Nhs Injury Benefit Scheme · CAS-44445-W7S6

CAS-44445-W7S6

Ombudsman’s Determination Applicant Mr N

Scheme NHS Injury Benefit Scheme (the Scheme)

Respondent NHS Business Services Authority (NHS BSA)

Outcome

Complaint summary

Background information, including submissions from the parties

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“£12,440.15 30/01/2006 to 29/01/2007

£14,333.70 30/01/2005 to 29/01/2006

£13,121.12 20/01/2004 to 29/01/2005.”

On 6 August 2019, Mr N provided to NHS BSA, the letter from his solicitors dated 18 February 2010, and the CRU 1 data from the DWP regarding his state benefits. Mr N further provided to NHS BSA a letter from his solicitors, dated 26 September 2019, that said:

“we were not involved in the CRU payments but we believe that the remaining sums due from the £150,000 constituted the sum paid to the CRU.”

1 Compensation Recovery Unit at the Department for Work and Pensions

2 CAS-44445-W7S6 On 29 August 2019, Mr N telephoned NHS BSA providing details of his pensions held with other providers and asked whether these would affect his PIB award. He also requested the information on how NHS BSA had calculated the damages annuity.

On 10 September 2019, NHS BSA replied to Mr N in writing with the details of his PIB calculation. It also said that, as he did not pay contributions to the other pension schemes while being in NHS employment, those would not be accountable against his PIB award when he started claiming those pensions. The relevant sections of the letter are set out in Appendix 3.

On 26 September 2019, Mr N’s solicitors wrote to NHS BSA to confirm what Mr N was paid in respect of his settlement. Extracts from the letter are set out in Appendix 4.

In October 2019, Mr N emailed the Employer enquiring what his annual salary was as at the date of his RTA, which was 31 October 2005. On 18 October 2019, the Employer replied to Mr N saying his annual salary on the above date was “£14,560.56 full time.”

In November 2019, NHS BSA paid Mr N’s PIB and arrears. His PIB award was backdated to the last day of employment, 29 January 2007. Extracts from NHS BSA’ memorandum dated 11 November 2019 showing a breakdown of its PIB calculation is set out in Appendix 5.

Dissatisfied with the PIB he was awarded, Mr N appealed under stage two of the IDRP. In summary he said:-

• He believed NHS BSA had used an incorrect lower pensionable pay when calculating his PIB. He wanted a figure of £14,560.56.

• He wanted to know whether NHS BSA would revise his PIB appropriately should his Employment and Support Allowance (ESA) cease.

• He had provided evidence that he had received £17,000 to £20,000 compensation and wanted NHS BSA to revise his PIB accordingly.

• He wanted NHS BSA to accept he had paid £24,457.27 to DWP in respect of payments due to its CRU. Therefore, NHS BSA should revise his PIB to take account of this.

On 3 January 2020, NHS BSA sent Mr N a response under stage two of the IDRP. In summary it said:-

• Its understanding was that his point regarding ESA had been resolved. It had resolved this issue before issuing the stage two decision. NHS BSA had acted upon his decision to cease his claim for contribution based ESA and had revised his PIB accordingly.

3 CAS-44445-W7S6 • He was awarded £150,000 in compensation on 8 February 2010. The award of compensation was paid “globally” which meant there was no formal breakdown in the court documents. The Regulations provided that any damages or compensation received in respect of the accepted injury must be taken into account when calculating a claimant’s PIB award.

• His solicitor was not able to provide a clearly delineated formal breakdown of the global figure.

• His PIB award included a reduction called ‘damages annuity’. This reduction was NHS BSA’s method of ensuring the compensation received for the RTA was taken account of and there was no duplication of payment of compensation in respect of the same injury.

• The damages annuity was calculated using an accountable amount of £101,465.78. The figure of £101,465.78 was £150,000 minus the CRU payment of £22,534.22 and minus £26,000 which evidence showed was paid in respect of treatment, pain and suffering.

• It referred to the relevant regulations applicable in Mr N’s case. The Regulations covered (i) the accountability of damages settlement under Regulation 17; (ii) the calculation of his average remuneration pay for PIB purposes under Regulation 4(2); (iii) definitions of average remuneration and pensionable pay under Section 2C(1)(d) and Part C1(6) respectively.

• The figure of £14,333.70 was provided by the Employer who confirmed this was Mr N’s highest pensionable pay, which Mr N received in 2005/2006 tax year. This year was used because his pensionable pay was lower in the 2004/2005 and 2006/2007 tax years, in accordance with Part C1(6).

