Unnoticed? The flaw in ESA conversion decisions
Martin Williams discusses the problems with letters sent by the DWP to existing claimants of incapacity benefit (IB), severe disablement allowance (SDA) and income support (IS) on grounds of disability informing them that they are to be reassessed for employment and support allowance (ESA).
Since March 2011, the DWP has been engaged in ESA reassessment. This involves reassessing 1.5 million recipients of IB, SDA and IS on grounds of disability (principally those entitled to IS on the basis they are incapable of work but also including other prescribed categories such as disabled students, deaf students and blind people1) to see whether they meet the criterion of having ‘limited capability for work’. Those who meet that criterion have their existing benefit stopped and are ‘migrated’ onto ESA (sometimes with a transitional award paid on top so they do not suffer a drop of income, given the often lower rates at which ESA is paid). Those whose score on the limited capability for work test doesn’t meet the magic 15 points (and for whom there would be no substantial risk to their or another person’s health were they required to work) lose their existing benefit and are forced to claim income-based jobseeker’s allowance or, possibly, for those with no entitlement to a means-tested benefit, are removed altogether from entitlement to any benefit paid in the event of unemployment or illness.
This reassessment process is a mammoth task: to complete the process by the deadline of March 2014, 11,000 cases must be decided a week.
In the trial of the reassessment process, around one-third of claimants were held not to be eligible to migrate onto ESA2.However, that trial was conducted using a less harsh test of limited capability for work than the one now in force and so it is likely that disallowance rates will be higher.
Those figures suggest there may already be around 20,000 people who have lost their entitlements to the older benefits for the sick and have failed to qualify for migration onto ESA. Many of those will have appealed against the decision ending their IB, IS or SDA. ESA is paid at assessment rate pending these appeals.
Claimants and advisers may have initially argued in such appeals that the claimant does in fact meet the required threshold of limited capability. However, it is arguable that many of the decisions made so far in the migration to ESA are unlawful on an altogether different basis.
What is a conversion decision?
The decisions made about whether a claimant qualifies for ‘conversion’ of her/his existing award into an award of ESA (ie, can be migrated) have an interesting feature: they end awards of IS, IB or SDA on the basis, not that the claimant has ceased to meet the conditions of entitlement, but rather because s/he has been assessed as not meeting (for an unsuccessful claimant) the conditions of entitlement for a completely different benefit (ESA) and converting (for a successful claimant) an existing award into an award of ESA without the need for a claim for that benefit.
The groundwork for the detailed legislation which allows such a feature to exist was tucked away in a Schedule to the Welfare Reform Act 2007 (WRA).3This allowed for the conversion of existing awards into ESA awards and the termination of the older benefits where conversion conditions were not met. The detailed rules allowing for the making of decisions are set out in the Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010 No.1907.
Requirement for notice
A conversion decision (whether ending entitlement to IS, IB or SDA on the basis the claimant does not have limited capability for work, or converting the award into ESA on the basis that s/he does) can only be made in respect of a ‘notified person’4 – ie, someone who has received a notice of the sort described in theRegulations.5 The rules explain clearly what the information the notice must contain:6
‘(a) that an existing award is to be converted into an award of an employment and support allowance if certain conditions are satisfied;
(b) that, if those conditions are not satisfied, theexisting award will not be converted and will terminate by virtue of these Regulations;
(c) of the requirements that must be met in order to satisfy those conditions.’
Potential problems with the notices
So far, it appears that the notices do not seem to meet those requirements. The text of notices seen by CPAG fail to inform claimants that their IB, SDA or IS on grounds of disability will cease if they do not meet the conditions for conversion to ESA – ie, the notice does not meet the rule in reg 4(2)(b). What the notices actually say is:
‘WHAT HAPPENS IF I AM NOT ENTITLED TO EMPLOYMENT AND SUPPORT ALLOWANCE? We will call you to discuss what your benefit options are [….] You may be entitled to Jobseeker’s Allowance, Income Support for other reasons or Pension Credit […] we will get in touch with you to discuss what your benefit options are at the appropriate time.’
