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[2008] UKSSCSC CP_4205_2006 (05 March 2008)

CP 4205 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The appeal is allowed. For the reasons below, the decision of the tribunal is wrong in law. I set it aside. I replace it with the decision that the tribunal should have given. This is:

Appeal adjourned. The appeal is referred to the Secretary of State, in part under regulation 38A of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 for onward reference to Her Majesty's Revenue and Customs, for determination by the relevant government department and, on any appeal, by the appropriate tribunal of the outstanding questions about the appellant's contribution record, in particular with regard to the appellant's record of actual contributions paid, her home responsibilities protection entitlement, her entitlement to credits and credited earnings, and her entitlement to pay voluntary contributions. The appeal is to be referred back to me, or if I am not available another Commissioner, to make a final decision on the appellant's state pension entitlement when all outstanding questions have been decided, if necessary on appeal.

2. The claimant and appellant ("B") is appealing with my permission against the decision of the Newcastle-upon-Tyne tribunal on 30 06 2006 under reference U 44 229 00162.
3. This decision deals with the most complex set of personal circumstances of any state pension claim or appeal I have ever considered. The complexity is in part because determination of the full facts involves crossing and re-crossing between the jurisdictions of the Department for Work and Pensions ("DWP") and Her Majesty's Revenue and Customs ("HMRC"), and also between the tax tribunals and the social security tribunals.
4. Because of this I sent a draft of the decision to both parties, and the secretary of state's representative provided a copy to HMRC. I also sent directions requiring as much information from both parties as was available to deal with the issues raised. The appellant gave a full reply as directed, while understandably also recording that she was unable to comment on all the individual points of law raised. For the Secretary of State, David Kendall also gave full and helpful submissions. He was of additional help both to me and to the appellant as he also sought help from HMRC. HMRC are not a party to the current appeal. But they would be a party to some of the appeals that may follow this decision if the appellant chooses to appeal aspects of this case. It is therefore helpful to have their views at this stage.
5. I also indicated, with the terms of the draft decision shown to the parties and HMRC, that I raised some of these points drawing not only on my current jurisdiction as a social security commissioner but also my judicial experience handling appeals in tax tribunals. Some points in this decision technically exceed my current jurisdiction, although not that wider jurisdictional experience. I drew the attention of all concerned to this, and they were happy for me to proceed on that basis. I take that as consent in this highly unusual and complex case not to confine myself too strictly to a narrow interpretation of my jurisdiction.
6. In order to clarify what needs formal determination, I have assumed facts from the submissions of the appellant that have not been determined. If any are disputed, or remain unclear, the relevant officials and tribunals will need to make formal findings on them. They should not be assumed to be correct because I have assumed them in this decision.

REASONS FOR THE DECISION

7. B, who is resident in France, claimed a British state retirement pension on 17 07 2005 a few weeks ahead of her 60^th birthday.

The decisions under appeal

8. Initial calculations showed that B was not entitled to a basic retirement pension by reference to National Insurance contributions paid in Britain and that her total weekly additional and graduated pension entitlement was £3.09. She drew attention to the fact that she had worked and had been married elsewhere in the European Union outside Britain. The British authorities asked the Belgian and French authorities for details of her periods of social assurance or similar qualifying periods in Belgium and France. There were no periods of assurance in Belgium. Periods of assurance in France were taken into account. On recalculation using this information, B was awarded a weekly British basic state retirement pension of £17.19, £3.09 additional pension, and a graduated retirement benefit of 50p. That award took into account a period when it was considered that B paid only reduced rate contributions in Britain and another period when she was entitled to home responsibilities protection ("HRP"). She was awarded £20.78 a week. B challenged this for several reasons, and correspondence with several parts of HMRC and DWP followed. That correspondence resulted in the award of £20.78 being confirmed.
9. B appealed. She claimed that she had not been awarded sufficient credits for her time as a student. She claimed that her British National Insurance ("NI") contribution record was defective with regard to an employment in 1973. She claimed that the period of election to reduced contributions was shorter than stated in the decision. She claimed she had not been awarded an adequate level of HRP. She disputed the failure to take account of her entitlements to the Belgian equivalent of child benefit. She also made two more general complaints. The first was about the demands for documentary evidence of her employment many years back despite the fact that she had told officials of the destruction of her personal records in a house fire in 1989. The second was that she had been excluded from the British social security system for 10 years because she was not habitually resident in Britain.
10. B's appeal was considered on the papers by a tribunal in June 2006. The tribunal's decision confirmed the decision made for the Secretary of State. It did not examine her grounds of appeal in detail. In essence, its reasons were that any dispute B had about her contribution record was a matter not for the appeal tribunal and the DWP but for HMRC. The tribunal assumed that B's contribution record was correct. It then found that the calculations made on the basis of that record were correct and therefore dismissed the appeal.

