[2010] UKFTT 356 (TC)
TC00638
Appeal number: TC/2009/10897
National Insurance contributions - gender dysphoria - determination of pensionable age – whether possible to interpret ‘woman’ as including person with gender dysphoria living as a woman – whether directly effective right under Directive 79/7 to cease paying contributions otherwise than by satisfying conditions for recognition under the Gender Recognition Act 2004 – Social Security Contributions and Benefits Act 1992 ss. 6(3) and 122 and Pensions Act 1995 sched. 4 – Human Rights Act 1998, s. 3 – Directive 79/7 – Gender Recognition Act 2004
FIRST-TIER TRIBUNAL
TAX CHAMBER
MAppellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS Respondents
TRIBUNAL: JUDGE NICHOLAS PAINES
Sitting in public in London on 31 March 2010
Christopher Stothers, Arnold & Porter (UK) Ltd, for the Appellant
Jason Coppel, instructed by the Solicitor for HM Commissioners of Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2010
1
DECISION
1.The appellant asked me not to disclose her identity in the published version of this decision. I agreed not to do so, and shall refer to her simply as ‘the appellant’. The issue in this appeal is whether she was required to continue to pay national insurance contributions when, being over 60, she began to live as a woman. I have delayed issuing this decision in order to take into account the decision of the Court of Appeal in Timbrell v Secretary of State for Work and Pensions [2010] EWCA Civ 701. I have concluded that the appellant is not assisted by the Timbrell decision, in which the facts were different in an important respect, and that she was required to continue paying NICs until the issue to her of a gender recognition certificate under the Gender Recognition Act 2004. I considered inviting submissions on the effect of Timbrell, but did not do so as I am satisfied that they would not alter my view of its effect.
1.The appellant is affected by the condition known as gender dysphoria, which can be broadly described (this is not an attempt at a definition) as the conviction that one belongs to the sex opposite to that indicated by the physical characteristics of one’s body. It is different from the condition referred to as intersex, where the body has a mixture of male and female physical characteristics. Gender dysphoria is a condition that has not until comparatively recently received legal recognition in this country. When it was necessary to decide to which sex a person belonged in law, the courts applied the threefold test adumbrated by Ormrod J in Corbett v Corbett [1971] P 83. This looked only at physical characteristics: whether, leaving aside any surgical intervention, the person had physically male or female gonads, genitals and combinations of chromosomes; where the indications were congruent (i.e. all indicated the same physical sex), the person was in law of the sex indicated. The same approach was taken by the Social Security Commissioners to the question whether a person was male or female for the purposes of pensionable age in R(P) 1/80 and R(P) 2/80; and Corbett was approved by the Court of Appeal in a different context (liability for a criminal offence only capable of being committed by a man) in R v Tan [1983] QB 1053.
2.Over the years, some degree of recognition of gender dysphoria began to be given administratively as regards matters such as driving licences, passports and medical cards though not, for example, as regards birth certificates; but Corbett and Tan continued to represent the legal position for the purposes of marriage and the criminal law, and transsexual people had no legal right to recognition by the State or others of what they considered to be their true gender. At the beginning of this century Corbett was applied by a majority of the Court of Appeal in Bellinger v Bellinger [2001] EWCA Civ 1140 so as to hold that Mrs Bellinger was not ‘female’ within the meaning of section 11 of the Matrimonial Causes Act 1973. Despite some success by a transsexual person complaining about a less liberal regime in B v France (13343/87, 25 March 1992), attempts to challenge the United Kingdom’s treatment of transsexual people before the European Court of Human Rights as being contrary to articles 8 (right to respect for private life) and 12 (right to marry) of the European Convention on Human Rights were initially unsuccessful, most recently in Sheffield and Horsham v United Kingdom (22885/93 and 23390/94, 30 July 1998) where the Court noted the mixed position among Contracting States and held that the matters complained of fell within the State’s margin of appreciation, albeit that States must keep the position under review. Things changed dramatically with the Court’s subsequent decision in Goodwin v United Kingdom (28957/95), decided in July 2002.
