[2025] UKUT 168 (AAC)

The cogency of the Secretary of State’s first ground of appeal depends on an analysis of a number of inter-locking statutory provisions.

In terms of decision-making, section 8(2)(a) of the Social Security Act 1998 (the 1998 Act) provides that:

“[w]here at any time a claim for a relevant benefit is decided by the Secretary of State (a) the claim shall not be regarded as subsisting after that time.”

The claim in this case was decided on the same day it was made. Moreover, the claimant did not seek to rectify the ‘mistake’ he had made on the claim before it was decided. It follows that an examination of the means, if there are such means, to rectify that mistake has to be located in the way in which a Secretary of State’s decision on a claim may be challenge and altered, the decision otherwise being final under section 17(1) of the 1998 Act.

Other than an appeal against the decision under section 12 of the 1998 Act, the means by which the Secretary of State may alter her section 8 decision is under section 9 or 10 of the 1998 Act and the regulations made under those sections. The former deals with revision of the decision and the latter supersession of the decision. Broadly speaking, revision allows the section 8 decision to be changed from the date on which it was made or the date from which it was effective (per section 9(3) of the 1998 Act), whereas supersession changes the decision from a later (effective) date, for example, where a claimant’s circumstances subsequently change.

In this appeal, of the revision and supersession routes only revision on the face of it could potentially provide a vehicle for changing the 17 August 2022 decision to make entitlement to the state pension arise from the year before. However, as the FTT belatedly recognised, regulation 3(4) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (the DMA Regs 1999) did not provide a ground for revision of the 17 August 2022 decision as regulation 3(4) is only about decisions made by HMRC under the Pensions Schemes Act 1993 and is not about decisions concerning entitlement to the state pension, which is governed by the Pensions Act 2014.

As this was the (sole) route by which the FTT decided the appeal, it would arguably be possible to allow the appeal on this basis alone. However, the Secretary of State has not sought this as the basis for the remedy on the appeal as that would leave unanswered whether she, at the mandatory reconsideration stage, or the FTT on the appeal could lawfully have rectified the claimant’s mistake and changed the date from which he was entitled to the state pension.

I should add, however, that I do not consider the FTT’s later reliance on regulation 3(1) and 4 of the DMA Regs 1999 assists the claimant either. This is because, insofar as the Secretary of State by her mandatory reconsideration decision (i.e., a decision under regulation 3 and 3ZA of the DMA Regs 1999) had also refused to extend time under regulation 4 of the DMA Regs 1999 for an ‘any grounds’ revision under regulation 3(1) of the same regulations, that refusal to extend time decision under regulation 4 was not itself an appealable decision (see R(TC)1/05) and so was not a matter before the FTT.

This last point does not, however, really matter because it was not disputed that following mandatory reconsideration (under regs 3(1) and 3ZA of the DMA Regs 1999), the claimant had brought an in-time appeal under section 12 of the 1998 Act against the 17 August 2022 decision. And the issue on that appeal was whether there was ‘any ground’ on which the 17 August 2022 decision could be changed. That is the key issue under the first ground in this appeal and by its decision the FTT concluded that it was lawful to change the decision so as to alter the start date of the claimant’s entitlement to his pension to 20 August 2021. If that decision was one which it was lawfully open to the FTT to make, the flawed reasoning by which it did so may not amount to a material error of law.

I agree with the Secretary of State that there was no lawful basis for either her or the FTT to have altered the start date of the claimant’s entitlement to the state pension from the clear date the claimant gave on the claim form as from when he wanted that entitlement to start. The FTT ‘stands in the shoes’ of the Secretary of State on appeal and can give any decision the Secretary of State could and ought to have given on the claim (R(IB)2/04 at paragraphs [15] and [25]), but in my judgement there was no proper basis for the Secretary of State to decide entitlement on the claim other than she did.

An important starting point for this analysis is that entitlement to the state pension is dependent on a claim being made for it: see sections 1(1) and 5(1) (and 1(4)(zb) and 5(2)(zb)) of the Social Security Administration Act 1992 (“the SSAA”). The relevant regulations are made under section 5(1) of the SSAA (see Miah at paragraph [10]) and are the Social Security (Claims and Payments) Regulations 1987 (“the CP Regs”). It was under regulation 4ZC(1) and regulation 4ZC(2)(g), read with schedule 9ZC, of the CP Regs that the claimant was authorised to make an on-line claim for his state pension.