The appeal to the Commissioner

11. B's application to appeal against that decision was a plea for help. In her view, she was effectively exiled from Britain on money grounds. She stated that she would not be entitled to income support if she returned here despite most of her family being here.
12. Any entitlement B has would now be for state pension credit rather than income support, but the point she makes would still apply. She also raised a number of specific issues. I granted permission to appeal as I considered some issues arguable. I asked the Secretary of State to make a detailed submission on several points, and invited consultation with HMRC if felt appropriate. In a full reply David Kendall for the Secretary of State supported the appeal. He gave a full submission confirming that he had consulted with HMRC in so doing. This included a copy of a letter sent by HMRC to B. That letter showed that one aspect of the decision taken by the tribunal was wrong in fact and law. There had been an error about the question of reduced rate contributions. The submission drew a lengthy response from B that drew on British, French and European Union legislation and materials in both English and French.
13. Understandably, B did not consider that she was in a position to attend an oral hearing of the appeal and she pressed for a decision on her appeal on the papers. In order to make as much progress as could be made at this stage, I issued full directions and a draft decision to both parties before finalising this decision. I also invited the parties to identify any common ground. As noted above, I received a chronology of relevant events from the appellant in reply. She also commented on several factual questions I raised in my draft decision and the directions, and she enclosed copies of various documentary items to confirm elements of her evidence.
14. This was copied to the Secretary of State. Mr Kendall undertook a number of enquiries following the receipt of the new information both in DWP and from HMRC. He indicated that both departments had seen my draft decision. And he made a short but most useful submission about the progress that could be made in dealing with the appellant's appeal in the light of the new information. But he was unable to identify little common ground at this stage save about the reduced rate contributions.
15. I have in this decision taken full account of the appellant's new evidence. Like the secretary of state's representative, I have accepted this at face value (although as noted above I cannot make formal findings about some of it). And I have withdrawn or amended parts of the draft decision accordingly.

Identifying the issues

16. B's complaints about her residence status and entitlement to state pension credit (in place of income support) are not relevant to this appeal. B is entitled to be paid her entitlement to state retirement pension in full while living in France. That is not in issue in this appeal. She cannot claim additional state retirement pension because she is not entitled to state pension credit. This is because the amount of state retirement pension depends entirely on her National Insurance contribution record (together, in certain circumstances, with that of a husband or former husband).
17. The starting point with her appeals about her contribution record is to identify and then to put in the correct order the points raised by her appeal. This case illustrates only too well the need for a systematic approach to a complex state pension entitlement appeal. It potentially involves all three elements of the standard British retirement pension:

basic pension,

additional pension, and

graduated retirement benefit.

Each of these three issues is decided separately, and by different officials. B has then, because of her career and life history, raised many of the issues that can serve to make an individual's pension contribution record complex. Specifically, her grounds of appeal to the tribunal and the Commissioner, together with the correspondence, raise the following issues:

starting and training credits, or credited earnings

election for reduced rate contributions

home responsibilities protection (HRP)

significance of award of family benefits in Belgium

accuracy of contribution record with respect to her employment

significance of periods of insurance in France

effects of her marriage, then divorce, then second marriage

late payment of voluntary contributions where no other contributions paid or credited

And, to add further complexity, it appears that B had more than one NI number, and therefore potentially more than one contribution record.

18. Considerable time has been spent by B and by officials of both DWP and HMRC on her claims. But no one established with B the kind of chronology that counsel produce as standard practice in bringing cases such as this before the courts. This is perhaps because the responsibility for taking the decisions relevant to B's pension entitlement is divided between DWP and HMRC. And the issues she raises are divided between different parts of those departments. Further, on appeal they are divided between the tax tribunals and the social security tribunals. (I use tax tribunals in this decision to refer together to the special commissioners of income tax and the general commissioners of income tax). It is therefore, in the literal sense, no one officer's or authority's job to check B's complaints that she is not being paid enough retirement pension. The unfortunate result is that despite voluminous official correspondence over two years it is impossible to construct an accurate chronology from the information that came before the tribunal in this case or initially to me. Nor has any attempt been made to consider the relevant issues in the proper order.
19. I therefore directed the appellant to provide a chronology as best she could. She did so, though with gaps in it. This has clarified some important points that were previously in doubt, and I have accepted the chronology in this decision as it stands. I commend the production of such a chronology both to appellants and to officials involved in similar complex pension and contribution appeals.

