Tribunal’s failure to find that former prisoner should be disqualified from receiving payments of contributory ESA for period of sentence amounted to error of law

Secretary of State for Work and Pensions v NC (ESA)
[2023] UKUT 124 (AAC)


The claimant was awarded old-style contributory employment and support allowance (ESA) in 2014, having previously been entitled to incapacity benefit. Payment was suspended for the period starting 3 January 2020, the date he was remanded in custody. He was later given a two-year sentence on 13 February 2020 and remained in custody throughout.

Following the claimant’s release from prison on 21 December 2020, he made a new claim for ESA which was treated as a claim for new-style ESA. The Secretary of State took the view that the claimant would not satisfy the contribution conditions for an award of the allowance but that the existing ‘credits’ award could be left open.

A final decision on the claim was deferred pending the final determination of his previous old-style ESA claim. The Secretary of State decided in January 2021 that the claimant was not entitled to old-style ESA from 3 January 2020. The claimant challenged the decision on the basis that ESA payments should be reinstated from his release date.

The First-tier Tribunal was not satisfied that the claimant had lost entitlement while imprisoned and went on to decide that he had not been disqualified from receiving contributory ESA while in prison and that he had therefore remained entitled to the allowance, and to receive payments of it, throughout his imprisonment. It also said in its statement of reasons that, had it decided that the claimant had been disqualified from receiving payments, it would nonetheless have held that he retained an underlying entitlement during the first six weeks of his imprisonment.

The Secretary of State appealed against the decision, submitting that the claimant was not only disqualified from receiving ESA throughout the period of his imprisonment but he was also not entitled to it throughout that period.

Issue before the Upper Tribunal

Whether the tribunal's failure to find that the claimant should be disqualified from receiving payments of contributory ESA for the period of his sentence, when payment had been suspended but no final decision on entitlement had been made, amounted to an error of law.


Appeal allowed, with the effect that the claimant was not entitled to ESA while he was in prison.


Summarising the legislative provisions applying to entitlement to old-style ESA and prisoners, Judge Rowland first highlights that –

'It is … important to note the differing effects of, on one hand, section 18(4)(b) of the Welfare Reform Act 2007 (the 2007 Act) and, on the other hand, regulation 159 of the Employment and Support Allowance Regulations 2008 (the 2008 Regulations), which is presumably made under paragraph 1(1)(a) of Schedule 2 to the 2007 Act. Where a person is merely 'disqualified for receiving' a benefit, under section 18(4)(b) of the 2007 Act or equivalent provisions in other legislation, he or she retains an underlying entitlement to the benefit. However, because having limited capability for work is a basic condition of entitlement to ESA, regulation 159 of the 2008 Regulations which applies only when a person is disqualified for receiving contributory ESA for more than six weeks, has the effect of removing such underlying entitlement.' (paragraph 5)

Judge Rowland adds that –

'As the Secretary of State submits and the First-tier Tribunal decided, it is clear that, notwithstanding section 18(4)(b) of the 2007 Act, regulation 160 of the 2008 Regulations has the effect that a person ‘undergoing imprisonment or detention in legal custody’ is not disqualified from receiving contributory ESA (and so remains entitled to that allowance because regulation 159 does not apply) unless a 'penalty' within the meaning of regulation 160(5)(c) is imposed at the conclusion of relevant criminal proceedings.' (paragraph 12)

Judge Rowland then says that what the First-tier Tribunal appears to have done when considering the definition of ‘penalty’ –

'… is read the words under section 90 or 91 of the Powers of Criminal Courts (Sentencing) Act 2000 (and, perhaps, all of the following part of the definition) as describing both ‘imprisonment’ and ‘detention’. Because it understood that those sections of the 2000 Act and the other statutory provisions applied only to those under the age of 18, the First-tier Tribunal appears to have concluded that no 'penalty' had been imposed on the claimant because he was well above that age.' (paragraph 14)

However, Judge Rowland goes on to broadly agree with the Secretary of State’s submission arguing against that interpretation, saying that –

'… because sections 90 and 91 of the 2000 Act (which have now been repealed) and the other statutory provisions mentioned were concerned only with detention, the effect of the First-tier Tribunal’s construction is to render the reference to 'imprisonment' entirely otiose.' (paragraph 15)

Having then considered the long history of the definition of ‘penalty’ in social security legislation, Judge Rowland reaches the conclusion that –

'I am satisfied that, reading the definition of ‘penalty’ as a whole and in its context, with due regard to its antecedents, it is clear that any sentence of imprisonment imposed at the end of criminal proceedings is a penalty. The First-tier Tribunal erred in law in deciding otherwise. On the undisputed facts, the claimant was disqualified for receiving contributory employment and support allowance from 3 January 2020 to 21 December 2020, because a sentence of imprisonment was imposed upon him at the end of the relevant criminal proceedings.

It follows that, by virtue of regulation 159, the claimant fell to be treated as not having limited capability for work and so lost his entitlement to contributory employment and support allowance.' (paragraphs 19 and 20)

On the question of whether old-style ESA could be reinstated on the claimant's release from prison, Judge Rowland finds that the Secretary of State erred in not determining within the supersession decision the claimant’s entitlement to contributory ESA between 22 December 2020 and the date of the decision.

While this may be academic – as it was unlikely that the claimant would have met the contribution conditions afresh – Judge Rowland notes that there was also a possibility that the claimant could establish entitlement to income-related ESA (with reference to LH v SSWP (ESA) [2014] UKUT 480 (AAC); [2015] AACR 14) particularly as regards the period after his release from prison.

Accordingly, Judge Rowland allows the Secretary of State's appeal but also directs that a decision is now made as to the claimant’s entitlement to ESA from 22 December 2020.


Judge Rowland also decides not to resolve a further issue raised by the appeal relating to whether entitlement was lost only from 14 February 2020 (the 43rd day of the claimant's imprisonment), which was the view favoured by the First-tier Tribunal in its statement of reasons, or from the first day of that period, as the Secretary of State submits. However, Judge Rowland observes that even on the First-tier Tribunal’s construction, the claimant was still disqualified from receiving payments from 3 January 2020, and he was still treated as not having limited capability for work from 14 February 2020, so he lost his underlying entitlement to contributory ESA for a period of more than twelve weeks which broke the limited capability for work linking period.