A critical relevant provision in the CP Regs is regulation 5(1). This provides that a claimant who has made a claim for, here, the state pension, “may amend it at any time before a determination has been made on the claim” (my underlining added for emphasis). If a claim is amended, it is treated as if it was amended at the outset of the claim: per regulation 5(1A) of the CP Regs. Consistently with this pre-decision focus, regulation 5(2) of the CP Regs allows a claimant to withdraw a claim “at any time before a determination has been made on it”. Following paragraph [9] of Miah, which dealt with different but analogous provisions, the effect of these provisions is that “an amendment can only be made before the claim has been determined”.

However, once the claim has been decided, the statutory fiction created by sections 8(2)(a) of the 1998 Act is that the claim no longer exists once it has been decided. This is reinforced by section 12(8)(b) of the 1998 Act and its provision that on deciding an appeal the FTT “shall not take into account any circumstances not obtaining at the time when the decision appealed against was made”.

Pausing there and standing back, the claim the claimant made for his state pension clearly set out that he wished to get his entitlement to the state pension to start from 20 August 2022. There was nothing which was unclear in that answer. Nor did anything else in the claim form suggest this date may not have been correct. That date was not amended on the claim before the claim was decided under section 8 of the 1998 Act. Once it was decided the claim ceased to exist and so the claim could no longer be amended. There is no dispute that the decision made on that claim, with its specific and clear start date for the entitlement, was correctly made. Given all of this, I can identify no lawful basis for the Secretary of State or the FTT on appeal changing the start date of entitlement to the state pension, as to do so would be to amend the claim after it had been decided and after it had ceased to exist.

It is important, moreover, to note that the statutory architecture governing entitlement to the state pension places in the hands of a claimant the choice between claiming the state pension on reaching pensionable age or deferring entitlement to the state pension until a later date.

In the case of the former, the claim can be made immediately on reaching on pensionable age or by making a ’backdated’ claim within 12 months of reaching pensionable age under entry number 13 in Schedule 4 to the CP Regs. It is accepted that had the claimant said in his 17 August 2022 claim form that he ‘wanted to get his state pension from’ 20 August 2021, he would have been taken as making such a backdated claim from his 66^th birthday on 20 August 2021. And that would have led to him receiving a lump sum of his year’s entitlement to the state pension back to 20 August 221 as well as his ongoing entitlement based on him having claimed the state pension from the age of 66.

Instead, however, the claimant’s answer to the above question of ‘20 August 2022’ was taken as the claimant deferring his entitlement to the state pension for one year pursuant to section 17(8)(a) of the Pensions Act 2014. That section 17 provides as follows:

“Effect of pensioner postponing or suspending state pension

17.- (1) If a person's entitlement to a state pension under this Part has been deferred for a period, the weekly rate of the person's state pension is increased by an amount equal to the sum of the increments to which the person is entitled.

(2)

But the weekly rate is not to be increased under subsection (1) if the increase would be less than 1% of the person's weekly rate ignoring that subsection.

(3)

A person is entitled to one increment for each whole week in the period during which the person's entitlement to a state pension was deferred.

(4)

The amount of an increment is equal to a specified percentage of the weekly rate of the state pension to which the person would have been entitled immediately before the end of that period if the person's entitlement had not been deferred.

(5)

In subsection (4) “specified” means specified in regulations.

(6)

The amount of an increase under this section is itself to be increased from time to time in accordance with any order made under section 150 of the Administration Act (annual up-rating of benefits).

(7)

For the purposes of this section and section 18 a person's entitlement to a state pension under this Part is deferred for a period if the person has opted under section 16 to suspend his or her entitlement for that period.

(8)

For the purposes of this section and section 18 a person's entitlement to a state pension under this Part is also deferred for a period if the person is not entitled to it for that period by reason only of—

(a)

not satisfying the conditions in section 1 of the Administration Act (entitlement dependent on claim etc), or

(b)

subsection (9) below.

