CH_1076_2008
[2008] UKSSCSC CH_1076_2008 (11 August 2008)
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[2008] UKSSCSC CH_1076_2008 (11 August 2008)
CH 1076 2008
DECISION OF THE SOCIAL SECURITY COMMISSIONER
- I allow the appeal. For the reasons below, the decision of the tribunal is wrong in law. It is set aside. I refer the appeal to a new tribunal to consider in accordance with the directions in this decision.
- The City of Sunderland Council ("the Council") is appealing with my permission against the decision of the Sunderland tribunal on 6 12 2007 under reference 236 07 01845. The respondent is the claimant and appellant before the tribunal ("Mr D").
- DIRECTIONS FOR REHEARING
A The rehearing will be at an oral hearing.
B The new tribunal should not involve any member who has previously been a member of a tribunal involved in this appeal.
C The parties are reminded that the tribunal can only deal with the appeal as at the date of the original decision under appeal.
D If the parties have any further written evidence to put before the tribunal, this should be sent to the tribunal within one month of the issue of this decision.
These directions are subject to any later direction by a district chairman.
REASONS FOR THE DECISION
- The agreed facts on which this appeal was based include the fact that Mr D receives two annuity payments, or pensions, from Abbey Life. The two payments, worth together about £10 a week, were payable half yearly in advance to Mr D.
- Mr D informed the Council that he was paying half the annuities to his wife, from whom he was separated. The Council took the view that Mr D was voluntarily giving his wife the money and that therefore he was depriving himself of that income. The Council accordingly adjusted his housing benefit to take into account the full annuity payments as his income. He appealed.
- The tribunal allowed Mr D's appeal because there was either a constructive trust in favour of the wife or there was an actual trust of the income in favour of the wife. In so deciding, the tribunal noted the position if there had been a divorce rather than only a separation of Mr D and his wife.
- The Council appeal against that decision with my permission. The grounds of appeal are that the income under the annuities was clearly Mr D's income, and that there were no grounds under the relevant regulations to exclude all or any of that income from Mr D's income for housing benefit and council tax benefit purposes. Mr D's representative withdrew from this appeal after I had issued permission to appeal. Mr D had no comments himself to make on the appeal.
My decision
- The decision of the tribunal is inadequate. I am unable from the facts found and recorded by the tribunal to establish how the tribunal found there to be either an actual trust in favour of Mr D's wife under which the income was required to be transferred or a constructive trust to that effect.
- There is a further problem, which again I am unable to deal with on the facts found by the tribunal. From the facts that are in the papers, the annuity pensions under payment to Mr D may be retirement annuity pensions in connection with a former employment. If so, the decision of the tribunal would have to be considered in the light of section 91 of the Pension Schemes Act 1995 and related provisions. Section 91(1) of the Pension Schemes Act 1995 provides:
"Subject to subsection (5), where a person is entitled, or has an accrued right, to a pension under an occupational pension scheme –
(a) the entitlement or right cannot be assigned, commuted or surrendered,
(b) the entitlement or right cannot be charged or a lien exercised in respect of it, and
(c) no set off can be exercised in respect of it,
and an agreement to effect any of those things is unenforceable.
- Subsection (4) provides that this does not prevent an attachment of earnings order being made. Subsection (5) provides that this does not apply to, or to an agreement to effect:
"(a) an assignment in favour of the person in question's widow, widower or dependent…"
There are other exceptions in that subsection, and in regulations under that subsection, but they are consistent with the limitation to surviving spouses (or civil partners) or dependents. There is no finding of fact that suggests that Mr D's wife is a dependent.
- There is no finding of fact by the tribunal that any transfer between Mr D and his wife took place as part of the agreement with Abbey Life. I see no basis for the alternative finding of an actual trust in this case. I am unclear if this is an annuity to which the prohibitions against assignment in section 91 apply. If the section does apply, I am unclear on what basis the tribunal could reach the finding it did about a constructive trust.
- In granting permission to appeal, I drew the attention of the parties to my decision CH 1672 2007. In that case I agreed with the submission of the appellant that the effect of an order of the High Court in judicial separation proceedings was such that one half of the pension received by the appellant in that appeal was to be left out of account when computing his income for housing benefit purposes. I emphasised in that decision that the central element in that decision was the mandatory nature of the transfer in accordance with the terms of the order of the High Court. Neither party has suggested that that reasoning can be applied to this case. There is no court order or similar mandatory requirement that Mr D transfer these funds in this case. I confirm my provisional view that that decision does not assist Mr D.
- I conclude that the appeal is allowed and the matter referred to a new tribunal. The new tribunal must consider on the full facts whether there was any basis on which it can be said that the whole annuity did not remain Mr D's income. The new tribunal is to have regard to the grounds of appeal for the Council, the principles in my decision CH 1672 2007 (and in particular paragraphs 20 – 29 and 40 – 55), and the relevant provisions both of the annuity contracts themselves and, if relevant, of the Pension Schemes Act 1995.
David Williams
Commissioner
11 08 2008
[Signed on the original on the date shown]
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