B's working life

20. B was 16 on 17 07 1961. She was, according to the papers, allocated an NI number on 1 08 1960. The papers now show that she was later allocated other NI numbers, and that needs to be investigated. She reached retirement age on 17 07 2005. For state pension contribution and benefit purposes this means that her working life started on 6 04 1961 and ended on 5 04 2005. Within that period of 44 years, all of which are relevant, the following central points must be established:

•    for basic pension entitlement, the total number of years, over B's working life in which she meets the contribution conditions. B must have paid or been credited with earnings of the necessary level so that she satisfies the contribution conditions in each of the necessary number of contribution years in her case

•    for graduated retirement benefit, the total value of contributions made by B as an employee under that scheme to April 1975

•     for additional pension, the total value of contributions made by B as an employee under that scheme since April 1975.

Basic pension: the necessary steps

21. The main rule is that a woman is required to have paid or been credited with the necessary level of earnings to meet the contribution conditions for 39 of the 44 years of her working life from 16 to 60. To establish this, a number of decisions must be made. I outline these below as the steps necessary for a full decision. I then examine the steps in dispute in this appeal. Only when all those steps have been taken, and decisions made, can a full final decision be taken on the amount of state retirement pension to which a claimant is entitled.
22. The first step for the appellant and any other woman married before 11 05 1977 is to establish if she elected to pay reduced rate National Insurance contributions - or before 1977 not to pay contributions - for any period during her working life. No one can elect for nil or reduced contributions since 11 05 1977. But an election in force on that date remains in force throughout a woman's working life or until she ends the election. The importance of this is twofold. First, reduced rate contributions do not count towards a state retirement pension. Second, a woman cannot receive home responsibilities protection for any period when she has a reduced rate contribution election in place. We must therefore identify the start and finish dates of any election made by B before we look either at her home responsibilities protection entitlement or at her contribution record.
23. Once her period of full contribution liability (and therefore state scheme coverage) is identified, the next step is to check the position with regard to home responsibilities protection (sometimes referred to as home responsibility protection). This is available from 5 04 1978. A woman does not have to pay or be credited with contributions for any year in which she is entitled to HRP. Subject to a reduced rate election, this is broadly any full year in which she received child benefit for her children or looked after an adult dependent. So we must examine B's HRP and therefore her entitlement to child benefit before we can decide how many contribution years are relevant to her pension claim.
24. Once periods of reduced rate election and HRP are excluded, the third step is to examine her contribution record of actual contributions during the years relevant to her claim. We must examine what she paid by way of Class 1, Class 2 or Class 3 contributions to identify for how many contribution years B has satisfied the relevant contribution conditions.
25. The fourth step follows from the third step. We must examine her entitlement to have contributions or periods of assurance under other European schemes counted in the same way as British contributions for periods when no British contributions were paid.
26. The fifth step, when we have established each of the above matters, is to examine whether she is entitled to credits or credited earnings for any year in which there are no, or no sufficient, British or foreign contributions.
27. The sixth step is then to consider if she is entitled to the advantage of the contribution record of any husband (or former or late husband) of hers in place of her own record where that is more advantageous.
28. The seventh and final step, to have the full picture, is to consider whether she still has the right to make late Class 3 contributions to make good any remaining gaps in her contribution record.

Graduated retirement benefit and additional pension: additional issues for decision

29. Separately from that process, we must also examine two other aspects of the claimant's contributions as an employed earner following from the third and fourth steps for basic pension entitlement. This is relevant for the period before April 1975 to her entitlement to graduated retirement benefit and from that time for additional pension. (This was the state earnings related pension scheme to 2002 and the state second pension after that). Only actual Class 1 (employee) contributions count for this purpose.
30. There is no additional entitlement to graduated retirement benefit by reason of any European Union employment or assurance. See EC Council Regulation 1408/71, Annex VI, paragraph 8. In practice there is also no additional entitlement to the additional pension directly from periods of employment or assurance elsewhere in the European Union. But the aggregation and apportionment rules of EC Council Regulation 1408/71, Articles 46 and 47 must be applied to entitlement to additional pension as stated in Annex VI, paragraph 15 to that Regulation. So the European position may need consideration here also.

