The Queen (on the application of (1) Sharon Pantellerisco (2–4) SN, JN and NN (Children, by their litigation friend SP)) v The Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Mr Justice Garnham |
| Judgment Date | 20 July 2020 |
| Neutral Citation | [2020] EWHC 1944 (Admin) |
| Date | 20 July 2020 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/3572/2019 |
[2020] EWHC 1944 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Garnham
Case No: CO/3572/2019
Richard Drabble QC and Tom Royston (instructed by Child Poverty Action Group) for the Claimants
Edward Brown and Stephen Donnelly (instructed by Government Legal Department) for the Defendant
Hearing dates: 12th May 2020
Approved Judgment
Introduction
By these Judicial Review proceedings, Ms Sharon Pantellerisco and her three children challenge the approach adopted by the Secretary of State for Work and Pensions (“the SSWP”) to the calculation of the benefit cap in the Universal Credit statutory scheme. The Claimants' application raised questions as to the proper construction of the Universal Credit Regulations 2013 (“the Regulations”), the legality of those regulations and the Defendant's application of them in the Claimants' case.
I heard argument on this case on 12 May 2020 and was in a position to deliver a judgment later that month. It then came to my attention that the Court of Appeal were considering very similar arguments to those I had heard in a case called Johnson. Judgment was handed down in that case on 22 June ( R (Johnson) v SSWP [2020] EWCA Civ 778). It was immediately apparent that that decision might have a significant impact on the resolution of the issues in the present case. Accordingly, I invited the parties to make further written submissions on the case. I am grateful to them for their responses.
In its original form the claim advanced three grounds:
i) As a matter of statutory construction, Reg.54 and Reg.61(2)(a) of the Regulations compelled the conclusion that money earned but not paid during an assessment period was nonetheless ‘income’ from that assessment period. The Secretary of State's contrary interpretation constituted an error of law.
ii) The combined effect of Reg.54 and Reg.82(1)(a) produces an unreasonable and irrational result.
iii) The Regulations are discriminatory in breach of Article 14 ECHR because they discriminate against UC claimants who are paid on a lunar rather than calendar monthly basis.
Ground 1 was founded on the decision of the Divisional Court (Singh LJ and Lewis J) in ( Johnson v SSWP [2019] EWHC 23 (Admin)). In the light of the Court of Appeal's decision in that case, Richard Drabble QC for the claimants properly acknowledged that he could not succeed on Ground 1. He maintains his case on the other grounds, although Ground 2 was the primary focus of his argument.
The Facts
The First Claimant was born on 13 March 1979. She is the sole carer of her three dependent children, SN, JN and NN. All three children live with her, as does the First Claimant's eldest child who is now aged 19. The youngest three children are all claimants in these proceedings. They are all still at school. The eldest child has recently finished her education. They all live together in rented accommodation, paying rent of £755pcm.
The First Claimant is employed for 16 hours a week at the national living wage rate. In the year to March 2020 that was a rate of £8.21 per hour. She is paid her salary on a 4-weekly cycle. The First Claimant first claimed Universal Credit (“UC”) on 4 February 2019. Universal Credit is calculated by reference to monthly assessment periods. The First Claimant's assessment period runs from 4 February 2019, the date she first made her claim.
The First Claimant's employer is a “Real Time Information” (“RTI”) employer. Information about its employees is passed from the employer to HMRC and from them to the Department for Work and Pensions (“DWP”).
The fact that the First Claimant is paid on a 4-weekly cycle is of crucial significance to this application. As the Claimants put it in their Statement of Facts and Grounds:
“A year has 13 4-week periods in it, but 12 monthly assessment periods. Therefore, like the First Claimant, everyone paid on a 4-weekly cycle will, each year, have eleven UC assessment periods in which they receive one thirteenth of their annual salary, and one assessment period in in which they receive two thirteenths of their salary.”
For the purposes of the Regulations, the First Claimant's “earned income” each month is the money actually received during each assessment period, irrespective of the period for which it was paid. The consequence, the First Claimant argues, is that instead of treating her as earning 1/12 of her annual wage in each of her 12 assessment periods, (which is essentially how the weekly earnings requirement is translated into a monthly benefit cap threshold by Reg. 82(1)(a)), the Regulations treat the First Claimant as earning 1/13 of her annual wage in 11 of her 12 assessment periods, and 2/13 of her annual wage in the other.
The effect can be explained by reference to the period July-August 2019. The First Claimant would have received £1,862.10 in UC if her income for the month had been taken as 1/12 of her annual income. Instead, she received a capped amount of £1,398.87. The reason why that was so was because her earned income for the month of the assessment period was treated as what she earned for 28 days of it, and as a result the benefit cap was applied.