3.In Goodwin the Court found infringements of both articles 8 and 12. In relation to article 8, itset out the considerations militating in favour of recognition of Ms Goodwin’s acquired gender: in brief summary, these were that her remaining for legal purposes male while living as a woman had unsatisfactory effects upon her private life; her legal status conflicted with an important aspect of her personal identity; her reassignment had been carried out by the National Health Service and it seemed illogical to refuse to recognise the legal implications of the result to which the treatment led; and the unsatisfactory nature of the situation had been recognised by the Court of Appeal in Bellinger. The Court then reviewed the considerations that had led it not to find an infringement of article 8 in previous cases, and found them no longer sufficiently persuasive. Under the heading ‘Striking a balance in the present case’ it concluded that the essence of the Convention was respect for human dignity and freedom and personal autonomy, holding that “in the twenty-first century the right of transsexuals to personal development and to physical and moral security in the full sense enjoyed by others in society cannot be regarded as a matter of controversy requiring the lapse of time to cast clearer light on the issues involved. In short, the unsatisfactory situation in which post-operative transsexuals live in an intermediate zone as not quite one gender or the other is no longer sustainable” (paragraph 90). In paragraph 91 it acknowledged the difficulties that any major change in the law would have in a number of fields, including social security, but these were not insuperable:
As Lord Justice Thorpe observed in the Bellinger case, any “spectral difficulties”, particularly in the field of family law, are both manageable and acceptable if confined to the case of fully achieved and post-operative transsexuals. Nor is the Court convinced by arguments that allowing the applicant to fall under the rules applicable to women, which would also change the date of eligibility for her state pension, would cause any injustice to others in the national insurance and state pension systems as alleged by the government. No concrete or substantial hardship or detriment to the public interest has indeed been demonstrated as likely to flow from any change to the status of transsexuals and, as regards other consequences, the Court considers that society may be expected to tolerate a certain inconvenience to enable individuals to live in dignity ....
4.Importantly, the Court’s conclusion at paragraph 93 was
Having regard to the above considerations, the Court finds that the respondent government can no longer claim that the matter falls within their margin of appreciation, save as regards the appropriate means of achieving recognition of the right protected under the Convention. [Emphasis added]
5.I need to refer to the reasoning under article 12, since it formed the basis of a submission of Mr Christopher Stothers on behalf of the appellant. At paragraph 99 the Court reminded itself that the right to marry was expressly made subject to the national laws of the Contracting States and that the test to be applied was whether national law impaired the very essence of the right; its conclusion in relation to article 8 did not ‘subsume all the issues under article 12’. The Court nevertheless found that the very essence of Ms Goodwin’s right to marry was impaired; it was artificial to say that she retained the right to marry a woman and she could not marry her chosen partner, a man with whom she was in a relationship. The Court was unprepared to leave the matter wholly within the State’s margin of appreciation, since British courts tended to regard it as best handled by the legislature, while the Government had no plans to legislate. It concluded
103.It may be noted from the materials submitted by Liberty that though there is widespread acceptance of the marriage of transsexuals, fewer countries permit the marriage of transsexuals in their assigned gender than recognise the change of gender itself. The Court is not persuaded however that this supports an argument for leaving the matter entirely to the Contracting States as being within their margin of appreciation. This would be tantamount to finding that the range of options open to a ContractingState included an effective bar on any exercise of the right to marry. The margin of appreciation cannot extend so far. While it is for the Contracting State to determine inter alia the conditions under which a person claiming legal recognition as a transsexual establishes that gender re-assignment has been properly effected or under which past marriages cease to be valid and the formalities applicable to future marriages (including, for example, the information to be furnished to intended spouses), the Court finds no justification for barring the transsexual from enjoying the right to marry under any circumstances.
6.Parliament responded to the Goodwin judgment by enacting the Gender Recognition Act 2004. The machinery set up by the Act involves, briefly stated, application to a Gender Recognition Panel; the Panel must grant the application if the applicant is over 18, “has lived in the acquired gender throughout the period of two years ending with the date on which the application is made” and intends to continue doing so for life, and certain evidence is provided (section 2). By section 4, upon granting an application the Panel must issue an interim or full gender recognition certificate. The effect of the issue of a full gender recognition certificate to a person is that “the person’s gender becomes for all purposes the acquired gender” (section 9(1)), but by section 9(2) the certificate does not affect things done, or events occurring, before it is issued. An interim certificate is to be issued if the person is still married; its issue makes that marriage voidable and by section 5 a court which annuls the marriage on that ground must thereupon issue a full certificate.
7.Schedule 5 to the Act deals with social security and pension entitlement where a full gender recognition certificate has been issued to a person; by paragraph 7 of that schedule, any question as to whether the person is entitled to a Category A retirement pension under section 44 of the Social Security Contributions and Benefits Act 1992 (to which, along with other relevant provisions of pensions legislation, I refer at paragraph 10 below) is to be decided as if the person’s gender had always been the acquired gender, thereby creating an exception to the rule in section 9(2). Paragraph 7(3) continues “if (immediately before the certificate is issued) the person (a)is a man who has attained the age at which a woman of the same age attains pensionable age, but (b)has not attained the age of 65, the person is to be treated for the purposes of section 44 of the 1992 Act as attaining pensionable age when it is issued”.
8.The Act came into force on 4 April 2005, but until 4 October 2005 applications under it could only be made by people who had been living in their acquired gender for 6 years or more (section 27). In the meantime, Bellinger had reached the House of Lords ([2003] UKHL 21), which found it impossible to interpret the terms ‘male’ and ‘female’ in section 11 of the 1973 Act as extending beyond biological gender and declared the section incompatible with the Convention.
