Potter v Secretary of State for Work and Pensions, joined with Minter v Hull City Council

Last updated: April 18, 2012

On appeal from Kingston upon Hull City Council v DLM (HB) [2010] UKUT 234 (AAC) And Secretary of State for Work and Pensions v JP [2010] UKUT 90 (ACC)  

These cases are about how equal pay settlements made to local authority part time workers are to be treated for benefit purposes, whether they are to be treated as income or capital, and whether they are to be attributed to past or future periods.

In Minter in the Upper Tribunal, Judge Howell held that the compensation was to be treated as earnings attributable to a past period and that this created an overpayment which was recoverable from the claimant.

In Potter in the Upper Tribunal, Judge Jacobs held that similar compensation was to be treated as income and attributed as earnings over a future period.

In EM v London Borough of Waltham Forest [2009] UKUT 245 (AAC), a decision was taken by Judge Wikeley that two single status payments of £3,817.96 and £2,125.46 were to be treated as capital for housing benefit purposes. This case was not appealed further.

There were therefore three Upper Tribunal decisions all of which came to different conclusions about the treatment of these types of payment.

The case was heard by the Court of Appeal on 19th July 2011. In a judgment dated 13th October 2011 the appeals were dismissed. The court held that the first task was to “determine the true characteristics of the payments in the hands of the recipient” as set out in R v National Insurance Commissioner ex parte Stratton [1979] ICR 209. The court held it was clear from the nature of the dispute the payment arose from that the nature of the payments was compensation for lower wages and was therefore income, and even if it had not been, they would still have been treated as such by the regulations.

Permission to appeal to the Supreme Court was refused in both cases. A full copy of the decision can be found here On appeal from Kingston upon Hull City Council v DLM (HB) [2010] UKUT 234 (AAC) And Secretary of State for Work and Pensions v JP [2010] UKUT 90 (ACC)

Counsel in this case is David Forsdick of Landmark Chambers