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Neutral Citation Number:	2008 23
Reported Number:
File Number:	CG 1239 2008
Appellant:	DC
Respondent:	Secretary of State for Work and Pensions
Judge/Commissioner:	Judge E. Jacobs
Date Of Decision:	25/11/2008
Date Added:	05/12/2008
Main Category:	Earnings and other income
Main Subcategory:	other
Secondary Category:
Secondary Subcategory:
Notes:	Reported as [2010] AACR 17 Income – Computation of Earnings Regulations – whether accrued holiday pay “payable in respect of a period” – whether it is “earnings of the same kind” as normal earnings and to be calculated in the same way The claimant retired on 30 November 2006. His last day of work was 21 November 2006. On 17 November he was paid a final payment consisting of wages and holiday pay (representing pay in lieu of outstanding annual holiday entitlement). He made a claim for carer’s allowance to take effect from 1 December 2006. The Secretary of State allowed the claim from 29 January 2007, but refused it for the period 1 December 2006 to 28 January 2007. An appeal tribunal confirmed the decision of the Secretary of State, holding itself bound by CG/4172/2001 to treat the claimant’s holiday pay as “earnings of the same kind” as payment of ordinary wages for the purposes of regulation 6(2)(a) of the Social Security Benefit (Computation of Earnings) Regulations 1996, which prescribes that earnings should be calculated over “a period equal to a benefit week or such number of benefit weeks as comprise the period commencing on the date on which earnings are treated as paid … and ending on the day before the date on which earnings of the same kind … would, or would if the employment was continuing, next be treated as paid … .”. On the basis that holiday pay fell within regulation 6(2)(a) and was “earnings of the same kind” as ordinary wages, the claimant’s entitlement to carer’s allowance did not begin until 29 January 2007. The claimant appealed to the Social Security Commissioners, whose functions by the time the appeal was heard had been transferred to the Upper Tribunal (Administrative Appeals Chamber). The Upper Tribunal confirmed the appeal tribunal’s decision (DC v SSWP [2008] UKUT 23 (AAC)) and the claimant appealed to the Court of Appeal. It was argued on behalf of the claimant that the holiday pay should be attributed to one benefit week on the basis of a disjunctive construction of regulation 6(2)(a) and that the words “earnings of the same kind” had to bear the same meaning as in 6(3) and (4) (dealing with aggregation of periods that would otherwise overlap) where holiday pay is clearly distinguished as being “earnings not of the same kind” as normal earnings. Held, dismissing the appeal, that: 1. in making the 1996 regulations the Secretary of State must be taken to have had regard to the holding in Chief Supplementary Benefit Officer v Cunningham [1985] ICR 660 that holiday pay is payable in respect of a period and so falls within regulation 6(2)(a) and not 6(2)(b) (Lowsley v Forbes [1999] 1 AC 329 (paragraphs 20 to 24, 43 and 44); 2. the phrase “of the same kind” in regulation 6(2)(a), though perhaps unnecessary, is intended to distinguish those earnings to which regulation 6(2)(a) applies, in other words, those paid in respect of a period, and those other kinds of earnings to which regulation 6(2)(b) applies and such an interpretation gives meaning to all the words of regulation 6(2)(a) and does not result in the surprising consequences that would result from a disjunctive reading (paragraphs 34 to 36); 3. in spite of the opacity of the language, regulation 6(2)(a) is a deeming provision which seeks to make relatively simple the assessment of the end date when a periodic payment is made which does not consist of ordinary pay (paragraph 40); 4. while any statutory scheme should be understood as a whole, that cannot lead to the immutable rule that the same words used in the same legislation necessarily have the same meaning (paragraphs 37 to 39); 5. (per Wilson LJ) the argument for a disjunctive interpretation of regulation 6(2)(a) ascribes to the word “or” the function of imposing a divorce between the preceding words “a period equal to a benefit week” and the succeeding words “such number of benefit weeks as …” which the grammar cannot sustain (paragraph 45); 6. (per Wilson LJ) whether earnings are of the same kind and whether they are payable in respect of a period are totally different questions and since no sensible meaning can be given to the phrase “of the same kind” in regulation 6(2)(a) it should be eliminated (Stone v Corporation of Yeovil (1876) 1 CPD 691 followed) (paragraphs 49 and 50).
Decision(s) to Download:	CG 1239 2008-00.doc [2010] AACR 17 bv.doc