The claimant, who was in receipt of tax credits as a single claimant, submitted an online claim for universal credit. Her claim was accepted online and an electronic notification, known as a “stop notice”, was sent to the decision-maker at HM Revenue and Customs, which was responsible for tax credits. Subsequently the Secretary of State for Work and Pensions, who was responsible for universal credit, notified the claimant that she was not entitled to universal credit as she did not have a right to reside in Great Britain and thus, by virtue of regulation 9 of the Universal Credit Regulations 2013 made under section 4(5) of the 1012 Act, was not to be treated as fulfilling the basic condition of being “in Great Britain” under section 4(1)(c) of the Welfare Reform Act 2012. As recorded in a further decision of the revenue the claimant’s award of tax credits came to an end. The First-tier Tribunal dismissed the claimant’s appeal against that decision. On the claimant’s further appeal, the central issue concerned the correct interpretation of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, pursuant to which, as part of the transition from “legacy” benefits to the system of universal credit, the claimant’s entitlement to tax credits would cease where she made a claim for universal credit (regulation 8(1)(a)) and the Secretary of State was satisfied that she met the “basic conditions specified in section 4(1)(a) to (d)” of the 2012 Act (regulation 8(1)(b)). The question was whether the “basic conditions” were to be read as they stood for that purpose or whether, as the claimant contended, they were to be read subject to qualifications set out in regulations made under the 2012 Act which applied to govern entitlement. Both the revenue and the Secretary of State contended that the only issue on the appeal was whether the tax credit decision-maker had received a stop notice.
On the claimant’s appeal—
Held, appeal dismissed. (1) The effect of regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014, if it applied, was to terminate the claimant’s existing award of tax credit on the day before the effective date of the universal credit decision under regulation 8(2). It was thus regulation 8 that operated to terminate the tax credit award, not the stop notice. The stop notice was purely an administrative step conveying information that a determination had been made, to ensure co-ordination between the departments involved or at least their computer systems, and was not an adjudicative step or part of an adjudication process. As the tax credit award was only terminated if the conditions in regulation 8 had been satisfied, the appeal turned on what the regulation required and whether it had been properly satisfied (paras 19, 20).
(2) As regulation 8 of the 2014 Regulations was concerned with the basic conditions “specified in” section 4(1)(a) to (d), it excluded cases in which a person was treated as not being in Great Britain under section 4(5)(a), or in other words cases in which section 4(1)(c) was qualified by deeming provisions. Accordingly, for the purposes of regulation 8 the words of section 4(1)(c) of the 2012 Act were freestanding and had to be read without regard to the qualifying regulations. It was notable that without regulation 8(1)(b) of the 2014 Regulations cases would be transferred from the old regime (tax credit) to the new regime (universal credit) at the moment that a claim was made, regardless of the outcome of the claim, and regulation 8(1)(b) thus provided a qualification which operated to the benefit of claimants, by providing for claims that did not meet the most basic conditions of universal credit to have no effect on the tax credit award. However, consistently with the way that transitional provisions operated, by picking circumstances that existed at a moment in time and stipulated the changes that happened thereafter, regulation 8(1) focused on the time when the claim was made and did not have the effect of aligning the operation of regulation 8 with the outcome of the claim for universal credit. In particular, it took no account of the financial conditions for entitlement which had to be met and did not include the basic condition in section 4(1)(e) of the 2012 Act regarding a claimant commitment, leaving open the possibility that the claimant might be refused an award despite satisfying the other basic conditions, however they were defined. Where regulation 8 applied, the effect was to terminate the award of tax credit on the day before the decision on universal credit took effect (which would usually be the date of claim), regardless of whether the Secretary of State made an award of universal credit or ultimately refused the claim, and it would thus be neither surprising nor anomalous if the claimant were left with neither her tax credit nor an award of universal credit (paras 1, 21–23, 27–32, 35, 40).
(3) By virtue of section 2 of the Social Security Act 1998 the Secretary of State was entitled to rely on a computer program to identify cases in which the transitional condition was satisfied. What the computer produced was not a decision or an assessment, but it was a “determination” within the meaning of section 2 (para 39).
The appeal was determined on written submissions.