DW/f

								

THE SOCIAL SECURITY COMMISSIONERS

SOCIAL SECURITY ADMINISTRATION ACT 1992
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
CONVENTION ON SOCIAL SECURITY BETWEEN
THE GOVERNMENT OF THE UNITED KINGDOM AND
THE GOVERNMENT OF NEW ZEALAND

APPEAL FROM A SOCIAL SECURITY APPEAL TRIBUNAL
ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Mr Commissioner David Williams

[ORAL HEARING

9 November 1998]

	Claimant		:	

	Benefit		:	Retirement pension

	Tribunal		:	Sutton

	Date of hearing	:	

	Tribunal case no	:	

1	I allow the claimant’s appeal, which was brought by leave of the Commissioner, against the decision of the Sutton social security appeal tribunal. The decision was to confirm the decision of the adjudication officer. This was that the claimant was entitled to a basic retirement pension from and including 25 March 1996 at the reduced weekly rate of £52.38. For the reasons below, that decision is erroneous in law. I therefore set it aside. I refer the appeal to a freshly-constituted tribunal for rehearing. 

2     	This appeal was the subject of an oral hearing by me on 9 November 1998. At the hearing, the claimant represented his claim in person. The adjudication officer was represented by Mr Heath of the Department of Social Security Solicitor’s Department. I am grateful to both for their help in this case.

3	The claimant originally appealed against the decision of the adjudication officer on the grounds that he disputed both the date from which he should receive his retirement pension and the rate at which he was entitled to receive it. Before me he accepted that the pension was payable at a reduced rate and maintained his appeal only as regards the date from which it was payable. Accordingly, I have considered only this aspect of the award of pension in this decision, except in so far as the arguments in the case bring the question of rate back into consideration.

The basis of claim

4	The claimant was born in New Zealand on 31 July 1924. He lived and worked in New Zealand for many years. However, for reasons not relevant to this claim, in 1989 he asserted his British citizenship and renounced his New Zealand citizenship. The claimant had been self-employed or a company director in New Zealand.  

5	At some point that is not clear from the case papers, the claimant made a claim for New Zealand superannuation. For the purposes of the Convention (paragraph 7 below), this is the equivalent of the British basic retirement pension [or was at the relevant time: there have been major reforms in New Zealand not otherwise relevant here]. The pensionable age for men at that time in New Zealand was 60. The claimant was 60 in 1984, but was of the firm view that he did not make his claim until he was 65 at least - over the state pensionable age in the United Kingdom. Unlike the British social security scheme, the New Zealand scheme was not a contributory scheme. Benefits were funded from general taxation. Entitlement was established  by reference, principally, to residency status. The claimant therefore had no contribution record in New Zealand on which to base his claim to a pension either in that country or elsewhere. He had no contribution record in Britain. For the sake of completeness, I note that he had no contribution record elsewhere either. However, superannuation was apparently paid to him for a time, but was at a later date withdrawn from him with retrospective effect. 

6	After 1989, the claimant spent periods in the United Kingdom. The precise lengths of those periods, and the resident status derived from those periods, are matters that may be in dispute in this appeal. However, after the claimant renounced his New Zealand citizenship, he lost his automatic residency rights in New Zealand and needed a visa to stay in New Zealand for longer than 6 months. His British citizenship gave him residence rights here. He also spent some time in Norway during this period. After the claimant’s claim to New Zealand benefits failed with retrospective effect, the claimant claimed a British retirement pension on 11 July 1996. His last arrival in Britain before that claim was made was on 21 March 1996. He was then aged 71. The claimant claimed benefit from 12 July 1995, one year before the date of claim, and when he was 70. He told me that he had not claimed previously because he had not wished to claim until he was 70. This was because he was aware that if he waited until he was 70 he would be paid a higher rate of pension. He had also assumed that he needed to be in this country to make a claim

The decision under appeal

7	The adjudication officer considered the claim under the terms of the  Convention on Social Security between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of New Zealand (the Convention) which entered into force on 1 January 1984. This was incorporated into British law by the Social Security (New Zealand) Order 1983 (SI 1983 No 1894) (the 1983 Order). Applying article 9(3) and (6) of the Convention, the adjudication officer awarded a basic retirement pension at a reduced rate to the claimant, but only from 25 March 1996. This was the first date after the last arrival of the claimant in Britain prior to the date of the claim on which the adjudication officer was acting.

