Northern Ireland - Social Security and Child Support Commissioners' Decisions

[1995] NISSCSC C5-95(IS) (14 September 1995)

 


C5/95(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY (CONSEQUENTIAL PROVISIONS) (NORTHERN IRELAND) ACT 1992 INCOME SUPPORT Appeal to the Social Security Commissioner on a question of law from the decision of Lisburn Social Security Appeal Tribunal dated 20 October 1994 DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal by the claimant against the decision of Lisburn Social Security Appeal Tribunal, whereby it was held that, for income support purposes, he was to be treated as having a weekly income of £13.00.
2. The background facts are not in dispute. The claimant, a single man aged 47 years, lives alone in an owner-occupied house on a farm of 21 acres. He declares work of 14 hours per week working on the farm, but states that he has no earnings or income. His farming activities are confined to hay-making, which produces an average of 1400 bales per year. However, this hay is not sold or consumed; but for the past 5 years has simply been stock-piled on the claimant's farm. On 11 January 1994 and again on 16 June 1994 the claimant confirmed that his present stock of bales was 6200. Having made enquiries as to the value of a bale of hay, the Adjudication Officer decided that the claimant was to be treated as having an income of £13.00 per week, assessed in accordance with the provisions of regulation 53 of the Income Support (General) Regulations (Northern Ireland) 1987, (the General Regulations), as being the tariff income for capital of £6,200. The amount of the claimant's income support was reduced accordingly, with effect from 12 July 1994, and he appealed.
3. As indicated in paragraph 1 above, by their decision dated 20 October 1994 the Appeal Tribunal disallowed the appeal, recording their reasons as follows:-

"We are satisfied on the basis of the evidence that the Adjudication

Officer was right in assessing the capital value of the bales of hay

at ?1 per bale giving the total capital of ?6,200.00. Claimant has

not sold any bales of hay in the last five years and therefore we

consider that they constitute a capital asset. The calculation of

weekly income has been correctly assessed with regard to Regulation

53 of the General Regulations."

4. The grounds of the claimant's appeal to the Commissioner are as follows:-

"I am a self-employed farmer. I hole (sic) a class 2 self-employed

rate national insurance certificate of exception. Schedule 10,

capital to be disregarded paragraph 6. The assets of any business

owned in whole or in part by the claimant and for the purposes

of which he is engaged as a self-employed earner. I make 21 acres

of hay each year. I work an average of 14 hours each week. I

sign on the unemployed register for part time work. I declare

I work 14 hours each week before I sign the register."

Schedule 10 the General Regulations is headed "Capital to be disregarded" and paragraph 6(1) is in the following terms:-

"The assets of any business owned in whole or in part by the

claimant and for the purposes of which he is engaged as a self-

employed earner or, if he has ceased to be so engaged, for such

period as may be reasonable in the circumstances to allow for

the disposal of any such asset."

5. In her written observations on the appeal, Mrs McRory, the Adjudication Officer now concerned with the case, points out that by regulation 2(1) of the General Regulations "self-employed earner" means a person who is gainfully employed in Northern Ireland or the Republic of Ireland otherwise than in employed earner's employment (whether or not he is also employed in such employment). She suggests that although the claimant carries on work on his farm, he has not been in gainful employment as he has not sold anything for 5 years. She further submits that if this is correct, it was necessary to consider whether the claimant should have been allowed time to dispose of his business assets. As the Tribunal had not dealt with these matters Mrs McRory agreed that their decision was erroneous in law; but she made it clear that she was in no way conceding that the claimant's income support had been incorrectly assessed.
6. I held an oral hearing which both the claimant and Mrs McRory attended. The claimant had little to add to the grounds of appeal as set out in his notice. In his submission the fact that he had been granted a national insurance certificate of exception was proof that he was self-employed, and that the value of his hay should therefore be disregarded. He stated that he had been storing his hay for 5 years and commented that it would be handy to have if he bought in any cattle. However, when asked if that was his intention he said that it was not. He was going to sell the hay this winter. Selling would probably start in October and might not be completed until the end of the winter.

The only additional matter dealt with by Mrs McRory concerned the capital value of the claimant's land. I suggested that there was a possibility that the Adjudication Officer might also seek to take this into account if the claimant were found not to be gainfully employed. Mrs McRory correctly pointed out that, so long as the claimant's land adjoined his house, it was included in the definition of the "dwelling occupied as the home", and as such its value fell to be disregarded under paragraph 1 of Schedule 10 to the General Regulations. The Adjudication Officer might, however, wish to enquire further into the location of the claimant's land.

7. The Tribunal's decision that the claimant was to be treated as having a weekly income of £13.00 may well turn out to have been correct. However, I agree that they failed to explain how they arrived at that decision and that there is nothing to indicate that they took into account the provisions of paragraph 6 of Schedule 10 the General Regulations. To that extent their decision was erroneous in law. In order to decide whether or not the claimant's accumulated bales of hay were to be taken into account as capital, the Tribunal should first of all have considered whether, at the material time, he was a "self-employed earner". For income support purposes a self-employed earner means a person who is gainfully employed otherwise than in employed earners employment - see regulation 2(1) of the General Regulations, and it therefore comes down to a question of whether the claimant was "gainfully employed". As I pointed out to the claimant at the hearing, that is not a question which can be conclusively determined by the fact that the claimant holds a certificate of exception under the provisions of section 11(4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992:- see GB Commissioner's decisions R(FC) 2/90 and R(FC) 2/92. Decisions on the meaning of "gainful employment" in relation to the self-employed appear to be few in number. I have, however, had regard to the case of Vandyk the Minister of Pensions and National Insurance 1954 2 AER page 723, in which it was held that, in relation to an employed person, the words "gainfully occupied" meant nothing more than that something by way of remuneration should be received by the employee from his employer, and that accordingly someone whose expenses exceeded his receipts was nevertheless gainfully occupied in employment. I have also studied a number of the decisions of the GB Commissioners on the meaning of "a gainful occupation" in relation to the old retirement pension law, and "remunerative work":- see R(P) 7/52; R(IS) 1/93; CIS/815/1992. The conclusion which I have reached is that a person is not gainfully employed in self-employment unless his activities yield something by way of remuneration, either contemporaneously with those activities or within a reasonable time thereafter. In the present case the claimant has for 5 years made no attempt to dispose of the hay which he makes each summer and in these circumstances it is in my opinion difficult to see how it could be said that he has, during the period relevant to this case been gainfully employed. The fact of the matter is that such work as he has carried out has not generated any earnings. The claimant has talked about selling his hay in the coming winter; but unless there have been clear developments in that direction the suggestion should in my view be treated with great caution.
8. For the reasons given in paragraph 7 above I allow this appeal and set aside the Tribunal's decision. I refer the case for determination by a new Tribunal, who will first of all have to decide whether the claimant was, at the relevant time, a "self-employed earner" within the meaning of the General Regulations. This is a question of fact to be decided on the available information, and in their approach to it the Tribunal should have regard to the views which I have expressed in this decision.

(Signed): R R Chambers

CHIEF COMMISSIONER

14 September 1995