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[1992] UKSSCSC CIS_270_1991 (28 May 1992)

R(IS) 1/93

Mr. M. H. Johnson CIS/270/1991

Remunerative work - freelance writer - whether work done "in expectation of payment"

After completing a year's Enterprise Allowance scheme as a free-lance writer earning £2,500 to £3,000 and continuing to write and submit articles for publication, the claimant was refused income support on the grounds that she was engaged in remunerative work within the meaning of regulation 5(1) of the Income Support (General) Regulations 1987. On appeal, the tribunal confirmed the decision. The claimant appealed to a social security Commissioner.

Held that:

whether or not a claimant is engaged in remunerative work is a question of fact. However, it must be determined in accordance with the specific terms of the regulation. The tribunal erred in law by adopting as a definition of "in expectation of payment" the words of the Commissioner in R(FIS) 1/83 "work carried out with the desire, hope and intention of claiming a reward or profit". The Commissioner was there defining, for the purposes of family income supplement legislation, the phrase "remunerative work" (which was not defined in that legislation) and not "in expectation of payment" (paras. 7 and 8);

desire and hope form no part of the definition in regulation 5(l), which clearly provides that such work must be carried out either for payment or in the expectation of payment. Expectation is not the same as desire, intention or hope (para. 9);

work carried out in expectation of payment means in realistic expectation of such payment (para. 11);

this claimant hoped to have work accepted and paid for, but was in fact working "on spec" which is in hope, not expectation of payment (para. 13);

The appeal was allowed.

DECISION OF THE SOCIAL SECURITY COMMISSIONER

My decision is that:

(a) the unanimous decision of the Scarborough social security appeal tribunal given on 4 December 1990 is erroneous in point of law and is accordingly set aside;

(b) the claimant is entitled to income support from 28 May 1990.

The claimant, Mrs. Joy Peach, appeals with my leave against the decision of the tribunal upholding the decision of the adjudication officer, issued on 25 June 1990, that Mrs. Peach was not entitled to income support because she was working more than 24 hours per week.

I held an oral hearing of this appeal on 30 April 1992, when Mrs. Peach attended and was represented by Mr. Mark Rowland, of Counsel, instructed by Messrs. Thorpe & Co, of Whitby, North Yorkshire. The adjudication officer was represented by Mr. John Polland of the Office of the Chief Adjudication Officer, and I am obliged to both Mr. Rowland and Mr. Polland for their assistance in this somewhat unusual and interesting case.

The facts, which are not in dispute are that Mrs. Peach, who is in her 50's, is divorced and lives in her own house, which is subject to a mortgage, was in receipt of income support until 22 May 1989. She then took part in an Enterprise Allowance scheme as a free-lance writer, earning some £2,500 to £3,000 from articles published during that period. On 12 June 1990 Mrs. Peach completed form B1, which is endorsed as having been treated as a claim for income support from 28 May 1990. On that form Mrs. Peach stated that she had "just finished a year on ENTERPRISE (writing)", from which she was owed £400, that she was not working more than 24 hours a week but that she wrote in her spare time and she stated under "Other information" that:

"I'd hoped to establish myself as a writer during my year on the Enterprise Allowance, and I'm sorry to have to ask for more help."

Mrs. Peach was visited by an officer of the Department on 22 June 1990 when:

"... it was established and confirmed by the claimant, that she was writing on average 35 hours per week and this did not include weekends."

The law relevant to this case is contained in section 20(3) of the Social Security Act 1986, which provides, in so far as it is relevant, that:

"(3) A person in Great Britain is entitled to income support if -

(a) he is of or over the age of 18 ...;

(b) he has no income or his income does not exceed the applicable amount;

(c) he is not engaged in remunerative work …;

(d) ...

(i) he is available for and actively seeking employment;"

and in regulation 5 of the Income Support (General) Regulations 1987 [SI 1987 No. 1967] ("the General Regulations"), which provides that:

"Persons treated as engaged in remunerative work

-(1) Subject to the following provisions of this regulation, for the purposes of section 20(3)(a) of the Act (condition of entitlement to income support), remunerative work is work in which a person is engaged, or, where his hours of work fluctuate, he is engaged on average, for not less than 24 hours a week being work for which payment is made or which is done in expectation of payment.

(2) The number of hours for which a person is engaged in work shall be determined -

(a) where no recognisable cycle has been established in respect of a person's work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week;

(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over-

(i) if there is a recognisable cycle of work, the period of one complete cycle (including where the cycle involves periods in which the person does no work, those periods but disregarding any other absences);

(ii) in any other case, the period of five weeks immediately before the date of claim or the date of review, or such other length of time as may, in the particular case, enable the person's average hours of work to be determined more accurately."

(Paragraphs (3) to (7) have no application to the present case.)

In the event the adjudication officer decided that Mrs. Peach:

"(a) had not reduced the hours which she devoted to writing to less than 24 hours per week;

(b) continued to write and submit for publication in the expectation of payment and indeed had received payments for articles published;

(c) had only claimed income support because of the cessation of Enterprise Allowance."

and that she therefore did not satisfy the condition of entitlement to income support, namely that she was not engaged in remunerative work. Mrs. Peach appealed and on 4 December 1990 the tribunal made various findings of fact, including that:

"3. .. she was continuing to write, spending at least the same amount of time as during the previous year in writing … The writing was done in expectation that a publisher could be found and she would be paid for it.

.. she had a novel with a publisher, a TV play with Channel 4, a non-fiction book and about a dozen articles with various magazines and papers.

Although she has no regular income from her writing she is drawing £30 weekly from her bank account."

