Surrogacy expenses count as assessable income for means-tested benefits claimants

15/01/26

On 15 January 2026, the Upper Tribunal gave an important judgment about the interaction between payments made to surrogate mothers and means-tested benefits in PQ v Secretary of State for Work and Pensions [2026] UKUT 1 (AAC).

The Appellant received income-based jobseeker’s allowance (now a legacy benefit) during which period she had acted as a surrogate twice, receiving regular monthly payments totalling £15,000 and £10,500 respectively for each pregnancy as “reasonable expenses”, as permitted under the relevant surrogacy legislation. On learning of the payments, DWP decided that they constituted “income” and their amount rendered her ineligible for the benefit for the relevant periods. She appealed that decision to the First-tier Tribunal (“FtT”), arguing that surrogacy expenses could not constitute income, and was unsuccessful.

The Upper Tribunal gave important guidance on the legal test for income, clarifying the uncertain interaction between two leading authorities in this area. It found that the FtT had not fallen into error because the regularity of the payments (on which the FtT had relied) indicated that the funds in question presumptively were to be counted as income, although that factor is not determinative. It rejected the Appellant’s case that the payments bore the hallmark of capital.

The Upper Tribunal further rejected the Appellant’s arguments that the payments ought to have been disregarded as “expenses incurred by a volunteer”, or as “voluntary payments”, both of which are carved out of the statutory scheme for means-tested benefits. Agreeing with the Secretary of State, the Upper Tribunal found that, under the scheme, “volunteering is seen as effectively akin to unpaid work” and surrogacy cannot be described as such. Nor were the payments “voluntary”, applying the leading case of R v Doncaster Metropolitan Borough Council ex p Boulton (1993) 25 HLR 195, because the intended parents make the payments with the expectation of obtaining something in return, such that the payments are not truly “benevolent” in the sense required by the caselaw.

The judgment can be found here.