8	The tribunal confirmed the decision of the adjudication officer. Its decision on the appeal was given by way of a brief manuscript decision notice, followed by a short statement of material facts and reasons. Before me, Mr Heath accepted that the decision notice and statement were inconsistent with each other on a number of details. While some of these may have been correctable as slips by the tribunal, he accepted that they were together with the brevity of the tribunal’s findings of fact and of the statement of reasons, such that the decision of the tribunal could be regarded as inadequate. It is my view that it is inadequate for that and two other reasons. The tribunal, as explained below, may have confused entitlement to pension with payability of that pension.  Its stated reasons appear to use the criteria in article 9(6) of the Convention (which relates to payability) for determining entitlement to pension (which is covered by article 9(3)).  Its failure to make these issues clear is an error of law. The tribunal also failed to consider the effect of article 23 of the Convention, although the application of that article is at least arguably relevant on the facts before the tribunal. The decision is therefore erroneous in law and must be set aside, and the matter must be referred to a new tribunal for rehearing.

9	I indicated to the parties at the hearing that my initial view was that the appeal was likely to succeed and that if so the matter would be referred to a new tribunal. I indicated that if that was so I would confine my decision to those points necessary to show why that was my decision and to directions to the new tribunal. As that is my view, and the parties indicated assent to this approach, I do not propose to discuss the points that arose further than necessary to direct the new tribunal. This is not intended with any disrespect to the thorough and helpful way in which the issues were explored before me by the claimant and Mr Heath. 

Directions to the new tribunal 

10	The tribunal is concerned with the application of the Social Security Acts and the Convention to the claimant’s claim, or claims, for British retirement pension. It is not concerned with any entitlement in New Zealand at any time.  

Status of the Convention  

11	The claimant argued before me that he was entitled to claim his pension under the combined effects of the Social Security Acts and the Convention.  In essence, his argument was that he could claim under the Convention when that was to his advantage, and under the Social Security Acts when it was not. While that is sometimes true under European Union law, it is not true for a convention such as the one in issue here. The power to reach international agreements is a prerogative power of The Crown. But it is long established that an international agreement only takes effect in the United Kingdom to the extent that Parliament so provides, and cannot by itself give rights to individuals: see Fothergill v Monarch Airlines [1981] AC 251, and the cases cited by the House of Lords in that case. Similarly, where an international agreement is given effect by Parliament, it overrides internal inconsistent law to the extent Parliament provides.

12	Provision is made to give effect to a social security convention by section 179 of the Social Security Administration Act 1992.  This provides:

Reciprocal agreements with countries outside the United Kingdom

179.-(l) For the purpose of giving effect-

(a)	to any agreement with the government of a country outside the United Kingdom providing for reciprocity in matters relating to payments for purposes similar or comparable to the purposes of legislation to which this section applies, or

(b)	to any such agreement as it would be if it were altered in accordance with proposals to alter it which, in consequence of any change in the law of Great Britain, the government of the United Kingdom has made to the other government in question,

Her Majesty may by Order in Council make provision for modifying or adapting such legislation in its application to cases affected by the agreement or proposed alterations.

(2)	An Order made by virtue of subsection (1) above may, instead of or in addition to making specific modifications or adaptations, provide generally that legislation to which this section applies shall be modified to such extent as may be required to give effect to the provisions contained in the agreement or, as the case may be, alterations in question.

13	In the case of the Convention, the Order in Council made under section 179 was the 1983 Order. Article 2 of the 1983 Order provides:

Modification of the Social Security Act 1975

2.	The Social Security Act 1975 shall be modified to such extent as may be required to give effect to the provisions contained in the Convention so far as the same relate to England, Wales and Scotland.

It follows that, so far as Britain is concerned, the full Convention takes effect and overrides inconsistent British internal social security legislation. If the claimant wishes to use the rights granted him under the Convention, he must do so subject to all the other provisions of the Convention. It is only if the Convention makes no specific provision that he can use the Social Security Acts themselves. Equally, if the Convention gives him rights, and imposes duties on others, he is entitled to those rights and the benefits of those duties on the basis that those rights and duties are granted or imposed by the authority of the Social Security Acts. 

