IN THE UPPER TRIBUNAL	Case No.  CG/1016/2009
ADMINISTRATIVE APPEALS CHAMBER

Before Deputy Judge Nicholas Paines QC

Decision:  I regret that the decision of the First-tier Tribunal is erroneous in law.  I  must set it aside and substitute a decision that the claimant is not entitled to a bereavement payment or a bereavement allowance in consequence of the death of his wife on 4 May 2007. 

REASONS FOR DECISION

1.	This case principally concerns the provisions governing bereavement payments set out in section 36 of the Social Security Contributions and Benefits Act 1992; an argument that the claimant could be entitled to a bereavement allowance under section 39B of the Act was, rightly in my view, dropped.  Section 36 was considered by Judge Howell QC in three cases very similar to the present one; his decision is reported at R(G) 1/06.  I respectfully agree with everything in R(G) 1/06, which enables my reasoning to be briefer than it would otherwise have been.  
2.	Section 36 provides, so far as relevant,
(1)	A person whose spouse … dies on or after the appointed day [9 April 2001] shall be entitled to a bereavement payment if 
(a)	either that person was under pensionable age at the time when the spouse …  died or the spouse … was then not entitled to a Category A retirement pension … and
(b)	the spouse … satisfied the contribution condition for a bereavement payment ….
3.	These provisions affect the claimant in the following way.  The claimant is a man born in 1937; his late wife was born in 1942 and died, at the sadly young age of 64, in July 2007; the claimant was himself aged 69 at that point in time.  It is not in dispute that the claimant’s late wife satisfied the contribution condition for a bereavement payment; the issue was whether one of the conditions in subparagraph (a) above was satisfied.  The first of those conditions clearly  was not, since the claimant was over pensionable age at the time of his wife’s death; the dispute was whether the second was satisfied.  That depended on the nature of the claimant’s late wife’s own pension entitlement at the date of her death,
4.	To understand the reason for this requirement being in the legislation, one has to look back at the history of the provision and its predecessors, as Judge Howell did in R(G) 1/06.  he explains that the original provision in the National Insurance Act 1946 entitled a widow to what was then called a widow’s allowance if at the date of his death (i) her late husband satisfied the contribution conditions for a retirement pension and (ii) “either he was not entitled to a retirement pension or she was under pensionable age”.
5.	Judge Howell explains the purpose of the allowance as follows:
Its purpose was to tide a widow over the short-term financial consequences of the loss of a breadwinner, at a time when he was still working or had otherwise not yet become entitled to draw retirement pension, or she herself was still under pensionable age so she could not start to get a retirement pension on his contributions from the date of his death. If they were both over pensionable age and he was already on retirement pension (which at that time would have meant he had retired from regular work) there was not the same need to deal with the short-term effect of the sudden loss of full earnings coming into the household: the widow then qualified at once for the single person’s retirement pension on her late husband’s contributions, and the separate widow’s allowance was not provided.
6.	As Judge Howell explains, the reason for including the case where “she was under pensionable age” was that being under pensionable age meant that she would not be entitled to a pension based on her late husband’s contributions until she reached pensionable age.  The reason for including the case where, despite having satisfied the contribution conditions, the deceased husband was “not entitled to a retirement pension” seems to have been to cover cases where either he was under pensionable age at the time of his death or, despite having reached pensionable age, had not retired.  
7.	In those cases the deceased husband either was still in work at the time of his death or, being under pensionable age, could perhaps be presumed to be.  The consequence of his death was that the household had lost his income (which in those days might often have been its only income); even if the widow would become entitled to a pension as a result of his death, she needed to be tided over the process of adjusting from his receiving a wage or salary to her receiving an almost certainly lower amount by way of pension.
