[2025] UKUT 353 (AAC)

sets out the material provisions of ss.54 and 55 and Schedule 5 of the Social Security Contributions and Benefits Act as amended;

refers to reg. 2 of the Social Security (Widow’s Benefit and Retirement Pensions) Regulations 1979 and quotes “The Act shall have effect as if that person had not become entitled as aforesaid”. It is submitted that the effect of the de-retirement is to treat the first claim, including any election for extra weekly pension, as if it had never occurred;

refers to reg. 4 of those regulations as amended. It is submitted that when the second claim is received the days on which state pension was paid are excluded days for the purpose of calculating increments;

does not address the appellant’s graduated retirement benefit, no doubt because the sums involved are minimal.

the concluding phrase of s.54(1), referring to “this Part of this Act”, is very similar to the quoted final phrase of the 1979 Regulations, which the appellant defines as “the Final Phrase” and which refers simply to “the Act”, meaning the Social Security Act 1975. He accepts for the purposes of his submission that the relevant provisions of the Regulations relate to s.54, but draws attention to the fact that both Acts cover a wide range of benefit entitlements and associated rights;

the Secretary of State appears to be relying exclusively on a line of argument not actively pursued before;

the Secretary of State does not address the appellant’s earlier arguments relating to the definition of “period of deferment” in s.55(3) or integrate the argument with s.55(3) and Schedule 5, paragraphs 2(1) and (3);

the primary policy objective underpinning s.54 and the relevant regulations is to encourage and facilitate de-retirement. Any interpretation of the legislation which unreasonably diminishes the incentives of doing so or which somehow restricts or complicates it should be regarded as running counter to the policy objective. The Secretary of State’s methodology and construction of the legislation have those effects;

the words “shall have effect as if” mean that the Final Phrase is a deeming provision and the approach set out in HMRC v. Vermilion Holdings Limited [2023] UKSC 37 at para. 23 applies;

the Secretary of State’s interpretation involves a retrospective effect on the rights of the pensioner which arose before the decision to de-retire was taken, but the Secretary of State does not face up to the full consequences which would follow from a literal interpretation of the words “as if that person had not become entitled to” the relevant pension if combined with retrospective effect. Those consequences would be that the pensioner was never entitled to the benefits received during retirement. That would be an “unjust, absurd or anomalous” outcome for the purposes of Vermilion, albeit that the appellant recognises that it is difficult to contemplate that a court would allow recovery to be enforced;

the Secretary of State looks selectively at the facts of the appellant’s case and does not face up to the potentially wide implications of that interpretation. For example, where the pensioner has not deferred his pension before retiring, de-retirement would mean that he lost entitlement to that pension for having de-retired. Similarly, where the pensioner had originally chosen a lump sum on retirement, the lump sum would be repayable on de-retirement. The appellant also raises the case of the effect on the accrued rights of widows or other dependents.

the alternative construction advanced by the appellant is that the words “shall have effect” in the Final Phrase are to be treated as looking to the future, so that it only applies to entitlement to pension which would otherwise have arisen after the pensioner elected to de-retire. The entitlement and rights which had previously accrued, including entitlement and rights to increments would be unaffected and would form the basis of the calculation of increment at the end of the de-retirement;

in support of that construction the appellant points to reg. 2(4), which uses the words “shall take effect” in connection with providing for the forward-looking time when the election to de-retire takes effect. Reg. 2(1) is expressly subject to the other provisions of the Regulations, including that paragraph. He also points to reg. 3, providing that no retirement pension shall be payable after the election and before the pensioner subsequently becomes entitled to a pension again or dies. He submits that that is the sole substantive effect of the Final Phrase;

the appellant submits that that approach is supported by s.55(3)(b), under which the period of deferment is to be construed as the period for so long as, in consequence of an election to de-retire, the pensioner is treated as not having become entitled to the pension. Disentitlement comes after the election;

the appellant submits that his approach to reg. 3 is entirely consistent with the equivalent deferment provisions in the Pensions Act 2014 on which he had previously made submissions and better accords with the policy objectives of s.54;

he makes clear that he does not contend that the period of his first retirement includes any incremental periods, but argues that that is because it was not a period of deferment and so the days would not be capable of constituting days of increment, not because on those days he received a state pension. Further, those were not days on which he would have been entitled to receive a pension if he had not deferred his pension, because on those days he actually did receive a pension.