Upper Tribunal: Universal Credit Payments Not Dependent on NI Number

OUTCOME: Allowed

R ([NAME_1]) v Secretary of State for Work and Pensions; [NAME_2]) v Secretary of State for Work and Pensions [2022] UKUT 189 (AAC)

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Case Nos: UA-2021-000580-JR and UA-2022-000464-JR

IN THE UPPER TRIBUNAL (ADMINISTRATIVE APPEALS CHAMBER)

ON TRANSFER FROM THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION ADMINISTRATIVE COURT

Before :

MRS JUSTICE FARBEY, CHAMBER PRESIDENT UPPER TRIBUNAL JUDGE WIKELEY UPPER TRIBUNAL JUDGE CHURCH

THE QUEEN

ON THE APPLICATION OF

[NAME_4] Claimant and

SECRETARY OF STATE FOR WORK AND PENSIONS Defendant

THE QUEEN

ON THE APPLICATION OF

[NAME_7] Claimant and

SECRETARY OF STATE FOR WORK AND PENSIONS Defendant

[NAME_10] and [NAME_13] (instructed by [COMPANY_17]) for [NAME_18] [NAME_19] (instructed by [COMPANY_22]) for Ms [NAME_23] [NAME_24] [NAME_25] QC and [NAME_26] (instructed by Government Legal Department) for the Defendant

Hearing date: 20 May 2022

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DECISION

The claimants’ applications for judicial review are dismissed.

REASONS Introduction 1. These claims raise the important question of whether the Secretary of State for Work and Pensions is entitled to withhold payment of Universal Credit (“[NAME_29]”) from an individual who does not yet have a National Insurance Number (“[NAME_30]”) until such time as a number has been allocated. The Secretary of State submits that she is bound by statute to await the allocation of a [NAME_30] before making any payment of [NAME_29], including a payment on account. The claimants submit that the Secretary of State has misdirected herself in law: the effect of the relevant statutory provisions is that the Secretary of State ought to have awarded (and paid) [NAME_29] at the point in the [NAME_29] application process when they provided documentary evidence that was sufficient for the Secretary of State to allocate a [NAME_30]. In addition, [NAME_18] raises questions of human rights and race discrimination. The key statutory provision 2. The provision of primary legislation which falls to be interpreted is section 1 of the Social Security Administration Act 1992 (“the Administration Act”), which provides (so far as relevant) as follows: Entitlement to benefit dependent on claim 1.―(1) Except in such cases as may be prescribed, and subject to the following provisions of 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. (1A) No person whose entitlement to any benefit depends on his making a claim shall be entitled to the benefit unless subsection (1B) below is satisfied in relation both to the person making the claim and to any other person in respect of whom he is claiming benefit. (1B) This subsection is satisfied in relation to a person if— (a) the claim is accompanied by—

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(i) a statement of the person's national insurance number and information or evidence establishing that that number has been allocated to the person; or (ii) information or evidence enabling the national insurance number that has been allocated to the person to be ascertained; or (b) the person makes an application for a national insurance number to be allocated to him which is accompanied by information or evidence enabling such a number to be so allocated.

3. As neither claimant in these proceedings held a [NAME_30] when she applied for [NAME_29], the key provision for present purposes is section 1(1B)(b). That provision applies to “any benefit” (section 1(1)), including [NAME_29] (section 1(4)(za)), but has received relatively little judicial consideration to date. Allocation of [NAME_31]

4. The national insurance scheme, and [NAME_31], were introduced in 1948. [NAME_31] provide a unique personal identification number and serve a range of purposes (including for welfare payments, recording national insurance contributions and maintaining taxation records). There are no statutory criteria governing their allocation. The policy is to allocate a [NAME_30] to anyone with a legitimate reason to have one (irrespective of nationality or citizenship). In practice, they are allocated to those individuals who are entitled to social security benefits (whether contributory benefits or otherwise) and those persons who are entitled to access the labour market. In the absence of a national identification system, they are used in the benefits system as unique reference numbers, enabling data- matching to take place so that potentially fraudulent claims for benefits may be discovered.

5. The procedure adopted by the Secretary of State for the allocation of [NAME_31] to [NAME_29] claimants is set out in the written evidence of [NAME_32], a Policy Team Leader employed by the Department for Work and Pensions (“the Department”). It is helpfully summarised in the skeleton argument of [NAME_78] on behalf of the Secretary of State. A [NAME_29] decision-maker determines whether a claimant meets the substantive conditions for [NAME_29] that are stipulated in Part 1 of the Welfare Reform Act 2012 (the “WRA 2012”). If they are met, but the claimant does not have a [NAME_30], then a [NAME_30] Application Request form (an “eDCI1”) will be sent to the [NAME_35]. This team operates as a second-level check in order to mitigate the risk of fraud. In every case, the issue of a [NAME_30] is subject to reasonable verification of entitlement by the [NAME_35]. The extent of verification will depend on the individual circumstances and the assessed level of risk.

6. As part of the verification process, the [NAME_35] will conduct an advanced trace on the Department’s Customer Information System (“CIS”) to check the claimant does not already have a [NAME_30]. That team will conduct a telephone interview to fill in the [NAME_30] application form and check sources from other [NAME_36]. Each application is independently assessed. The decision-maker must be satisfied that the claimant has the right to reside and is permitted to have recourse to public funds. Identity is verified to a “medium”

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confidence level in line with departmental standards. If a [NAME_30] is allocated, it will be recorded in the eDCI1 form and sent to the [NAME_29] decision-maker.

7. In all cases, irrespective of whether a claimant has a [NAME_30] at the time of applying for [NAME_29], the first instalment of [NAME_29] should be paid within 7 days of the end of the relevant assessment period. An “assessment period” is “a period of one month beginning with the date of entitlement and each subsequent period of one month during which entitlement subsists” (Universal Credit Regulations 2013 (SI 2013/376) regulation 21(1)). As an assessment period is one month, this means that claimants do not receive their first payment of [NAME_29] until about 5 weeks after their initial claim. The normal timescale for allocating a [NAME_30] via the eDCI1 procedure is 10 working days but this can be expedited where necessary. In the majority of cases, therefore, there is sufficient time for a [NAME_30] to be allocated before the point at which a claimant is paid benefit. The claims [NAME_1] 8. [NAME_18] is a Vietnamese national. In July 2017, she was granted leave to enter the United Kingdom as a student, with no recourse to public funds. She spent 6 months studying in Bristol before moving to London in early 2018. [NAME_18]’s witness statement does not set out whether she continued her studies in London or abandoned them. Her son was born in [DATE]. She is his sole carer. On 4 November 2020, she was granted limited leave to remain with no restrictions on recourse to public funds. She was at that time being provided with accommodation and financial support by social services.

9. On 4 December 2020, [NAME_18] commenced an online application for [NAME_29]. On 13 January 2021, she completed the application. On 26 January 2021, she was informed that the Department had verified her identity. On 20 February 2021, she was advised to apply for a [NAME_30] herself which she did. Regrettably, she had been given the wrong advice as a request for a [NAME_30] should have been initiated from within the Department by way of the internal process that we have described in paras 5 and 6 above. That administrative error caused delay in processing her [NAME_29] claim.

10. On 25 May 2021, [NAME_18]’s solicitors sent a letter before claim to the Government Legal Department. The letter requested that the Secretary of State award and pay [NAME_29] to [NAME_18] from 13 January 2021 without further delay, and that the Department amend its system so that [NAME_29] payments could be made without a [NAME_30]. The solicitors contended that the allocation of a [NAME_30] as a condition of the receipt of [NAME_29] had breached [NAME_18]’s rights under Article 1 of the First Protocol to the European Convention on Human Rights (“[NAME_37]”), which provides for the protection of property.

11. In response to the letter before claim, on 26 May 2021, [NAME_18] was awarded a back payment of [NAME_29] to cover the period between 13 January 2021 and 12 May 2021. On 27 May 2021, she received an additional payment in respect of the child element of [NAME_29] to cover the same period.

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12. On 2 June 2021, the Department responded to the letter before claim. The Department accepted that internal guidance had not been followed and that a [NAME_30] application ought to have been made by departmental staff on [NAME_18]’s behalf. Having rectified the error and commenced payments to [NAME_18], the Secretary of State was not willing to take any other steps.

13. By a claim form lodged in the Administrative Court on 19 July 2021, [NAME_18] seeks declaratory relief and damages in relation to “a failure to decide to pay benefit, ongoing from 13 January 2021 until 26 May 2021.” She contends that the Secretary of State’s requirement that an individual must be allocated a [NAME_30] prior to payment of [NAME_29] amounts to (i) a misdirection of law; (ii) a breach of [NAME_37]; and (iii) unlawful discrimination against her as a foreign national; more specifically, indirect discrimination within the meaning of section 19(1) of the Equality Act 2010 (the “EA 2010”) on grounds of race. That claim is founded on the proposition that foreign nationals are less likely than British nationals to have a [NAME_30] prior to making a claim for [NAME_29].

14. On 17 September 2021, [NAME_18] was granted permission to apply for judicial review by [NAME_38] sitting as a Deputy High Court Judge. On 13 December 2021, HHJ Lickley QC, sitting as a Judge of the High Court, transferred the claim to the Upper Tribunal under section 31A(3) of the Senior Courts Act 1981, citing among other matters the Upper Tribunal’s specialist knowledge in this area of the law. On 14 February 2022, Farbey J directed that the claim be heard by a three-judge panel on the basis that it raised a question of law of special difficulty or an important point of principle or practice (Senior President’s Practice Statement on the composition of tribunals in matters before the Upper Tribunal (Administrative Appeals Chamber), para 3(a)). [NAME_3] 15. [NAME_40] is a Nigerian national who arrived in the United Kingdom in 2008. We have not been informed of the circumstances of her entry nor of her full immigration history. She is the sole carer for her three children, who were born in the United Kingdom. Her eldest child having been registered as a British citizen at some stage, [NAME_40] was granted limited leave to remain in March 2021 as the parent of a British child. Her leave carried no restrictions on recourse to public funds.

16. Prior to the grant of leave, [NAME_40] and her children had been accommodated and supported by her local authority under section 17 of the Children Act 1989. On 8 April 2021, she applied for [NAME_29]. On 21 May 2021, following enhanced checks, the Department verified her identity. On 24 May 2021, she was informed that her entitlement to [NAME_29] had been approved. On 3 June 2021, her local authority accommodation was terminated; she and her children were moved to temporary accommodation in a hostel room which we accept was unsuitable for the children’s needs. On the same day, she received a message from the Department confirming that it was awaiting allocation of a [NAME_30] in order to progress the [NAME_29] claim.

17. On 5 June 2021, [NAME_40] asked the Department about how to “get help with an advance payment.” By letter dated 7 June 2021, her solicitors requested that

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[NAME_29] payments be urgently commenced. On 8 June 2021, she received a message from the Department saying: “We are still awaiting your National Insurance number. We are unable to issue advance or payment before National Insurance number has been allocated.” 18. On 11 June 2021, [NAME_40] received her first [NAME_29] payment. As in [NAME_18]’s case, the delay in allocating the [NAME_30] was caused by the Department’s failure to initiate the correct internal [NAME_30] procedure, which was in turn caused by administrative error. We are told that the delay meant that [NAME_40] and her children were housed in the hostel room for longer than otherwise would have been the case: she had to await the allocation of a [NAME_30] before she could make progress with her application for local authority housing as a homeless person.