14	The Convention also gives guidance on the way it is to be interpreted.
Article 1(1) contains the following definitions that are relevant in this case:

(h) “entitled to receive” means entitled to receive subject to any condition about giving notice or making a claim and to any earnings rule, retirement rule, means test or disqualification which may be appropriate;
(s) “usually resident” means, in relation to the United Kingdom , ordinarily resident ...

Article 1(2) provides:

(2)	Other words and expressions which are used in this Convention have the meanings respectively assigned to them in the legislation concerned

15	The tribunal should therefore consider the issues before it on the basis of the terms of the Convention unless there is no specific relevant provision in the Convention.  

The issues before the new tribunal 

16	The tribunal rehearing this case must decide four questions:
	(A)	when did the claimant claim a British retirement pension?
	(B)	was the claimant entitled to a pension as a result of his claim?
	(C)	from what date was the claimant entitled to a pension?		(D)	for what periods was he entitled to payment?

(A) 	When did the claimant claim?

17	It is not in dispute that the claimant claimed a retirement pension on 11 July 1996. However, the claimant had apparently previously claimed New Zealand  superannuation. If he did, then article 23 of the Convention should be considered. This provides:

(1)	Any claim, notice or appeal which should, for the purposes of the legislation of one Party, have been submitted within a prescribed period to the insurance authority or the competent authority of that Party, shall be treated as if it had been submitted to that insurance authority or competent authority if it is submitted within the same period to an insurance authority or competent authority of the other Party.

(2)	Any claim for benefit submitted under the legislation of one Party shall be deemed to be a claim for the corresponding benefit under the legislation of the other Party in so far as this corresponding benefit is payable in accordance with the provisions of this Convention.

(3)	Any document submitted under the legislation of New Zealand may, where appropriate, be treated as a notice of retirement given under the legislation of the territory of the United Kingdom.

(4)	In any case to which the provisions of paragraph (1), (2) or (3) of this Article apply, the authority to which the claim, notice, appeal or document has been submitted shall transmit it without delay to the competent authority or insurance authority of the other Party.

18	It does not appear that any consideration has so far been given to this provision in so far as it may apply to the claimant. I therefore assume that no transmission has occurred under paragraph (4). Before me, the claimant stated that he did claim superannuation in New Zealand and that he did so, so far as he could recollect, after he was 65. Certainly, the case papers show that the New Zealand authorities had initially accepted his entitlement to benefit and had put it in payment. At a later stage the New Zealand authorities had determined that superannuation was not payable, and had taken steps to recover the amount said to be overpaid. It does not appear on the facts before me that any consideration was given at that or any other time to the claim being considered as a British claim [or for the recovery provisions in article 19 of the Convention that are linked to such an action to be put into effect]. However, I see nothing in the Convention that stops article 23 applying because the New Zealand claim failed only retrospectively, and I see no reason why that should be so.

19	I have no authority to comment in any way on what may, or may not, have happened in New Zealand, although the claimant had put a number of relevant items of correspondence in the papers. If a view is, or has been, taken in New Zealand with which the claimant does not agree, it may be tested only through appeal mechanisms available in New Zealand. But that does not exclude me from examining article 23 as it applies in Britain. I add that if that consideration results in a disagreement between the British and New Zealand authorities about the interpretation or application of the terms of the Convention, the remedy is provided in the Convention itself. Article 25 sets out a compulsory arbitration mechanism for dealing with such disputes. But it may be invoked only by the parties to the Convention. 

20	Article 23 is in mandatory terms. It clearly applies to the British social security authorities whether or not it has been applied by the New Zealand authorities. The new tribunal must therefore consider it. If the claimant can show to the satisfaction of the tribunal, on the balance of probabilities, that he submitted a claim for New Zealand superannuation - and when and in what terms he submitted it - then the tribunal should consider that claim as a claim made for British retirement pension “in so far as this corresponding benefit is payable in accordance with the provisions of this Convention”. Similarly, if the claimant submitted any document to the New Zealand authorities about retirement that is relevant to a British claim then this should, under paragraph (3), be treated as a notice of retirement.

21	While it is for the claimant to prove his claim (and therefore the New Zealand claim), the administrative provisions of the Convention may help him with that. First, there should as a matter of fact have been a referral from the New Zealand authorities to the British authorities of any relevant claims or notices by reason of article 23(4). Second, article 22 provides that the two authorities should assist each other on any matter relating to the application of this Convention free of charge.