8.	In its modern form the section is gender-neutral and covers civil partnerships as well as marriages; the most accurate way of summarising its effect involves referring to ‘the deceased’ and ‘the survivor’.  As interpreted by Judge Howell, the condition now refers to the deceased’s entitlement to a Category A retirement pension (not, as suggested in the commentary to the section in Social Security Legislation 2009/2010, the survivor’s entitlement to such a pension).  That is a logical development since a category A pension entitlement is the successor to the husband’s pension entitlement referred to in the 1946 provision.  What is less clear (to me at least) is the logic of retaining entitlement to a bereavement payment for survivors over pensionable age while at the same time making the entitlement depend on which category or pension the deceased was entitled to.  But that is plainly what the legislation does, as Judge Howell explains.
9.	The claimant completed a claim form for bereavement benefits in January 2008.  In it, he referred to his having been told that his wife had been in receipt of a ‘Category ABL’ pension; this somewhat confusing piece of internal DWP vocabulary is explained in R(G) 1/06 and I refer to it below.  The claimant said (rightly as a matter of the legislation) that there is no such category as ABL; he asserted that his wife had received a Category A pension, based on her contribution record, from (approximately) her 60th birthday until his 65th birthday; she had then become entitled to a higher amount of pension by way of Category B, which should be treated as her entitlement as at the date of her death by virtue of section 43 of the Act as this was more favourable to her.  In my view (in agreement with Judge Howell) that is not the way in which the  somewhat complex provisions of sections 43 onwards of the Act work.
10.	It is not in dispute that the claimant’s wife was awarded a Category A pension on her 60th birthday.  It was made up of the basic pension plus earnings-related additional pension and a small amount of graduated retirement benefit.  But, in response to a request for a reconsideration of its decision on the claimant’s bereavement benefit claim, the DWP asserted that on his 65th birthday she had “claimed for an increase based on his contributions, a Category ABL State Pension”, which was higher than the Category A pension (see pages 30-31) and in another undated reconsideration (page 24) the Department asserted that the claimant’s wife had become entitled to “a composite retirement pension ….  The Retirement pension category payable to [her] from the date of her husband’s retirement is recorded by the Pension Service as category ABL.  The term ABL is used … for administrative purposes and reflects awards that are made up of a composite of both Category A and category B pensions”.  It also states that, had she elected to receive a category B pension, it would have been about £5 per week higher than the category A pension; the ‘composite’ pension was about £5 higher again.  
11.	The Department also stated that the paperwork relating to this (which occurred in 2002) had been destroyed under data protection rules, but the computer record showed that a ‘Category ABL’ pension had been in payment.
12.	With the assistance of a representative, the claimant appealed to the First-tier Tribunal on the basis of an argument (which I explain further below) that his wife should be regarded as having been entitled at her death to a Category B rather than a category A pension.  Perhaps unwisely in this highly technical area, the Secretary of State did not attend the appeal.  Neither did the claimant, though his representative did.  The tribunal allowed the appeal as regards the bereavement payment.  Relying on paragraph 24 of R(G) 1/06, the tribunal found that there had been a “fresh claim for Category B retirement pension instead of Category A”.  
13.	Basing itself on the Department’s letter at page 31, the Tribunal found that “the claimant’s wife had made an application for a state pension based on her husband’s contributions after he had turned 65”.  It then found that “the Secretary of State acknowledged the application as evidenced at page 31 of the schedule of evidence but decided that the Appellant’s wife should be awarded a Category ABL state pension”.  It reasoned that “Whilst the Secretary of State may well have decided to award a Category ABL state pension the tribunal finds that this does not undermine the Appellant’s claim that nevertheless his wife in effect made an application for a Category B pension.  The tribunal notes that the [Secretary of State] is unable to bring forward substantive evidence to contradict the Appellant’s account because the [Secretary of State] has destroyed the relevant documentation.”  The Secretary of State appeals with the permission of a First-tier Tribunal judge.