19. On 29 July 2021, [NAME_40]’s solicitors sent a letter before claim to the Department requesting that it amend current guidance on the provision of [NAME_31] so as to allow the payment of benefits prior to the allocation of a [NAME_30]. By letter dated 10 August 2021, the Department responded by saying that the Secretary of State had taken action to allocate a [NAME_30] to [NAME_40] and to commence the payment of [NAME_29]. The response confirmed that the Secretary of State would issue updating guidance to operational staff whenever necessary but the Secretary of State did not agree to review her position on whether the allocation of a [NAME_30] should or should not be a pre-condition of any payment of [NAME_29].

20. By a claim form lodged in the Administrative Court on about 20 August 2021, [NAME_40] seeks declaratory relief in relation to the Secretary of State’s “practice of withholding [[NAME_29]] payments until a [NAME_30] is allocated”, which is said to be in breach of the Secretary of State’s statutory duties. Permission to apply for judicial review was granted by HHJ Simon, sitting as a Judge of the High Court, on 23 March 2022. At the same time, he transferred the claim to the Upper Tribunal. On 14 April 2022, a Registrar of the Upper Tribunal directed that both claims be heard together. We are grateful to the parties for their co-operation with the Tribunal and with each other which ensured that a three-judge panel could hear the claims on an expedited basis. The legal framework Welfare Reform Act 2012 21. The WRA 2012 introduced [NAME_29] to replace six types of means-tested benefits (such as income support) and tax credits (such as working tax credit) for people of working age, known collectively as the “legacy benefits.” As Holgate J observed in R (TP and AR) v Secretary of State for Work and Pensions [2022] EWHC 123 (Admin), para 2: “The reform had a number of aims including the simplification of the benefits system and its administrative processes, encouraging people into work where possible, improved targeting of financial support to meet needs, the removal of overlapping benefits, reduced

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scope for error and fraud, and the achievement of a fairer overall financial burden on taxpayers.” 22. [NAME_29] provides a claimant with a single monthly payment in arrears, comprised of a number of elements designed to reflect individual circumstances. Thus, section 1 of the WRA 2012 provides as follows: Universal credit 1.― (1) A benefit known as universal credit is payable in accordance with this Part. (2) Universal credit may, subject as follows, be awarded to— (a) an individual who is not a member of a couple (a “single person”), or (b) members of a couple jointly. (3) An award of universal credit is, subject as follows, calculated by reference to— (a) a standard allowance, (b) an amount for responsibility for children or young persons, (c) an amount for housing, and (d) amounts for other particular needs or circumstances.

23. Section 2 of the WRA 2012 provides for claims to be made either by a single person or by a couple jointly, while sections 3-6 govern matters of substantive entitlement, including the “basic conditions” (section 4) and “financial conditions” (section 5). However, the WRA 2012 and the associated secondary legislation do not contain a complete code governing entitlement to [NAME_29]. In particular, a claimant must also comply with section 1 of the Administration Act, which makes entitlement to benefit dependent on making a claim.

24. As we have set out in para 2 above, the basic rule, as enshrined in section 1(1) of the Administration Act, is that no person is entitled to any benefit (as listed in section 1(4)) unless, among other things, they make a claim for it in the prescribed time and manner (or are treated as such). By virtue of section 1(1A), claimants have in addition to provide either a [NAME_30], together with evidence or information to show it is theirs (subsection (1B)(a)(i)); or evidence or information to enable their [NAME_30] to be traced (subsection (1B)(a)(ii)).

25. Those who have no [NAME_30] must apply for one. By virtue of section 1(1B)(b) of the Administration Act, they must provide sufficient evidence or information “enabling such a number to be so allocated.” Those are the key words that fall to be interpreted in these claims.

26. Three previous decisions at this level have considered the meaning of subsection (1B)(b): CH/4085/2007 (Mr [NAME_41]), CH/2366/2008 (Upper

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Tribunal Judge Mesher) and CH/2452/2009 (Upper Tribunal Judge Burns QC). The first two of those decisions recognise the problematic nature of the drafting of subsection (1B). Mr [NAME_41] referred to this as being “a most unsatisfactory provision in a number of respects” (para 17). Judge Mesher, referring to subsections (1A) to (1C), commented that “the inept and loose wording of those subsections creates large problems of interpretation” (para 27). These drafting infelicities may help to explain both the differences of judicial views expressed in those three decisions and our own doubts about some of the observations in CH/4085/2007 which we discuss further below (see paras 47 and 50).

Advance payment of benefit

27. There is provision for the advance payment of benefit. The relevant enabling power is to be found in section 5(1)(r) of the Administration Act (as amended by the WRA 2012):

Regulations about claims for and payments of benefit

5.―(1) Regulations may provide … (r) for the making of a payment on account of such a benefit—

(i) in cases where it is impracticable for a claim to be made or determined immediately, or for an award to be determined or paid in full immediately,

(ii) in cases of need, or

(iii) in cases where the Secretary of State considers in accordance with prescribed criteria that the payment can reasonably be expected to be recovered; … 28. Regulation 5 of the Social Security (Payments on Account of Benefit) Regulations 2013 (SI 2013/383) ― for convenience in this judgment we call this provision the “Advance Payment Regulation” ― provides as follows: Payment on account of benefit where there is no award of benefit 5.—(1) The Secretary of State may make a payment on account of benefit to A if— (a) either of paragraphs (2) or (3) applies; (b) it appears to the Secretary of State likely that the conditions of entitlement for benefit are satisfied (or will be satisfied during the period in respect of which the payment is to be made); and (c) the Secretary of State is satisfied that A is in financial need.

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(2) This paragraph applies where A has made a claim for benefit but the claim has not yet been determined. (3) This paragraph applies where A is not required to make a claim for benefit by virtue of— (a) regulation 6 or 7 of the [NAME_29] etc. Claims and Payments Regulations (claims not required for entitlement to universal credit or an employment and support allowance in certain cases); or, as the case may be, (b) regulation 3 of the Claims and Payments Regulations (claims not required for entitlement to benefit in certain cases), but an award of benefit has not yet been made.

29. It is plain on the face of the Regulation (para 1(b)) that the threshold for an advance payment is whether it appears to the Secretary of State “likely” that the conditions of entitlement for benefit are satisfied. We shall return to this “likelihood” threshold below. European Convention on Human Rights: Article 1 Protocol 1 30. [NAME_37] provides for the protection of property in the following terms:

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

31. In Moskal v Poland (2010) 50 EHRR 22, the [ADDRESS] of Human Rights considered the application of [NAME_37] to social and welfare benefits. It confirmed (at para 38) that [NAME_37] does not create a right to acquire property and that it: “places no restriction on the state’s freedom to decide whether or not to have in place any form of social security scheme, or to choose the type or amount of benefits to provide under any such scheme.” 32. If, however, domestic legislation provides for “the payment as of right of a welfare benefit”, that legislation must be regarded as generating “a proprietary interest falling within the ambit of [[NAME_37]] for persons satisfying its requirements” (para 38). Where an individual has an “assertable right” under domestic law to a welfare benefit, the importance of that interest should be reflected by “holding [NAME_37] to be applicable” (para 39).

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33. That [NAME_37] is not engaged where there is no assertable right to a social security benefit was reinforced by the Court in [NAME_44] v United Kingdom 26252/08 (ECtHR 4th section, 10 April 2012). The applicant in that case complained about the raising of the pension age for women, contending that she had suffered discrimination on grounds of her age and sex. [ADDRESS] considered the provisions of [NAME_37] read with Article 14 of the Convention. In determining that the application was inadmissible, the Court reiterated that [NAME_37] does not create a right to acquire property and held (at para 17): “Where…the person concerned does not satisfy…the legal conditions laid down in domestic law for the grant of any particular form of benefits or pension, there is no interference with the rights under [[NAME_37]].”

34. The mere fact that a property right may be subject to revocation does not prevent it from being a “possession” within the meaning of [NAME_37]; but a conditional claim which lapses as the result of the non-fulfilment of the condition cannot be considered to amount to a possession ([NAME_45], para 40).

Equality Act 2010

35. Section 19(1)-(2) of the EA 2010 provides:

19 Indirect discrimination

(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B’s.

(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B’s if –

(a) A applies, or would apply, it to persons with whom B does not share the characteristic,

(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,

(c) it puts, or would put, B at that disadvantage, and

(d) A cannot show it to be a proportionate means of achieving a legitimate aim.

36. The protected characteristics include race (section 19(3)) which in turn includes nationality (section 9).

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37. Section 29 prohibits a public authority from discriminating against a person in the exercise of a public function. It was not in dispute that the administration of social security benefits is such a function.

38. Section 136 provides:

136 Burden of proof

(1) This section applies to any proceedings relating to a contravention of this Act.

(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred.

(3) But subsection (2) does not apply if A shows that A did not contravene the provision.

(4) The reference to a contravention of this Act includes a reference to a breach of an equality clause or rule.

The meaning of section 1(1B)(b) The [NAME_30] rule 39. On behalf of [NAME_18], [NAME_46] submitted that the Secretary of State had applied what he called “the [NAME_30] rule” in a way that created unlawful delay in [NAME_29] decision-making, even putting to one side the case-specific errors that had occurred in the present cases. On behalf of [NAME_40], [NAME_47] made a similar submission but referred to the “[NAME_30]” policy as opposed to a rule. We do not accept that these shorthand descriptions advance the claims on any ground of public law. The Secretary of State is entitled to exercise her statutory duties through the conventional tools of policy and consistent practice in relation to the relevant statutory provisions. That is what she has done. We are not persuaded that there is any freestanding “rule” or that we should consider anything more than the four corners of the statutory scheme. We shall concentrate on what we regard as the points of public law properly raised by the claims. The parties’ submissions 40. [NAME_48] and [NAME_49] submitted that the Secretary of State had misdirected herself in law as to the effect of section 1(1B)(b). By referring to the provision of information “enabling” a [NAME_30] to be allocated, [NAME_50] had connoted the future possibility of allocation and not the end result of the allocation process. The word “enabling” had a forward-looking meaning and did not describe a completed review or completed verification of the information supplied. Furthermore, they argued, the purpose of subsection (1B)(b) would be

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nugatory if it required actual entitlement to a [NAME_30], as subparagraph (a) deals with the situation where a claimant has a [NAME_30]. 41. [NAME_50] could not have intended that [NAME_29] payment must be delayed and await the allocation of a [NAME_30]. The Act requires the Secretary of State to have in place a system that does not leave [NAME_29] claimants resourceless – which was the practical effect of awaiting the allocation of a [NAME_30] before paying any [NAME_29] to the claimants. 42. [NAME_48] and [NAME_49] submitted that section 1(1B)(b) requires only that an application for a [NAME_30] is made before a person is eligible for an advance payment under the Advance Payment Regulation. The [NAME_30] application must be accompanied by the kind of information and evidence which would in principle enable a [NAME_30] to be allocated. If the documents submitted by a claimant could in principle lead to a [NAME_30], a claimant’s entitlement to [NAME_29] would appear “likely” right from the start of a [NAME_29] claim. The likelihood threshold for an advance payment – in para 1(b) of the Advance Payment Regulation - would be met right from the start of a [NAME_29] claim. 43. [NAME_48]’s submission, supported by [NAME_49], was that the Department’s requirement for a [NAME_30] to have been allocated before making an advance payment thwarted the purpose of the Advance Payment Regulation. This was because by the time a [NAME_30] had been allocated it was by definition possible to decide whether there was entitlement to [NAME_29] and make a payment of benefit in the normal way. If [NAME_50] had intended that no advance payment be made before the allocation of a [NAME_30], the legislation would have said so. [NAME_50] did not intend that some of the most resourceless people in society should actually have received a [NAME_30] before an advance [NAME_29] payment could be awarded and paid.