Divided decision-making responsibilities

31. No one official, government department, or member of the tribunals judiciary has the power to make decisions on all seven steps together. A series of decisions must be assembled in the right order from different offices, and if necessary different tribunals, to establish the full picture. On appeal, some of these decisions go to social security tribunals and some to tax tribunals. I indicate which is which below. Because of this I cannot consider all these issues properly within this appeal. But, with the warning I gave the parties and their consent to the approach I took, I have looked on both sides of the jurisdictional boundaries of this exceptionally complex appeal.

Step 1: election to reduced rate contributions

32. I dealt with this issue at length in my draft decision. This is now one area where I can now indicate some progress. In my draft decision I set out an analysis of the evidence at that stage about the appellant's first marriage and subsequent divorce, and also about reduced rate elections. B was married for the first time in 1969 and probably divorced in 1975. It is now clear that there were initial official errors about the availability of an election to pay reduced rate contributions. A letter from HMRC on 10 07 2007, received after the date of the tribunal hearing, apologises that the previous statements that B elected to pay reduced contributions in 1967 were wrong. It explains that she could not do this until 1975. It confirms that she elected to pay contributions as a married woman from 20 October 1969.

It is also now accepted that HMRC need to look at B's contribution record during that period again in the light of all the information she has now provided.

33. The tribunal did not consider any of this. In fairness, it could not accept the submissions on this point simply because the facts and HMRC acceptance were not before it.

But the error renders the tribunal's own decision wrong in law because the contribution record on which it took its decision had been assumed and not decided, and it is now clear that the assumptions were wrong.

34. My view is that this step has now been dealt with, save for the consequential re-examination of B's contribution record in a later step. I conclude that the appellant was married before the date on which she could elect for reduced rate contributions. And the letter from HMRC on 10 07 2007, after the date of the tribunal hearing, is correct in accepting that the appellant did not elect for married women's reduced rate relief. Previous official assertions to the contrary are wrong. But I can only express a view on that. I cannot decide it formally. It has been indicated that this will be checked against the further information (including National Insurance numbers) that the appellant has now supplied.

Step 2: home responsibilities protection

35. B was awarded three years entitlement to HRP in calculating her pension award. She appealed on the grounds that this was insufficient. The papers show that B had three sons with her first husband. The eldest was born on 3 03 1980. The others were born in 1981 and 1987. Either B or her then husband would probably have been entitled to either British child benefit or an equivalent elsewhere from the full year starting after the birth of the oldest son. That is 1981-82. HRP was available for that year. In principle it could continue until the youngest son was 19, as he was unfortunately disabled, so that it removed 20 years or half the required years of contribution (whichever is the lower) of B's working life. So B could claim HRP from 1981-82 to 2000-01 if she met the full conditions, including the receipt of child benefit.

Entitlement to British child benefit

36. A letter written to B's Member of Parliament on 7 06 2005 states that B claimed British child benefit from 10 03 1980 (the week after the oldest son was born) to 27 04 1981, from 25 10 1982 to 28 10 1985 and from 21 11 1988 to 14 08 1989. This entitled her to HRP for 1980, 1983, and 1984. The letter also states that B produced a document confirming receipt of Belgian family allowances from 1 09 1989 and 30 09 2004. An internal note dated 16 08 2005 from the HMRC Centre for Non-Residents to the Pension Service states that:

"The periods that she was claiming UK child benefit are recorded on her NI account and she has been correctly awarded the corresponding number of years HRP.

Unless [B] can provide us with evidence that she was in receipt of UK child benefit for any period that is not recorded on her account there is nothing further that we can do."

Unfortunately that account, or at least the part of it that deals with the payment of UK child benefit, is not in the papers before the tribunal. The tribunal was therefore not in a position to decide if it agreed with that statement, and neither am I.

