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DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is given under section 14 of the Social Security Act 1998. It is:
The decision of the Plymouth appeal tribunal under reference U/03/200/2003/00749, held on 26 April 2004, is not erroneous in point of law.
2. The issue in this case is whether the claimant’s Tax Free Service Invaliding Pension is to be taken into account in calculating his entitlement to incapacity benefit. He argues that it should be. The Secretary of State disagreed and the appeal tribunal confirmed the Secretary of State’s decision.
3. The tribunal’s chairman gave the claimant leave to appeal to a Commissioner. The Secretary of State has not supported the appeal.
4. Although incapacity benefit is a contributory benefit, its amount may depend on the claimant’s other income. Section 30DD of the Social Security Contributions and Benefits Act 1992 deals with reduction on account of pension payments. In short, it provides for the amount of incapacity benefit to be reduced by half of the amount by which a pension exceeds a threshold, currently £85 a week. So, if the pension is £105 a week, it exceeds the threshold by £20 and the amount of incapacity benefit is reduced by £10. ‘Pension payment’ is defined by section 30DD(5). The relevant part of the definition reads:
‘a periodical payment made in relation to a person under a personal pension scheme or, in connection with the coming to an end of an employment of his, under an occupational pension scheme or a public service pension scheme’.
Section 30DD(6) then adopts the definitions for those three types of pension scheme from the Pension Schemes Act 1993.
5. The claimant can succeed in either of two ways. One way is to show that the Tax Free Service Invaliding Pension is not paid under a ‘pension scheme’ as defined for the section. The other way is to show that the Pension comes within one of the disregards.
6. It is convenient to deal with first. There are two types of disregard. One disregards persons, the other disregards pension payments. Both are prescribed by Social Security (Incapacity Benefit) Regulations 1994. The former is covered by regulation 26 and consists of persons who are entitled to the care component of disability living allowance at the highest rate. The claimant is not so entitled. The latter is covered by regulation 21, which sets out three disregards, none of which applies.
7. The relevant definitions from section 1 of the Pension Schemes Act 1993 are:
‘"occupational pension scheme" means any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employments so as to provide benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with qualifying service in an employment of any such description or category;
‘"public service pension scheme" means an occupational pension scheme established by or under an enactment or the Royal prerogative or a Royal charter, being a scheme—
(a) all the particulars of which are set out in, or in a legislative instrument made under, an enactment, Royal warrant or charter, or
(b) which cannot come into force, or be amended, without the scheme or amendment being approved by a Minister of the Crown or government department,
and includes any occupational pension scheme established, with the concurrence of the Treasury, by or with the approval of any Minister of the Crown and any occupational pension scheme prescribed by regulations made by the Secretary of State and the Treasury jointly as being a scheme which ought in their opinion to be treated as a public service pension scheme for the purposes of this Act.’
8. The nature of a Tax Free Service Invaliding Pension was set out by Mr Commissioner Rowland in paragraph 3 of his decision in R(IS) 3/99. I do not need to repeat it.
9. What matters is whether or not the claimant’s Pension is paid under an occupational or public service pension scheme. The claimant has argued throughout this case that his Pension is a war disablement pension. There is no express exclusion for war disablement pensions in section 30DD. The claimant accepts this, but in his grounds of appeal argues that the nature of these pensions is such that they are only covered by section 30DD if they are expressly included. The argument goes like this. The claimant first argues that a war disablement pension is paid partly as compensation for disablement and partly to help with the extra expenses that arise from the disablement. I am prepared to accept that. The claimant then argues that this explains the special treatment that such pensions receive when applying means-testing provisions to other benefits. I accept that also. But I do not accept the conclusion that the claimant then draws. He argues that the nature of a war disablement pension is so different from any other pension covered by section 30DD that it can only be included if it is expressly mentioned. The language of the legislation and the techniques of interpretation do not allow me to accept that argument. The definitions of occupational and public service pension schemes are written in terms of the instruments which create the schemes and the circumstances in which the pension becomes payable. Those terms allow no scope for excluding from them schemes which otherwise satisfy the definition but which happen to have features that justify or explain special treatment elsewhere in social security law.
10. In response to the Secretary of State’s observations, the claimant refers to the legislation governing the tax position for his Pension. He argues that the tax exemption changes the identity of the payment. I reject that argument. The legislation to which he refers affects the tax position, but it does not have any effect on the social security position.
11. The claimant has also argued in the course of the case that his Pension is not related to the termination of his employment. I reject that argument also. It is correct that the Pension is related to his disablement. But it was also payable in connection with, and on, the termination of his employment.
12. The claimant has relied on this decision as an authority in support of his case. It is not. The case concerned income support. There is an express disregard for ‘a war disablement pension’ in paragraph 16(a) of Schedule 9 to the Income Support (General) Regulations 1987. The issue for the Commissioner was what that expression meant. He was able to find a definition in the statute under which the Regulations had been made.
13. This case is distinguishable for these reasons. It is concerned with incapacity benefit, not with income support. The legislation does not contain an express reference to war disablement pensions. Moreover, the Commissioner was interpreting secondary legislation (a statutory instrument), whereas I am concerned with primary legislation (a statute or an Act of Parliament). It is not permissible to apply definitions to a statute in the way that is permissible for statutory instruments.
14. In short, R(IS) 3/99 was concerned with completely different legislation and circumstances from those with which I am concerned.
15. I dismiss the appeal.
Signed on original
on 8 December 2004 Edward Jacobs