(9)

A person is not entitled to a state pension under this Part for any period during which his or her entitlement to any other state pension under this Part is deferred.

The effect of the claimant’s answer – of “20 08 2022” – was that he was not seeking to make a backdated claim under section 1 of the SSAA for the period from 20 August 2021, he therefore (per section 17(8)(a) of the Pensions Act 2014) had not made a claim for (and from) 20 August 2021, and had only made a claim from 20 August 2022. It was thus by this route that the claimant deferred his entitlement to the state pension for a year, until 20 August 2022. The increments to which he then became entitled under section 17(1) of the Pensions Act 2014 are commonly referred to as “Extra State Pension”.

As the Secretary of State explained, although the Pensions Act 2014 introduced a benefit called the “state pension”, deferment of entitlement to this type of state retirement pension was not new. As the Explanatory Notes to the Pensions Act 2014 set out, under Part 2 of the Social Security Contributions and Benefits Act 1992 a claimant could “choose not to claim their pension at pensionable age or to give up their pension for a period of time after they have started to receive it” (paragraph 95 of the Explanatory Notes). The previous legislative scheme (per paragraph 94 of the Explanatory Notes) allowed the person who deferred claiming their state retirement pension to “qualify for either an increase to their weekly pension (known as increments) or for a lump sum payment from the point they claim (subject to some conditions)”. The change from this brought in by the Pensions Act 2014 was that the “basic principle of deferral [was] retained… but only the ability to accrue a weekly increase”. In other words, the option on deferral to obtain a lump sum was removed. The reason, however, for retaining deferral within the Pensions Act 2014 was because (as the Department for Work and Pensions explained in its 2013 paper “The single-tier pension: a simple foundation for saving” (Cm8528), at pages 29 and 99)“the option to defer the state pension [was] an important flexibility to retain” and “individuals should have the flexibility of choice in terms of drawing their pension if they decide to stay economically active and to continue working after State Pension age”.

It is this ‘claimant autonomy’, in terms of choosing whether or not to defer the start of their entitlement to their state pension, which the Secretary of State points to as being a key aspect of entitlement to the state pension. I agree. That choice is one which it is for the individual claimant to exercise, and is not for the Secretary of State to make. It is a choice which has an implicit statutory grounding in section 17(8)(a) of the Pensions Act 2014, as it is the claim (or lack thereof) made by the claimant for their state pension, and the period for which such a claim is made by the clamant, upon which deferment of entitlement to the state pension depends. Deferral of entitlement to the state pension (from a person’s pensionable age) is automatic where no claim is made under section 17(8)(a) of the Pensions Act 2014. However, as we have seen on the potential outcomes that were available on this claimant’s case and where the claim is made after pensionable age, in such a case it is the period for which the claim is subsequently made by the claimant that may govern whether deferral is effective. And even in cases where a claimant has deferred entitlement to their state pension (under either section 16 or 17 of the Pensions Act 2014), identifying when the state pension becomes payable depends on identifying, per regulation 22DA(1)(a)(ii) of the CP Regs, “the first day in respect of which the person makes a claim for their state pension”.

The making of this choice may depend on a number of variables of which only the individual claimant may have knowledge or be concerned about. Thus, whether a claimant in the same position as the claimant in this case wishes to receive the ‘Extra State Pension’ that deferral will bring, or instead the arrears of state pension in respect of a past period of up to a year by ‘backdating’ the claim, may depend on a number of considerations including: (i) whether the claimant is retired or is still economically active; (ii) the claimant’s health and life expectancy at the date of claim; (iii) the claimant’s current and expected future financial position (including the incidence of taxation); and (iv) possible returns available to the claimant on investing an award of benefit. These (and other) considerations will vary from claimant to claimant. I accept, moreover, that the Secretary of State is not equipped to make the choice as to the commencement of entitlement on behalf of individual claimants or determine what is in their best interests. That choice is best exercised by the individual claimant before, at, or after they reach their pensionable age. Properly construed the legislative scheme respects this choice. In this sense, the identification of the date from which a claimant wishes their entitlement to their state pension to begin is a ‘constitutive’ element of the claim, and cannot be altered once the claim has been decided.