• The NHS PS Regulations provided that when calculating pension benefits the whole time equivalent pensionable pay should be used. This was why there was a difference in pay in pension documents compared to PIB documents.

• Mr N’ evidence showed his annual salary was £14,560.56. But annual salary was not the same as pensionable pay for the purposes of calculating his PIB. NHS BSA relied on the information it received from the Employer regarding the pay figure as it did not have access to this information.

• It advised Mr N several times to contact the Employer regarding his issue with his pay figure.

• It was satisfied Mr N’s average remuneration had been calculated in accordance with Regulation 2C(1).

• It referred to the solicitor’s letter of 29 September 2019, which confirmed Mr N received £150,000 in respect of his RTA; £17,000 to £20,000 in respect of the injuries. NHS BSA understood this letter to be confirmation that £20,000 of his

4 CAS-44445-W7S6 settlement was paid solely in respect of pain and suffering and in respect of financial losses.

• NHS BSA could use its discretion to only take into account the financial elements, that is loss of earnings, should a clearly delineated breakdown be provided. It used its discretion to offset the sum of £6,000 which Mr N’s solicitor said was paid directly for treatment, and £20,000 which was the maximum amount that the solicitor provided was paid directly for pain and suffering. It was satisfied that that was a reasonable way of administering his damages.

• It was not satisfied that the solicitor had provided sufficient evidence to show Mr N had paid £24,457.27 to the CRU. The solicitor’s letter of 26 September 2019 said that the solicitor was not involved in the CRU payments. It referred to Mr N’s solicitor’s letter dated 18 February 2010 which explained the sum of £22,534.22 had been deducted from the damages settlement in respect of CRU payments.

• It was satisfied that the 18 February 2010 letter was “indisputable evidence” that he paid £22,534.22. However, it was open to revising his PIB award should Mr N provide a letter from the DWP post-dating the compensation settlement to prove £24,457.27 was paid to CRU.

On 24 January 2020, NHS BSA wrote to Mr N informing him that an overpayment of £795.15 had occurred regarding his PIB. This error was due to an incorrect rate applied to his PIB on 11 December 2019, and therefore it had to be recalculated. It asked Mr N to repay the £795.15 to the bank of which details were enclosed.

Dissatisfied that the overpayment had occurred, Mr N provided further comments to NHS BSA. In his submissions, he said this overpayment had caused him considerable distress and inconvenience. He agreed he could repay the overpayment, and this was to be taken on 8 March 2020, but NHS BSA failed to do so.

On 18 March 2020, the Chief Executive Officer of NHS BSA apologised to Mr N for the confusion and distress that had been caused regarding the overpayment.

On 19 May 2020, NHS BSA sent Mr N a revised stage two IDRP decision addressing the overpayment. It said that unfortunately, although Mr N requested the deduction to be made from the next payment on 8 March 2020, the payroll for March had already been completed. The overpayment was recovered on 8 April 2020. NHS BSA said it acted quickly in recognising and correcting the error therefore offered its apologies and reimbursed Mr N “for any costs incurred in repaying the overpayment, including taxi fare.”

There was further communication between Mr N and NHS BSA between May and July 2020, regarding different matters unrelated to this complaint. As a result of this, NHS BSA informed Mr N that it considered it had fully addressed his complaint and restricted further communication with him regarding the complaint.

5 CAS-44445-W7S6 23. Mr N’s position:-

• He provided the Pensions Ombudsman’s Office (TPO) with various documents, such as payslips, and his P45 which he says shows a higher salary than the salary NHS BSA used to calculate his PIB.

• He provided a copy a letter from JobCentre Plus dated 4 June 2010, that shows he made a payment of £24,457.27 to the CRU. Mr N said that due to his poor health, treatments and worry, he was unable to obtain the letter earlier.

• The overpayment caused him distress and inconvenience.

• He was unhappy that NHS BSA had stopped communication with him.

• He made several comments about the Employer’s actions regarding his pensionable pay, not informing him earlier of PIB application and the reason for leaving employment.

NHS BSA’s position:-

• Prior to the complaint being referred to TPO, it had not had sight of the letter dated 4 June 2010.

• After reviewing the letter, it has now accepted that Mr N made a payment of £24,457.27 to CRU and it revised his PIB. NHS BSA cannot be held responsible for not having seen the letter of 4 June 2010 previously, as it can only act on the information provided to it by Mr N.

