1. This is an appeal by way of case stated brought with leave from a decision of the Chief Social Security Commissioner, given on 24 January 2000, whereby he dismissed the appellant’s appeal from a decision of Belfast Social Security Appeal Tribunal dated 21 April 1998. The Tribunal upheld the decision of the adjudication officer, that the appellant was not entitled to a personal allowance in respect of her dependent children, as each had capital in excess of £3000.

2. The appellant Mrs Elizabeth McAuley has two sons, Alan Daniel, born on 29 August 1981, and Kevin Patrick, born on 4 January 1984. She was divorced from her husband some time before his death intestate on 26 June 1996. Her husband had a pension and insurance plan, under which death benefits were payable directly to his two sons, not forming part of his estate. On 9 July 1997 the sum of £20,143.68 was paid into court by the pension trustee in respect of each son, and the county court judge ordered the moneys to be invested as directed by the Accountant General, to be held until each beneficiary reached the age of 18 years. The trustee asked the court to receive the funds under section 63 of the Trustee Act (Northern Ireland) 1958, and according to a certificate from the Deputy Chief Clerk of the court the judge treated the money as having been transferred pursuant to Order 21 of the County Courts (Northern Ireland) Rules 1981. The latter reference appears to be an error for Order 28, which deals with payment into court under section 63 of the 1958 Act. A further sum of £3000 due under another policy was paid into court in respect of each minor on 11 March 1998.

3. Kevin McAuley reached the age of 18 years on 29 August 1999 and is now absolutely entitled to the capital, but his brother Alan is still under that age. During their minority neither son has been entitled to obtain access to the capital, except when the court orders a payment out. That will normally be done only in exceptional circumstances – a payment out of £400 in respect of each child was ordered at Christmas 1997. During the minority of each child the income of his fund has been paid to Mrs McAuley to apply on his behalf.

4. The appellant has been in receipt of income support for several years. She informed her local security office of the payment of the sums into court, and on 25 February 1998 an adjudication officer decided that personal allowances in respect of her sons were not to be included in the assessment of the level of entitlement to income support, on the ground that each child had capital in excess of £3000. The amount of income support payable to the appellant was accordingly reduced to a material extent. She appealed to the Social Security Appeal Tribunal, which in a written decision dated 21 April 1998 upheld the adjudication officer’s decision. She appealed to the Social Security Commissioner, who gave a decision on 24 January 2000 dismissing her appeal. She asked the Commissioner to state a case for the opinion of this court, which he signed on 9 October 2000, the questions posed being as follows:

5. The conditions governing payment of income support are contained in section 132 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992. The material portions of the section are subsections (1) and (4)(b):

6. Under section 133 the appellant’s sons were to be regarded as members of her family for this purpose while they were under the age of 16.

7. Part IV of the Income Support (General) Regulations (Northern Ireland) 1987 sets out the basis for calculating “applicable amounts” for income support purposes. Under Regulation 17(1)(b) such an amount is payable in respect of a child or young person who is a member of the family, unless his capital exceeds the sum of £3000. Regulation 42 and Schedule 10 make provision for certain sums to be disregarded in calculating capital. The material part of Schedule 10 is paragraph 43:

8. Mr Larkin advanced two submissions in support of his argument that the sums paid into the county court should be disregarded in calculating the capital of the appellant’s sons;

9. The Chief Social Security Commissioner rejected both submissions, summarising his reasons at paragraph 13 of the case stated:

10. It may be seen that in respect of the first issue the Commissioner simply stated his conclusion that the appellant’s sons had capital, without considering the issue in any more detail. Mr Weatherup QC for the respondent department submitted that as the issue had not been argued before the Commissioner it was not open to the appellant to request that a question be posed and considered on it. Since it may be a material issue, which could have been argued, and since in question 1 the Commissioner asked if he should have considered it, we propose to deal with the arguments and answer the question. We take the same approach to question 2, which asks if the Commissioner should have considered provisions of the European Convention on Human Rights.

11. We are unable to accept the argument that the funds in court had no value simply because the beneficiaries could not claim payment of them before they attained the age of 18 years. It may be that the beneficiaries could not obtain access to the capital and were dependent on the judge ordering payment out of court of any sums which he thought fit to release to them, but we do not regard this factor as making the funds valueless. They were a source of income to the appellant for the maintenance of the beneficiaries, which in itself implies that the capital must have a value. The right to them was vested in the children, not contingent on attaining the age of 18, and only the enjoyment of the capital was deferred. If either had died before that age the whole sum in court would have formed part of his estate. Moreover, the fact that it is specifically provided that certain sums in court are to be disregarded must mean that those sums are to be regarded as having a value, otherwise it would not be necessary to make such provision. We consider that on the ordinary principles of domestic law these funds have a material value and that, even if a discount on the full amount should be made because of the deferment of enjoyment of the capital, each must, having regard to the amount and the ages of the beneficiaries, have at all material times had a value of more than £3000.

12. Mr Larkin sought to argue that to decline to disregard the funds in court involved a breach of Article 8 of the Convention on Human Rights and Article 1 of the First Protocol, and that under section 6 of the Human Rights Act 1998 it was now unlawful for the respondent department to act in a way which was incompatible with these Convention rights. Article 8(1) provides:

13. Article 1 of the First Protocol provides:

14. In support of this submission Mr Larkin cited Case 156/1996/775/976 Petrovic v Austria, in which a father complained that he was refused payment of a parental leave allowance, which was paid only to mothers. The ECJ held that there was a breach of Article 14 (which prohibits discrimination on the ground of, inter alia, sex) taken together with Article 8. It does not seem to us to follow that failure to pay the allowance was in itself a breach of Article 8, which appears to be borne out by paragraph 26 of the judgment:

15. The ground for its decision was set out in paragraph 29, that by granting parental leave allowance States were able to demonstrate their respect for family life and accordingly could not discriminate between the sexes in paying that allowance. However these paragraphs may be said to hang together logically, it seems clear from the Petrovic decision that refusal to disregard the funds in court cannot be a breach of Article 8, since there is no positive obligation on States to do so.

16. Counsel also cited the ECJ’s decision in Case 39/1995/545/631 Gaygusuz v Austria, in which the respondent government had refused to grant emergency assistance to an unemployed man who had exhausted his entitlement to unemployment benefit, on the ground that he was not an Austrian national. The Court held that there was a breach of Article 14 of the Convention, taken in conjunction with Article 1 of the First Protocol. In paragraph 41 of its judgment it held that the right to emergency assistance in so far as it was provided for in the legislation was a pecuniary right for the purposes of Article 1 of the First Protocol. It therefore had to be applied without discrimination on grounds of nationality. Again, this does not amount to a finding that to refuse to pay the allowance would have been of itself a breach of that article. We accordingly do not consider that the arguments based on the Convention are well founded.

17. We can dispose of the second argument very shortly. The funds in court represented death benefits under the pension and insurance plan of the boys’ father. The connotation of compensation is the replacement of something lost, as when a family sustain pecuniary loss on the death in an accident of the father who maintained them. These moneys, by contrast, were paid on foot of a contract made by the deceased and do not in any sense of the word represent compensation. We appreciate that the reason behind the provision for disregarding damages or compensation paid into court appears to be that the beneficiaries cannot obtain any access to capital, except for modest occasional payments out, and that this circumstance is mirrored in the present case. Although Mr Larkin urged us for this reason to take a broad view and adopt a purposive interpretation of the Regulations, we do not consider that we can go so far as to class these funds as compensation.

18. We accordingly answer the questions as follows:

19. The appeal must accordingly be dismissed.