[2024] UKUT 251 (AAC)

This appeal, brought by the Secretary of State with the permission of District Tribunal Judge Ennals, is about how the making of pension contributions by way of ‘salary sacrifice’ should be treated for the purposes of eligibility for Employment and Support Allowance.

The issue I must decide is whether amounts ‘sacrificed’ by the Respondent (whom I’ll call the “claimant”) under his employer’s ‘salary sacrifice’ scheme are to be included in the calculation of ‘earnings’.

My decision is that such an arrangement involves the employee agreeing contractually to forego an amount of cash pay to which they would, but for that agreement, be entitled in return for the employer’s agreement to make a payment in kind, namely an employer’s contribution to the employee’s occupational pension. The amount ‘sacrificed’ does not form part of the employee’s earnings for the purposes of regulation 95 of the Employment and Support Allowance Regulations 2008 (the “ESA Regulations”)