• It recalculated the PIB correctly, however it incorrectly told the Adjudicator that his PIB would increase by £60 per month. It later confirmed the £60 increase is not per month but per annum.

• It paid Mr N arrears of £505.76 backdated to 8 February 2010, the date he received compensation.

• It apologised for this oversight and explained that this was due to the team incorrectly estimating manually that the increase would be applied monthly. However, when the calculator processed the increase along with his PIB it was identified that his PIB award would be increased by £60 per annum and not £60 per month.

• NHS BSA will only correspond with Mr N through TPO, as it had previously explained to Mr N that it had already addressed all his points under his complaint.

In response to the points made by NHS BSA, Mr N said:-

• When he heard NHS BSA made an error with the revised PIB figures, he stopped eating, his ill health was aggravated by worry and stress.

6 CAS-44445-W7S6 • He wants his arrears to be backdated to his last day of employment which was 29 January 2007 and not 8 February 2010.

Adjudicator’s Opinion

“pensionable pay in respect of the member's last year of pensionable employment, ending on the date the member ceases to be in such employment, or dies, whichever occurs first, except—

(a) if pensionable pay was greater in either or both of the 2 consecutive years immediately preceding the last year, “final year's pensionable pay” means pensionable pay in respect of the year immediately preceding the last year or, if greater, pensionable pay in respect of the first of those 2 consecutive years”

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Mr N did not accept the Adjudicator’s Opinion and in summary said:-

Had the Employer provided him with relevant information sooner he could have applied for PIB in 2007 and not in 2019. He believes the Employer failed and misled him.

He referred to various documents, P45s, and statements, which he said show a higher pay figure than the pay figure NHS BSA has used to calculate his PIB. On that basis, he wants NHS BSA to revise his PIB.

He referred to his own costs incurred in relation to treatment, and travel before he received compensation which was in excess of £100,000. NHS BSA is using £62,000 of his own money against him to lower his pension.

10 CAS-44445-W7S6 He referred to his pension contributions of £958.56 which equates to 6% of his pensionable pay of £15,975.82. This figure should have been used by NHS BSA.

In response to the Adjudicator’s Opinion NHS BSA said:-

It did not accept the Adjudicator’s recommendation that it should pay Mr N £500 for the significant distress and inconvenience caused.

It believed that the errors mentioned by the Adjudicator are minor and were rectified quickly. Considering “the distress caused by Mr N to employees at NHS BSA including threats of violence and intimidation” it is difficult to justify £500.

However, it respects the Adjudicator’s view and will wait for the Ombudsman’s Determination in this matter.

As neither Mr N nor NHS BSA accepted the Adjudicator’s Opinion, the complaint was passed to me to consider. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr N and also NHS BSA.

Ombudsman’s decision

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I partly uphold Mr N’s complaint.

Directions

Anthony Arter

Pensions Ombudsman 18 November 2021

12 CAS-44445-W7S6 Appendix 1 NHS Injury Benefit Regulations 1995 (as amended)

Regulation 17 states:

“(1) The Secretary of State shall take into account against the benefits provided in these Regulations any damages or compensation recovered by any person in respect of the injury or disease or in respect of the death of a person to whom these Regulations apply, and such benefits may be withheld or reduced accordingly.”

Regulation 4(2)

“Where a person to whom regulation 3(1) applies ceases to be employed before 31st March 2018 as such a person by reason of the injury or disease and no allowance or lump sum, other than an allowance under paragraph (5) or (5A), has been paid under these Regulations in consequence of the injury or disease, there shall be payable, from the date of cessation of employment, an annual allowance of the amount, if any, which when added to the value, expressed as an annual amount, of any of the pensions and benefits specified in paragraph (6) will provide an income of the percentage of his average remuneration shown in whichever column of the table hereunder is appropriate to his service in relation to the degree by which his earning ability is permanently reduced at the date that person ceases that employment.”

“Average Remuneration” is defined in Section 2C(1)(d) and states:

“2C.—(1) In these Regulations, “average remuneration” means—

(d) in relation to a person other than a practitioner to whom the 1995 Regulations apply, such amount as would be or would have been that person’s final year’s pensionable pay under regulation C1(6) of those Regulations”

NHS Pensions Scheme Regulations 1995 (as amended)

Part C1(6) states:

“Pensionable Pay, Pensionable Service and Qualifying Service

C1 Meaning of “pensionable pay” and “final year's pensionable pay”

(6) Subject to paragraph (6A), in these Regulations, “final year's pensionable pay” means pensionable pay in respect of the member's last year of pensionable employment, ending on the date the member ceases to be in such employment, or dies, whichever occurs first, except—