14.	In order to understand the position, it is necessary to turn back to the Act.  Section 44 entitles a person to Category A retirement pension based on his or her own contributions; section 45 provides for it to include an earnings-related additional amount.  Section 48A provides for a married person (or civil partner, but I shall focus on married people) to receive a Category B pension by virtue of the contributions of their spouse once both spouses have attained pensionable age.  But during the other spouse’s lifetime it is only payable at the basic rate specified in section 48A and Schedule 4, Part I, paragraph 5.  In the claimant’s wife’s case, the basic rate of a Category B pension would have been about £10 per week higher than the basic rate of her Category A pension, but the pension would not have included the earnings-related addition to her category A pension, which was about £5 per week.  Hence she would only have been about £5 per week better off.
15.	Provision is made in section 43 for cases where, apart from that section, a person would be entitled to more than one retirement pension.  The basic rule (section 43(1)) is that a person cannot be entitled to more than one pension in the same period, save for an exception in section 43(2) which does not apply here.  By section 43(3)(a) a person who, but for section 43(1), would be entitled to a Category A and a category B pension may give notice stating which of them he or she wishes to receive.  If no such notice is given, he or she is entitled to whichever pension is the more favourable (section 43(5)); but all this is subject to section 1 of the Social Security Administration Act 1992, which says that a person is not entitled to a social security benefit unless he  or she has claimed it, or is treated as having claimed it, in accordance with Regulations: see Secretary of State v Nelligan (R(P) 2/03).  
16.	Also relevant is section 51A, which applies in cases where, but for section 43(1), a married person would be entitled to a Category A pension and a Category B pension based on their spouse’s contributions.  It provides that “if by reason of a deficiency of contributions the basic pension in the Category A retirement pension retirement pension falls short of the weekly rate specified in Schedule 4, Part I, paragraph 5, that basic pension shall be increased by the lesser of (a) the amount of the shortfall or (b) the amount of the weekly rate of the Category B retirement pension”.
17.	Part I, paragraph 5 of Schedule 4 is the same provision as sets the amount of a Category B pension (see paragraph 14 above).  So what section 51A does, in a situation like that of the claimant’s wife when the claimant reached 65, is to increase the basic rate of her Category A pension up to the level of the Category B pension that she could otherwise receive; the increase is automatic in the sense that it does not have to be applied for; and the pension remains a Category A pension; and, being still a Category A pension, it continues to contain its earnings-related element.  This is what the DWP internally calls a ‘Category ABL’ pension.  In the claimant’s wife’s circumstances, it was the most favourable outcome: she both obtained the approximately £10 per week increase in the basic rate of her Category A pension and retained the approximately £5 per week of additional earnings-related element.
18.	Though a person does not have to ask the Secretary of State to apply section 51A to their case, the operation of a section 51A is nevertheless subject to the precondition that the person is, apart from section 43(1), ‘entitled’ to both pensions.  Because of section 1 of the Administration Act , that means they must have claimed, or be treated as having claimed, or be relieved of the need to claim both pensions pursuant to the Social Security (Claims and Payments) Regulations 1987.  Nowadays, regulation 3(cb) of those Regulations (as amended) relieves a person in the claimant’s wife’s circumstances of the need to claim a Category B pension; but that provision did not exist in 2002.
19.	As the Claims and Payments Regulations stood in 2002, the provisions in ‘interchange’ provided (as they still do) that a claim for any category of retirement pension might be treated as a claim for any other category.  But the interchange provision is only of any use if a claimant meets the conditions of entitlement to the other category at the time he or she claims.  So the claimant’s wife’s claim for a Category A pension when she reached 60 could not be treated as a claim to a Category B pension because she did not meet the conditions of entitlement to that until her husband (the claimant) reached 65, which happened later.  Therefore, she could not receive a so-called ‘Category ABL’  pension on his reaching 65 unless she put in a further claim at that time.  The Department describes the claim as a claim for an increase based on her husband’s contributions and the claimant’s representative interprets this as an acceptance that the claim was for a Category B pension; I shall assume in his favour that that is correct.  
20.	If she did so (as it is clear she did), then the precondition for the operation of section 51A would be satisfied and section 51A would begin to apply to her Category A pension.