44. In response, [NAME_51] submitted that what he called the “gateway” to payment of [NAME_29] in section 1(1B)(b) of the Administration Act was only satisfied when the accompanying information or evidence had actually been verified. Until that point, it cannot be known whether the information or evidence in question would “enable” the allocation of a [NAME_30]. The claimants’ case, in effect, was that if they made an application with information or evidence that appeared or purported to be sufficient to enable a [NAME_30] to be allocated (for example, the provision of a passport as proof of identity), then they were entitled to payment of [NAME_29] as of right on the same day. On the claimants’ analysis, production of a fraudulent passport would trigger the payment of [NAME_29], which would be contrary to the public interest and to the objective of the legislation.

45. The requirement under the Advance Payment Regulation that it be “likely” that the conditions for entitlement for benefit are satisfied cannot apply to the entitlement conditions in section 1(1B)(b) of the Administration Act. Verification is a neutral exercise, in the sense that it will not in advance of any verification process be “likely” either that entitlement will be established or that it will be rejected: it is a matter of reaching the correct conclusion following the process established for that purpose by the Secretary of State. It follows that an advance payment could not be made in the claimants’ cases until after entitlement to a

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[NAME_30] was established, at which point the claimants had received [NAME_29] payment in accordance with their statutory entitlement. Analysis and discussion 46. In CH/4085/2007, para 26, Mr [NAME_41] held: “It is to be observed that there is no requirement that a national insurance number have been allocated before benefit is awarded. It is sufficient that an application has been made. That is consistent with the idea that having the national insurance number is not really necessary for entitlement to a non-contributory benefit but is merely a tool in the fight against fraud. The payment of benefit is not generally to be delayed while the application for the national insurance number is processed.” 47. The claimants rely on this passage in support of their contention that, on the proper interpretation of section 1 of the Administration Act, it is sufficient for the award of [NAME_29] that the mere provision of information that is sufficient for the allocation of a [NAME_30] will be sufficient for the award of [NAME_29]. We observe, however, that the key issue before Mr [NAME_41] was whether a failure by the claimant’s partner to attend an interview in connection with an application for a [NAME_30] justified the refusal of a claim for benefit. The [NAME_42]’s observations in para 26 were obiter dicta. Nor did he set out any principles of law or cite any authority which would shed light on how he approached the exercise of statutory interpretation underlying his observations in para 26.

48. In CH/2366/2008, Judge Mesher agreed with certain aspects of the decision in CH/4085/2007 but he doubted or disagreed with other parts of Mr [NAME_41]’s reasoning, going so far as to describe the [NAME_42] as having used “some rather fancy footwork” (para 25) to achieve a particular solution. Moreover, Judge Mesher did not directly address the point made by Mr [NAME_41] in para 26 of the earlier decision. We do not regard Judge Mesher’s decision as advancing the question of statutory interpretation one way or the other.

49. The third decision at this level (CH/2452/2009) concerned a number of errors in a local authority’s decision-making process in a housing benefit claim. We take the view that Judge Burns’ decision turns on its own facts and does not lay down any broader propositions of law. In particular, Judge Burns does not deal with para 26 of CH/4085/2007.

50. In sum, Mr [NAME_41] did not set out the principles of statutory interpretation which he employed in making the observation at para 26 of his decision. Neither of the two later decisions addressed the specific point made in that passage and which is raised by the claims before us. We therefore consider the proper construction of section 1(1B) of the Administration Act afresh for ourselves.

51. In construing the words of section 1(1B) of the Administration Act, we must “ascertain the intention of [NAME_50] as expressed in the words it has chosen”

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(R ([NAME_52]) v Secretary of State for Health [2003] UKHL 13, [2003] 2 A.C. 687, para 38, per Lord Millett). Our task is to “give effect to the true meaning of what [NAME_50] has said” (para 8, per Lord Bingham of Cornhill). [NAME_50] has said will be derived from the meaning of individual words read in the context of the enactment as a whole. The Tribunal will “favour an interpretation of legislation which gives effect to its purpose rather than defeating it” (Test Claimants in the FII Group [NAME_53] v [NAME_54] (formerly [NAME_54]) [2020] UKSC 47, [2022] A.C. 1, para 155, per Lord Reed PSC and Lord Hodge DPSC). It is well-established that, if the enactment is ambiguous, the meaning which relates to the mischief it is intended to cure should be adopted rather than a different or wider meaning which the situation before [NAME_50] did not call for (Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] A.C. 59, 614C–D).

52. The legislative history of section 1 is instructive in terms of casting light on [NAME_50]’s intention. The requirement that entitlement to benefit is conditional upon a claim for such a benefit having been made (now enshrined in subsection (1)) was originally imposed by section 165A(1) of the Social Security Act 1975 (as inserted by the Social Security Act 1985, section 17). This amendment was designed to reverse the effect of the decision in Insurance Officer v McCaffrey [1984] 1 WLR 1353, in which the House of Lords had held that the legislation did not require a claim as a condition precedent to entitlement to benefit. This was contrary to the Department’s long-held assumption as to the administration of the benefits system, prompting [NAME_50] to enact the 1985 amendment.

53. Subsections (1A)-(1C), however, were inserted by section 19 of the Social Security Administration (Fraud) Act 1997 with effect from 1 December 1997. Section 19 was headed “Requirement to state national insurance number.” [NAME_50]’s intention was plain. Consonant with the title of the amending legislation, the new additional condition of entitlement was an anti-fraud measure. The effect of subsection (1A) (subject to any exceptions by virtue of subsection (1C)) was that making a claim in accordance with section 1(1) was no longer sufficient. The words of subsection 1(A) are unambiguous: no person whose entitlement to any benefit depends on his making a claim shall be entitled to the benefit unless subsection (1B) is satisfied.

54. Subsection (1B) provides three gateways to entitlement. Claimants necessarily fall into one of three categories in terms of their [NAME_30] status: (1) those who have a [NAME_30] and can prove it; (2) those who have a [NAME_30] and cannot remember it or themselves prove it; and (3) those who do not have a [NAME_30].

Accordingly, claimants must either (1) provide a [NAME_30], together with evidence or information to show it is theirs (subsection (1B)(a)(i)); or (2) provide evidence or information to enable their [NAME_30] to be traced (subsection (1B)(a)(ii)); or (3) apply for a [NAME_30] and provide sufficient evidence or information “enabling such a number to be so allocated” (subsection (1B)(b)).

55. The third statutory gateway – for claimants without a [NAME_30] – does not simply require an application for a [NAME_30]. Nor does it require, as such, the allocation of a [NAME_30]. As a matter of the plain meaning of the legislative text, it requires an application for a [NAME_30] alongside “information or evidence enabling such a

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number to be so allocated.” Given that this was part of a package of anti-fraud measures, these words cannot refer to information or evidence which purports to enable a [NAME_30] to be allocated. Rather, [NAME_50] must mean verified information or evidence which actually then enables a [NAME_30] to be allocated.

56. Against this background, neither [NAME_48] nor [NAME_49] had a satisfactory response to the scenario in which a person supported a [NAME_30] application with a false passport. It is no answer to say that wrongly paid [NAME_29] can be recovered by the Secretary of State. While that is correct as a statement of principle, the practical reality is very different, not least as short of court action (which may well not be cost-effective or feasible) the Department can only recover overpaid benefit by way of deductions from existing benefit entitlement or wages. There are therefore sound reasons of public policy for [NAME_50] to impose, by virtue of subsection (1B)(b), a process of verification before awarding or paying public funds to a person who may not be entitled to them. While the effect of that process is that payment of [NAME_29] is not possible until a [NAME_30] has been allocated, subsection (1B) does not in terms require the allocation of a [NAME_30] as a precondition of entitlement to benefit.

57. As we have set out above, the claimants also submitted that the Department’s operation of the statutory provisions is incompatible with the Advance Payment Regulation. Made under the authority of section 5(1)(r) of the Administration Act, the purpose of the Advance Payment Regulation is to allow money to be paid urgently to people in need when it has not been possible to determine their entitlement to benefit. This provision is not unique to [NAME_29]. However, the structure of the [NAME_29] scheme, with its delayed initial payment, means that [NAME_29] advances for new claimants are in practice the norm rather than the exception: we understand that some 60 per cent of all claimants take up such advance payments. [NAME_51] acknowledged in his oral submissions that advance payments had become “more prominent” with the advent of [NAME_29] (not least as the system of social fund crisis loans has not been replicated).

58. The Advance Payment Regulation enables a [NAME_29] advance to be made if three conditions are satisfied. The first is that the claimant has made a claim for [NAME_29] which has yet to be determined (regulation 5(1)(a) and (2)). The second is that the Secretary of State is satisfied that the claimant is in financial need (regulation 5(1)(c)). Neither of those criteria is problematic in the present context.

59. The third is that “it appears to the Secretary of State likely that the conditions of entitlement for benefit are satisfied (or will be satisfied during the period in respect of which the payment is to be made)” (regulation 5(1)(b)). We agree with [NAME_51] that verification is a neutral exercise under section 1(1B)(b) in the sense that it will not be “likely” that entitlement will be established under that process or, conversely, not established. The Department cannot know until the verification process has been completed. Even if there were to be some case, in theory, where the likelihood threshold could be met before the allocation of a [NAME_30], the exercise in the cases before us was, on the facts, a neutral one.

60. It follows that an advance payment could not be made in either of the claims before us until after entitlement to a [NAME_30] had been ascertained - at which point

15

[NAME_29] could be paid in the normal way. We acknowledge that this effectively makes the Advance Payment Regulation otiose in the context of a claimant subject to section 1(1B)(b). We recognise that this may mean that claimants without [NAME_31] may be forced to rely on other less secure means of statutory or charitable welfare support. However, the provisions of the Advance Payment Regulation are secondary legislation and, on conventional principles of statutory interpretation, they cannot be deployed to interpret a provision of primary legislation such as section 1(1B) of the Administration Act. The practical effects on claimants of the interpretation that we have reached is a matter of policy for the Government. On ordinary public law principles, the Tribunal cannot and must not become involved in matters of executive responsibility. The additional arguments of [NAME_18] [NAME_37] 61. [NAME_48] submitted that [NAME_18]’s making a claim to [NAME_29] gave her an “assertable right under domestic law” in respect of her [NAME_29] claim which satisfied the test for the engagement of [NAME_37] set out in [NAME_45] v Poland. We disagree. Given the effect of section 1(1B)(b) of the Administration Act, there was no assertable right to [NAME_29] when [NAME_18] made her claim and supplied documentary evidence which ostensibly met the requirements, and neither was there an assertable right when the [NAME_29] decision-maker determined that [NAME_18] had met the substantive conditions for [NAME_29] stipulated in Part 1 of the WRA 2012. It was not until the identification documentation had been verified that the “assertable right” to the benefit arose.

62. On a proper reading of section 1(1B)(b) of the 1992 Act, [NAME_18] did not satisfy the legal conditions for the grant of [NAME_29] as at 13 January 2021, but only when the [NAME_55] was met, and it was only at this point that she acquired an assertable right to payment of benefit. In our judgment, [NAME_18]’s making of a claim and provision of documentation which may have fulfilled the conditions for the grant of [NAME_29] did not create a property right that was subject to revocation if the documentation turned out not to be satisfactory (the situation contemplated in [NAME_45] v Poland). Rather, the right did not arise until the verification process was complete.

