IN THE UPPER TRIBUNAL	Case No.  CIB/3202/2009
ADMINISTRATIVE APPEALS CHAMBER

1.	This is an appeal by the Claimant, brought with my permission, against a decision of a First-tier Tribunal sitting at Newcastle-upon-Tyne on 29 July 2009. For the reasons set out below I dismiss the appeal. 

2.	The Claimant is a man now aged 47. He is a US Citizen, but worked as an employee in the UK between 1980 and 1987, and national insurance contributions were paid in respect of that employment. The last contributions paid in the UK were in respect of the year 1986/7. 

3.	At some point in or after 1987 he moved to the USA, and he still lives there. He had coverage under the relevant USA insurance scheme from at least 1993 (p.11). He last worked in the USA on 14 October 1998 (p.24), at which date he became incapable of work under the USA rules. He claimed US disability benefit in September 1999, and was paid from April 1999 (p.24). Payment of benefit is still continuing. According to information received from the Federal Benefits Unit of the American Embassy in London (p.24):

	“In the application form he filed in September 1999, plus all his appeals, [the 	Claimant] answered NO to the question “do you have coverage in any other 	country”. The first indication that he might have foreign work was in March 	2008 when the liaison form was sent to SSA Baltimore.” 

4.	In May 2008 the overseas department of the Pensions Service in Newcastle-upon-Tyne received from the relevant US authority in Baltimore a completed form dated 30 April 2008 and headed “US – UK Agreement on Social Security. Transmittal/Request/Certification.” It stated that UK disability benefit had been claimed on 14 March 2008. 

5.	On 18 August 2008 a decision was made by a decision maker on behalf of the Secretary of State as follows:

“On 14 March 2008 [the Claimant] made a claim for UK incapacity benefit to the US authority in Baltimore. When he made his application for a US Disability Benefit on 15 September 1999 he confirmed he had no insurance 	coverage in any other country so the US authority had no reason to send his 	claim to the UK to look at whether he was entitled to UK incapacity benefit. 

The time limit for claiming benefit is 3 months. [The Claimant] is not entitled to UK incapacity benefit from 14 October 1998 to 13 December 2007 (both  dates included). 

I have looked at his claim to UK Incapacity Benefit from 14 December 2007. [The Claimant] does not satisfy the contribution conditions for Incapacity Benefit as he has not paid or been credited with contributions in the USA and the United Kingdom in the two relevant tax years ending on 5 April 2005 and 5 April 2006 which amount to at least 50 times the lower earnings level for those years. 

As [the Claimant] last paid contributions to the UK scheme in 1987 and the USA scheme in 1998 he is not entitled to UK incapacity benefit from and including 14 December 2007.”

6.	On receipt of that decision the Claimant wrote on 5 September 2008 as follows:

“I do not agree with your decision because I never said that I did not have any insurance coverage in any other country. I worked in England from 1980 through 1987 and I was insured. 

Your letter indicates that in the application that I made for US disability benefit on 15  September 1999 I confirmed that I had no insurance coverage in any other country. I never said that. This question was never directed to me. I would like to see a copy of this application. 

You say that the time limit for claiming UK incapacity benefits is 3 months. I did not know that. I read the pamphlet (totalization agreement with the UK) on instructions in filing for that type of benefit and the instructions did not mention anything about the 3 month time limit. This was the first time I read about the instructions in filing for those benefits. When I filed for US benefits in 1999 no-one at the social security office ever mentioned that to me. Therefore I was unaware of that rule. In March of 2008 was when I first read about the totalisation agreement with the UK and I filed immediately.”

7.	A record of a telephone conversation between the Claimant and the UK Pensions Service on 9 September 2008 includes the following:

“.. [the Claimant]  …… said no one at the SS office [in the US] ever asked the question about coverage in another country when he filed for US benefit. I said that when he filed his claim there would have been a question asking if he had coverage in another country and he should have confirmed then that he had worked in the UK. [The Claimant] then said that he had left the question blank when filling in his claim form. I explained that the US authorities have probably taken this as a “no” answer and [the Claimant] said that they shouldn’t have done that because he didn’t understand the question at the time.” 