22	The tribunal should therefore determine whether there was any claim prior to the claim of 11 July 1996. If there was, the tribunal should consider if that claim gives rise to entitlement to a pension. If there was not, the tribunal should consider what entitlement arises from the claim in July 1996.

(B)	Was the claimant entitled to a pension?

23	The claimant’s entitlement to a British Category A basic retirement pension cannot be based only on British social security law. This is because he has no contribution record in Britain. He cannot therefore meet the requirements of section 44 of the Social Security Contributions and Benefits Act 1992 without reference to the Convention. He must base his claim solely on the Convention. He can do so by reference to article 9, as the claimant was clearly, on the facts, someone “in the United Kingdom” - at least for some relevant periods - who had been resident in New Zealand.

24	Article 9 provides, so far as relevant to this claim:

United Kingdom retirement pension by virtue of residence in New Zealand

(1)	The provisions of this Article shall apply to persons in the United Kingdom who have been resident in New Zealand.

(2)	Where a person is in, or resident in, the United Kingdom and at the time when he was last in New Zealand he was receiving national superannuation under the legislation of New Zealand, otherwise than by virtue of this Convention or the former Agreements, provided that he is over pensionable age as defined under the legislation of the United Kingdom he shall be entitled, subject to the provisions of paragraph (6) of this Article, to receive a basic retirement pension at the full standard rate under the legislation of the United Kingdom as if he satisfied the contribution conditions for such a pension...

(3)	Subject to the provisions of paragraphs (4) and (6) of this Article, for the purpose of a claim for basic retirement pension under the legislation of the United Kingdom by a person to whom the provisions of paragraph (2) of this Article do not apply, a person in, or resident in, the United Kingdom shall be treated as if he, or in the case of a claim made by a married woman or widow by virtue of her husband's insurance, her husband, had paid a Class 3 contribution under the legislation of the United Kingdom for each week during which he was resident in New Zealand.

[(4) and (5) apply only to women]

(6)	Any basic retirement pension which has become payable under the legislation of the United Kingdom by virtue of the provisions of this Convention or the former Agreements shall cease to be payable if and when the person to whom, or in respect of whom, the pension is payable leaves the United Kingdom, unless that person is usually resident in the United kingdom and his absence from the United Kingdom is only temporary.

25	It must be considered first if article 9(2) applies to the claimant. This only applies if, when the matter is to be considered in Britain, the claimant, when last in New Zealand was “receiving national superannuation under the legislation of New Zealand, otherwise than by virtue of this Convention”.  If a claim made for superannuation in  New Zealand is within the scope of article 23(2), then this is the operative claim for consideration. Applying article 9(2), the claimant must show that he was over 65 at that time (or otherwise meets the British claim rules) and whether he was in, or was resident in, the United Kingdom at that time. 

26	If he met those conditions, it must also be decided whether he was “receiving national superannuation under the legislation of New Zealand” at that time. The complication in this case is that the claimant apparently did receive superannuation for a time, but entitlement was later rescinded with retrospective effect. It is therefore important to decide, as a matter of interpretation of the Convention, whether the test in article 9(2) is actual receipt at the time, or receipt at a time when the claimant was entitled to receive the benefit. The former is a factual question, while the latter requires determination of the position with reference to New Zealand law. The issue is important in this case because the claimant would, under article 9(2), receive a full British pension but under article 9(3) he has conceded that he is only entitled to a reduced British pension. 

27	By reason of article 1(2) of the Convention, if the words used in the Convention have a technical meaning in the New Zealand legislation that is drawn to the attention of the tribunal, then the tribunal should give those words that meaning. If there is no such meaning (or none is drawn to the tribunal’s attention) then the text of the Convention is to be interpreted in accordance with the usual rules of treaty interpretation, and not any technical meaning in Britain. As the Commissioner recently observed in CF/3532/1009 (at paragraph  16), the general rules are laid down in the Vienna Convention on the Law of Treaties (of which the United Kingdom is a party: Cmnd 7964).
Article 31 provides that:

(1)	A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

(2)	The context for the purpose of the interpretation of a treaty shall comprise in addition to the text, including its preamble and annexes:
(a)	any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b)	any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.

3.	There shall be taken into account together with the context:
(a)	any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b)	any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c)	any relevant rules of international law applicable in the relations between the parties.