21.	No wonder this confused people.  A claim for a different category of pension  was necessary in order to give rise to the continued payment, at a higher rate, of the category of pension she was already receiving.  I can see that the DWP finds it convenient to call this a ‘Category ABL’ pension or a ‘combination’ of Categories A and B, but that vocabulary is apt to confuse an outsider.  Judge Howell described the pension neatly as a ‘topped up’ Category A pension.
22.	Next, in the light of the tribunal’s reasoning, one needs to consider how all this inter-relates with section 43.  Subsections (3) to (5) operate in a situation where a  person is ‘entitled’ to (which includes having claimed, or being treated as having claimed, or being relieved of the need to claim) a Category A and a Category B pension.  It then enables the person to give notice to the Secretary of State saying which one they want to receive.  It follows that the ‘notice’ choosing the category of pension to be paid, as contemplated by section 43, is a different thing from a claim to a pension in accordance with the Claims and Payments Regulations.  
23.	The claimant’s wife could theoretically have given a notice under section 43, choosing either Category A or Category B, at the same time as making a claim for Category B, but there is no evidence that she did so.  It would have been perverse of the Secretary of State to send out paperwork encouraging people to make a choice under section 43(4) which was or might be less favourable to them; it is better not to give a notice of choice because without one section 43(5) obliges the Secretary of State to pay whichever pension is higher.  Moreover, the  fact that the Department paid her a ‘topped up’ category A pension is strong evidence that she did not give a notice of choice under section 43(4) choosing Category B.
24.	The result of all this exploration of these complicated and confusing provisions it that the tribunal was wrong in my view to equate a claim for Category B pension with a notice of choice under section 43(4).  It was also wrong to rely  on paragraph 24 of R(G) 1/06, which in my view it misunderstood.
25.	In that case the deceased wives’ ‘topped up’ Category A pensions were identical in amount to their Category B pensions.  The Secretary of State had awarded topped up Category A pensions.  The claimants argued that, under the ‘whichever is the most favourable’ rule in section 43(5), he should have awarded Category B pensions that would have paid the same amount during the wives’ lifetimes and not prevented the claimants qualifying for a bereavement payment in the event of their wives’ earlier deaths.  Judge Howell rejected that argument saying (with emphasis in the original) that, there having in fact been an award of Category A, “that was an end of the matter so far as any possibility of alternative entitlement under section 43 was concerned; unless or until there was a fresh claim for Category B retirement pension instead, which there never was.” 
26.	Both the context and the Judge’s emphasising the word ‘fresh’ show that what he had in mind was a further claim, accompanied by a notice of choice under section 43(4), made at a point in time later than the husbands’ 65th birthdays.  He was clearly not suggesting that a claim for Category B pension made at the time the husbands reached 65 could take effect as a choice under section 43(4), particularly since the argument he was dealing  with was based on section 43(5), which deals with cases where there has not been an express choice.
27.	The claimant’s representative has argued that the finding that the claimant’s late wife gave a section 43(4) notice at the time the claimant reached 65 is a finding of fact, which I cannot disturb.  If it is a finding of fact, then in my view it is based on an error of law, namely that a claim within the meaning of the Claims and Payments Regulations is the same thing as a notice under section 43.  To the extent that it is a finding that the claimant’s wife both made a claim and, separately, gave a notice of choice, it is a finding for which there is no evidence at all, and it was therefore an error of law to make it.  The decision is therefore erroneous in law.  
28.	
29.	+Moreover, the only conclusion that the tribunal could lawfully have come to on the evidence is that the claimant’s late wife was in receipt of Category A pension at the time of her death, so that the claimant does not satisfy the conditions for entitlement to a bereavement payment in section 36(1).
30.	I therefore have to decide that the claimant was not entitled to a bereavement payment or a bereavement allowance in consequence of his late wife’s death.  

Deputy Judge Nicholas Paines QC
22 January 2010