63. Even if [NAME_37] is engaged, we are satisfied that some delay in making payment to claimants with no [NAME_30] pending the outcome of the verification process is justified by the important public interest in preventing the payment of benefit in respect of fraudulent claims, which was [NAME_50]’s intention in introducing section 1(1B)(b). We are satisfied that, to the extent that the process of verification involved any interference with a property right, it was justified in this case. The EA 2010 64. [NAME_48] contended that the Secretary of State’s decision to await the allocation of a [NAME_30] before paying any form of [NAME_29] amounted to unlawful indirect discrimination contrary to section 19 of the EA 2010 on the basis that:

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(1) Administering benefit is a public function falling within section 29 of the EA 2010;

(2) National origin falls within the protected characteristic of “race” in section 19(3) of the EA 2010;

(3) The Secretary of State’s practice of awaiting a [NAME_30] is particularly likely to affect foreign nationals, who are much less likely to have a [NAME_30] already than are UK nationals, given that young people who are resident in the UK at the age of 15 years and 9 months and in respect of whom child benefit is paid are allocated a [NAME_30] by HMRC; and

(4) The delay that non-UK nationals experience in receiving benefit from the Defendant following a [NAME_29] claim puts them at a “particular disadvantage” when compared to UK nationals.

65. The first two of these propositions are not in dispute. With regard to (3), we note that the system of “juvenile allocation” of [NAME_31] at the age of 15 years and 9 months to all who are resident in the UK and in respect of whom child benefit is paid (which is operated by HM [NAME_54] & Customs) is applied without reference to nationality. A foreign national who meets these conditions will receive a [NAME_30] when they reach the relevant age in the same way that a British national does. However, we accept that it is more likely that an adult British national making a benefit claim will already have a [NAME_30] than a foreign national making such a claim.

66. With respect to [NAME_48]’s fourth proposition, [NAME_48] submitted that [NAME_18] had at least shown a prima facie case of disadvantage (as required by section 136 of the EA 2010), and that the Defendant had not rebutted that prima facie case. We accept, based on the evidence (including the Secretary of State’s own evidence on delay), that [NAME_18] has established a prima facie case for “particular disadvantage” to foreign nationals, especially in the case of advance payments, from which those applying without a [NAME_30] are shut out.

67. However, a provision, criterion or practice is only “discriminatory” under section 19(1) of the EA 2010 if the person applying the provision, criterion or practice cannot show it to be “a proportionate means of achieving a legitimate aim” (see section 19(1)(d) of the EA 2010). The Supreme Court has held that in areas concerning general measures of economic and social strategy and moral judgments a wide margin of appreciation is given to the state (see R(SC) v Secretary of State for Work and Pensions [2021] UKSC 26, [2022] A.C. 223).

68. [NAME_48] urged us to engage in particularly exacting scrutiny of the issue of justification on the basis that there was no compelling evidence that the Secretary of State had weighed the potentially discriminatory impact of her policy of requiring the [NAME_55] to have been reached before any claimant may receive payment, and because the putative discrimination relates to the highly sensitive ground of national origin. We have done so.

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69. The government issues [NAME_31] only to those who are resident in the United Kingdom. To issue [NAME_31] to the entire world, on the off-chance that they might at some point in the future come to the UK and claim benefits or enter employment here, would plainly be impossible. Equally, abandoning the system of routinely issuing [NAME_31] to United Kingdom residents approaching adulthood would generate major inefficiency in relation to market and social security access.

70. [NAME_50] has, by enacting the Social Security Administration (Fraud) Act 1997 which inserted section 1(1B) into the Administration Act, made it clear how the competing interests of making advance payment of benefits on account of need on the one hand, and fraud prevention on the other, are to be balanced. Giving the state the “wide margin of appreciation” that is its due in matters of economic and social strategy, we are satisfied that the operation of the [NAME_30] system in its current form is a proportionate means of achieving the legitimate aim of efficient administration of welfare benefits while preventing the misuse and abuse of public funds through fraudulent claims. Conclusion 71.

For these reasons, each of the grounds of challenge fails and these claims for judicial review are dismissed. It follows that no question of damages or other relief arises.

72. We record that, in [NAME_40]’s case, the claim originally included a ground for judicial review that challenged the lawfulness of some part of the Secretary of State’s guidance for decision-makers. Following an amendment of the guidance which removed the passage under challenge, [NAME_40] does not seek relief on this ground but seeks the costs of this part of the claim on the grounds that her challenge was successful. The Secretary of State opposes the award of costs on the grounds that the guidance was amended as a matter of expediency (to cure any possible ambiguity) and not as a legal necessity. We did not hear argument on the substantive issue and reserved our decision on costs for the parties to file written submissions.

73. We direct that the claimants should each file and serve written submissions on any consequential matters – including submissions on costs – within 14 days of the receipt of this decision. The Secretary of State should respond to those submissions within 14 days of receiving them and any Reply from either of the claimants must be received by the Upper Tribunal within 7 days thereafter.

MRS JUSTICE FARBEY, CHAMBER PRESIDENT

UPPER TRIBUNAL JUDGE WIKELEY

UPPER TRIBUNAL JUDGE CHURCH

(Approved for issue on 18 July 2022)

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

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[2023] AACR 9 R ([NAME_1]) v Secretary of State for Work and Pensions; [NAME_2]) v Secretary of State for Work and Pensions [2023] EWCA Civ 566

CA (Underhill, Nugee and Edis LJJ) UA/2021/000580-JR 25 May 2023 UA/2022/000464-JR Social Security Administration Act 1992; National insurance numbers; Advance payments; Entitlement; Irrationality; Social security benefits

The appellants were individuals who had been granted limited leave to remain in the UK with recourse to public funds. They had applied for universal credit ([NAME_29]) but did not have National Insurance numbers ([NAME_30]). They satisfied the conditions for [NAME_29] but to be entitled to benefit they had to m ake a claim. The Social Security Administration Act 1992 Part I section 1(1B)(a) required the claim to be accompanied by the person's [NAME_30] or section 1(1B)(b) required the person to make an application for a [NAME_30] to be allocated to them, accompanied by information or evidence enabling such a number to be so allocated.

There had been delays in allocating each appellant with a [NAME_30] and it had taken some months for them to receive [NAME_29], which had been backdated to the date of their claim. The Secretary of State took the view that no advance payments of [NAME_29] could be made until the end of the verification process for the claimant’s entitlement to a [NAME_30].

The appellants challenged the Secretary of State's policy not to make any payment of [NAME_29] or any payment on account until a [NAME_30] had been allocated. They each brought a claim for judicial review. The two cases were heard together in the Upper Tribunal (Administrative Appeals Chamber) by a three-judge panel. The Upper Tribunal dismissed their applications on the basis that the Secretary of State’s position was justified by public policy to impose a verification process before awarding or paying public funds.

The claimants appealed with permission to the Court of Appeal.

Held, allowing the appeal in part that:

1. it was not irrational for the Secretary of State to have a two-stage process under which the claimant's eligibility for [NAME_29] was checked first, and then the entitlement to and allocation of an NI number was separately considered if necessary (paragraphs 65-70).

2. evidence that enables a [NAME_30] to be allocated to a claimant for benefit is evidence that establishes that the claimant does in fact have a right to benefits. False documents do not do this.

3. DWP’s blanket practice of refusing to pay advance payments simply on the basis that a claimant does not have a [NAME_30] is flawed. The legislation does not prevent the DWP from making advance payments to someone who does not have a [NAME_30].

DECISION OF THE COURT OF APPEAL

[NAME_57], [NAME_10] and [NAME_13], instructed by [COMPANY_17] appeared for [NAME_18]

[NAME_57] and [NAME_19] instructed by [COMPANY_22] appeared for [NAME_40]

[NAME_59] and [NAME_26], instructed by the Treasury Solicitor appeared for the Secretary of State for Work and Pensions

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

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Lord Justice Nugee: Introduction 1. This appeal is about Universal Credit (“[NAME_29]”). It concerns the gap between a person claiming [NAME_29] and receiving it, and whether the Secretary of State can make payments on account during that period. The specific question concerns those who claim [NAME_29] but who do not have a National Insurance Number (“[NAME_30]”) at the time of making a claim. 2. [NAME_29] is only payable to those who make a claim. In simple terms the process is as follows. The claimant makes a claim for [NAME_29]. It is then for the Secretary of State for Work and Pensions (“the Secretary of State”) to decide the claim (although in practice this and other decisions are made by officials in his department, the Department for Work and Pensions (“the DWP”), on his behalf). If the decision is that the claimant is entitled to [NAME_29], an award is made. Once an award is made the benefit is put into payment.

3. It necessarily however takes some time for the decision to be made. What is more, [NAME_29] is payable by reference to assessment periods of a month, and is paid in arrears, only having to be paid within 7 days of the end of each assessment period. That means that when a person claims [NAME_29], they will not be paid [NAME_29], even if the claim is decided promptly in their favour, for some 5 weeks after making a claim.

4. The Secretary of State has power under regulations to make a payment on account of benefit to a person who has made a claim for benefit which has not yet been determined and is in financial need, if it appears likely to the Secretary of State that the conditions of benefit are or will be satisfied. These payments on account are known as advance payments. Very many applicants for [NAME_29] apply for, and receive, advance payments to cover them in the gap between claiming [NAME_29] and [NAME_29] coming into payment. Decisions on advance payments are made quickly, often on the same day.

5. There is a problem however for those who do not have a [NAME_30]. It is by statute a condition of entitlement to [NAME_29], like other social security benefits, that the claimant either has a [NAME_30] at the time of claiming or, if they do not have one, applies for one to be allocated, providing information or evidence enabling that to be done. The DWP treats a claim for [NAME_29] by a person who does not have a [NAME_30] as including an application for one to be allocated. The practice, as explained in detail below, is for one set of officials first to check that the claimant is otherwise eligible for [NAME_29], and then for the claimant’s entitlement to a [NAME_30] to be verified by a specialist team. Only once that has been done will the claim for [NAME_29] be accepted.

6. In such a case the Secretary of State takes the view that no advance payments can be made until the end of the verification process. This is on the basis (in summary) that it is not possible to assess whether a claimant is “likely” to satisfy the conditions for benefit until that point. The practical effect is that a claimant for [NAME_29] who does not have a [NAME_30] cannot access either [NAME_29] itself or advance payments pending the verification process and may be entirely without income for that period.

7. These two appeals concern individuals who did not have [NAME_31] and who applied for

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

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[NAME_29]. In each case there were significant delays in processing their claims due to administrative error. They have each now in fact been paid what they are entitled to. But their cases form a convenient vehicle to examine the questions of law that arise. They each brought a claim for judicial review. The two cases were heard together in the Upper Tribunal (Administrative Appeals Chamber) by Farbey J (the Chamber President) and Upper Tribunal Judges Wikeley and Church (“the [NAME_60]”). In a decision issued by the [NAME_60] on 18 July 2022 at [2022] UKUT 189 (AAC) they dismissed the applications for judicial review. The claimants now appeal with permission granted by Lewis LJ. Statutory framework – (1) [NAME_29]

8. It is convenient to set out the relevant statutory provisions at the beginning. They can be divided into three groups. The first are those specifically dealing with [NAME_29]. The second are those which deal with the administration of social security benefits generally. The third are those dealing with interim payments or payments on account.

