Northern Ireland - Social Security and Child Support Commissioners' Decisions

Decision No: C10/06-07(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
INCOME SUPPORT
Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 16 June 2006
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal, leave having been granted by me, by the Department against a decision dated 16 June 2006 of an appeal tribunal sitting at Lurgan. I held a hearing of the appeal which the claimant attended accompanied by Sister McG…. Ms Rush of Decision Making Services Branch attended to represent the Department. The claimant is a nun in a Religious Order who has retired from teaching and is entitled to an occupational pension in respect of that employment of £979.46 per month. When she became a nun the claimant took a vow of poverty to the effect that she should not receive any money but that any money to which she might become entitled should be paid to her Order. The claimant had executed a Deed of Trust to the effect that her entire salary when a teacher was to be paid to the Order. The Convent in which she had lived was sold in 1995, she lived in a new Convent for one year then on 10 September 1996 moved into a Fold. She claimed income support (IS) from 24 February 1999. On her claim form she stated that her only source of income was retirement pension (RP) and that she had a disability living allowance (DLA) Motability car. She had formerly been receiving from the Order an annual bursary of £6500 which ceased on 15 February 1999. She was awarded IS from 24 February 1999 taking RP as her only source of income. Upon further enquiry the claimant's entitlement to the RP was ascertained.
2. By a decision dated 6 January 2004 the Department decided that the claimant should be treated as having notional income of £979.46 per month from 24 February 1999 and as a result should be disallowed IS. The claimant appealed to a tribunal. At the tribunal the Department submitted that its original decision was incorrect because the occupational pension paid in respect of the claimant was an actual income rather than a notional income. It therefore asked the tribunal to replace the decision under appeal with an amended decision in the following terms:

"The decision awarding Income Support from 24.02.99 is revised in accordance with regulation 3(5)(b) of the Social Security and Child Support (Decisions and Appeals) Regulations (Northern Ireland) 1999. This is because it was given in ignorance of the material fact that [the claimant] had an Occupational Pension amounting to £226.03 per week. As a result [the claimant] is not entitled to Income Support from 24 February 1999 because her income exceeds her applicable amount."

I pause here to note that if the occupational pension is the claimant's income she is not and has not since 24 February 1999 been entitled to IS. I also note that if the occupational pension was the claimant's then the original decision awarding IS was given in ignorance of that fact and it was a material fact.

3. The tribunal allowed the appeal. It decided that the claimant did not have any actual income by way of occupational pension. It decided further that the Deed of Trust covered the occupational pension. It found that the salary and later the pension did not belong to the claimant because of her vow of poverty and that the Order, in accordance with its normal practice, took control of all the finances, she having no experience in dealing with day-to-day matters.
4. The Department appealed to a Commissioner. Both at hearing and in its application for leave to appeal made by letter dated 27 October 2006 Ms Rush submitted that the tribunal had erred in law in:

(1) Concluding that the Deed of Trust executed by the claimant in favour of her Religious Order covered the claimant's occupational pension (payable when she retired from her teaching job) when the evidence indicated that only her teacher's salary was covered.

(2) Alternatively if the Deed of Trust did extend to the claimant's occupational pension, the tribunal had erred in concluding that the said pension did not belong to the claimant. While it might be correct that once the claimant agreed to give her pension to her Religious Order it belonged to the Order, this could only be after the pension had become the claimant's possession and it should therefore be taken into account in the claimant's IS assessment.

(3) The Department had asked the tribunal, in the event of the tribunal concluding (as it did) that the pension was not actual income of the claimant, to consider whether it was notional income to be attributed to the claimant within regulation 42 of the Income Support (General) Regulations (Northern Ireland) 1987. The tribunal had erred in not recording conclusions in relation to this matter in particular with regard to regulation 42(4)(a)(ia). That provision is to the effect that any payment of income (with certain exceptions which are not relevant in this case) made -

"to a third party in respect of a single claimant or his partner (but not a member of the third party's family) shall be treated –

…

(ia) in a case where that payment is a payment of an occupational pension or is a pension or other periodical payment made under a personal pension scheme, as possessed by that single claimant or, as the case may be, by the claimant's partner."

(4) The tribunal had failed to consider the application of regulation 21 and paragraph 7 of Schedule 7 to the said Regulations. The said provisions are to the effect that the applicable amount of Income Support for "a claimant who is a member of and fully maintained by a religious order" is "Nil".