There is nothing, moreover, in the language of statutory scheme which allows a claimant to alter this choice once the claim for the state pension has been made and the decision has been made on that claim. This may be contrasted with other specific situations where the Pensions Act 2014 does allow for changes to be made. For example, section 8 of the Pensions Act 2014 allows for a “choice of lump sum or survivor's pension under section 9 in certain cases”. Importantly, by section 8(7) it provides for (and thus recognises) regulations to be made that “allow a person, in specified circumstances, (a) to alter his or her choice under this section; or (b) to make a late choice”.

I accept the Secretary of State’s argument that this result is unsurprising. As she puts it, permitting a claimant to change their election about from when they want their entitlement to the state pension to begin after the claim has been decided would have significant consequences for the administration of the state pension system which cannot have been intended. For example, if a claimant elects to backdate their claim for entitlement to the state pension to a date 12 months before the date of claim, they will be paid a significant sum (possibly over £10,000) in arrears of state pension out of the National Insurance Fund. If that election could be changed by revision of the awarding decision, or on appeal, that significant sum would be expected to be recovered, but the legislation provides no clear means by which recovery could occur. Regulation 5(1) of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 would not seem to apply as it does not allow for offsetting of amounts owed to the Secretary of State against future payments of benefit. And section 71 of the SSAA would not apply either, absent misrepresentation or failure to disclose of a material fact.

I therefore consider that the FTT erred in law in altering the date on which the claimant’s entitlement to the state pension was to begin when there was no legal basis for it to alter the claimant’s election about that issue as set out in the on-line claim form. The right of appeal found in section 12(1) of the 1998 Act is against a decision of the Secretary of State. However, it was not for the Secretary of State to determine or decide from when the claimant wished to obtain his entitlement to his state pension. What the Secretary of State (and the FTT on appeal) had to decide was the correct level of the entitlement to the state pension based on, and giving effect to, the date from which the claimant wanted his entitlement to the state pension to begin. Putting this perhaps another way, giving effect to the claimant’s election as to when his entitlement to the state pension should begin, was a decision that corresponded to his correct entitlement based on his election. Moreover, the FTT was not permitted to take into account the wish of the claimant, raised after the decision under appeal was made, to change the claim in terms of his election as to when entitlement was to begin, as to do so would run contrary to section 8(2) of the 1998 Act.

Nor does anything decided in Miah alter this analysis. The issue at the heart of Miah was about whether a claim for universal credit had been made within the time for which that benefit had to be made and where there was an absence of evidence about the date from when Mr Miah wished to claim his universal credit. The essence of the Court of Appeal’s decision is at paragraph [50] where, as I read it, it concluded that whether the claim for universal credit had in fact been made in time could be determined (on revision or on appeal) like any other issue going to entitlement. Here, by contrast, there is no issue on the FTT’s findings that the claim was made within time and on the basis of the claimant having clearly elected on the claim form to defer his claim and his entitlement by one year, to his 67^th birthday. Those issues were clear and required no further findings to be made. The issue in this case was not whethera claim for state pension from 20 August 2021 when the claimant reached his pensionable age was, in principle, “within the time” prescribed by regulation 19(1) of the CP Regs. It is common ground that had the claimant (instead of what he in fact did) elected to make a claim from 20 August 2021, the Secretary of State would have made an award from that date. Miah provides no assistance on identifying the correct date of entitlement in the context of the state pension where the identification of when entitlement to the state pension, and the choices which lie behind that identification, lies with the claimant alone, and where the claimant clearly and unambiguously identified that date.

I therefore agree with the Secretary of State that:

“While it goes without saying that a state pension claim must be properly considered by the Secretary of State, it is very different to a claim for universal credit……in the universal credit context, claims are generally “forward looking” only, and, in the exceptional cases where they may be back-dated, it is for the Secretary of State to “extend the time for claiming” universal credit by a decision, having regard to a number of objective considerations then in existence. There is moreover norequirement on claimants to indicate that they wish to back-date their claim. In the state pension context, by contrast, the legislation deliberately confers a subjective choice on customers, and them alone, as to when their entitlement is to begin. That is a defining parameter of their claim to state pension.”

This disposes of the first ground of appeal.