Secretary of State for Work and Pensions v NC (Employment and Support Allowance): [2024] UKUT 251 (AAC)
Upper Tribunal Administrative Appeals Chamber decision by Judge Church on 20 August 2024
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Judicial Summary
This appeal is about how pension contributions by way of ‘salary sacrifice’ should be treated for the purposes of the conditions of eligibility for Employment and Support Allowance under the Employment and Support Allowance Regulations 2008 (the “ESA Regulations”).
If the ‘salary sacrifice’ amounts formed part of the claimant’s earnings for the purposes of regulation 96 of the ESA Regulations the claimant’s earnings exceeded the limit for ‘permitted work’, disentitling from ESA for the relevant periods, but if they were excluded from his earnings under regulation 95(2)(a) as a ‘payment in kind’ his earnings would be below the permitted limit and he would be entitled to ESA.
Judge Church decides, following R(CS) 9/08, that such an arrangement involved the employee agreeing contractually to forego an amount of cash pay to which he would, but for that agreement, be entitled in return for the employer’s agreement to make a payment in kind, namely an employer’s contribution to the employee’s occupational pension. The amount ‘sacrificed’ does not form part of the employee’s earnings. The decision of the First-tier Tribunal involved no material error of law and was upheld. followed.