[2023] UKUT 124 (AAC)

Until certain amendments made by the Welfare Reform Act 2012 come into force in relation to a claimant, Part 1 of the Welfare Reform Act 2007 makes provision for employment and support allowance in two forms, a contributory allowance and an income-related allowance. Under section 1(3)(a), it is a basic condition of entitlement to employment and support allowance that the claimant “has limited capability for work”. Section 18(4)(b) provides –

“Except where regulations otherwise provide, a person shall be disqualified for receiving a contributory allowance for any period during which he is –

(a)

…, or

(b)

undergoing imprisonment or detention in legal custody.

Paragraph 1(a) of Schedule 2 provides –

“1.

Regulations may make provision –

(a)

for a person to be treated in prescribed circumstances as having, or as not having, limited capability for work;

(b)

…;

(c)

….”

Insofar as is material, regulations 159 to 161 of the Employment and Support Allowance Regulations 2008 (SI 2008/794), as in force at the time of the Secretary of State’s decision, provided –

“Treating a claimant as not having limited capability for work

159.

—(1) Subject to paragraph (2), the claimant is to be treated as not having limited capability for work if the claimant is disqualified for receiving a contributory allowance during a period of imprisonment or detention in legal custody if that disqualification is for more than 6 weeks.

(2)

….

Exceptions from disqualification for imprisonment

160.

—(1) Notwithstanding section 18(4)(b) of the Act, a claimant is not disqualified for receiving a contributory allowance for any period during which that claimant is undergoing imprisonment or detention in legal custody—

(a)

in connection with a charge brought or intended to be brought against the claimant in criminal proceedings;

(b)

pursuant to any sentence; or

(c)

pursuant to any order for detention,

made by a court in such proceedings, unless paragraph (2) applies.

(2)

This paragraph applies where—

(a)

a penalty is imposed on the claimant at the conclusion of the proceedings referred to in paragraph (1); or

(b)

in the case of default of payment of a sum adjudged to be paid on conviction a penalty is imposed in respect of such default.

(3)

….

(4)

….

(5)

For the purposes of this regulation—

(a)

…;

(b)

…;

(c)

“penalty” means a sentence of imprisonment or detention under section 90 or 91 of the Powers of Criminal Courts (Sentencing) Act 2000  or section 250 or 259 of the Sentencing Code, a detention and training order under section 100 of the Powers of Criminal Courts (Sentencing) Act 2000 or Chapter 2 of Part 10 of the Sentencing Code, a sentence of detention for public protection under section 226 of the Criminal Justice Act 2003 or an extended sentence under section 228 of that Act or, in Scotland, under section 205, 207 or 208 of the Criminal Procedure (Scotland) Act 1995;

(d)

…;

(e)

….

(6)

….

Suspension of payment of a contributory allowance during imprisonment

161.

—(1) Subject to the following provisions of this regulation, the payment of a contributory allowance to any claimant—

(a)

which is excepted from the operation of section 18(4)(b) of the Act by virtue of the provisions of regulation 160(1), (3) or (6); or

(b)

which is payable otherwise than in respect of a period during which the claimant is undergoing imprisonment or detention in legal custody,

is suspended while that claimant is undergoing imprisonment or detention in legal custody.

(2)

….

(3)

….”

When the relevant amendments to the 2007 Act made by the 2012 Act come into force in relation to a claimant, they abolish income-related employment and support allowance (replacing it with universal credit), so that employment and support allowance becomes a wholly contributory benefit. As a consequence, the 2008 Regulations are replaced by the Employment and Support Allowance Regulations 2013 (SI 2013/379). The terms “old-style” and “new-style” are used to distinguish between, on one hand, the contributory and income-related allowances that may be awarded under the unamended form of the 2007 Act and the 2008 Regulations and, on the other hand, the single, contributory form of employment and support allowance that may be awarded under the amended form of the 2007 Act and the 2013 Regulations. Making a new claim for employment and support allowance or for universal credit now generally brings the relevant amendments into force for that claimant, but there are other reasons why they may come into force. It should, however, be noted that, although it is sometimes said that an award of “old-style” contributory employment and support allowance has been “converted” into an award of the “new-style” allowance, they are technically the same benefit.

It is also important to note the differing effects of, on one hand, section 18(4)(b) of the 2007 Act and, on the other hand, regulation 159 of the 2008 Regulations, which is presumably made under paragraph 1(1)(a) of Schedule 2 to the 2007 Act. Where a person is merely “disqualified for receiving” a benefit, under section 18(4)(b) or equivalent provisions in other legislation, he or she retains an underlying entitlement to the benefit. However, because having limited capability for work is a basic condition of entitlement to employment and support allowance, regulation 159, which applies only when a person is disqualified for receiving contributory employment and support allowance for more than six weeks, has the effect of removing such underlying entitlement.