The Legal Framework
The Welfare Reform Act 2012 (“WRA”) sets out how Universal Credit entitlements is to be calculated:
“8 Calculation of awards
(1) The amount of an award of universal credit is to be the balance of—
(a) the maximum amount (see subsection (2)), less
(b) the amounts to be deducted (see subsection (3)).
…
(3) The amounts to be deducted are—
(a) an amount in respect of earned income calculated in the prescribed manner (which may include multiplying some or all earned income by a prescribed percentage), and
(b) an amount in respect of unearned income calculated in the prescribed manner (which may include multiplying some or all unearned income by a prescribed percentage).”
The 2013 Regulations provided the general principles for the calculation and the relevant detailed provisions. Reg. 21 provides that an assessment period is “a period of one month beginning with the first date of entitlement and each subsequent period of one month during which entitlement subsists” and that ordinarily each assessment period begins on the same day of each month
Reg.54 and Reg.61 were at the forefront of the Claimants' argument. Reg.54 sets out the general principles for the calculation of earned income:
“(1) The calculation of a person's earned income in respect of an assessment period is, unless otherwise provided in this Chapter, to be based on the actual amounts received in that period.”
Reg.61 identifies the information required for calculating earned income:
“(1) Unless paragraph (2) applies, a person must provide such information for the purposes of calculating their earned income at such times as the Secretary of State may require.
(2) Where a person is, or has been, engaged in an employment in respect of which their employer is a Real Time Information employer—
(a) the amount of the person's employed earnings from that employment for each assessment period is to be based on the information which is reported to HMRC under the PAYE Regulations and is received by the Secretary of State from HMRC in that assessment period; and
(b) for an assessment period in which no information is received from HMRC, the amount of employed earnings in relation to that employment is to be taken to be nil.
(3) The Secretary of State may determine that paragraph (2) does not apply—
(a) in respect of a particular employment, where the Secretary of State considers that the information from the employer is unlikely to be sufficiently accurate or timely; or
(b) in respect of a particular assessment period where—
(i) no information is received from HMRC and the Secretary of State considers that this is likely to be because of a failure to report information (which includes the failure of a computer system operated by HMRC, the employer or any other person); or
(ii) the Secretary of State considers that the information received from HMRC is incorrect, or fails to reflect the definition of employed earnings in regulation 55, in some material respect.
(4) Where the Secretary of State determines that paragraph (2) does not apply, the Secretary of State must make a decision as to the amount of the person's employed earnings for the assessment period in accordance with regulation 55 (employed earnings) using such information or evidence as the Secretary of State thinks fit.
(5) When the Secretary of State makes a decision in accordance with paragraph (4) the Secretary of State may—
(a) treat a payment of employed earnings received by the person in one assessment period as received in a later assessment period (for example where the Secretary of State has received the information in that later period or would, if paragraph (2) applied, have expected to receive information about that payment from HMRC in that later period); or
(b) where a payment of employed earnings has been taken into account in that decision, disregard information about the same payment which is received from HMRC.
…
(7) In this regulation “Real Time Information Employer” has the meaning in regulation 2A(1) of the PAYE Regulations3.”
Reg. 79 identifies circumstances where the benefit...
To continue reading
Request your trial
-
Upper Tribunal (Immigration and asylum chamber), 2021-06-03, [2021] UKUT 146 (IAC) (R (on the application of Waseem & Others) v Secretary of State for the Home Department (Long residence policy – interpretation))
...policy could also be considered through the framework of a ‘rationality review’, described most recently in R (Pantellerisco) v SSWP [2020] EWHC 1944 (Admin), at [47] to [50], which encompassed an assessment of the comparative disadvantages of the various options open to the respondent, the......
-
R (on the Application of Waseem & Others) v Secretary of State for the Home Department (Long Residence Policy — Interpretation)
...AC 945; [2014] 3 WLR 1404; [2015] 2 All ER 453 R (on the application of Pantellerisco) v Secretary of State for Work and Pensions [2020] EWHC 1944 (Admin) R (on the application of Quila and Another) v Secretary of State for the Home Department; R (on the application of Bibi and Another) v S......
-
Upper Tribunal (Immigration and asylum chamber), 2021-06-03, JR/03246/2019 & Ors.
...policy could also be considered through the framework of a ‘rationality review’, described most recently in R (Pantellerisco) v SSWP [2020] EWHC 1944 (Admin), at [47] to [50], which encompassed an assessment of the comparative disadvantages of the various options open to the respondent, the......
-
Sharon Pantellerisco and Others v The Secretary of State for Work and Pensions
...of Appeal so stated when allowing the appeal of the Secretary of State for Work and Pensions against a decision of Mr Justice Garnham([2020] PTSR 2289) granting a claim for judicial review by the claimant, Sharon Pantellerisco, and her dependent children. Edward Brown and Stephen Donnelly f......