37. B raised two separate queries about the limited award of HRP. First, she claimed to be entitled to further years of HRP in respect of her time bringing up the children in Britain. Second, she claimed HRP in respect of the periods for which she received Belgian family benefit. The submission to the tribunal from the Secretary of State asserted the entitlement to HRP for three years. It did not deal with either of the queries raised by B. That submission referred to the Social Security Pensions (Home Responsibilities and Miscellaneous Amendments) Regulations 1978, regulation 1(1) and the Social Security Pensions (Home Responsibilities) Regulations 1994, regulations 2(1). It did not explain why B was not entitled to any further period. It therefore failed to deal with B's grounds of appeal. So, therefore, did the tribunal.
38. B's first ground of appeal related to her periods in Britain. No one seems to have decided as a matter of fact when B was in Britain. She has now informed me that she was in Britain with the children until 1985 when she left first for France and then moved on to Belgium. And for a time in 1985 she considers she may have been resident in both Britain and Belgium. There is a record of the award of Belgian family benefit to them from September 1989. She moved from Belgium back to Britain in 1994. Then she moved to France in 1995 and has been there since. In one letter (28 June 2005) she states that she had back pay of child benefit from 1985 to 1988 sent to her husband, who was then working in Britain. In her grounds of appeal to the tribunal she asserts that she had two separate British child benefit records, and that she received child benefit in 1990-91 in addition to the child benefit recorded for the three years of HRP entitlement awarded. B has now provided further details of this aspect of her personal history. It is of course possible on the facts that B and the children had homes, and were therefore resident or ordinarily resident, in more than one country at the same time during these periods. And it appears that she may have had more than one NI number at the time and two separate child benefit numbers under which she states she received child benefit. These issues leave several questions undetermined.
39. Some of the uncertainty need not detain us. The relevant conditions for entitlement to HRP in respect of the care of children are in regulation 2(1)(a) and (2)(a) of the Social Security (Home Responsibilities) Regulations 1994. Put simply, a claimant is entitled to HRP if he or she can be taken as precluded from regular employment by responsibilities at home and also that throughout the year in question he or she is in receipt of child benefit in respect of a child. B can only receive HRP for a year if she was entitled to child benefit for the whole of that year. If the dates of claim in the letter quoted above are correct as a record of the dates when she was entitled to child benefit, then the award of three years' HRP seems to be correct. B will be entitled to additional years of HRP only if it can be shown that she was entitled to child benefit throughout those additional years. The information she now produces suggests that the award of child benefit to her in 1990 and 1991 was for more than a year, but not for any full tax year. If her husband claimed and received the benefit, then he might be able to claim HRP but she cannot. See Commissioners' decisions CP 1778 2001 and CP 391 2005. But there is now more detail available on these issues and a proper decision needs to be taken.
40. The question of entitlement to British child benefit for periods when B was outside Britain is considered in a formal letter to B, then living in Belgium, from the Department of Social Security, in 1991. This suggests that there was a formal decision in 1989 about her entitlement to child benefit from 1985. It also suggests that B was not entitled to British child benefit while living in Belgium, although her then husband may have been entitled. He was at the time both working in Britain and maintaining the children. This suggests that there should be some record of B's entitlement, or that of her then husband, to child benefit in this period. There is no further official information in the papers about these points. They were not dealt with in the submissions to the tribunal. They remain for decision.

Foreign benefits for children

41. Is it relevant that B received Belgian family benefits or French family benefits in place of British child benefit? I assume for current purposes that B received Belgian benefits from September 1989 to September 1994 although again details are missing from the papers. And B has stated that she also received French benefits for two years in 1997 to 1999. If that is right, and if the Belgian or French family benefit is to be counted as the direct equivalent of British child benefit, then there is an argument that B could be entitled to HRP for several additional years. That would directly affect B's pension entitlement.
42. Consideration was given in a letter from the Child Benefit Centre to B in February 1991 to the issue of B's rights under European Union law to child benefit. No consideration has been given to whether B can claim any European Union law rights to assert that her entitlement to the Belgian or French equivalent of child benefit should be treated in the same way as British child benefit for HRP purposes. To assert such a right B must be able to bring herself within the personal scope of a relevant measure of European Union law. No consideration has been given to this or to whether B was, in the European Union law sense of the term, a worker or otherwise directly entitled to European Union law rights in respect of benefit for her children. This might arise under Council Regulation 1408/71 read with Council Regulation 574/72 or under other relevant provisions of European Union law. And it may, on the facts in the papers, be that she was in a different position when in France than when she was in Belgium. B states that this matter is still being looked into by the European Commission. Perhaps subject to the consideration of the problems by the European commission, it is another matter that requires decision as part of this appeal.
43. There appears currently to be no authority, no agreed position, and no clear legislation in Britain about whether HRP can be claimed by reference to family benefits paid elsewhere in the European Union in place of child benefit. My provisional view, formed with caution as I have not had the benefit of any argument, is that there is not. A full answer may depend on the European rights that B seeks to assert. That may depend on her personal status at a particular time. For example, was she a worker? The initial decision about this is in principle a matter for the Secretary of State for Work and Pensions but in CP 1778 2001 I agreed that, as a matter of British law, this was transferred to HMRC under the authority of section 17 of the Social Security Contributions (Transfer of Functions) Act 1999. Mr Kendall has confirmed that position in this case. It is not clear if that also applies to questions of European Union law, where the Secretary of State and HMRC are both listed as the competent authorities in Council Regulation 574/72. But whether it is for HMRC or the Secretary of State to decide, it has not been decided. On appeal, it is to be decided by a social security tribunal. See CP 391 2005.
44. In this case there is as yet no decision for a tribunal to decide. Before a decision can be made, HMRC or the Secretary of State should produce the record of decisions about B's entitlement to British child benefit. The records or evidence of entitlement to the Belgian and French equivalents of child benefit are also needed. This may need a formal inter-governmental information request. Once those periods of entitlement are identified, B can challenge both the factual records and the issue of principle about any European law entitlements. Any dispute on these questions is for determination by a social security tribunal.