8.	The Claimant then faxed to the Pensions Service a copy of the answers which the Claimant appears to have given at the time of the application for disability insurance benefits which he had made in the USA on 28 September 1999. The only answer which is of any possible relevance to the question whether he had worked in the UK is the following, on the first page: “I am not entitled to nor do I expect to become entitled to a pension or annuity based in whole or in part on work after 1956 not covered by social security.” There appears to have been no answer directed specifically to the question whether he had coverage abroad. 

9.	The Claimant then appealed against the decision of 18 August 2008 refusing UK incapacity benefit. He stated in the appeal form as follows:

“I filed for US social security disability benefit on September 15, 1999. The question regarding “covered under foreign social security [agent]” was filled out correctly, because I was not entitled to benefit from UK. But I work in UK from 1980-1987. When I filed for US disability benefit in September 1999 I did not know about Totalization social security agreement between the US and UK. Nobody at social security office told me about the Totalization Agreement. I found out about the Agreement in March 2008 when I filed under the Totalization Agreement. I should not be penalised for not being told about the Totalization Agreement on September 15, 1999.”

10.	The First-tier Tribunal, by the decision now under appeal to me, dismissed the Claimant’s appeal at a paper hearing. The Tribunal held that:

	(1) The Claimant could not be treated as having made a claim to UK incapacity benefit, by virtue of his claims in the USA, until March 2008; 

	(2)  There is no provision in UK law permitting time for making his claim to be extended back to 1999, but only to 14 December 2007 (i.e. 3 months before the date of claim). 

	(3)   His claim for UK incapacity benefit from 14 December 2007 failed because “the Secretary of State is correct in saying that there must be contributions or credits in the two preceding tax years to the year of claim where those contributions or credits amount to at least 50 times the low earnings level for those years.” 

11.	The first issue arising in this appeal is when the Claimant’s claim for UK incapacity benefit was made. 

12.	The position where there are potentially overlapping entitlements to social security benefits in the USA and the UK is governed by the Agreement between the two countries which is contained in Schedule 1 to the Social Security (United States of America) Order 1984 (“the USA Agreement”).

13.	Under Article 18 of that Agreement the Claimant’s claim in the USA in 1999 was required to be treated as a claim in the UK if the Claimant (a) requested that it also be considered as a claim in the UK or (b) provided evidence at the time of the claim in the USA indicating that he had completed periods of coverage (i.e. had paid national insurance contributions) in the UK. 

14.	The Claimant accepts that he did not do either (a) or (b) in 1999, but states that this was because he did not realise, because no-one told him, that he could claim in the UK. I am afraid that the UK decision maker was right to look only at whether the Claimant had fulfilled (a) or (b). The reason why he did not do so is irrelevant. If the Claimant could establish that he ought in 1999 or later to have been given information in the US about the possibility of claiming in the UK, he might have some sort of action in the US under US law against the relevant state authority. I cannot of course express any opinion about that, and I have no reason to believe that such an action would be (or have ever been) available. But whether it would or not is irrelevant to the question I have to decide, which is whether the Tribunal went wrong in law in deciding that the Claimant could not be treated as having made a claim to UK incapacity benefit until he notified the US social security authority, on 14 March 2008, that he had had coverage in the UK (p.10). As I have said, on the evidence before it the Tribunal was right to decide as it did. 

15.	The Tribunal was further clearly right to decide that the claim to UK incapacity benefit which, by virtue of Article 18 of the Agreement, was made in March 2008, could not be backdated by more than 3 months. Under UK legislation a claim for incapacity benefit is backdated for up to 3 months prior to the date of claim, but there is no provision for any greater degree of backdating. 