9. So far as the first group of provisions is concerned, [NAME_29] was introduced in 2013 by the Welfare Reform Act 2012 (“WRA 2012”), initially for a small cohort of claimants, and was later expanded until national coverage was achieved in December 2018. Part 1 of the WRA 2012 (ss. 1 to 43) concerns [NAME_29], and Chapter 1 of Part 1 (ss. 1 to 12) deals with entitlement and awards. The first group of sections (headed “Introductory”) consists of ss. 1 and 2. These provide that a benefit known as [NAME_29] is payable in accordance with Part 1 (s. 1(1)), that it may be awarded either to a single person or to a couple jointly (s. 1(2)), and that a claim may be made for [NAME_29] by a single person or members of a couple jointly (s. 2).

10. The next group of sections (headed “Entitlement”) consist of ss. 3 to 6. These provide that claimants are entitled to [NAME_29] if they meet the basic conditions and the financial conditions (s. 3), specify the basic conditions and financial conditions (ss. 4 and 5 respectively), and provide for certain restrictions on entitlement (s. 6). The basic conditions specified in s. 4(1) are as follows: “4 Basic conditions (1) For the purposes of section 3, a person meets the basic conditions who— (a) is at least 18 years old, (b) has not reached the qualifying age for state pension credit, (c) is in Great Britain, (d) is not receiving education, and (e) has accepted a claimant commitment.” The financial conditions specified in s. 5 are that a claimant’s (or joint claimants’) capital is below a prescribed amount, and that their income is such that if they were entitled to [NAME_29], the amount payable would not be less than any prescribed minimum.

11. The next group of sections in Chapter 1 (headed “Awards”) consists of ss. 7 and 8: s. 7(1) provides that [NAME_29] is payable in respect of each complete assessment period within a period of entitlement (the period during which entitlement to [NAME_29] subsists), and s. 8 sets out how awards are

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

4

calculated. This is supplemented by the final group of sections in Chapter I, namely ss. 9 to 12 (headed “Elements of an Award”).

12. The remaining Chapters of Part I contain provisions relating to claimant responsibilities (Chapter 2) and supplementary and general provisions (Chapter 3) respectively.

13. Various regulations have been made for the purpose of WRA 2012. The Universal Credit Regulations SI 2013/376 (“the [NAME_29]”) contain further provisions about such matters as entitlement and the calculation of awards. Regulation 9 for example expands on the basic condition in s. 4(1)(c) WRA 2012 that a person “is in Great Britain”. It provides that, subject to exceptions, a person is to be treated as not being in Great Britain if he is not habitually resident in the United Kingdom, Channel Islands, Isle of Man or Republic of Ireland (reg 9(1)); and is not to be regarded as habitually resident there unless he has a right to reside in one of those places (reg 9(2)). Regulation 21 concerns assessment periods. It provides that an assessment period is a period of one month beginning with the first date of entitlement, and each subsequent period of one month during which entitlement subsists (reg 21(1)).

14. Further regulations are found in the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations SI 2013/380 (“the [NAME_29] etc Claims and Payment Regulations”). Part 4 of the regulations (regs 45 to 56) concerns payment of benefit, which is defined so as to include [NAME_29] (reg 2). Regulation 45 provides that subject to the other provisions of Part 4, benefit is to be paid in accordance with an award as soon as is reasonably practicable after the award has been made. Regulation 46 provides for payment of benefit by direct credit transfer to a bank account. Regulation 47 concerns payment specifically of [NAME_29]. It provides the general rule that [NAME_29] is payable monthly in arrears in respect of each assessment period (reg 47(1)); and that where paid by direct credit transfer it is to be paid within 7 days of the last day of the assessment period. Statutory framework – (2) Administration of social security benefits 15. The second group of provisions concerns the administration of social security benefits generally. For a person to receive payment of [NAME_29] they not only need to satisfy the basic conditions and financial conditions set out in the WRA 2012, but also to satisfy certain administrative conditions. [NAME_61], who appeared with [NAME_62] for the Secretary of State, referred to the question whether an individual’s personal circumstances are such as to satisfy the conditions set out in the WRA 2012 as “eligibility” and the question whether they have complied with the administrative conditions as “entitlement”. This distinction between eligibility and entitlement is not found in the statutory language but it is a convenient one and I will adopt it.

16. Entitlement, as opposed to eligibility, depends on compliance with the requirements of the Social Security Administration Act 1992 (“[NAME_63]”). The [NAME_63] lays down the general rule that a person is not entitled to benefit unless they duly make a claim for it (s. 1(1)).

17. This section was amended by the Social Security Administration (Fraud) Act 1997 (“the SS (Fraud) Act 1997”). As its title suggests, this Act contained a number of provisions intended to aid in the prevention and detection of fraud in connection with social security benefits. One of these was s. 19, headed “Requirement to state national insurance number”, which amended s. 1 [NAME_63] by adding new sub-sections (1A) to (1C).

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

5

18. As so amended, s. 1(1) to (1B) provide as follows: “1 Entitlement to benefit dependent on claim (1) Except in such cases as may be prescribed, and subject to the following provisions of 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. (1A) No person whose entitlement to any benefit depends on his making a claim shall be entitled to the benefit unless subsection (1B) below is satisfied in relation both to the person making the claim and to any other person in respect of whom he is claiming benefit. (1B) This subsection is satisfied in relation to a person if— (a) the claim is accompanied by— (i) a statement of the person’s national insurance number and information or evidence establishing that number has been allocated to the person; or (ii) information or evidence enabling the national insurance number that has been allocated to the person to be ascertained; or (b) the person makes an application for a national insurance number to be allocated to him which is accompanied by information or evidence enabling such a number to be so allocated.” These provisions apply to claims to benefit as defined by s. 1(4). The definition was amended in 2013 by the WRA 2012 to add [NAME_29] as one of the benefits to which the provisions in s. 1 apply (s. 1(4)(za)).

19. The next stage after the making of a claim is for the claim to be decided. By virtue of s. 8 of the Social Security Act 1998 (“SSA 1998”) this is a matter for the Secretary of State.

This provides, so far as relevant, as follows:

“8 Decisions by Secretary of State.

(1) Subject to the provisions of this Chapter, it shall be for the Secretary of State— (a) to decide any claim for a relevant benefit…” “Relevant benefit” is defined by s. 8(3). Again the definition was amended in 2013 by the WRA 2012 to include [NAME_29] (s. 8(3)(aa)).

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

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20. If the decision is to uphold the claim, this is generally referred to as an award of benefit. We were not referred to any statutory definition of award, but it is a term frequently used in the primary and secondary legislation (see for example ss. 7 and 8 WRA 2012 (“Basis of awards” and “Entitlement to awards”), and ss. 9 to 12 WRA 2012, each of which begins “The calculation of an award of universal credit is to include…”) and in Secretary of State for Work and Pensions v Adams [2003] EWCA Civ 796 at [17] Sedley LJ said that an award of benefit (in that case invalidity benefit) signified “an extant decision that the claimant is entitled to it”.

21. The effect of an award of [NAME_29] is that [NAME_29] becomes payable in accordance with the [NAME_29] etc Claims and Payment Regulations. This means that it is paid in respect of each assessment period (reg 47 of the [NAME_29] etc Claims and Payment Regulations). Since the first assessment period runs from the date of entitlement (reg 21 of the [NAME_29]) and a claimant is not entitled until he or she has made a claim (s. 1(1) [NAME_63]), the practical effect is that once an award of [NAME_29] is made [NAME_29] is payable for each assessment period of a month, starting from the date of claim. But under reg 21 of the [NAME_29] it is only payable in arrears and within 7 days of the end of each assessment period. Hence there is a built-in gap of some 5 weeks or so between a claim being made and [NAME_29] actually being paid, even in the usual case where the claim is processed reasonably promptly. Statutory framework – (3) interim payments or payments on account 22. Statutory provision enabling payments of benefits to be made to claimants pending determination of their claim is a long-standing feature of the social security legislation. The earliest iteration of the legislation that we were shown was s. 51 of the Social Security Act 1986 (“SSA 1986”), which enabled regulations to be made to provide, among other things, for the making of a payment on account of benefit where a claim had been made and it was impracticable for it to be immediately determined (s. 51(1)(f)(ii)).

23. This was re-enacted in similar terms by s. 5 [NAME_63]. In 2013 s. 5 was amended by the WRA 2012 to provide as follows: “5 Regulations about claims for and payments of benefit (1)Regulations may provide— … (r) for the making of a payment on account of such a benefit—

(i) in cases where it is impracticable for a claim to be made or determined immediately, or for an award to be determined or paid in full immediately; (ii) in cases of need, or; (iii) in cases where the Secretary of State considers in accordance with prescribed criteria that the payment can reasonably be expected to be recovered” At the same time the list of benefits to which the section applied was expanded to include [NAME_29] (s. 5(2)(za)). The section has since been amended but not so as to affect these aspects of it.

[2023] AACR 9 R ([NAME_1]) v SSWP; [NAME_2]) v SSWP

7

24. Regulations were duly made under s. 51 SSA 1986, called the Social Security (Payments on account, Overpayments and Recovery) Regulations SI 1988/664, reg 2 of which provided the Secretary of State with discretionary power to make an interim payment, that is a payment on account of benefit to which it appeared to him that a person was or might be entitled, in circumstances where, among other things, a claim had been made but it was impracticable for it to be determined immediately.

25. These regulations continued in force when s. 51 SSA 1986 was replaced by s 5 [NAME_63], although they were amended from time to time. They were revoked and replaced in 2013 by new regulations made under s. 5 [NAME_63], namely the Social Security (Payments on Account of Benefit) Regulations SI 2013/383 (“the Payments on Account Regulations”). These, as amended, are the regulations in force. Part 2 of the regulations (regs 3 to 10) concerns payments on account. Reg 3 contains a definition of benefit which includes [NAME_29] (reg 3(1)(a)). Reg 4 provides that the Secretary of State may make a payment on account of benefit to a person (‘A’) in accordance with that Part. Reg 5 (as amended) provides: “5 Payment on account of benefit where there is no award of benefit (1) The Secretary of State may make a payment on account of benefit to A if— (a) either of paragraphs (2) or (3) applies; (b) it appears to the Secretary of State likely that the conditions of entitlement for benefit are satisfied (or will be satisfied during the period in respect of which the payment is to be made); and (c) the Secretary of State is satisfied that A is in financial need. (2) This paragraph applies where A has made a claim for benefit but the claim has not yet been determined. (3) This paragraph applies where A is not required to make a claim for benefit by virtue of—

(a) regulation 6 or 7 of the [NAME_29] etc. Claims and Payments Regulations (claims not required for entitlement to universal credit or an employment and support allowance in certain cases); or, as the case may be, (b) regulation 3 of the Claims and Payments Regulations (claims not required for entitlement to benefit in certain cases), but an award of benefit has not yet been made.” 26. Reg 6 makes provision for the Secretary of State to have a similar power where an award of benefit has been made but (among other things) the date for the first payment of benefit to A has not yet been reached. Reg 7 contains a definition of what it is for A to be in financial need for these purposes. Reg 10 contains provision for payments on account to be brought into account against payments of benefit.