Step 3: gaps in the British contribution records

45. On this I stray beyond the jurisdiction of the social security tribunals into the jurisdiction of the tax tribunals. I do so because, as social security commissioners have found in, for example, CP 2739 2003 and CP 357 2004, it is not possible to deal sensibly with decisions that cross and then re-cross the borderlines in jurisdictions between government departments and then the tribunals on a strict jurisdictional approach.
46. The RF1 produced shows that no contributions were paid or credited to B between the payment of 9 Class 1 contributions in 1966-67 and the payment of 35 Class 1 contributions in 1972-73. There are no further contributions paid for 1973-74 or 1974-75. B stated in her grounds of appeal that this record ignored a period of employment in 1973. There is no equivalent detail in the papers of B's contribution record from April 1975 when the system changed. HMRC have now accepted that at least part of this record needs to be revisited, namely the period when it was wrongly considered that B had elected to pay reduced rate contributions. There is also the question of alternative NI numbers and the relevance of any other RF1.
47. As it is now accepted that B's contribution record needs further examination, the question of her record must be referred to the Secretary of State, and then by the Secretary of State to HMRC for decision, with any dispute going to the tax tribunals.
48. Turning to the tribunal decision under appeal, B put issues about her actual contribution record in dispute. The tribunal was wrong in its decision simply to assume that the contribution record was correct. That is clearly appropriate as a starting point for a social security tribunal. And it may remain so if there is no serious issue in dispute about a contribution record. But the assumption must give way to a proper decision and appeal when the record is challenged as B has challenged it.
49. However, B should bear in mind that she must be able to produce evidence to back any assertion that the actual contribution record is wrong. I note B's problem following her house fire and the lost records. It may be unfortunate that an individual's records have been destroyed as B's have been. And the problems may be compounded if HMRC weeded out records in the way I discussed in Rose, [2007] Simons Tax Cases (Special Commissioners Decisions) 129. But it is clear law that no assumptions can be made for or against a party where documents are no longer available for that reason. But there must be some evidence (including of course oral evidence or recall by a claimant) to set against the evidence in the official contribution record if it is to be questioned. And it is for an appellant to produce that evidence. It is then for HMRC and the tax tribunals to decide.
50. In this case the tribunal should either have decided that B's grounds of appeal on this point were irrelevant to the decision before it or it should have followed the procedure laid down in regulation 38A of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. That requires it to refer the matter to the Secretary of State for onward reference to HMRC for decision. The tribunal was wrong in law in not doing either of those things. My formal decision follows the second of those courses of action.

Step 4: foreign contribution records

51. The papers contain formal certificates from the French and Belgian authorities about periods of assurance completed in those jurisdictions. They show periods of assurance in France but none in Belgium. If B considers these to be wrong, any remedy she has will be under the relevant laws in Belgium or France. The British authorities accept these certificates as properly made under Council Regulation 574/72. It is clear that B is aware of that from her last submission.

Step 5: credits and credited earnings

52. There are three kinds of credit or credited earning put in issue on the facts in the papers: starting credits, credits for training, and credits during periods of sickness. This is another area where jurisdiction is shared both in law and in practice between DWP and HMRC.

Starting work and training

53. The NI contribution record on the standard form RF1 shows that B was credited with 44 contributions in the year she was 16, and a full set of 52 contributions in the following two years. Six credited contributions were then awarded in 1963-64. As a matter of fact this shows full credited contributions until B was 18 and some beyond that age. The record then

notes that B went back into full time education in September 1965 until July 1968.

