NOTE: the provisions of Article 14 apply only with respect to U.K. disability (i.e., invalidity benefits or Short or Long-term incapacity benefits (IB) claims filed prior to October 27, 2008. From that date, a new benefit called Employment and Support Allowance (ESA) replaced the Short and Long-term IBs. Existing benefits claims filed prior to that date continued after that date, but no new claims were permitted. For more information, please refer to: https://www.gov.uk/employment-support-allowance/overview.
Article 14 established rules for determining entitlement to and the amount of U.K. invalidity benefits for persons who worked in both the United States and the United Kingdom.
At the time of the original Agreement, U.K. invalidity benefits were payable to U.K. residents who were disabled and met certain minimum coverage requirements. Under U.K. law, a person was generally considered disabled after he or she had been incapacitated for work for 168 days during which he or she was entitled to short-term cash sickness benefits. To meet the minimum coverage requirement, a person must have paid the equivalent of six months of contributions under the U.K. system some time before disability onset and also have paid or been credited with at least six months of coverage in the tax year preceding the calendar year in which disability onset occurred. Persons who qualified for invalidity benefits received a flat-rate amount of approximately $50.00 per week in 1983. This amount was increased by about $30.00 per week if the worker had a dependant wife and by about $13.00 per week for each dependent child (1983 rates).
The Supplementary Agreement made important modifications in Article 14 of the original Agreement to allow expanded payment of U.K. disability benefits to U.S. residents. In addition, the Supplementary Agreement conformed Article 14 to major revisions in the disability benefit provisions of U.K law that became effective April 13, 1995.
BACKGROUND
Most employed persons in the United Kingdom who have been incapacitated for work for at least 4 days are eligible to receive payments from their employer known as statutory sick pay (SSP) for up to 28 weeks. Prior to April 13, 1995, disabled persons not eligible for SSP (generally the self-employed and certain limited categories of employees) received alternative social security payments, known as sickness benefit, for the initial 28-week period of incapacity. After 28 weeks, both SSP and sickness benefit were replaced with a benefit known as invalidity benefit.
SSP continues to be the benefit paid to most employees for the first 28 weeks of incapacity. Under legislation effective April 13, 1995, however, both sickness benefit (for persons not eligible for SSP) and invalidity benefit were replaced by a new benefit called Incapacity Benefit (IB). The new Incapacity Benefit had two elements: “short-term” and “long-term” IB. Short-term IB was paid for the first 28 weeks of incapacity at a rate corresponding to that of the former sickness benefit ($69.55/week in 1995). Starting with the 29th week of incapacity, Short-term IB was increased to a somewhat higher rate ($82.24/week in 1995). Persons who received statutory sick pay for 28 weeks also had their SSP payments replaced with Short-term IB at the higher rate starting with the 29th week of incapacity.
Long-term IB replaced Short-term IB starting with the 53rd week of incapacity and was paid at the same rate as the former invalidity benefit ($92.19/week in 1995). Long-term IB could be increased by supplements for a dependent spouse and children under certain conditions.
The original Agreement included provisions that allow a person in the United States to qualify for U.K. invalidity benefit. Beginning April 13, 1995, the U.K. interpreted these provisions of the Agreement as applying to Long-term IB (which the U.K. considered to be the successor to invalidity benefit), but not to U.K. sickness benefit or the new Short-term IB. Although the Agreement applied to the new Long-term IB (and previously to invalidity benefit), in practice, almost no one in the United States was able to qualify for either benefit because the eligibility requirements set forth in the original Agreement were very restrictive.
Under the Supplementary Agreement, a person in the United States was able to qualify for the U.K. Long-term IB under less stringent conditions. (NOTE: Articles 14.1-14.5 of the Agreement, as amended, still refer to “invalidity benefit”; however, Article 1.7(n) of the Agreement, as amended by the Supplementary Agreement, defined this term to include Long-term IB.) The Supplementary Agreement did not affect eligibility requirements for Short-term IB, which was generally not payable to persons in the United States. Although these annotations for Article 14 are written in the present tense, as noted above, the United Kingdom replaced the benefits these annotations describe with a new system of benefits (ESA) to which the Agreement does not apply. It is not possible for persons in the United States to file claims for ESA, and ESA benefits are generally not payable to persons in the United States.