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National Insurance Numbers ([NAME_31]). 27. [NAME_31] are of course very familiar as numbers unique to individuals, which remain unchanged throughout one’s life. The United Kingdom does not operate a national identity scheme as such, and in the absence of such a scheme, [NAME_31] operate as the principal method of identification of individuals by the state, being used by a number of agencies such as the DWP, HMRC and the Home Office. 28. [NAME_31] have been a feature of the National Insurance system since it was introduced in 1948, enabling contributions to be recorded against an individual’s name. They are recognised by statute, as s. 1(1B) [NAME_63] shows. But they do not themselves have a legislative basis. [NAME_51] told us that the practice of allocating [NAME_31] to individuals was purely a matter of executive policy. They are not automatically allocated at birth. But Government policy is to allocate [NAME_31] to individuals in the UK, irrespective of nationality, who require, or are likely to require, a [NAME_30].

29. In practice this means that almost everyone resident in the UK will be allocated one shortly before they reach 16 (“juvenile registration”). Juvenile registration is the responsibility of HMRC, and any young person who is both resident in the UK and part of a live claim to child benefit will be allocated a [NAME_30] at the age of 15 years and 9 months. This makes it unnecessary for this cohort to make individual applications when they start work or claim benefits.

30. But this does not in fact apply to all young people as it is only the case if child benefit is claimed for them, which is not always done. If an individual was not previously registered as a juvenile (either because although resident in the UK no child benefit was claimed for them, or because they have come to the UK subsequently), they can be registered as adults if either they have a right to work and wish to access the labour market, or if they make a claim for benefits. Adult registration is the responsibility of the DWP and the DWP’s policy is only to allocate a [NAME_30] when there is a business need, that is to record national insurance contributions for those lawfully starting employment or for the payment of benefits to those entitled to them. The DWP prioritises the latter “benefit-inspired” applications over the former “employment- inspired” applications.

31. The fact that everyone either lawfully in work or in receipt of benefits has a unique, life-long, identification number serves a number of purposes. For those in work, [NAME_31] are used for maintaining not only national insurance contribution records but also taxation records. For those in receipt of benefits, [NAME_31] assist in the calculation and payment of benefits. For example the [NAME_64] uses a claimant’s [NAME_30] to receive a claimant’s earnings information from HMRC (which helps the DWP to calculate the right amount of benefit); and the DWP’s Central Payment System uses [NAME_31] to ensure that payment is made to the right person. [NAME_31] are also integral to the DWP’s aim of mitigating fraud in the benefits system: the use of [NAME_31] makes it easier to identify identity theft, and also mitigates the risks of both social security fraud (claiming benefits to which a person is not entitled) and labour market fraud (working when a person is not entitled). Allocation of [NAME_31] to those making a claim for [NAME_29]

32. The evidence for the Secretary of State (given in each case by [NAME_32], a Policy Team Leader at the DWP) contains a very helpful account of the internal processes used by the DWP to ascertain or allocate a [NAME_30] when a claimant claims [NAME_29]. This was supplemented by some further information supplied to us at our request after the hearing. It is not necessary to detail it all but I will summarise the essential points.

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33. Under s. 1(1B) [NAME_63] (paragraph 18 above) it is a requirement of entitlement to [NAME_29] that either (i) the claim to [NAME_29] is accompanied by a statement of the claimant’s [NAME_30]; or (ii) the claim is accompanied by information or evidence enabling the [NAME_30] that has been allocated to them to be ascertained; or (iii) the claimant makes an application for a [NAME_30] to be allocated to them. One might have expected from this that a claimant for [NAME_29] would be asked when they applied whether they already had a [NAME_30] (and if so, whether they knew what it was); and that if they did not, they would be prompted to apply for one.

34. In fact this is not what happens. Claims for [NAME_29] are now made by completing an online application form. This contains no questions about [NAME_31] as such, but it does require the claimant to give personal details such as their name, date of birth and address. The next step is for the DWP to ascertain if the claimant meets the eligibility requirements under the WRA 2012. This involves a check on their identity, described in the evidence as “verifying their identity to [NAME_29] standards”, and also confirming that they are habitually resident. As part of this process the claimant may be asked to provide proof of identity such as a passport. These processes are carried out by the [NAME_29]. After the claimant’s identity has been verified to [NAME_29] standards, an automated search is carried out for the claimant’s [NAME_30] using the information provided by them.

35. If this does not identify the claimant’s [NAME_30], the [NAME_29] agent carries out basic checks to see if the claimant already has a [NAME_30]. If this does not produce a result, the [NAME_29] agent applies for a [NAME_30] to be allocated. This is done by completing an internal form which is then passed to a different team, the [NAME_35]. The allocation of [NAME_31] is a separate, specialised function within the DWP, and the [NAME_30] officers (unlike [NAME_29] agents) are security-cleared in the light of the nature of the process. The form makes it clear that a case should not be referred to the [NAME_35] until eligibility for benefit (that is, for [NAME_29], in the terms of the WRA 2012) has already been established.

36. On receipt of the form a [NAME_30] agent carries out a more advanced check to see if the claimant already has a [NAME_30]. If none is traced they then carry out checks to confirm that the claimant has the right to reside in the UK; that they have the right of access to public funds; and that their identity is verified to what is described as “medium confidence level in line with the [DWP’s] common standard of identity verification”. This may include asking the claimant for proof of their identity and immigration status, and a [NAME_30] decision maker conducting checks against Home Office sources to confirm that the information presented with the [NAME_30] application matches information on the Home Office system such that the claimant’s identity and immigration status are valid.

37. Once the [NAME_30] decision maker has verified the information to the appropriate standard, a [NAME_30] is allocated and noted on the form and this is returned to the [NAME_29] agent who requested it. The target turnaround time for allocating [NAME_31] for benefit-inspired applications is 10 working days. [NAME_51] told us that this is much quicker than for employment-inspired applications (where individuals apply online).

38. In some cases the verification process can result in the original (provisional) decision on eligibility for [NAME_29] being invalidated, for example on the grounds that the claimant has no recourse to public funds, that their immigration status is invalid, or that their identity has not been established. Advance payments 39. The [NAME_64] is designed such that a claimant cannot receive any payment from [NAME_29]

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without a fully verified [NAME_30]. For ordinary monthly payments this is not in most cases a problem. As already explained, [NAME_29] is payable in monthly instalments in arrears, the first payment being paid within 7 days of the end of the first month of entitlement. In the majority of cases there is sufficient time for a [NAME_30] to be allocated before [NAME_29] would fall due for payment in any event.

40. But there will be a gap of 5 weeks or so between a claim for [NAME_29] being made and [NAME_29] being received. For those with [NAME_31] this gap can be filled by advance payments. These are in practice the norm rather than the exception: the [NAME_60] was told that some 60% of claimants for [NAME_29] take up advance payments.

41. But because the [NAME_64] requires a fully verified [NAME_30] before payment, no advance payments are made to those without a [NAME_30] until one has been allocated. This can obviously cause hardship for those without any other income during this period.

Facts of individual cases

42. [NAME_18] and [NAME_40], the claimants in the two specific cases before us, have now each received payment of the [NAME_29] to which they are entitled, backdated to the date of their claims, and they have no ongoing loss. As it was put by [NAME_65], who appeared with [NAME_46] and [NAME_66] for [NAME_18], and with [NAME_47] for [NAME_40], the case is not about quantum of [NAME_29] payments but about timing.

43. In those circumstances the facts of the individual cases are no longer of prime significance and can be shortly stated. [NAME_18] is a Vietnamese national who was granted limited leave to remain in the UK (with recourse to public funds) in November 2020. She applied for [NAME_29] on 13 January 2021. The [NAME_29] team verified her identity on 26 January 2021 and that she was habitually resident on 13 February 2021. (For those purposes she was asked to provide her passport and residence permit.) But she did not receive payment of [NAME_29] (backdated to the date of claim of 13 January 2021) until 26 May 2021. It appears that the reason for the delay was that after the [NAME_29] team had verified her identity and confirmed that she met the eligibility requirements she was incorrectly told to make her own (employment-inspired) [NAME_30] application instead of the case being then referred, as it should have been, to the [NAME_35]. Nothing was ever said to her about advance payments. 44. [NAME_40] is a Nigerian national. She was granted limited leave to remain in the UK (with recourse to public funds) in March 2021. She applied for [NAME_29] on 8 April 2021. After she had uploaded her passport and residence permit she was told on 24 May 2021 that her entitlement to [NAME_29] had been approved. But payment of [NAME_29] (again backdated to the date of claim) was not made until 11 June 2021. The delay appears to have been caused by the fact that she had made an employment-inspired application for a [NAME_30]. This should not have prevented her case being referred to the [NAME_30] application team, but the [NAME_29] agent wrongly thought that it did. [NAME_40] did ask about an advance payment but was told that one could not be issued before her [NAME_30] had been allocated.

45. In each case therefore the delay in allocating a [NAME_30] was primarily caused by individual human errors rather than by the design of the DWP’s policies. Decision of [NAME_60] 46. [NAME_18] and [NAME_40] each brought a claim for judicial review. They each said that

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the Secretary of State’s policy of not making any payment of [NAME_29], or advance payment, until a [NAME_30] had been allocated, was unlawful. The claims were heard together by the [NAME_60].

47. For present purposes the relevant parts of the [NAME_60]’s decision can be summarised as follows. First, they rejected a submission that all that s. 1(1B)(b) [NAME_63] required was an application for a [NAME_30] with evidence, and that there was no requirement for that evidence to be verified. Their reasoning can be seen from their decision at [55]-[56], as follows: “55. The third statutory gateway – for claimants without a [NAME_30] – does not simply require an application for a [NAME_30]. Nor does it require, as such, the allocation of a [NAME_30]. As a matter of the plain meaning of the legislative text, it requires an application for a [NAME_30] alongside “information or evidence enabling such a number to be so allocated.” Given that this was part of a package of anti-fraud measures, these words cannot refer to information or evidence which purports to enable a [NAME_30] to be allocated. Rather, [NAME_50] must mean verified information or evidence which actually then enables a [NAME_30] to be allocated.

56. Against this background, neither [NAME_48] nor [NAME_49] had a satisfactory response to the scenario in which a person supported a [NAME_30] application with a false passport. It is no answer to say that wrongly paid [NAME_29] can be recovered by the Secretary of State. While that is correct as a statement of principle, the practical reality is very different, not least as short of court action (which may well not be cost-effective or feasible) the Department can only recover overpaid benefit by way of deductions from existing benefit entitlement or wages. There are therefore sound reasons of public policy for [NAME_50] to impose, by virtue of subsection (1B)(b), a process of verification before awarding or paying public funds to a person who may not be entitled to them. While the effect of that process is that payment of [NAME_29] is not possible until a [NAME_30] has been allocated, subsection (1B) does not in terms require the allocation of a [NAME_30] as a precondition of entitlement to benefit.” 48. Second, they rejected a submission that once an application had been made for a [NAME_30] advance payments could be made to a claimant. Their reasoning on this issue can be seen from their decision at [58]-[60] as follows: “58. The Advance Payment Regulation enables a [NAME_29] advance to be made if three conditions are satisfied… 59. The third is that “it appears to the Secretary of State likely that the conditions of entitlement for benefit are satisfied (or will be satisfied during the period in respect of which the payment is to be made)” (regulation 5(1)(b)). We agree with [NAME_51] that verification is a neutral exercise under section 1(1B)(b) in the sense that it will not be “likely” that entitlement will be established under that process or, conversely, not established. The Department cannot know until the verification process has been completed. Even if there were to be some case, in theory, where the likelihood threshold could be met before the allocation of a [NAME_30], the exercise in the cases before us was, on the facts, a neutral one.