54. The formal position on these issues involves:

(a) starting credits or credited earnings for the year in which a claimant is 16 and the following two years. These are payable under regulation 4 of the Social Security (Credits) Regulations 1975 (SI 1975 No 556) ("Credits Regulations"). The records of these credits are kept by NICO, but formal decisions about them are made by the Secretary of State for Work and Pensions, with an appeal to the social security appeal tribunals.

(b) credits or credited earnings for approved training under regulation 7 of the Credits Regulations and credits or credited earnings on the termination of full-time education, training or apprenticeship under regulation 8 of the Credits Regulations. Credits or credited earnings for approved training can be claimed only by a claimant who was over 18 before the start of the tax year in which the week of potential entitlement occurred. Entitlement can only arise where the course is an approved training course lasting less than a year. Credits and credited earnings under regulation 8 do not count towards the contribution conditions for any part of a state retirement pension. They are therefore irrelevant here.

(c) entitlement to pay voluntary Class 3 contributions late for periods of higher or further education under the relevant provisions in the Social Security (Contributions) Regulations 2001. I return to this point below.

55. It appears that no appealable decision has yet been taken about these credits or credited earnings. As a matter of fact B appears to me to have been given her full entitlement to starting credits. And I see no arguable entitlement to credits for approved training. My own view is therefore that there is nothing to be gained by B from this aspect of her appeal.

Other credits

56. There appears to be a period of payment of sickness benefit to B at the beginning of her career. No credits had been given in respect of this. This is perhaps because she was thought not to be paying full contributions at the time. Separately, B stated on her claim form that she received income support for periods in 1988 and 1989 and then in 1995. There is no detail about why she received this benefit at those times, but there may have been an entitlement to credited earnings while that entitlement was in place. Both these issues may need further consideration. My formal view must be that these matters have not been decided. So there can be no valid appeal on those points at this stage. In any event, the social security tribunal could not decide them and was wrong in law to purport to do so. If B wishes to have the matter taken further, then there must be an official decision.

Step 6: relying on contributions of her former husband

57. B raises the question why she cannot be granted the benefit of the contributions paid by her first husband while she was (whether in Britain or in Belgium) looking after the children and not herself working. She accepts that she was married to a second husband, after divorce ended her marriage with her first husband, in 1999.
58. This is the one aspect of B's appeal on which there is a clear answer. Section 48(3) of the Social Security and Benefits Act 1992 provides that where a woman has been married more than once, she can claim a retirement pension by reference only to the contributions paid by the husband or former husband of the later or latest marriage. B remarried in 1999 and made her pension claim in 2005. She can claim only by reference to the contribution record of her second husband.

Step 7: paying additional contributions

59. B and her Member of Parliament were both told in the correspondence that B could pay late voluntary Class 3 contributions in respect of at least part of the gaps in her contribution record. Any Class 3 contributions paid, even late, would if adequate make good part of B's contribution record. B's contribution record needs to be re-examined and if necessary formally determined. Only then can those gaps be identified. It must then be considered if B is entitled to make late payments. That is another matter on which I cannot comment further in this decision. Whether B is still entitled to make any late contributions is a matter between her and HMRC. In so far as it involves any discretion by HMRC then I trust it will be accepted that the extraordinary complexity of this appeal warrants a generous exercise of that discretion. But I cannot decide that. Any appeal goes to the tax tribunals.

Calculating basic retirement pension entitlement

60. Once all the above matters have been agreed, decided or identified as irrelevant, and any late contributions have been paid, and only then, the definitive calculation of basic pension entitlement can be undertaken. That calculation is the duty of the Secretary of State. Neither the Secretary of State nor I can undertake that calculation on the information available and decisions made so far. Neither could the tribunal, and its decision is plainly wrong in law in asserting that it could.

Calculating graduated retirement benefit entitlement

61. This may need revisiting if as a result of the decisions about actual British Class 1 (or insured or employed earners) contributions, there is any change to the record of contributions made before 1975.

Calculating additional pension entitlement

62. This may need revisiting with regard to actual Class 1 contributions after 1975. It may also need revisiting if the number of years for which it is accepted that the claimant is entitled to be credited with foreign periods of contribution or assurance in other European Union states is increased. This is because of the need to perform the equivalence calculations required by EC Council Regulation 1408/71, article 46, read with Annex VI, paragraph 15 to that Regulation.