4.	A special meaning shall be given to a term if it is established that the parties so intended.

28	I have already commented on the point covered by article 31(4), and am not aware of any further assistance available by reason of paragraphs (2) and (3). In particular, I note there is no relevant guidance in the Adjudication Officer’s Guide published by the Department of Social Security Central Adjudication Services. If there are any relevant agreements or practices these must also be drawn to the attention of the tribunal. In their absence, regard must be had to the ordinary meaning of the phrase in its context and in the light of its object and purpose.  The object and purpose of the Convention are straightforward. The object is stated in the preamble of the Convention. It is that the governments of the two countries, having established reciprocity in the field of social security desire “to extend and modify the scope of that reciprocity and to take account of changes in their legislation”. Reciprocity means the grant of full social security rights for New Zealanders in Britain in exchange for the grant of similar full rights in New Zealand for the British. The purpose of the Convention is to enable that reciprocity. That being so, in the case of an ambiguity in interpretation the interpretation which, subject to reciprocity, provides a claimant with full right is to be preferred to one which restricts those rights. That is also consistent with the requirement of an interpretation in good faith.

29	The context is that article 9(2) allows, in effect, a transfer of basic pension entitlement from New Zealand to the United Kingdom, while article 9(3) allows a claim to be made in the United Kingdom based on the New Zealand equivalent of a contribution record. This is why paragraph (2) gives rise to a full British pension entitlement but paragraph (3) may not. Article 23 should also be borne in mind.  Reading the two article together, it seems to me that the scheme of the Convention is clear. If a claimant makes a claim for New Zealand superannuation, and is awarded it, and then moves to Britain, the rights to pension are transferred to a British pension. If the claimant makes a claim for New Zealand superannuation, but does not get it but then goes to Britain, then that claim should be transferred to the British authorities to see if there is a claim for a British pension. If the claimant moves to Britain and then claims the pension directly from the British authorities, it is for them to determine the claim under the Convention terms, giving the claimant benefit for the time spent in New Zealand. 

30	In that context, full weight must not only be given to the factual issue of whether the claimant is receiving national superannuation, but whether he is doing so under the legislation of New Zealand. My conclusion is that the claimant can only satisfy article 9(2) if he not only receives the superannuation but is entitled to receive it. That interpretation confirms the scheme and removes any consequence that might arise by a claimant who, for example, knows he is to lose his right to superannuation but leaves New Zealand for Britain and applies for a British before payment is actually stopped. (I do not suggest that this is what this claimant did, as he clearly disputed the New Zealand withdrawal of his rights). In my view, that meaning is an ordinary meaning of the words and is consistent both with the context and with the object and purposes of the Convention. It follows, on the facts as they stand in the case papers and as conceded by the claimant, that the claimant cannot claim under article 9(2). However, this is subject to further consideration if it is shown that there are relevant technical meanings to be taken into account by reason of article 1(2) of the Convention, or any relevant agreements or practices to the contrary.

31	Subject to the above, the tribunal should consider article 9(3). It may consider this either because it accepts that a claim was deemed to be made under article 23(2), but that article 9(2) did not apply to that claim, or because no such claim was made, and it is considering the matter based on the claim of 11 July 1996. In either case, the tribunal must first consider whether at that time the claimant was, as a question of fact, “a person in, or resident in, the United Kingdom.”

32	As regards the claimant’s residence at the time of the claim, the tribunal is required to find only that the claimant was resident in the United Kingdom at that time, not that he was ordinarily, usually, or habitually resident here. Residence is a question of fact. Some guidance is given on the factors to be taken into account in article 20 of the Convention, but none obviously apply in this case. Otherwise, the term is to be given its ordinary meaning.  The context in this case is of someone who comes and goes from Britain. This was discussed in some detail, and by reference to previous authorities, in R(P) 2/67. In this case, the terms of article 9 make it clear that presence in the United Kingdom is sufficient, and that the status of “residence” is of importance only when the claimant is not “in” the United Kingdom.

33	The claimant claimed that he was resident here throughout the relevant period because he was considered to be resident here for income tax purposes. In particular, he referred to a letter from the New Zealand  Inland Revenue in 1996 confirming that he was regarded as a resident in the United Kingdom by the United Kingdom tax authorities and that in the view of the technical advisor the claimant was resident in the United Kingdom and not in New Zealand. The claimant also drew attention to the guidance published by the United Kingdom Inland Revenue in leaflet IR20, and argued that this guidance also confirmed that he was resident during this period.