Claimants reading this are not put on notice that if they fail to qualify for conversion their existing awards will end.
Similarly, the notices do not meet the requirement to explain what criteria must be satisfied if a claimant is to be entitled to have her/his award converted to an ESA award – ie, s/he does not meet the rule in reg 4(2)(c). All the notice actually seems to say that bears on whether a particular claimant will qualify for conversion or not is:
‘To decide if you are entitled to Employment and Support Allowance we need to assess and understand how your illness and disability affects the amount and type of work you could do.’
That does not explain the degree to which a claimant’s illness/disability must affect the amount and type of work s/he can do in order to qualify for conversion. It simply implies that a knowledge and understanding of this is needed by the DWP to enable it to decide about conversion. A claimant reading this would not be able to tell whether s/he would be more likely to qualify for conversion if her/his illness/disability severely limited her/his ability to work or if the limitations were mild. CPAG believes that the minimum standard the notice must meet to comply with this rule is to state that a claimant must be assessed as having limited capability for work as defined for the purposes of ESA to qualify for conversion. Ideally, the DWP would also provide details of the test of limited capability for work so that a claimant can be in a position to put forward relevant information about how s/he satisfies the test.
Possible consequences of these problems
Where a claimant has only received a notice that is inadequate in the way described above, it is arguable that the decision is unlawful. This is because there is no power to make a conversion decision in respect of anyone other than a notified person. If that is the correct position, then the ending of the existing awards which such claimants were receiving has no legal basis. All such claimants, should still be receiving IB, IS or SDA.
There is extensive caselaw on what the consequences should be in cases where the law requires a notice requirement to be met on the part of the state before it can take a further step (such as the conversion decision in the present discussion) where the notice requirement is not met. The question in such cases is whether the failure to give the correct notice then invalidates (sometimes referred to as ‘voids’ or ‘renders null’) the subsequent step.
Much of that caselaw is concerned with the requirement, in various rules, to give notice of rights of appeal when issuing a decision. The general rule in such cases is that if a person has not been given such notice but nonetheless appeals, then nothing should turn on the failure to give the notice (as the person has plainly not been prejudiced by the failure).7Some caselaw is also concerned with cases where rules are designed to ensure a person is informed of steps s/he is required to take in order to avoid certain consequences (in a social security context, see the cases concerning the effect on the power to terminate benefit for failure to comply with an information request where a claimant has not received adequate notice of what s/he must do to be regarded as complying with the information request).8
It is difficult to be certain how that caselaw applies to the situation where the failure does not relate to giving notice of appeal or informing a claimant of some step s/he must take but rather to explaining to a claimant the legal tests s/he is due to be subjected to. However, it appears that the purpose of the requirement that a claimant be informed of the conditions that must be met to qualify for conversion, and that entitlement will cease if those conditions are not met, is to ensure that a claimant is aware of which aspects of the way her/his health problems limit her/his ability to work are relevant to the forthcoming test s/he is to be put through – and also so s/he knows that the result is crucial to continued entitlement. Given that, it is likely that this caselaw is of relevance here also.
That raises the question of whether a claimant seeking to have her/his old benefit restored on the basis s/he was not given proper notice is required to show that s/he has been prejudiced by that failure in order to succeed.
The Court of Appeal, in joined cases R (Jeyeanthan) v SSHD and SSHD v Ravichandran  EWCA 3010, considered whether the Home Secretary should be disallowed from bringing appeals where his required notice to the tribunal did not contain a mandatory declaration of truth. The Court ruled that he should not. Part of that reasoning included the fact that the appellants had nonetheless participated in the appeals and, in any event, the tribunal could waive the requirement. However, the Court highlighted that there are some cases of failure to comply with a notice requirement where it is not necessary for a person, who seeks to challenge subsequent actions on the basis no notice was given, to show that s/he has been prejudiced by the failure to provide notice.9
The Court went on to set out the questions which are likely to arise where a tribunal has to decide such cases. These can be expressed as follows:
- Is strict compliance with the requirement what is needed or will it be enough if there has been substantial compliance? If so, has there been substantial compliance?