In their reasons for their decision the tribunal relied on the definition of "work done 'in expectation of payment"' in R(FIS) 1/83 as "work carried [out] with the desire and intention of claiming a reward or profit", and they held that, as Mrs. Peach was:

"... working more than 24 hours with the desire and hope that in due course she would receive payment for her labour she is in remunerative work as defined by regulation 5(1) ... and therefore precluded from income support ..."

Now an essential difference between R(FIS) 1/83 and the instant case is (as in CFC/3/1989, to which I was referred) that the family income supplement legislation provided no definition of "remunerative work" whereas both the family credit and the income support legislation defines the words in regulation 5(1) (see para. 5 above), as being:

"... work in which a person is engaged ... on average, for not less than 24 hours a week being work for which payment is made or which is done in expectation of payment."

Whether or not a claimant is engaged in such work is a question of fact for the tribunal but it must, of course, be determined in accordance with the specific terms of the regulation. In my judgment the tribunal erred in law in paragraph 3 of their reasons, by adopting as a definition of "in expectation of payment" the words of the Commissioner in R(FIS) 1/83 "work carried out with the desire, hope and intention of claiming a reward or profit". The Commissioner was there defining, for the purposes of the relevant family income supplement legislation, the meaning of the words "remunerative work" not "in expectation of payment".

In my judgment the tribunal compounded their error in paragraph 4 of their reasons by there stating that Mrs. Peach:

"... was working more than 24 hours with the desire and hope that in due course she would receive payment ..." (my emphasis).

Desire and hope form no part of the statutory definition, which clearly provides that such work must be carried out either for payment or in the expectation of payment. Expectation is defined by the Shorter Oxford English Dictionary as inter alia:

"1. The action or state of waiting, or waiting for (something) ...

The action of mentally looking for something to take place; anticipation ...

Expectancy.

Ground or warrant for expecting ..."

On any footing expectation is not the same as desire, intention or hope. For the above reasons the tribunal plainly misdirected themselves in law, their decision is consequently erroneous in law and I set it aside.

I have no doubt that this is a case in which I can and should exercise my discretion under section 101(5)(a)(i) of the Social Security Act 1975 to give the decision which the tribunal should have given. It is clear that Mrs. Peach is over 18, that such income as she had did not exceed the applicable amount, that she was both available for work and, according to her statement (entitled, very aptly, "A Cautionary Tale for Aspiring Writers") she had applied, unsuccessfully, for a large number and variety of jobs. It follows that she fulfilled the conditions of section 20(3)(a), (b) and (d) of the 1986 Act and that the only issue is whether she was engaged in remunerative work within the meaning of section 20(3)(c).

In my judgment work carried out in expectation of payment means in realistic expectation of such payment. In my view that in fact accords with the words used by the Commissioner in R(FIS) 1/83, "the desire hope and intention of claiming a reward", and it will be noted that the words are to be read conjunctively. On the one hand someone engaged in some hopeless and fruitless occupation such as alchemy could never be said to have any expectation of payment, while on the other hand someone (such as the sculptor who makes a brief appearance in paragraph 10 of CFC/3/1989), who has been commissioned to produce work for which he will not get paid until delivery, would obviously be engaged in work in expectation of payment.

In between those two hypothetical examples lie many which may well be not so easily susceptible of determination. It seems to me that the only guiding principle must be common sense and an appreciation of the realities of the situation in question. It would plainly be absurd to hold that a man fell foul of regulation 5(l) if he devoted himself to tending his garden or allotment, and, whenever the occasion presented itself, sold small quantities of surplus produce, or equally if a woman were to pass the time knitting but occasionally sold the odd sweater at a church bazaar. It would be unreasonable to expect such persons to limit their activities to 24 hours a week and, in my view such a person would be in the same position as anyone else on income support who from time to time had earnings from casual work; it would be for them to declare any such earnings so that entitlement to benefit could be adjusted as appropriate.

Mrs. Peach had, during her "enterprise year" had the good fortune to earn a certain amount of money; since the year ended she had had negligible success in placing her work and was apparently existing on what her bank manager allowed by way of overdraft, doubtless secured by a charge on her house. Nevertheless she continued to write and, in all probability spent more time doing so in order to produce work for submission than she would have done had she had some regular commission to fulfil. Clearly she hoped to have work accepted, and paid for, but she was in fact working, as the phrase goes, "on spec" but, as I have said above, hope is not expectation, and the tribunal's finding that she had a number of manuscripts awaiting consideration by various publishers is irrelevant, such work is and, until accepted, remains, to use a colloquialism, "pie in the sky".

It was plainly important for Mrs. Peach to work as, in view of her age and qualifications and the rejection of her job applications, establishing herself as a self-employed writer was really her only hope of becoming financially independent; I do not believe that the legislation was ever intended to discourage anyone from that course. I am satisfied that at the relevant time Mrs. Peach, although working more than 24 hours a week, was not engaged in remunerative work within the meaning of section 20(3)(c). Accordingly in my judgment she fulfilled the conditions of entitlement to income support; I direct that the question of her entitlement be referred to an adjudication officer for assessment and payment. In the event of any dispute arising the matter is to be remitted to me.

Such calculation of Mrs. Peach's entitlement will, of course, take into account any actual earnings she may have received. In that respect I do not see that her case need present any greater problems than that of any other casual worker, although if, as is to be hoped, she achieves greater success, it may become necessary for her entitlement to be reviewed. Mr. Rowland helpfully drew to my attention regulation 30 of the General Regulations which, he submitted, although normally applied to consider a self-employed person's accounts annually, would also empower an adjudication officer to take any 52 week period he chose on a review; that would provide a proper safeguard against overpayment of benefit where the claimant's receipts were of irregular but substantial amounts, the "windfall situation".

The claimant's appeal is allowed and my decision is set out in paragraph 1.

Date: 28 May 1992 (signed) Mr. M. H. Johnson

Commissioner