16.	The next question is whether the Secretary of State was right to reject the claim to UK incapacity benefit which was made in the USA on 14 March 2008, and which took effect as a claim from 14 December 2007, on the ground that the Claimant did not satisfy the “second contribution condition”. At the time of giving permission to appeal I stated as follows in relation to this: 

“However, I give permission to appeal for the following reasons. The Secretary of State accepts that the Claimant can be treated as having made a claim in the UK as from 14 December 2007. The reason given by the Secretary of State for refusing that claim was that the Claimant did not satisfy the “second contribution condition”, in that he did not have coverage in either the UK or the USA in the years ending 5 April 2005 and 5 April 2006. However: 

(i)	Was the Secretary of State right to treat the years ending 5 April 2005 and 5 April 2006 as the relevant years for the purposes of the second contribution condition? Under Article 14.2 of the Agreement with the USA the relevant years are “the last 2 complete contribution years before the relevant benefit year”. “Relevant benefit year” does not appear to be defined in the Agreement, but by reference to English legislation would appear to mean (as the Secretary of State appeared to accept in the written submission to the Tribunal) the benefit year in which the period of incapacity for work began. The Secretary of State stated in para. 12 of the written submission to the Tribunal that “in this case the American authorities advised the Pension Service that Mr Grant’s incapacity for work began on 14 December 2007. This means [that] the benefit year in which the period of incapacity for work started is 2007.” However, it seems to me at present that the USA authority in fact advised that the period of incapacity for work began on 14 October 1998 (p.24). If that is right, was not the “relevant benefit year” the year ending 5 April 1999, and if so were not the crucial years for the purposes of the second contribution condition the years ending 5 April 1997 and 5 April 1998? The Claimant had coverage in the USA in those years. (p.11)

(ii)	Alternatively, even if the “relevant benefit year” was the year ending 5 April 2008, under Article 14.2 of the Agreement with the USA “a person will be considered to meet the second contribution condition if he is credited with at least 2 quarters of coverage under the laws of the United States in each of the last 2 complete contribution years before the relevant benefit year.” The Claimant has been incapable of work and in receipt of US benefit since 1998/9. If that had been the case in England, he would have received national insurance credits. Should the Secretary of State have requested the US authority to state whether there is any US equivalent of credited contributions? If so, it may be sensible for the Secretary of State to request that information before making the submission in this appeal.”

17.	Para. 2 of Article 14 of the USA Agreement provides as follows:

“A person who has satisfied the first contribution condition for sickness benefit as defined in Article 1 using contributions under the laws of Great Britain …… only, who is in the territory of the United States and is not subject to the laws on coverage of Great Britain ….. under Articles 4, 5 or 6 of this Agreement, shall be entitled to receive invalidity benefit under the laws of Great Britain ……. provided that:

	(a)	the second contribution condition for sickness benefit under the laws of 	the United Kingdom is satisfied using relevant periods of coverage under the 	laws of the United Kingdom and, if necessary, the United States, and

	(b)	the person is incapacitated for work and has been so incapacitated 	throughout the qualifying period for invalidity benefit, in which case the 	person shall be treated as if sickness benefit followed by invalidity benefit, 	under the laws of Great Britain …….. had been paid throughout that period of 	incapacity.”

18.	Para. 2(3) of Schedule 3 to the Social Security Contributions and Benefits Act 1992 provides that the second contribution condition includes the requirement that “the claimant must in respect of the last two complete years before the completion of the relevant benefit year have either paid or been credited with contributions of a relevant class or been credited (in the case of 1987-88 or any subsequent year) with earnings”. 

19.	Para. 2(6) provides that 

	“(a) “the relevant time” is the day in respect of which benefit is claimed; 

	(b)	“the relevant benefit year” is the benefit year in which there falls the 	beginning of the period of incapacity for work which includes the relevant 	time.” 

