Reasonable Expenses or Income? A Landmark Ruling on Surrogacy Payments in the UK

In this case, the appellant, who was receiving income-related jobseeker’s allowance, entered into two domestic surrogacy agreements with two different sets of intended parents.

She received £15,000 in one arrangement and £10,500 in the other, paid in monthly instalments during her pregnancies.

The Secretary of State determined that these payments constituted income, resulting in an overpayment of benefits that was recoverable.

The First-tier Tribunal dismissed her appeal, and the Upper Tribunal upheld that decision.

The Upper Tribunal provided important clarification: payments made to a surrogate as “reasonable expenses” cannot be treated as capital, nor can they be disregarded as voluntary payments.

Although domestic surrogacy in the UK is structured as altruistic, the Tribunal reasoned that the payments were made with the expectation of receiving something in return: a child.

As such, they had a quid pro quo element and could not be treated as purely voluntary.

Domestic, intended parents already navigate significant legal complexity.

The addition of benefits implications for surrogates introduces another layer of uncertainty and administrative burden.

This may further incentivise intended parents to seek arrangements overseas, despite the higher costs and risks.

Internationally, surrogacy practices vary widely.

In the United States, surrogacy is well-regulated in many states, but it can cost upwards of $200,000. Such high costs drive intended parents toward other jurisdictions, including Nigeria, Northern Cyprus and Ukraine, each of which has presented legal and ethical challenges in recent years.

Globally, surrogacy is increasingly commercialised, with projections estimating the industry could be worth $129 billion by 2032.

However, concerns persist about the exploitation of women and children in poorly regulated jurisdictions.

The United Nations Special Rapporteur on Violence against Women has even called for the global abolition of surrogacy, citing risks to vulnerable women and girls.