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Neutral Citation Number:	2012 UKUT 171 AAC
Reported Number:
File Number:	CH 2897 2011
Appellant:	Lloyd v LB of Lewisham
Respondent:	LB of Lewisham (HB)
Judge/Commissioner:	Judge C. Turnbull
Date Of Decision:	29/07/2013
Date Added:	27/06/2013
Main Category:	Earnings and other income
Main Subcategory:	Disregards
Secondary Category:	Housing and council tax benefits
Secondary Subcategory:	other
Notes:	Court of Appeal decision reported as [2013] AACR 28. Superannuation award – whether income or compensation – application of paragraph 14(1)(e) of Schedule 5 – proper approach to finding the correct meaning of a provision Ms Lloyd retired early on health grounds after she was assaulted while working as a parking warden. Under the terms of a superannuation scheme she was paid over £15,000 per annum in compensation for her lost income (not for her injuries). Ms Lloyd successfully claimed housing and council tax benefits from the local authority but failed to declare her superannuation award. Later the local authority reassessed Ms Lloyd’s benefit claims to take account of the award and decided she had received recoverable overpayments of over £27,000. Ms Lloyd’s appeal to the First-tier Tribunal (F-tT) was unsuccessful. The Upper Tribunal (UT) held that Ms Lloyd’s case was indistinguishable from the decision of the Court of Appeal in Malekout v Secretary of State [2010] EWCA Civ 162; [2010] AACR 28 which established that such early pension payments should be treated as income for income support purposes. It was argued by Ms Lloyd before the Court of Appeal that paragraph 14(1) of Schedule 5 to the Housing Benefit Regulations 2006 (the 2006 Regulations) should be interpreted widely so as to include agreements made before an injury occurred and that the decision in Malekout was not binding (as it concerned income support) and had also been decided per incuriam (as the Court of Appeal had failed to consider the equivalent of regulation 41(5) of the 2006 Regulations). Held, dismissing the appeal, that: 1. Ms Lloyd’s income loss award was made under her terms of employment, which had been agreed long before her injury. There was no suggestion that her employer was at fault in failing to protect her against her injury. Therefore, her award was not a payment “in consequence of” any accident or injury or disease for the purposes of the Social Security (Recovery of Benefits) Act 1997 (the 1997 Act) and was not liable to be reduced by the amount of any state benefits she might have received (paragraphs 15 to 16); 2. paragraph 14(1)(e) of Schedule 5 to the 2006 Regulations only excluded sums paid under agreements made after an injury had occurred. The judgement in Malekout was not strictly binding as it concerned income support. But the income support and housing benefit regulations covered similar subject-matters and so the discussion in Malekout was highly persuasive and its conclusion accorded with the natural reading of paragraph 14(1)(e). The court would only depart from Malekout if it was decided per incuriam; if some relevant legal rule or regulation had been overlooked, and, but for that omission, the conclusion that was reached could not stand: see Morelle v Wakeling [1955] 2 QB 379. To decide whether Malekout should be followed it was necessary to establish the meaning of paragraph 14(1)(e) because although regulation 41(5) dealt with similar subject matter it was differently worded (paragraphs 26 to 31); 3. the wording of paragraph 14(1)(e) permitted a wide and a narrow meaning: the former would include payments made after an injury under agreements or orders made at any time, the latter only payments under an agreement or order made after the injury. The proper approach to finding the correct meaning of a provision was to be found in the light of its function and the context in which it appeared in the statute-book. In the case of paragraph 14(1)(e) it was one of determining the income of a claimant for the purpose of deciding his or her entitlement to benefit. In the absence of any rational reason for adopting a wider meaning then the narrower meaning should be chosen and vice versa. It would be illogical for paragraph 14(1)(e) to give protection to sums clearly paid to replace income. The whole purpose of the exercise was to calculate income. To give paragraph 14(1)(e) the wider meaning, of including agreements made before the injury occurred, would mean that the exclusion would lack a rational basis. It would effectively allow double recovery of income by Ms Lloyd: (the income loss award from her employer and housing and council tax benefit calculated on the basis that that income had not been replaced) (paragraphs 43 to 51); 4. the deduction of social security benefits and the claw back in the 1997 Act made sufficient difference to justify the 2006 Regulations treating pre-injury compensation on a different basis from post-injury compensation (paragraphs 52 to 53). Permission to appeal further was refused by the Supreme Court on 3.12.13.
Decision(s) to Download:	CH 2897 2011-01.doc [2013] AACR 28ws.doc