34	The test for “residence” for tax purposes is the same as that for social security purposes, save for one important point. Residence is determined for tax purposes by reference to each tax year. Residence for social security benefit purposes is normally to be determined as at a particular day or week. Leaflet IR20 explains the United Kingdom Inland Revenue’s view of the practical application of “residence” in the tax context, and any application of it to the social security context has to note the differences in contexts. In particular, the leaflet shows that the Revenue relies on what is termed the “183 day rule”, namely that residence in any year is to be determined in part on whether the claimant is, or is not, present in the United Kingdom for 183 or more days in that year. The Revenue view, consistent with general international tax practice, is that a person present here for 183 days in total in a year is resident here for the tax year. But the Revenue also use alternative rules to look at a pattern of visits and stays over a period of years, such as occurred in this case.  

35	It is as appropriate (perhaps more appropriate) to look at the equivalent guidance published for social security purposes. This is in Part 20 of the Adjudication Officer’s Guide (paragraphs 20866 to 20893).  The main guidance is:

There is no statutory definition of what reside or resident means. Each case must be decided on its own facts. Whether a person is resident or ordinarily resident in GB is primarily a question of fact and degree
(Paragraph 20866, citing as authority IRC v Lysaght [1928] AC 234)

AOs should refer to the dictionary definition of reside when deciding if a person is resident in GB.
(Paragraph 20870, citing R(F) 1/62; the paragraph then sets out the definition from the Shorter Oxford English Dictionary).

36	A determination that a claimant is resident in the United Kingdom for income tax (or social security contribution) purposes does not make that person resident for social security benefit purposes. Because of the different time frames for decision, it may be appropriate on particular facts for a claimant to be regarded as resident for one of those purposes but not for the other. However, the underlying test is the same and has to  be assessed on all the facts. With that in mind, the Inland Revenue guidance on the 183 day rule or the alternative rules may be helpful to the social security authorities. Subject to the important differences, it would seem desirable that the various British authorities applied the test of residence consistently to the various rights and duties that are dependent on it. There is a certain symmetry in the proposition that individuals who are liable because they are “resident” to British income tax and social security contribution laws should be entitled to its social security benefits where entitlement is also dependent on residence (and the reverse).

37	As an alternative to showing residence here, the claimant may show that he was “in” the United Kingdom at the relevant time, in other words that he was physically present at that time. This is a question of fact to be determined on the evidence.

38	If the tribunal  finds that the claimant meets either of these tests in connection with a claim, then it must decide whether, as a result of the claim, the claimant was entitled to a basic retirement pension under section 44 of the Social Security Contributions and Benefits Act 1992. The requirements of section 44 are that the claimant is of the relevant age and has met the contribution conditions.  In applying section 44, the contribution conditions are replaced by the assumption set out in paragraph 9(3), namely that each week of  residence in New Zealand is treated as if it were a Class 3 contribution. Formal determination of the satisfaction of contribution conditions is for the Secretary of State, not for the tribunal nor the Commissioner. In this case the aspect of the claim does not appear to be disputed by either party, so I need not comment further. Assuming the claimant can satisfy the tribunal that he was right in stating that he was over 65 when claiming New Zealand superannuation, it seems that the two conditions in section 44 are met once it is determined that there is a claim that meets the relevant tests.

(C)	From what date is the claimant entitled to a pension? 

39	The claimant claimed the retirement pension on 11 July 1996 from the previous 12 July. The adjudication officer awarded pension from 25 March 1996. The refusal to award pension before that date was the central reason for the claimant’s appeal. Of course, if it is found that the relevant claim for present purposes is the claim for New Zealand superannuation, the following considerations are not relevant. I deal with it because the adjudication officer and tribunal considered only the 1996 claim, and because the new tribunal may also find that the relevant claim is the 1996 claim.

40	The adjudication officer refused to backdate the pension beyond 25 March 1996 because this was the day on which the claimant last arrived in the United Kingdom before his claim. This was because, in the view of the adjudication officer, his claim as restricted to that period by article 16 of the Convention.  Article 16 provides (so far as relevant in this case):

Where a person makes a claim -
	(a)	for retirement pension ... under the legislation of the United Kingdom within
	twenty-six weeks after his last arrival in that country ...
	[(b) applies only to claims in New Zealand]
and shows that, apart form satisfying the condition  of making a claim, he was entitled, by virtue of the provisions of this Convention, to receive the benefit in question for any period between the date of his arrival and the date of his claim, arrears of benefit shall be payable for the period, subject to the provisions of article 15 of this Convention. 

