This represents a significant Upper Tribunal decision on the subject of surrogacy payments.
In PQ v Secretary of State for Work and Pensions [2026] UKUT 1 (AAC), the Tribunal was asked to determine if contractual payments made to a surrogate mother for expenses constitute “income” for means-tested benefits, such as income-related Jobseeker’s Allowance (JSA).
The Background
The Appellant, while in receipt of income-related JSA, entered into two surrogacy arrangements with two sets of intended parents. She received payments for expenses amounting to £15,000 and £10,500 respectively. The DWP classified these as income and that as a result there had been a recoverable overpayment of benefit. The appellant is therefore ineligible for the benefit.
The Legal Framework
The Appellant appealed to the Upper Tribunal. The Tribunal considered the definition of income under the Jobseeker’s Allowance Regulations 1996 and the Jobseekers Act 1995, and determined that that payments received for surrogacy should be treated as income when assessing entitlement to JSA.
Furthermore, while acknowledged as “reasonable expenses” under surrogacy law, the Judge found they did not fall under any applicable disregard regulations for calculating income-based JSA.
The Judgement and Recommendation
The Upper Tribunal upheld the First-Tier Tribunal’s decision and dismissed the appeal. This decision confirms that regular surrogacy payments can trigger a reduction or cessation of means-tested benefits.
Notably, the Judge went on with the note below:
…Potential surrogates are entitled to expect greater clarity about the consequences of accepting surrogacy payments when they are on benefit – although I recognise that, depending on individual circumstances, it may be more advantageous for some claimants to have such payments treated as capital while for others the converse may be true. With that in mind, I recommend that the Secretary of State’s officials review the current treatment of surrogacy payments in the benefit system. I emphasise that I am making no suggestion as to whether the present position should be changed, not least as this would raise wider policy issues which are outwith the jurisdiction of the Upper Tribunal…
Hopefully such recommendation would encourage DWP officials to review how these payments are treated within the benefits system, and to minimise negative impact on individuals involved.
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