60. It follows that an advance payment could not be made in either of the claims before us until after entitlement to a [NAME_30] had been ascertained – at which point [NAME_29] could be paid in the normal way. We acknowledge that this effectively makes the Advance Payment Regulation otiose in the context of a claimant subject to section

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1(1B)(b).” 49. The [NAME_60] then rejected certain other arguments which have not been revived on this appeal and dismissed the applications for judicial review. Grounds of Appeal 50. Three grounds of appeal are advanced by [NAME_67]:

(1) Ground 1 challenges the [NAME_60]’s conclusion, in relation to advance payments, that the “likelihood” criterion in reg 5(1)(b) of the Payment on Account Regulations cannot be met in the case of claimants who do not have a [NAME_30].

(2) Ground 2 challenges the [NAME_60]’s conclusion on s. 1(1B)(b) [NAME_63]. It is contended that on a correct interpretation this does not require that the information or evidence provided by the claimant is formally or fully verified before the claimant qualifies for benefit.

(3) Ground 3 challenges the practice whereby [NAME_30] allocation does not begin until every other aspect of a claimant’s eligibility to [NAME_29] has been determined. Ground 2

51. I will start with Ground 2 which logically comes first. This question is also the main issue decided by the [NAME_60] and I accept [NAME_51]’s submission that it is what the case is fundamentally about. It is a pure question of statutory construction. I will set out s. 1(1B)(b) [NAME_63] again for the sake of convenience: “(1B) This subsection is satisfied in relation to a person if— … (b) the person makes an application for a national insurance number to be allocated to him which is accompanied by information or evidence enabling such a number to be so allocated.” [NAME_67]’s submission, as formulated in his skeleton argument, was that the word “enabling” has a forward-looking meaning: it does not describe a completed review or completed verification of the information supplied, but simply connotes that a [NAME_30] would in principle be possible.

52. The difficulty I have with this way of putting the point is that it is not clear what it is intended to mean in practical terms. What s.1(1B)(b) requires is that the application is accompanied by certain information or evidence. The words “enabling such a number to be so allocated” are a description of the information or evidence which is required. Plainly these words cannot be interpreted as referring to information or evidence that is already verified – that would be nonsensical. Nor is there anything in s. 1(1B)(b) which expressly requires that the information or evidence supplied is subsequently verified. In terms all it requires is that the application is accompanied by appropriate information or evidence. In principle that requirement will either be complied with it or not at the time that the application is made (the actual process may not be quite as neat as this but this is what the statutory language

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contemplates). What is appropriate information or evidence is information or evidence that enables a [NAME_30] to be allocated, which is necessarily something that will happen after receipt. In that sense I agree that the word “enabling” is forward-looking: appropriate information or evidence is information or evidence that will enable the DWP to allocate a [NAME_30].

53. But this obscures the real difference between the parties. This was clarified in the oral submissions. [NAME_67] submitted that information or evidence satisfied s. 1(1B)(b) if it appeared on its face sufficient to enable a [NAME_30] to be allocated. If it turned out subsequently that the information or evidence was false, any award of benefit could be superseded or revised: see ss. 9 and 10 SSA 1998, and regulations made thereunder.

54. As [NAME_51] put it, this submission means that the real question is this: is it enough for a claimant to submit information or evidence that purports to justify the allocation of a [NAME_30]? Or must a claimant submit authentic information or evidence that does in fact justify the allocation of a [NAME_30]? To use the example referred to by the [NAME_60], if as part of the processing of their claim a claimant is asked to upload their passport, do they satisfy s. 1(1B)(b) by uploading a passport that appears genuine, or only by uploading one that is genuine? 55. Once the issue is identified in this way, I think the answer is self-evident. Evidence that enables a [NAME_30] to be allocated seems to me plainly to refer to evidence that does in fact justify the allocation of a [NAME_30], not evidence that merely purports to but in fact does not. “Enabling” is admittedly a slightly odd word to use in this context. It is a perfectly apt word in s. 1(1B)(a)(ii) (“information or evidence enabling the [[NAME_30]] that has been allocated to be ascertained”) where the sense is that once the DWP has got the relevant information (name, address, date of birth and so on), it can find the claimant’s [NAME_30], usually automatically. But “enabling” is a less apt word in s. 1(1B)(b). Of course the DWP could allocate a [NAME_30] to someone presenting false documents and in that sense even false documents could be said to enable a [NAME_30] to be allocated, but I agree with [NAME_51] that it is perfectly obvious that what is meant is information and evidence that justifies the allocation of a [NAME_30]. [NAME_31] are only allocated to those who need them (something which, as [NAME_51] said, the framers of the legislation can be expected to have known), and this in turn means those who either have a right to work or (in the present context) a right to benefits, I think it follows that evidence that enables a [NAME_30] to be allocated to a claimant for benefit is evidence that establishes that the claimant does in fact have a right to benefits. False documents do not do this.

56. I would have reached this conclusion even without the fact that s. 1(1A) and (1B) were introduced into s. 1 [NAME_63] by the SS (Fraud) Act 1997. But that I think puts the matter beyond doubt. The very purpose of this Act was to reduce the incidence of fraud in the social security system. It is therefore evident that the requirement for claimants to either have a [NAME_30] (and disclose it, or disclose information enabling it to be found), or to apply for one, was itself an anti-fraud measure, designed to prevent social security benefits from being paid to those not entitled to them. In those circumstances it can scarcely be supposed that [NAME_50]’s intention was that claimants could comply with the new requirement in s. 1(1B)(b) by supplying information or evidence that appeared on its face to justify the allocation of a [NAME_30], but was in fact false.

57. That is enough to dispose of Ground 2, but I should briefly mention three points put forward by [NAME_67]. One, found in his written submissions but not I think repeated orally, was that the Secretary of State’s interpretation would render s. 1(1B)(b) otiose. As soon as the verification process is successfully completed, a [NAME_30] is allocated and at that point the claimant will qualify under s. 1(1B)(a), and so reliance on s. 1(1B)(b) is not needed.

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58. The answer to this point is that given by [NAME_51]. The effect of s. 1(1B)(b) is to crystallise the date of entitlement as the date of the initial [NAME_29] claim. That means that a claimant without a [NAME_30] can make a claim and, once approved, benefit will be payable as from that date (as it was in the case of [NAME_18] and [NAME_40]). If s. 1(1B)(b) were not there, a claim could only be made by someone within s. 1(1B)(a), that is someone who already had a [NAME_30], and neither [NAME_18] nor [NAME_68] could have made a claim until a [NAME_30] had been allocated to them. Their entitlements would therefore start from the dates of claims made after allocation of a [NAME_30], and not (as in fact happened) from the dates of claims made some time before the allocation of a [NAME_30]. I agree with this analysis which seems to me unanswerable.

59. The second point relied on by [NAME_67] was that the [NAME_60]’s decision was inconsistent with that of Mr [NAME_41] in CH 4085/2007 [2008] UKUT 14 (AAC). That was not a decision in relation to [NAME_29] (which did not then exist) but it did concern s. 1(1B)(b) [NAME_63], in the context of a claim to housing benefit. It was a case where although the claimant had a [NAME_30], her husband did not, and although information was submitted by the husband as requested (such as his name, address and date of birth), he failed to attend an interview. The actual decision of [NAME_41] was that the information or evidence referred to in s. 1(1B)(b) did not extend to information and evidence provided at an interview. That was because the application had to be “accompanied” by the information, and the information and evidence mentioned in the legislation is “only that information and evidence that the person concerned could reasonably be expected to send when the application was made” (at [30]). He did however also say that there is no requirement that a [NAME_30] has been allocated before benefit is awarded, it being sufficient that an application had been made; and that “the payment of benefit is not generally to be delayed while the application for the [[NAME_30]] is processed” (at [26]).

60. I do not consider it necessary to consider whether the actual decision was correct on its own facts, which are some way removed from the present question; it was dealing with a different problem, that of when and how evidence and information should be provided, and not with the quality of information provided, namely whether it was genuine or fraudulent, at all. And the [NAME_42]’s observations at [26] were undoubtedly, as the [NAME_60] said in the present case, obiter dicta and he did not explore the questions we have been asked to consider. I do not in those circumstances find the decision of any real assistance for the resolution of the present case.

61. The third point relied on by [NAME_67] was a statement made by the relevant Minister ([NAME_69], then the Parliamentary Under-Secretary of State for Social Security) during the committee stage of what became the SS (Fraud) Act 1997. He said (Standing Committee E, 28 January 1997):

“The hon. Member for Leyton mentioned delays in the allocation of a national insurance number. It is not necessary for a number to have been allocated before a claim can be processed. Under subsection (1B)(b), it is simply necessary for a person to apply and supply the necessary supporting information.”

[NAME_67] suggested that this statement was admissible under the rule in Pepper v Hart [1993] AC 593, and that it supported his interpretation.

62. I do not propose to consider whether the strict rules for admissibility laid down in [NAME_72] v [NAME_73] are satisfied in this case, nor whether permission should be given to advance this point, which is a new point not raised below, because I do not find the Minister’s comments

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helpful on the present question. They are little more than a paraphrase of the statutory language. As a matter of law it was true to say that a [NAME_30] does not need to have been allocated before a claim is processed, in the sense that consideration of whether the claimant meets the eligibility requirements can, and does, proceed before the allocation of a [NAME_30]. Even if by “processed” the Minister meant “processed to the point of payment” it was strictly accurate to say that the Act does not require the allocation of a [NAME_30] as a pre-condition of payment. All that the Act requires, as the Minister says, is for the claimant to apply and supply “the necessary” supporting information. What the Minister does not address is what happens if information is supplied which on its face appears to support the application but on examination turns out not to be genuine. But that is the question that is in effect raised by Ground 2. In those circumstances I do not regard the Minister’s statements as helping to resolve that question.

63. None of these points therefore is sufficient to displace what I regard as the natural meaning of the statutory language. The position can in my view be simply stated. In order for a person to be entitled to [NAME_29] they must make a claim (s. 1(1) [NAME_63]), and if they do not already have a [NAME_30] must apply for one (s. 1(1A) and (1B)(b) [NAME_63]). That must be supported by information and evidence that justifies the allocation of a [NAME_30]. It is then for the Secretary of State to decide the claim (s. 8 SSA 1998). In order to decide the claim the Secretary of State must decide among other things if the information and evidence does justify the allocation of a [NAME_30]. If it does the claim is upheld and an award of [NAME_29] made. But if it does not the claim is not upheld and no award is made. That seems to me what the statutory provisions provide and to amount to a coherent and understandable scheme.

64. In my judgment therefore the [NAME_60] was entirely right on this point, and I would dismiss this ground of appeal. Ground 3 65. I propose to consider Ground 3 next. [NAME_67] submitted that the practice of the Secretary of State in having a two-stage process, under which the [NAME_29] agent first verified the claimant’s identity to [NAME_29] standards and otherwise checked the claimant’s eligibility for [NAME_29], and then the [NAME_30] officer went over the same material a second time, was unlawful in needlessly delaying the process. It would, he said, be possible for the Secretary of State to begin the verification process on day 1 of a [NAME_29] claim so that the [NAME_30] allocation proceeded in parallel with the other entitlement conditions. 66. [NAME_51] submitted that the [NAME_30] allocation process takes place in the way it does because it would be illogical and a waste of resources to refer a case to the [NAME_30] officers unless and until it were known that the claimant required a [NAME_30]. The first stage is therefore designed to confirm whether the claimant meets (or, to be more precise, appears to the [NAME_29] agent to meet) the eligibility requirements under the WRA 2012, as unless they pass this first stage the business case for an allocation of a [NAME_30] to them is not made out. Moreover as part of the first stage there will be an automated search to see if the claimant already has a [NAME_30], followed by basic searches by the [NAME_29] agent if they do not (see paragraphs 35 and 36 above). It is only if these processes do not succeed in tracing a [NAME_30] for the claimant that the case is referred to the [NAME_74].