5. In Ms Rush's submission, the tribunal found that the claimant did not have access to her occupational pension. It should have gone on to consider on the evidence, whether if the Order controlled her finances (by deciding what she could or could not have access to) this meant that the claimant was being fully maintained by the Order, with the Order providing the amount of income it deemed necessary to support her in accordance with her vow of poverty. The tribunal had erred by failing to consider this matter.
6. The claimant opposed the appeal stating that she had never received a salary or an occupational pension. It had all been paid to the Order. This the claimant gladly accepted as she had taken a vow of poverty. DLA and RP were afforded to her by the Order as her means of subsistence.
7. The claimant complained that she felt harassed and had suffered stress due to how she had been treated. A statement had been made that she directly received occupational pension at one stage. This was factually incorrect.
8. Ms Rush explained that the Department's submission to that effect was based on a letter received from the Department of Education.
9. At hearing I explained to the parties that I, like the Department and the tribunal, had to decide this matter under the "secular law" as contained in the statutory provisions. Both parties were of the view that, if I considered the tribunal had erred in law, I should myself give the decision which the tribunal should have given.
10. An occupational pension is income. I did not understand there to be any dispute on this. It is not capital. The income of the claimant is to be taken into account and calculated according to the Regulations (regulation 28). The issue in this case appears to stem from the claimant's contention that the occupational pension is not her income. She considers that it does not belong to her, having been included in the Deed of Trust and transferred under that Deed by her to the Religious Order in pursuance of her vow of poverty.
11. Even working on the assumption that the occupational pension was included in the relevant Deed of Trust there is a basic flaw in the claimant's argument. The claimant can only put into the Trust assets (in this case income) which is hers to put in. She could not for example put someone else's income into the Trust. It is only her own possessions at the date of the Deed of Trust or those assets which become her possessions after that date which can be put into the Trust. The occupational pension had to be income of the claimant before it could be part of the Trust. Whether it was paid to the claimant directly or to the Order on her behalf does not matter. It is still her income. Section 123 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 was in effect at the relevant time and provided that a person was to be entitled to IS if his or her income was less a prescribed applicable amount. In this case it was not.
12. Essentially the claimant's direction to the Department of Education to make payment to the Order was a direction which the claimant had power to terminate at any time each month before the payment was made to the Order. It only took effect each month when the pension became payable. I appreciate that the claimant regarded the income as belonging to the Order but in actual legal fact each monthly payment was hers but paid to the Order at her direction.
13. I appreciate that the claimant would not terminate the direction because of her vow of poverty. That does not, however, alter the fact that the income is hers and has been obtained by her in that had it not been so obtained she could not direct where payment of it should be made. The actual cheque or cash may not have come into her possession but that does not matter. The pension was her possession.
14. While respecting, as I do, the claimant's vow, it would, in my view, be manifestly unjust to consider the pension as not her pension. The claimant is of course free to do what she wants with the pension. She has chosen to give it to her Order in pursuance of a vow voluntarily undertaken. She cannot, however, expect the tax payer to pay more money to maintain her when there is adequate income to do so. She has directed that payment be made to the Order. That is her use of income possessed by her, in this case income of over £226.05 per week. It does not mean that the income was not her possession, quite the reverse. If it was not she could not control to whom it should be paid. She may not have physical possession of the pension because she chooses not to have it pass through her hands. However she owns it until it is paid into the Order's funds in the same way as any other person owns something until they later give it away.
15. The tribunal, in my view, erred by concluding otherwise. Its conclusion was not sustainable on the evidence before it which was quite clearly to the effect that the pension was the claimant's pension to dispose of and that she could only dispose of it because it was hers to dispose of.
16. I consider this to be a case where it is expedient that I give the decision which the tribunal should have given. The claimant's weekly income from 24 February 1999 was much too great for her to be entitled to IS. Her IS exceeds her applicable amount.
17. My decision is that the decision awarding IS from 24 February 1999 should be revised as having been given in ignorance of the material fact that the claimant had an occupational pension amounting to £226.03 per week. As a result she was not entitled to IS from and including 24 February 1999. In other words my decision is the same as the Department's amended decision referred to above.
18. I have considerable sympathy for the claimant. She naturally will not break her vow of poverty. The solution, however, appears to be with the Order which should consider allowing her to retain at least part of her pension rather than seeking recourse to IS.
19. The Department wins its appeal.

(signed): M F Brown

Commissioner

13 November 2007