20.	Section 30C(1) of the 1992 Act provides, so far as directly material:

	“For the purposes of any provisions of this Act relating to incapacity 		benefit, subject to the following provisions and save as otherwise 			expressly provided – 		

		(a)	a day of incapacity for work means a day on which a 				person is incapable of work

		(b)	a period of incapacity for work means a period of 4 or 				more consecutive days, each of which is a day of incapacity for 				work. 

		(c)	……………………………………….”

21.	Regulation 4 of the Social Security (Incapacity Benefit) Regulations 1994 provides, so far as directly material:

“(1)	For the purposes of incapacity benefit a day shall not be treated as a day of incapacity for work if it is – 
		(a)	a day in respect of which a person – 
			(i)	has made no claim for incapacity benefit; 
			(ii)	has made a claim for incapacity benefit but not within 					the prescribed time and good cause for the delay is not shown; 			or 
			(iii)	has made a claim for incapacity benefit but not within 					the prescribed time and, whether or not the person has shown 				good cause for the delay, he is not entitled to benefit as a result 				of section 1(2) of the [Social Security Administration Act 					1992] (which provides for a 12 month limit on claims for 					incapacity benefit); 

		(aa)	……………………………………………………………”

22.	Under the above provisions, the years in which the necessary contributions must have been made, if the “second contribution condition” is to be satisfied, are “the last two complete years before the completion of the relevant benefit year.” The Secretary of State’s decision refusing UK incapacity benefit was made on the footing that “the relevant time” in this case is the period commencing on 14 December 2007 (which is the earliest date to which, under UK law, the Claimant’s claim for UK incapacity benefit can be backdated). That is clearly correct. 

23.	“The relevant benefit year” is then “the benefit year in which there falls the beginning of the period of incapacity for work which includes the relevant time [i.e. in this case 14 December 2007].” The Secretary of State’s decision under appeal was made on the footing that the period of incapacity for work therefore commenced on 14 December 2007, which meant that the relevant benefit year was the year 7 January 2007 to 6 January 2008, which in turn meant that the tax years in which the contributions had to be made or credited were the years ending 5 April 2005 and 5 April 2006. 

24.	However, the question which I raised in my sub-para (i) set out in para. 16 above was whether the “period of incapacity for work” started, not on 14 December 2007, but on 14 October 1998. That was the date on which the Claimant’s incapacity in fact started, and he has been continuously incapable of work since then. However, at the time of raising that question I had not taken into account the provisions of Regulation 4 of the Social Security (Incapacity Benefit) Regulations 1994, to which the Secretary of State has now drawn my attention. The Secretary of State submits that that provision means that no day before 14 December 2007 can be part of the “period of incapacity for work”, because the Claimant’s claim cannot relate to a date before 14 December 2007. 

25.	When one looks at the precise terms of Regulation 4 of the 1994 Regulations, it is possible, however, to construct a somewhat subtle argument that the Claimant’s period of incapacity for work did start on 14 October 1998. First, it can be said that the Claimant has claimed incapacity benefit back to 14 October 1998, so that Reg. 4(1)(a)(i) does not apply. Then it can be said that (a)(ii) does not apply because the Claimant did (he would argue) have “good cause” for the delay in not claiming within 3 months (i.e. the prescribed time) of each day from 14 October 1998 onwards for which he wishes to claim. It can further be argued that head (iii) does not apply because it is not as a result of section 1(2) of the Social Security Administration Act 1992 that he was not able to claim incapacity benefit back to 1998, but rather as a result of section 1(1) and the 3 month time limit for claiming incapacity benefit specified in reg. 19(1) of and Schedule 4 to the Social Security (Claims and Payments) Regulations 1987. 

26.	The relevant provisions of s.1 of the Social Security Administration Act 1992 are as follows:

“(1)	Except in such cases as may be prescribed, and subject to the following 	provisions in this section and to section 3 below, no person shall be entitled to 	any benefit unless, in addition to any other conditions relating to that benefit 	being satisfied – 

		(a)	he makes a claim for it in the manner, and within the time, 				prescribed in relation to that benefit by regulations under this Part of 			this Act; or 
		(b)	he is treated by virtue of such regulations as making a claim for 			it.