67. [NAME_67] accepted that his challenge to the Secretary of State’s practice was a rationality challenge and required him to establish that the system operated by the Secretary of State was irrational. We were not addressed on the principles applicable to such a challenge but they have been elucidated in numerous authorities. It was not disputed that in a case such

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as this they impose a high hurdle.

68. In my judgement the claimants have not demonstrated that the Secretary of State’s current arrangements are irrational. As [NAME_51] said in his opening remarks it is a hallmark of a civilised welfare system to pay claimants what they are properly entitled to promptly. But that not only entails processing claims without undue delay, it also entails ensuring that payments are only made to those who are in fact entitled to them. That among other things involves taking steps to identify and reduce fraud. Fraud is corrosive to the public good, being a waste of public resources and something which can potentially be used to perpetrate organised crime. It is for the Secretary of State to devise and operate administrative systems which are designed to meet the twin objectives of prompt payment (not delaying the processing of claims) and accurate payment (paying the right amount to those entitled to benefit but not paying those who have no right to benefit), objectives which are necessarily somewhat in tension.

69. It is not suggested in those circumstances that there is anything irrational in the Secretary of State making use of a limited number of specialist, security-cleared officers to carry out the verification checks involved in the [NAME_30] allocation process, something which the ordinary [NAME_29] agents are not in a position to do. And it seems to me that [NAME_51] is right that once this position is accepted, it is also rational for this necessarily resource-intensive process to be reserved for those cases which have been shown to need it. The vast majority of claimants after all do have [NAME_31] already. It therefore makes sense for cases only to be referred to the [NAME_35] once the [NAME_29] agent has checked that the claimant appears to meet the eligibility requirements and that no [NAME_30] has been found for them either automatically or by the basic searches carried out by the [NAME_29] agent. In that way the [NAME_74] can be deployed solely to deal with cases where the claimant appears both to have an entitlement to benefit and to be without a [NAME_30]. The suggested alternative of the [NAME_30] officers dealing with every case on day 1 would divert this limited resource to a very large number of cases where they turned out not to be needed. Far from speeding up the process, that would be likely to delay the allocation of [NAME_31] to those who do need them.

70. The [NAME_60] does not appear to have been asked to consider this issue specifically in the way that we were and we do not therefore have the benefit of any separate consideration of it by them, but for the reasons I have given I would dismiss this ground of appeal. Ground 1 71. The final ground of appeal is Ground 1. This challenges the Secretary of State’s position that it is not possible to make advance payments to [NAME_29] claimants without a [NAME_30].

72. [NAME_67]’s submission was very simple. Under s. 5(1)(r)(i) [NAME_63] (as amended by the WRA 2012), regulations can be made providing among other things for “the making of a payment on account of such a benefit [which includes [NAME_29]] … in cases where it is impracticable for a claim to be … determined immediately”: see paragraph 23 above. Under reg 5(1) of Payments on Account Regulations, the Secretary of State may make a payment on account of benefit (which includes [NAME_29]) to a claimant if three conditions are satisfied: see paragraph 25 above. The first is satisfied if the claimant has made a claim for benefit but the claim has not yet been determined (reg 5(1)(a) and (2)) and the third is satisfied if the claimant is in financial need (reg 5(1)(c)). In the case of claimants for [NAME_29] who are awaiting determination of their claim the first condition will be satisfied, and the third condition will no doubt very often be satisfied. The remaining condition is the second, in reg 5(1)(b), which I repeat here for convenience:

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“(b) it appears to the Secretary of State likely that the conditions of entitlement for benefit are satisfied (or will be satisfied during the period in respect of which the payment is to be made)” The Secretary of State’s position is that where a claimant does not have a [NAME_30] this condition cannot be satisfied until the verification undertaken under the [NAME_30] allocation process has taken place. [NAME_67] submits that that is wrong, and that even before verification the Secretary of State can properly form the view that it is likely that the claimant will turn out to be entitled to [NAME_29], and hence that it is “likely that the conditions of entitlement are satisfied.” 73. As a matter of the ordinary use of language there seems to me to be considerable force in [NAME_67]’s submission. Reg 5 is expressly dealing with a case where a claim has been made but not yet determined (unlike reg 6 which concerns a case where an award has been made but not yet come into payment). Ex hypothesi therefore in a reg 5 case, it will not be known at the date of the application for an advance payment whether the claimant will fact turn out to be entitled, and the criterion for payment in reg 5(1)(b) is therefore not that the claimant will be entitled but the lower one of it appearing to the Secretary of State that it is likely that they will be entitled. It is not at first sight obvious why this should not apply to the s. 1(1B)(b) requirement as much as the other conditions of entitlement.

74. It is therefore necessary to consider with some care why the Secretary of State says that this is not right. [NAME_51] in his written submissions made a number of points. First he said that the way the case was argued below was confined to whether the Payment on Account Regulations shed light on the true interpretation of s. 1(1B)(b) [NAME_63]. That may or may not be so, but the point is now clearly taken as a separate point on the applicability of reg 5 of the Payment on Account Regulations to a person with no [NAME_30].

75. Second, [NAME_51] said that the claimants sought to argue that it was not necessary for s. 1 [NAME_63] to be satisfied before an advance payment could be made. In his written submissions he said that this was a new point that they should not be allowed to take on appeal, but in his oral submissions he confirmed that this objection was not pressed. On the substance of it, he submitted that the Secretary of State has a duty not to pay benefit monies to persons that are not entitled to them, and that the power to make advance payments to claimants was not a power to disapply the statutory restriction on entitlement in s. 1 [NAME_63]; this created a threshold condition that claimants had to actually satisfy, not just be likely to satisfy.

76. This argument was not developed orally. Insofar as I have understood the point that is being made I do not accept it. Take a person such as [NAME_40]. It is now known that she did satisfy the conditions for entitlement to [NAME_29]. That means she not only met the eligibility conditions for [NAME_29] as laid down in the WRA 2012 (at least 18, habitually resident in the UK and the like), but also the conditions for entitlement in s. 1 [NAME_63] (making a claim, making an application for a [NAME_30], and providing the appropriate information and evidence). [NAME_51] accepts that the former are “conditions of entitlement for benefit” within the meaning of reg 5(1)(b) and that the Secretary of State can take a view as to whether it is “likely that they are satisfied” even before determination of the claim. But I do not myself see why the latter are not also “conditions of entitlement for benefit” and why it is not possible in principle for the Secretary of State to consider whether it is likely that they are satisfied. I do not see that the requirements of s. 1(1B) [NAME_63] are a threshold that needs to be shown to have been crossed before the question can even be asked. And if it does appear to the Secretary of State to be likely that the conditions are satisfied then s. 5 [NAME_63] and reg 5 of the Payment on

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Account Regulations would seem to supply the necessary statutory power to make a payment on account even to a person who in the event turns out not to have been entitled after all. The risk of paying someone who is not in fact entitled is a risk that is inherent in a scheme which permits payments to claimants before their claims have been determined.

77. The third point made by [NAME_51], and the one on which he concentrated his oral submissions, was that it is not in practice possible to form a view as to whether a claimant is likely to pass the verification test. He sought to uphold the view of the [NAME_60] at [59] that verification for the purposes of s. 1(1)(b) is a “neutral exercise” in the sense that it will not be “likely” that verification will or will not be established (see paragraph 48 above). I have to say I do not quite understand what is meant by a neutral exercise in this context. [NAME_51] said that a better word might be “binary” and that what was meant was that either the verification exercise would show that the claimant was duly entitled or it would not. It would return a value of either 0 or 1 and could not be in between. That I understand, but I do not see how that differs from the satisfaction of any condition. Take the first of the basic conditions of eligibility, which is that the claimant is at least 18. That too is a binary condition that will either be satisfied or not: the claimant will either be at least 18 at the date of claim or not. In most cases it will no doubt be apparent, even before the claim is determined, that the claimant will be likely to satisfy this condition, but there may be cases where there is real doubt. In such a case the Secretary of State can nevertheless, it seems to me, quite properly take the view in a particular case that it is likely that the claimant will satisfy the condition even if this has not yet been established and may not be certain. I do not see why it is in principle any different with the verification process undertaken for those with no [NAME_30].

78. In oral submissions [NAME_51] made the point that until the verification process has in fact been undertaken it is in practice impossible to assess what the outcome is likely to be. This seems to me a slightly different point. It is not directed to whether in principle the Secretary of State can properly ask the question whether it is likely that the s. 1(1B)(b) condition will turn out to be satisfied, but to whether in practice the Secretary of State (or realistically his officials) will in any individual case be able to answer that question Yes. [NAME_51] said that the [NAME_29] agents would not be able to do so as they have no training or experience in identifying fraudulent applications and so no way of assessing the likelihood of the claim being verified, and that the [NAME_30] agents would in practice not be able to form a view one way or the other until they had considered the case at which point they would be in a position to determine it anyway.

79. This I think is a more substantial argument. But it seems to me a point that turns on the facts of particular cases. I do not think we can properly say that in every case where a claimant applies for [NAME_29] and does not have a [NAME_30], it necessarily follows that the Secretary of State will be unable to determine whether it is likely that the claimant will satisfy the requirements of s. 1(1B)(b) so as to be entitled to benefit. It does not seem self-evident that this will always be impossible; nor do I think that the evidence expressly deals with this question. The scheme of the provisions contemplates that in a case where a claimant’s claim has not yet been determined and the claimant is in need the Secretary of State will consider whether it appears likely that the conditions of entitlement are met; and it seems to me that this is just as much so in a case where the claimant does not have a [NAME_30] as in the case when they do. In my judgment therefore the Secretary of State’s practice in never considering whether this is likely in a case where the claimant does not have a [NAME_30] is flawed.

80. Quite what this might entail in practice is not something that we can resolve on this appeal. [NAME_51] pointed to a statement by [NAME_75] that the potential alternative to the

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current practice would be to allocate a temporary [NAME_30] to a claimant (which would allow the payment of an advance to them prior to the allocation of a final [NAME_30]) but that this would be unlikely to save any time for claimants; and he said that changing the system to cater for this would not only be disruptive but also risk undermining a key protection against fraud. We do not have the material to assess such questions and in any event it is a matter for the Secretary of State and not for the Court to decide on the administrative arrangements to put in place. All that I mean to decide is that the Secretary of State’s position that it is never possible to pay an advance payment to a claimant without a [NAME_30] (because it is not possible to assess whether it is likely that the claimant meets the conditions of entitlement until their application for a [NAME_30] has been verified) is not one that is warranted by the language of the regulation. Pending such verification it seems to me to be possible in principle for the Secretary of State to consider whether it is likely that such a claimant meets the conditions of entitlement or not. How that can be done in practice is not I think something we can rule on.

81. I would therefore allow the appeal on Ground 1 to this limited extent. We heard no submissions on the appropriate form of relief (and the respective Appellant’s notices simply seek the setting aside of the order appealed against without indicating the form of any substitute order) and I would invite counsel to address this in submissions, if not agreed, after our draft judgments are circulated. Lord Justice Edis:

82. I agree.

Lord Justice Underhill, Vice-President of the Court of Appeal (Civil Division):

83. I also agree