recording that the claimant’s award of tax credit had come to an end with effect from 16 March 2019 by reason of her having made a claim for universal credit on 17 March 2019, notwithstanding that the Secretary of State for Work and Pensions, in a decision dated 5 April 2019, had decided that the claimant was ineligible for universal credit because she did not have a right to reside in Great Britain and thus, by virtue of regulation 9 of the Universal Credit Regulations 2013, was not to be treated as fulfilling the basic condition of being “in Great Britain” under section 4(1)(c) of the Welfare Reform Act 2012. With permission granted by the First-tier Tribunal the claimant appealed to the Upper Tribunal on the ground that, for the purpose of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, pursuant to which the claimant’s entitlement to tax credits would cease where she made a claim for universal credit and the Secretary of State was satisfied that she met the “basic conditions specified in section 4(1)(a) to (d)” of the 2012 Act, the basic conditions were to be read subject to the qualifications set out in regulations made under the 2012 Act which applied to govern entitlement to universal credit, so that where she did not meet the condition of being “in Great Britain” as so qualified, the Secretary of State could not be satisfied that she met the basic conditions and her award of tax credits ought to continue.
The facts are stated in the judgment, post, paras 3–5.
The appeal was determined on written submissions.
19 January 2022. UPPER TRIBUNAL JUDGE JACOBS promulgated the following judgment.
DECISION
The decision of the First-tier Tribunal did not involve the making of an error on a point of law under section 12 of the Tribunals, Courts and Enforcement Act 2007.
REASONS
A. The issue1 This appeal is about the transition from tax credits to universal credit. In particular, it is about the interpretation of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014. This refers to the basic condition for entitlement to universal credit in section 4(1)(c) of the Welfare Reform Act 2012, which reads: “a person meets the basic conditions who … (c) is in Great Britain …” Do those words have to be understood as they stand or subject to qualifications in regulations authorised by the Act? I have decided that they are freestanding and have to be read...
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