The phrase “entitled to receive” is defined in article 1(2). Article 15 deals with duplication of benefit rights between the United Kingdom  and New Zealand  and is not relevant here. Mr Heath argued, on behalf of the adjudication officer, that this article allowed late payment for the period back to the date of last arrival, but excluded late payment for any further period.

41	The claimant claimed a full 12 months late payment under general social security legislation. This was provided by regulation 19 of the Social Security (Claims and Payments) Regulations 1987 in the form in which it stood at that time (specifically regulation 19(6)(b) read with regulation 19(7) and, as to the date of claim, regulation 6). Had the claimant been claiming retirement pension without reference to the Convention, it is clear that he would have been entitled to this backdating. For this purpose, it is irrelevant whether he was or was not in the United Kingdom at the time. Section 119 of the Social Security Contributions and Benefits Act 1992 allows provision to be made  for persons who are or have  been outside Great Britain. 	The relevant regulations under that section are the Social Security (Persons Abroad) Regulations 1975. Regulation 4(1) of those regulations provides that:

a person shall not be disqualified for receiving ... a retirement pension of any category or graduated retirement benefit by reason of being absent from Great Britain.    

That is subject to limitations relating to additional pension and upratings, but these are not in issue in this appeal.

42	Does the Convention override regulation 19 of the Social Security (Claims and Payments) Regulations 1987 as read with regulation 4 of the Social Security (Persons Abroad) Regulations 1975 ? Article 9(6) clearly does so. This expressly stops payment in certain conditions - see paragraph 48 below. But article 9(6) does not deal as such with late claims or late payments. Mr Heath submits that article 16 has the same effect. That article, he argues, makes the only relevant provision for late claims or late payments. In the absence of other provision no other late payment can be made.

43	I do not accept Mr Heath’s argument. Looking at the Convention as a whole, it does not deal with late claims or late payments by exclusion because it does not deal with them at all in general terms. It makes provision of the recovery of an advance payment or overpayment of benefit by one authority by means of a deduction from any sums obtained by the other authority (article 19), and to avoid duplication (article 15). But these are both cases where there are or may be double claims to benefit. There is no double claim here. Article 16 allows a period in which a person can make a claim within a period of arrival in the United Kingdom (and equally in New Zealand) as if it were made on the date of arrival. Had the claimant in this case made his claim for retirement pension on the date he arrived in the United Kingdom,  there would have been no scope for the operation of article 16. But that would not expressly have dealt with any late claim.

44	I discussed in paragraphs 27 - 29 the problems of resolving ambiguity in the Convention. Those considerations also apply to the interpretation of article 16. In addition, it must be recalled that a provision in the Convention only overrides the underlying British social security rights to the extent that this is required by section 179 of the Social Security Administration Act 1992 and article 2 of the 1983 Order (see paragraph 13 above). 

45	The claimant argued that the purpose of article 16 was to allow new migrants 26 weeks to decide if they wished to stay in the United Kingdom and therefore claim benefit. I do not find that it is restricted in that way, but I agree with the more general point that this article is designed to assist those claiming under the Convention rather than restrict their rights. This is the essential difference in interpretation between the views of the claimant and Mr Heath. The purpose of the Convention, as already noted, is to enable reciprocity. In my view, article 16 provides a practical rule to facilitate, on a reciprocal basis, timely claims by those moving between the two countries.  This may be - I do not know - because of differences in approaches to late claims and late payments between the United Kingdom and New Zealand. Article 16 is drafted as a facilitating measure, and it should be interpreted and applied as such. It should not therefore be interpreted or applied as a rule to cut down the rights of a claimant in the United Kingdom. If the claimant can show that he was entitled to a late payment for 12 months before the claim was made, article 16  confirms part of that period, but does not disentitle the claimant from pension for any part of the period not covered by the article if he meets the relevant conditions. Further, nothing in the 1983 Order requires the restrictive interpretation offered  by Mr Heath. 

46	The claimant’s claim, if it is found to be the claim made on 11 July 1996, should therefore be taken as a claim that can be backdated (subject to any relevant conditions) for 12 months under regulation 19(6)(b) of the Social Security (Claims and Payments) Regulations 1987. This does not, however, mean that the claimant meets all the conditions for payment of the pension from 12 July 1995.

