[2024] UKUT 251 (AAC)

The essence of the Secretary of State’s case on the appeal was that the First-tier Tribunal erred in law by failing to treat the amount of the ‘EE Pension Salary Sacrifice’ as earnings, as required by regulation 96 of the ESA Regulations.

According to Mr Jennings’ preferred legal characterisation, the amount of salary said to be ‘sacrificed’ was in fact applied by the claimant by way of an employee contribution to his occupational pension scheme. As such, 50% of that amount fell to be disregarded under regulation 96(3)(b) of the ESA Regulations, with the remining 50% being included within the calculation of the claimant’s earnings, taking his earnings beyond the permitted maximum for the period.

Mr Jennings argued that if gross earnings were arrived at after deducting the amount of any salary sacrifice, this would lead to an irrational outcome because a further deduction under regulation 96(3)(b) would then be required, resulting in a total deduction of 150%.

Mr Jennings invited me to set aside the First-tier Tribunal’s decision aside as being materially in error of law, and to exercise my discretion under section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007 to re-make the decision.