(2)	Where under subsection (1) above a person is required to make a claim 	or to be treated as making a claim for a benefit in order to be entitled to it – 

		(a)	if the benefit is a bereavement payment ………………..; and
	(b)	if the benefit is any other benefit except disablement benefit or 		reduced earnings allowance, the person shall not be entitled to it in 		respect of any period more than 12 months before that date, except as 		provided by section 3 below.”

27.	The reason why the argument which I set out in para. 25 above is available to the Claimant is that reg. 4 of the 1994 Regulations was drafted in a form which was appropriate to fit the legislation relating to time limits for claiming as it was in 1994, but has not been updated to take into account changes in that legislation. 

28.	In 1994 the time limits for claiming most benefits, including incapacity benefit, were laid down, as they are now, by reg. 19(1) of and Schedule 4 to the Social Security (Claims and Payments) Regulations 1987. However, at that time reg. 19(2) contained a general provision for extension of the time limits for “good cause”, as follows:

“Where the claimant proves that there was good cause, throughout the period from the expiry of the prescribed time for making the claim, for the failure to claim a benefit specified in column (1) of Schedule 4 before the date on which the claim was made the prescribed time shall, subject to section 1 of the Social Security Administration Act 1992 (12 months limit on entitlement before the date of claim) and paragraph (5), be extended to the date on which the claim is made.”

29.	At that time section 1(2) of the 1992 Act was therefore necessary in order to limit the maximum period of extension for “good cause” to 12 months. 

30.	 However, as from April 1997 the general provision permitting an extension of time for “good cause” was removed, and replaced with the possibility of an extension of up to 3 months for specified benefits if certain conditions are fulfilled, and up to 6 months in relation to other specified benefits if certain (different) conditions are fulfilled. 

31.	As noted above, the position in relation to incapacity benefit is now in effect simply that the claim can be backdated for up to 3 months without any conditions needing to be satisfied. That is because Schedule 4 to the 1987 Regulations specifies, as the prescribed time for claiming incapacity benefit, “the day in respect of which the claim is made and the period of 3 months immediately following it.” (In 1994 that period was 1 month). 

32.	The reason why a claim for incapacity benefit cannot be backdated by more than 3 months is therefore that there is no longer any general provision for a more extensive backdating, such as was previously to be found in reg. 19(2) of the 1987 Regulations. Section 1(2) of the Social Security Administration Act 1992 has therefore since April 1997 had no effect – i.e. has been unnecessary - in relation to incapacity benefit. 

33.	The intention displayed by reg. 4(1) of the 1994 Regulations, viewed against the legislation relating to time limits for claiming as it then stood, is that a day could only be a day of “incapacity for work” (and therefore form part of a period of “incapacity for work”) if it was a day in respect of which a valid claim for incapacity benefit had been made. (In other words, it had to be a day in respect of which a claim was either made within 1 month, or within 12 months if good cause for the delay could be shown). 

34.	In my judgment it would make a nonsense of the intention behind reg. 4(1) of the 1994 Regulations if it were now construed as having the effect that a day during which a claimant was in fact incapable of work can be a “day of incapacity for work” even if it is a day more than 3 (or indeed 12) months before the date of claim, provided that good cause for the delay in claiming can be shown. As I have said, the reason why reg. 4(1)(a)(iii) does not apply in that situation is that section 1(2) of the 1992 Act is no longer needed in order to limit the backdating to 12 months, because there is no longer any general provision permitting backdating for good cause. 