- Is the requirement for compliance with a notice requirement capable of being waived? If so, has it been waived?
- If the requirement for compliance either cannot or has not been waived, what are the consequences of non-compliance?
In the context of the inadequacies of the notices sent in ESA conversion cases, regardless of whether strict or substantial compliance with the notice requirement is called for, it is arguable that, in any event, the letters do not even achieve substantial compliance: the letters do not meet the rule that they inform claimants that their benefit will stop if they do not qualify for conversion, or indeed what conditions must be met to qualify for conversion. It has been held that a ‘total failure to comply with a significant part of a requirement cannot in any circumstances be regarded as “substantial compliance”.’10
It is also clear that there is no rule allowing the requirement for notice in conversion cases to be waived. Furthermore, the judgment emphasises that, when trying to determine the consequences of non-compliance with a notice requirement, the tribunal is seeking to determine, from an analysis of the legislative scheme as a whole, what the drafter of the rules intended to be the consequences of a failure to comply with the notice requirement. With regard to that, note that within social security law, it is not possible to take into account circumstances not obtained at the time of the decision11 (in other words, attempts by the Secretary of State to give proper notice after making a conversion decision are probably futile). It is also arguable that the drafter only intended to allow a conversion decision to be made in respect of a notified person: the scheme could have been designed in a way such that the power to make a conversion decision arose more generally, but it was not.
All those factors point to the consequences of non-compliance being to invalidate the subsequent decision: without the need to show the claimant has in fact been prejudiced by the failure.
The requirement to show a claimant has been prejudiced can be seen to serve a function where the failure in notice relates to a failure to notify appeal rights or failure to inform the claimant s/he must perform a certain act to avoid specified consequences. Such a function of the requirement for notice is harder to discern with regard to conversion notices.
Nonetheless, it is possible that it will be decided that it is necessary for a claimant to show in addition that s/he has been prejudiced by the inadequate notice. Therefore, claimants are advised to explain the effect of the inadequate notice on them – eg, might they have completed the ESA50 differently had they known what the test was? Note also that claimants may have received phone calls from the DWP in which they are given more information about the conversion process, and it may be that what is said in those conversations has a bearing on what should be the outcome in particular cases.
What about claimants who could qualify for conversion?
There are issues in cases where a claimant has a solid argument that s/he does qualify for conversion and, in particular, where ESA would be more than the old benefit. For example, consider a single claimant of IS, not receiving DLA, who has a strong case for limited capability for work and to be placed in the support group; ESA is worth more to her/him as the support component is slightly higher than the disability premium on IS – and also s/he would received an enhanced disability premium if placed in the support group.
It is possible that winning the appeal on the basis of the notice point discussed in this article would not be the best result for such a claimant: a victory on the notice point does not give the claimant ESA but rather restores the lost award of IS. In such cases, advisers could suggest that, as the claimant consents to the appeal proceeding on the substantive issue, notwithstanding lack of proper notice, it would be unjust to follow that course – the notice requirements are there to protect claimants and failure to follow them should not result in a claimant being disadvantaged. Note, however, there is also a risk that if the argument is not run and the appeal fails on the more conventional ground of limited capability for work (or the claimant in the example above is not assessed as in the support group), then an opportunity to put an argument that could have won the case in some measure will have been lost. In the end, it is for advisers to consider the issues and possible risks with their clients and decide how to put the case in the best way.
As stated, the consequences of victory on the basis of inadequate notice in these cases is possibly that the claimant’s award of IS on grounds of disability, IB or SDA should be restored. Any ESA paid while the appeal was pursued could be treated as paid on account of the benefit that should have been received, and the claimant should receive the difference between the ESA and what s/he should have had in arrears.
Jeyeanthan suggests that where a person who has not been properly notified actually benefits from the decision which is subsequently taken, it will be rare that the failure to give the correct notice should deprive that person of the benefit s/he has received.12 However, it is not clear the example discussed there would translate into an answer to the problem for claimants in this case.
What about those already converted?
It does not seem that insisting such decisions were invalid in all cases would result in any detriment to those whose awards were successfully converted to ESA.