9.At the time of her birth in June 1942 the appellant had the physical characteristics of a male, but from early childhood she felt herself to be female. She lived in a male role until 2004, when she began to take female hormones and, shortly afterwards, told her family of her decision to begin to live full-time as a woman. This, she told me, she did continuously from 4 June 2004 onwards; that is not admitted by HMRC. In June 2004 the Appellant reached the age of 62; she was thus already of an age at which a woman would not be required to pay national insurance contributions and would be entitled to a retirement pension. The appellant’s marriage was dissolved by a decree nisi in October 2004 and a decree absolute in November 2004. In December 2004 she changed her forenames from male to female ones by deed poll. She underwent gender reassignment surgery in December 2005. In June 2006, two years after she considered that she had begun to live as a woman, she applied to the Gender Recognition Panel for a recognition certificate. The panel took the view that the appellant had not begun fully to live as a woman until her change of name in December 2004 (something the appellant disputes, but decided not to contest before the panel, as doing so would only further delay the issue of a certificate); she applied to them again on 1 December 2006 and they issued a full certificate on 21 December.
10.From the moment the certificate was in existence, the effect of the Gender Recognition Act was that for the purposes of entitlement to a Category A pension, the appellant was to be treated as always having been in law a woman but (by virtue of paragraph 7(3) which I have quoted above) as having attained pensionable age on the date of issue of the certificate since, at that date, she was over the age at which a woman with her date of birth reaches pensionable age. For a woman born before 1950, that age is 60 years: see section 122 of the Social Security Contributions and Benefits Act 1992, as amended, and Part I of schedule 4 to the Pensions Act 1995. A person who reaches pensionable age is entitled, subject to meeting contribution conditions, to a Category A retirement pension (section 44 of the Contributions and Benefits Act) and is no longer liable to pay Class 1 national insurance contributions (section 6(3)).
11.There had been correspondence between the appellant and HMRC and the Department of Work and Pensions in 2005 and 2006 about her entitlement to a retirement pension. The DWP had decided in August 2006 that she was not entitled to a retirement pension. She appealed against that decision but was unsuccessful both before the Appeal Tribunal (which dismissed her appeal in May 2007) and before the Social Security Commissioners, who dismissed her further appeal in March 2008. In the meantime she had successfully claimed a pension, in reliance on her gender recognition certificate, with effect from December 2006, so the period in issue was that between June 2004 – when, the appellant argued, EU law and/or the Human Rights Act 1998 entitled her, as a transsexual person who was living as a woman, to be recognised in law as female – and December 2006. (There was also an issue, which I need not go into, about the date on which she first claimed a pension, a claim for benefit generally being a prerequisite to entitlement under social security law; the issue arose because the appellant had initially corresponded with HMRC, which failed to pass the pension claim on to the DWP. This resulted in HMRC making a payment of compensation to the appellant.)
12.The appellant’s arguments before the Social Security Commissioners were very similar to her arguments before me; Mr Jason Coppel, who appears for HMRC, invites me to agree with their decision, which is reported as decision R(P) 1/09. For the appellant, Mr Christopher Stothers says the Commissioners were wrong.
13.Correspondence continued between the appellant and HMRC about her liability for Class I contributions. Since liability ends at pensionable age, the issue was again whether EU law and/or the Human Rights Act entitled her to be regarded as a woman from June 2004 onwards. If so then, she being over 60, her liability would cease at that point. Though the underlying question to be resolved is the same as the question decided against her by the DWP and the social security Tribunal and Commissioners, HMRC are not bound to reach the same decision as the DWP. HMRC did, however, decide that the appellant did not attain pensionable age until receiving her gender recognition certificate. That decision was formally taken in February 2009 and confirmed on review in May 2009 and this appeal is against that decision.
14.On the appellant’s behalf Mr Stothers submits that the ‘two year rule’ in section 2 of the 2004 Act and the requirement of a change of name for all purposes, on which the gender recognition panel based its decision not to issue a certificate before December 2006, infringe EU law and the Human Rights Convention, and that the appellant was entitled to be treated as having reached pensionable age in June 2004 when, already over 60, she began living as a woman. He submits that, for pension purposes, HMRC would not have been entitled to delay recognition until the dissolution of the appellant’s marriage in November 2004. As a fallback position, he submits that she was at all events entitled to recognition from the time at which she underwent gender reassignment surgery in December 2005. He submits that I can give effect to the appellant’s Convention rights by interpreting the term ‘woman’ in the provision on pensionable age in schedule 4 to the Pensions Act 1995 as applying to the appellant from June 2004, pursuant to section 3 of the Human Rights Act 1998, and that in any event EU law requires me to hold that she was no longer required to pay contributions after that date.