14th August 2017 Gender reassignment and the state pension—fair play for all?

The significance of the prospective effect of gender recognition certificates when claiming a state pension after gender reassignment was underlined in the recent case of Secretary of State for Work and Pensions v HY and another. Partner Anne-Marie Winton explores the decision.

Original news

Secretary of State for Work and Pensions v HY and another [2017] UKUT 303 (AAC)

The Upper Tribunal allowed the Secretary of State’s appeals against two decisions of the First-tier Tribunal (FTT) concerning the entitlement of the respondents, who had been male at birth but had undergone gender reassignment surgery, to claim their retirement pensions at the state pensionable age for women, even though they did not have a gender recognition certificate under the Gender Recognition Act 2004 (GRA 2004).

What was the background to the case?

The state pensionable age for women is currently lower than for men (though the difference is being levelled up over time, and will be equalised at 65 for men and women by November 2018, with planned increases for both sexes thereafter).

State pension does not in most cases come into payment automatically at state pensionable age—it has to be claimed. This can be done up to four months in advance, and pension can be backdated for a maximum of 12 months but not to a date before reaching state pensionable age. State pension can also be deferred in order to receive an increased amount, but starting from a later date—it is increased on the assumption that it will, due to the deferral in payment, be for a shorter period than if it had commenced at state pensionable age.

The first respondent had been living as a woman since the 1980s, and underwent gender reassignment surgery in 1986. She claimed a retirement pension to commence in July 2014, when she reached 62, the state pensionable age at that time for a woman. The appellant refused her claim on the basis that she did not have a gender recognition certificate so, as a man, was not yet entitled to a pension. The first respondent appealed, arguing that since 1982 she had been treated as female by HM Revenue and Customs when paying tax and national insurance contributions, and was also recorded as a woman in her passport. She received a gender recognition certificate in February 2015, and claimed again for her pension which was put into payment from that date. Her appeal sought to reinstate her pension for the period from July 2014 to February 2015.

The second respondent started living as a woman in 1983, had gender reassignment surgery in 1988 and obtained a gender recognition certificate in February 2014, by which time she was over 65. In May 2014 she claimed backdated state pension from May 2008, her 60th birthday, the pensionable age for women at that date. The appellant refused her application, and her pension was put into payment from her 65th birthday, the pensionable age for men.

Both respondents argued that they had been the subject of discriminatory treatment.

The FTT held that the first respondent had been entitled to receive the pension from when she had reached state pensionable age as a woman, and that while the second respondent was not entitled to a pension from her 60th birthday, the amount of the pension to which she was entitled on her 65th birthday should reflect a deferment of entitlement to a pension from the earlier birthday.

The appellant appealed to the Upper Tribunal.

What did the Upper Tribunal decide, and why?

Firstly, the Upper Tribunal considered whether there was any reason why the respondents could not by law apply for a gender recognition certificate before they reached the relevant pensionable ages for women, thereby enabling them to claim a state pension from that point onwards. On the facts, there was nothing preventing this from being done—both had reached the female pensionable age after GRA 2004 came into force.

Then the Upper Tribunal considered whether, notwithstanding the lack of a gender recognition certificate, the respondents ought anyway to be treated for pension purposes as women as they had undergone surgery prior to reaching their respective women’s pensionable ages. The Upper Tribunal concluded that this was not the case.

The Upper Tribunal also looked at whether there was any breach of Council Directive 79/7/EEC by virtue of the fact that gender recognition certificates were prospective only on the recipient claiming State pension, and whether the respondents had been treated less favourably than women who had been registered as female from birth.

The appellant argued that it was vital to have certainty about the date upon which a person was taken as acquiring a new gender and that was why a gender recognition certificate operated with prospective effect, as there could be considerably uncertainty before its issue as to when a person could be said to have acquired a new gender. Even though in the circumstances it was clear that the respondents had acquired female gender prior to obtaining their gender recognition certificates and before reaching the female pensionable age, this was not sufficient to allow their state pension claims to be backdated to that point. Retrospectivity for pension purposes would cause difficulties for those whose gender had been reassigned from female to male as they would have to repay pension paid to them as women before they reached the male pensionable age.

The Upper Tribunal accepted the appellant’s further arguments that while a system could have been designed to operate as the respondents contended, it was not a breach of Council Directive 79/7/EEC for the UK to put in place the gender recognition certificate system under GRA 2004. That the respondents could have applied earlier for a certificate was not enough for their claims to succeed. GRA 2004 would have enabled them to apply for a certificate before reaching a woman’s state pensionable age, and they had time to but simply failed to do so. No unequal treatment arose.

To quote the judgment:

‘Lots of claimants fail to claim benefits in time due to misapprehensions about the law or simply not realising that there is anything to claim.

To what extent is the judgment helpful in clarifying the law in this area?

Both respondents were unaware of the extreme importance (both in terms of when they could claim their state pension and its amount) of obtaining a gender recognition certificate as soon as they were entitled to do so and before reaching state pensionable age. That some, but not all parts, of government treated them as their reassigned gender was particularly confusing in the circumstances—it appears quite understandable for any person not to have a detailed knowledge of the operation of the state pension system. The government does write to prospective State pensioners around four months before their state pensionable age, but of course, if that pensionable age is still officially recorded as the age for men, when the person is now female but without a gender recognition certificate, that letter will be too late.

How does the decision fit in with other developments in this area of law?

Gender is registered at birth on the birth certificate. The European Court of Human Rights had previously considered in Goodwin v United Kingdom [2008] All ER (D) 113 (Jan) whether a breach in equal treatment law arose on the UK’s failure to recognise in law a post-operative transsexual’s reassigned gender. This resulted in the passing of GRA 2004 in April 2005, allowing people to acquire a gender recognition certificate for their reassigned gender for all purposes. That certificate can then be used to obtain a new birth certificate.

Pension provision ought to be made in line with the principles of equal treatment, but the government has been able to rely on a carve-out in the relevant Directive allowing the preferential treatment of women from a state pensionable age perspective. For private sector pension schemes, equal treatment of men and women for pension purposes has been required since May 1990 (the so-called ‘Barber equalisation’ following Barber v Guardian Royal Exchange Assurance Group [1990] 2 All ER 660), though in practice took a number of years to implement correctly.

What are the implications for practitioners?

It may be rare that this issue arises in practice, but from a pensions perspective it is worth having a general working knowledge of gender recognition certificates and their importance for evidential purposes in correctly determining the gender of a scheme member, and the date that it was acquired.

This interview was published in Lexis®PSL Legal Insights on 11 August 2017. Click for a free trial of Lexis®PSL.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. ARC Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.