(a) if pensionable pay was greater in either or both of the 2 consecutive years immediately preceding the last year, “final year's pensionable pay” means

13 CAS-44445-W7S6 pensionable pay in respect of the year immediately preceding the last year or, if greater, pensionable pay in respect of the first of those 2 consecutive years”

14 CAS-44445-W7S6 Appendix 2 Extracts of the solicitors’ letter dated 18 February 2010.

“To summarise if I may the terms of the settlement, you are to receive a net sum of £118,465.78 which is the agreed sum of £150,000.00 less the amount due to the DWP in respect of benefits received which total as at 8th February 2010 in the sum of £22,534.22.

…

In addition, also to be deducted from the sum of £150,000.00 are the interim payments which are stated to have been made. This amounts to a sum of £9,000.00. The interim payments were apparently sent on the following date:

5th May 2006- £500.00

20th April 2006- £500.00

1st October 2007- £2,000.00

There is also a further payment which is held by your Trust in the sum of £6,000.00 which is in respect of treatment.

…

It was agreed that the payment which the Defendants would make in the net sum of £118,465.78 will be paid to this firm in order that there will be no difficulties in relation to the Trust which I understand is presently being operated. As you know I have only been dealing with your case since recently, and therefore I have no details as to the actual Trust Fund but I suggest you liaise with those who administer the Fund so that they can assist you in dealing with the relevant monies that are forthcoming.”

15 CAS-44445-W7S6 Appendix 3 NHS BSA’s letter to Mr N dated 10 September 2019 said:

“I can confirm once we obtained details of the settlement and determined the total figure accountable, we first need to calculate the amount of NHS Injury benefit due up to the date of the settlement. In your case, it was decided to account for £127,465.78. Monies up to the date of settlement include a lump sum of £7,415.07 and an allowance of £39,732.77. Therefore meaning a total of £47,147.84 has been withheld. The remaining damages of £80,317.94 was then converted into a damages annuity figure. This figure is reached by dividing the sum of £80,317.94 by the factor advised by the Government Actuary’s Department (GAD). To gain the relevant factor we use gender and then age applicable at the time of the settlement. In your case the factor was 52.34, we then revert the amount back to your last day of service.

…

I note you have sent in further information regarding your settlement and have requested that it is reduced by £12,977.50, your correspondence has been logged and we will contact you again regarding our decision in due course.”

16 CAS-44445-W7S6 Appendix 4 The solicitor’s letter to NHS BSA dated 26 September 2019 said:

“We can confirm that Mr N’s claim consisted of a claim for various losses including care, past services, past loss of earnings and medical costs.

In addition there was a claim for future loss including future care and future lost earnings, services equipment and rehabilitation costs and medical costs.

This matter was due for Trial on the 10th and 11th February 2021 and on the 8th February there was an Appeal Hearing where after a meeting between the Claimant and his Advisors and the Advisors of the Defendant, a settlement was reached.

We can confirm that the settlement agreed was a sum of £150,000.00 and a sum of £7,076.95 was paid to a Trust Fund set up on his behalf on the 28th August 2009 and a further sum of £118,465.78 on the 26th February 2010.

We were not involved in the Compensation Recovery Unit payments but we believe the remaining sums due from the £150,000.00 constituted the sum paid to the CRU.

The figure of £150,000.00 was not broken down in terms of what each sum was for each specific item. It was a generic offer for all heads of Mr N’s claim, and therefore it is not possible, to specifically attribute what part of that sum was specific to the specific injury claim as opposed to financial and other losses.

We can however advise that the assessment of the value that was likely to have been made in respect of Mr N’s injuries would have been within the bracket of £17,000.00 to £20,000.00 and therefore anything over and above that sum of £20,000.00 is likely to have been in respect of his claim for financial and other losses arising out of his injury claim.”

17 CAS-44445-W7S6 Appendix 5 NHS Injury Benefits Scheme Memo dated 11 November 2019 stated:

“Damages settlement

Date of settlement 08/02/2010

Last day of Employment 29/01/2007

Amount accountable £101,465.78 (127,465.78-26,000.00)

Our benefit

Lump sum withheld £7,415.07

PIB allowance withheld to Feb 2010 £29,666.86

Total £37,081.10

To annuitise £101,465.78

£37,081.10-

Total £64,384.68

Annuity Value

Male Age 37 Factor 52.34

£64384.68/factor= £1,230.12

Reverse PI= 1.0975 =£1,120.84”

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