Summary

63. The decision of the social security tribunal is plainly inadequate. Given the complexity of the appeal and the inadequacy of the papers supplied by both parties, that is not surprising. But the decision must be set aside.
64. For B's appeal to be dealt with fully and properly, the following steps apply:

(1) It is now accepted (since the tribunal hearing) that B did not elect for reduced rate contributions after her first marriage. That step has now been determined in B's favour.

(2) The period or periods during which B was entitled to HRP must be determined. That may involve a formal determination of the periods for which B was entitled to British child benefit. It may also involve determining whether she had any entitlement to Belgian or French child or family benefits that are for these purposes the equivalent under European Union law to British child benefits. That series of decisions is for the Secretary of State and HMRC, with an appeal to a social security tribunal. As that is the first formal question requiring determination, my decision is to refer the matter to the Secretary of State to make, with HMRC, any necessary decisions.

(3) The period or periods of actual contribution by B under both British and other European Union legislation must then be determined. That is a matter for HMRC. HMRC will need to look again at B's record now that it is clear that she did not elect for reduced contributions during her first marriage. Any appeal goes to the tax tribunals. As it is accepted that this also needs determining, I also formally refer the matter to the Secretary of State for onward reference for determination at the appropriate stage.

(4) The period or periods of entitlement to contribution credits or credited earnings must then be decided. That is a matter for both HMRC and the Secretary of State. Any appeals about credits or credited earnings are for the social security tribunals.

(5) The view I take that B cannot rely on any contribution record of her first husband, but only on that of her second husband, is based on clear legislation and is not open to argument. Any relevant contribution record of that husband needs to be determined.

(6) The question of any entitlement to make voluntary contributions is a matter for HMRC. Any appeal is to tax tribunals. This arises once (3), (4) and (5) are determined.

(7) Only then can the Secretary of State calculate basic pension entitlement. And only then can I consider that calculation and determine this appeal. It must be adjourned until all above steps are completed or B indicates that she is nor pursuing any step further.

(8) Separately from (7), but in parallel with it, any necessary adjustments must be made to entitlements to graduated retirement benefit and additional pension, with any disagreement referred to me for final decision.

General conclusions

65. The result is plainly absurd. Regulation 38A of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 requires me to adjourn this appeal while it is referred to the Secretary of State and by the Secretary of State to HMRC, and then back again, and then back again (and again) as necessary until it can eventually be referred back to me for decision, if not agreed by the appellant.
66. As a result, and notwithstanding the appellant's pleas for urgency, this appeal may stand officially adjourned for several years if the full procedures required by law to determine this appellant's entitlements are pursued. But that is currently the required procedure, and I have no power to alter that procedure. If B wishes to maintain her appeals on all the factual points she has raised (and ignoring any appeal on points of law only) she must obtain decisions about HRP (including decisions about her child benefit record and foreign equivalents) and then appeal them to the social security tribunals, then obtain a decision from HMRC about her actual contribution record and appeal it to the tax tribunals, then obtain decisions from HMRC and the Secretary of State about any credited earnings and appeal them to the social security tribunal again, then, if she wishes to consider any voluntary contributions, agree the position with HMRC or appeal it to the tax tribunals again, and then finally ask the Secretary of State to calculate her basic pension entitlement and make a submission to me or another Commissioner about that final decision. Alongside that are the decisions and appeals necessary to deal with the other elements of her state retirement pension.
67. I note what B says about her inability to get any advice. But she must make her own decisions about what she continues to dispute and what she wishes to appeal.
68. This decision reflects the formal current position. However, before that position can be fully applied, the current rules about appeals will have been replaced as the Tribunals, Courts and Enforcement Act 2007, Part 1, starts to come into effect. That will replace the various social security and tax tribunals with a single first tier tribunal. That may assist the appellant and anyone else unfortunate enough to get caught in this extraordinary legislative version of snakes and ladders.
69. I draw this case to the attention of those concerned with the introduction of the new first tier tribunal, and appeals from that tribunal. I suggest that they bear in mind the cross-jurisdictional problems in this case when making provision for assignment of jurisdictions and judges to different parts of the first tier tribunal and for cross-jurisdictional transfers of individual appeals. This decision illustrates scope for new regulations and procedures to rationalise appeal structures so that future appellants do not find themselves following the almost surreal complexity that the current procedures have imposed on this appellant.

David Williams

Commissioner 5 03 2008