- The Secretary of State could simply send such people a new and compliant notice and remake the decision, using the same evidence as before, so as to award ESA only from after the date of notice.
- In a few cases, an overpayment will occur where more ESA than the old benefit has been paid, but it is difficult to see how that would be recoverable.
- In other cases, where the new benefit is less, claimants are unlikely to lose out as they will have been receiving transitional additions.
The fact that such claimants would not lose out avoids any unfortunate consequences of holding their notices invalid, and that too is a reason to suggest that it would not be unfair to insist that failure to send a proper notice invalidates the subsequent decision in all cases.
Practicalities of bringing an appeal on this basis
Advisers may wish to ensure that claimants who have not had their award converted are advised to make appeals against the conversion decision (if they have not already done so). If the claimant has not already appealed and is late, see p1179 of CPAG’s Welfare Benefits and Tax Credits Handbook for advice. Appeals could be filed even if the claimant clearly would not have obtained 15 points under the limited capability for work assessment: if no conversion decision could lawfully be made, it does not matter what points a claimant may have scored in the event that one was made.
Furthermore, for ongoing appeals, advisers should alert the tribunal to the problem with the notice.
It is by no means certain that every tribunal will accept this argument in every case. Therefore, advisers must ensure that, if there is a case that a claimant may have had limited capability for work at the time the decision was made, this case is put to the tribunal. That will mean preparing for the appeal in the usual way (taking detailed instructions from the claimant about her/his problems relevant to the activities assessed in the limited capability for work test, obtaining evidence from doctors and finding any flaws in the DWP’s medical report).
It is possible that the DWP could seek to appeal to the Upper Tribunal against a decision allowing an appeal on the notice point and suspend payment of the old award pending that appeal. If that happens, CPAG can provide further advice both on the current payment and defending the decision before the Upper Tribunal.
It should also be noted that the DWP may redesign the notices so that they are compliant with the Regulations. If this is done, conversion decisions made for those who have been notified properly will not suffer from the defect outlined here – but such claimants will have been given proper information about what is going to happen to the benefit they have had for a number of years and will go in to their work capability assessments equipped with the knowledge, not just of the nature of the test they must meet to qualify for ESA, but also of what will happen if they do not satisfy that test.
The following update was added on 06/06/2012:
Update: some further issues
Since writing this article, CPAG are now aware that a number of cases, using the argument presented here, have succeeded at the First-tier Tribunal. The DWP do not appear to have appealed against these decisions and at least in some cases have put the old IS or IB back into payment.
We have seen what appears to be a standard response to the argument from the DWP. This standard response and a sample reply from CPAG have now been added to the documents at the top right of this page.
Please be aware that welfare rights law and guidance change frequently. Therefore older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.
- 1. Reg 1(4) Employment Support Allowance (Transitional Provisions) Regulations 2008 No.795 (ESA(TP) Regs)
- 2. Para 153 of Work and Pensions Committee report: The Role of Incapacity Benefit Reassessment in Helping Claimants into Employment, The Stationery Office, July 2011
- 3. Section 29 and Schedule 4 para 7 ESA(TP) Regs
- 4. Reg 5(1) Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010 No.1907 (ESA(TPHB&CTB)(EA)(No.2) Regs)
- 5. Reg 4(2) ESA(TPHB&CTB)(EA)(No.2) Regs
- 6. Reg 4(3) ESA(TPHB&CTB)(EA)(No.2) Regs
- 7. See, for example in a social security context, Godwin v Rossendale BC  EWCA Civ 726 and LB Haringey v Awaritefe  EWCA Civ 1491
- 8. CH/2995/2006, AA v LB Hounslow  UKUT 13 (AAC), R(H) 4/08, GZ v SSWP  UKUT 93 (AAC)
- 9. R (Jeyeanthan) v SSHD and SSHD v Ravichandran  EWCA 3010 at para 10
- 10. London & Clydesdale Estates Ltd v Aberdeen District Council  1 WLR 182 at pp188–90
- 11. s12(8)(b) Social Security Act 1998
- 12. Jeyeanthan at para 13