Upper Tribunal provides clarity on the proper treatment of surrogacy expenses under the legacy benefits legislation

On 15 January 2026, the Upper Tribunal handed down judgment in PQ v Secretary of State for Work and Pensions [2026] UKUT 1 (AAC). 39 Essex Chambers’ barrister Flora Curtis was instructed by the Appellant in the appeal, which concerned how a series of payments, made to a claimant for expenses that she incurred while acting as a surrogate, should be treated for the purpose of legacy income-based Jobseeker’s Allowance (JSA(IB)).

The Appellant, PQ, had acted as a surrogate on two occasions while in receipt of JSA(IB). During that time, she was in receipt of monthly payments from the intended parents of the children she was carrying, which were intended to cover the expenses that she incurred as a result of the two pregnancies. The Secretary of State, on learning about the payments, determined that they were properly categorised as income for the purposes of JSA(IB). The Secretary of State therefore decided that there had been a recoverable overpayment of benefit to the Appellant. The Appellant appealed this decision unsuccessfully to the First-tier Tribunal.

In an important judgment, Upper Tribunal Judge Wikeley concluded that the Secretary of State and the First-tier Tribunal had been correct to categorise the surrogacy expense payments as ‘income’ for the purposes of the Jobseeker’s Allowance Regulations 1996 and the Jobseekers Act 1995. He further concluded that the surrogacy payments were not exempt from consideration as income as they were neither ‘voluntary payments’ nor expenses paid to a volunteer for the purposes of Schedule 7 of the Regulations.

The judgment provides clarity to both prospective surrogates and intended parents as to how surrogacy payments are to be treated for the purposes of legacy benefits such as JSA(IB). As Judge Wikeley noted in the final paragraph of the judgment, potential surrogates are entitled to expect greater clarity about the consequences of accepting surrogacy payments while in receipt of legacy benefits. Judge Wikeley recommended that the Secretary of State’s officials review the current treatment of surrogacy payments in the benefit system.