35.	There are a number of ways in which an argument in the Claimant’s favour along the lines set out in para. 25 above could be rebutted.  One would be to read reg. 4(1)(a)(iii), in the light of the changes in the time limit legislation which have been made since reg. 4 was enacted, as meaning that a day cannot be a day of incapacity for work if it is a day in respect of which, if there were still the possibility of the time limit for claiming being extended for good cause, incapacity benefit could not be awarded by reason of the 12 month time limit in section 1(2) of the Social Security Administration Act 1992. It seems to me that at the very least one must make that qualification. But, in agreement with the Secretary of State, I would prefer a more radical reading of reg. 4(1) as a whole to the effect that a day is not a day of incapacity for work if it is a day in respect of which either no claim for incapacity benefit has been made, or (if a claim has been made) in respect of which incapacity benefit cannot be awarded because the claim was made outside the prescribed time. In other words, it seems to me that one must now read reg. 4(1) as if all of what follows after “but not within the prescribed time” in reg. 4(1)(a)(ii) had been repealed. All the succeeding words have simply become inappropriate in the light of the changes in the legislation relating to time limits since 1994, and it seems to me that the legislative intention must be that they should be ignored. 

36.	Giving reg. 4(1) of the 1994 Regulations that meaning is sufficient to defeat an argument by the Claimant that his “period of incapacity for work” extends back to 1998, up to which time he had coverage in the USA. I therefore agree with the Secretary of State’s submission in this appeal, although for substantially more complex reasons, that the first issue which I raised at the time of giving permission to appeal (see para. 16 above) does not assist the Claimant. 

37.	The second issue which I raised was whether the Tribunal had sufficient evidence before it as to whether the Claimant had “coverage” in the USA in respect of the crucial years ended 5 April 2005 and 2006, given that he has been in receipt of US disability benefit since 1998, and in the UK would in those circumstances have received incapacity credits.

38.	In relation to this the Secretary of State submits that the information before the Tribunal was sufficient to show that the Claimant has not had coverage in the USA from 1999 onwards. He refers me to the information supplied by the US authority at pages 11 to 12. Each page contains the words “US Social Security Agreement certified coverage record. International Agreement.”  Each page sets out figures for “regular” earnings in respect of each of the years 1993 to 1998, but each of the years since then has no earnings figures shown opposite it. Plainly the Claimant has not had earnings since then, as he has been unable to work. At the foot of the second page is stated: “the following symbols indicate periods for which coverage exists based on …” and then follows a key which indicates that “C” means “wages”. One then reads: “The following symbols indicate periods for which coverage does not exist: N – no coverage”. Above on that page, and the previous one, the years 1993 to 1998 have “CCCC” after them (relating, it seems, to the 4 quarters of each year), whereas the following years each have “NNNN” after them. I accept the Secretary of State’s contention that that is a sufficiently clear indication that the Claimant has not had coverage in the USA for the years from 1999 onwards, and therefore did not have coverage in the crucial years ended 5 April 2005 and 2006. If there were a system of incapacity credits in the USA similar to that in England, it seems to me that that would have been indicated on the information supplied by the US authorities. The Claimant did not of course have coverage in the UK either during those years. In my judgment, therefore, the second point which I raised at the time of giving permission to appeal does not assist the Claimant either. The Tribunal was entitled on the evidence before it to accept the Secretary of State’s contention that the Claimant did not have coverage in the USA in the two crucial years. 

39.	It therefore follows that in my judgment the Tribunal reached the right result, and this appeal must be dismissed. 

40.	The main thrust of the Claimant’s grounds of appeal has been that he should not be disadvantaged because of the fact that at the time of claiming disability benefit in the USA in 1999 he did not know that he could claim benefit in the UK, and therefore did not inform the US authorities that he had had coverage in the UK. However, for the reasons which I have explained, the reason why he did not inform the US authorities in 1999 is irrelevant. Neither the Tribunal nor I have found that he did not have good cause for not informing the US authorities about his UK work. The Claimant has no entitlement to UK incapacity benefit, even for the period from 3 months before the date of his claim in 2008, because he did not satisfy the second contribution condition. 

Charles Turnbull
Judge of the Upper Tribunal
28 June 2010