(D)	For what periods is the claimant entitled to payment?

47	Once entitlement to retirement pension has been established, the final point to be considered is how far the claimant can claim payment. But for the Convention, payment could be claimed for the full 12 months back from the date of claim and for all future weeks. However, the Convention provides an overriding limit in article 9(6) (set out at paragraph 24 above), and this must be applied to the claimant’s claim.

48	Under article 9(6) read with the definitions in article 1(1), the claimant may only receive payment of pension for any week if either he is in the United Kingdom for that period or alternatively he is at that time ordinarily resident here and his absence is only temporary. This provision applies either to the claimant’s claim for pension made in 1996 or, if it is found to be the appropriate, the earlier claim for New Zealand superannuation.  

49	It is a question of fact whether the claimant was ordinarily resident for all or any part of any relevant period. It is separate from presence or residence (see paragraph 32 - 37 above). The generalised Convention term “usually resident” emphasises that it is a test to be applied over the longer term, and not for a short period.  An individual who is resident in the United Kingdom for a series of years will also be ordinarily resident for at least the later years in the series, but equally the individual may remain ordinarily resident here although absent from the United Kingdom for one year in a series. 

50	It could be argued on that ground that the Inland Revenue guidance in IR20, which the claimant argued should be applied for this purpose also, is of more relevance here than in determining residence (see paragraph 34 above). As the claimant pointed out, Inland Revenue practice is to look at a period of three years or more (see IR20, chapter 3). This may be regarded as a useful rule of thumb, but it is no more than that. Again, reference might equally be made to the guidance in the Adjudication Officer’s Guide (paragraphs 20795 - 20826). That guidance expressly relies on the leading case on the meaning of the term, which is R v Barnet LBC ex parte Shah [1983] 2 WLR 16, and the discussion of that case by the Commissioner in R(M) 1/85. 

51	In R(M) 1/85 the Commissioner applied the meaning from the Shah decision, which he summarised as follows (at paragraph 10):

In a recent appeal before the House of Lords, Regina v Lambeth London Borough Council [1983] 2W.L.R.16 Lord Scarman went into the question of what was meant by ordinary residence in very great detail. He accepted the interpretation adopted in the 2 tax cases of 1928, namely Levene v Inland Revenue Commissioners [1928] A.C.217 and Inland Revenue Commissioners V Lysaght [1928] A.C.234 and stated at page 25E
"I agree with Lord Denning M.R. that in their natural and ordinary meaning the words mean "that the person must be habitually normally resident.., apart from temporary or occasional absences of  long or short duration". The significance of the adverb 'habitually’ is that it recalls two necessary features mentioned by Viscount Sumner in Lysaght's case, namely residence adopted voluntarily and for settled purposes".

Later, at page 27C Lord Scarman went on to define 'settled purpose'. He said:
"And there must be a degree of settled purpose. The purpose may be one; or there may be several. It may be specific or general. All the requires is that there is a settled purpose. This is not to say that 'propositus' intends to stay where he is indefinitely, indeed his purpose, while settled, may be for a limited period. Education, business or profession, employment, health, family or merely love of the place spring to mind as common reasons for a choice of regular abode. And there may well be many others. All that is necessary is that the purposes of living where one does has a sufficient degree of continuity to be properly described as settled".

52	If it is established that the claimant is on all the facts ordinarily resident in the United Kingdom for any relevant period, then payment of the pension may continue provided that any absence is “only temporary”. “Temporary absence” is an important term in British social security legislation and its interpretation here may, consistently with article 1(2) of the Convention, be based on the interpretation of the British term. This has been considered in several Court and Commissioners’ decisions. The leading decision is that of the Court of Appeal in Chief Adjudication Officer v Ahmed  (to be reported as R(S) 1/96). The Court stressed that “temporary” was not the opposite of “permanent” and had to be decided on all the facts. Intention of the individual was always relevant but not decisive. Further, a period of absence that started as temporary might cease at some point to be temporary. In this case, even the longest interval during which the claimant was outside the UK appears to be a matter of months, with an intention to return here each time, so it may be that the claimant can satisfy the tribunal, on all the facts, that the absences were temporary. As with the other issues of fact in this appeal, the burden is on the claimant to prove this on the balance of probabilities. 

 								David Williams
								Commissioner
						
								17 November 1998