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[1997] UKSSCSC CIS_858_1994 (18 June 1997)

R(IS) 10/98

Mr. M. J. Goodman CIS/858/1994

Absence from Great Britain - claimant on work experience in Belgium and France and receiving maintenance from the European Social Fund - whether in receipt of a training allowance and so not required to be available for work

The claimant was following a business administration course that occupied less that 21 hours of study per week and therefore did not affect his eligibility to income support. The course involved a two week "work experience" placement based in European Community institutions in Brussels and Strasbourg. His college paid for his travel and hotel expenses but he was dependent on his income support for living and other expenses. The maintenance monies paid by the college originated out of the European Social Fund and were administered by the Secretary of State for Employment. The adjudication officer decided that the claimant was not entitled to income support while he was absent from Great Britain. A tribunal dismissed the claimant's appeal and he appealed to a Commissioner, arguing that he was entitled to income support by virtue of European Community law.

Held, allowing the appeal, that:

the money received by the claimant from the college was "for his maintenance" because it included hotel and travel expenses (para. 10);

the European Social Fund constituted "public funds" (para. 11);

the payments were transmitted via the Secretary of State for Employment and were therefore made "by or on behalf of the Secretary of State for Employment" (para. 12);

the claimant was "following a course of training ... approved by or on behalf of the Secretary of State for Employment" because the Secretary of State had to satisfy himself that the course was within the ambit of the European Social Fund (para. 14);

the payments were therefore a training allowance within regulation 2(1) of the 1987 Regulations so that, by virtue of regulation 8(1) and paragraph 11 of Schedule 1, the claimant was not required to be available for work and, by virtue of regulation 4(2)(c)(i), he was entitled to income support while temporarily absent from Great Britain;

the claimant's case succeeded under United Kingdom law but he could not have derived any assistance from European Community law, including Council Regulation (EEC) No. 1408/71 (paras. 15 to 19);

regulation 4 of the 1987 Regulations was neither ultra vires nor in conflict with any fundamental principle of European Community law (para. 19).

DECISION OF THE SOCIAL SECURITY COMMISSIONER

I allow the claimant's appeal against the decision of the social security appeal tribunal dated 22 July 1994, as that decision is erroneous in law and I set it aside. My decision is that the claimant was not disentitled to income support for the inclusive period from 7 to 17 March 1994 by reason of being absent from Great Britain because that absence was temporary; during that absence the claimant continued to satisfy the other conditions of entitlement to income support; and the claimant was not required to be available for employment because during that period he was in receipt of a training allowance; Social Security Contributions and Benefits Act 1992, section 124; Social Security Administration Act 1992, section 23; Income Support (General) Regulations 1987, SI 1987 No. 1967 as amended, regulations 2(1) and 4.

This is an appeal to the Commissioner by the claimant, a man aged 35 at the date of the tribunal proceedings. The appeal is against the unanimous decision of a social security appeal tribunal, dated 22 July 1994, which dismissed the claimant's appeal from a decision of the adjudication officer (issued on 5 March 1994) to the effect that while absent from Great Britain for the inclusive period from 7 March 1994 to 17 March 1994 the claimant was not entitled to income support, though he had been in receipt of that benefit before the absence from Great Britain. Further details are given below.

The appeal was the subject of oral hearings before me on 19 September 1995 and 29 July 1996, at which the claimant was present and was represented by Mr. P. Diamond of Counsel. The adjudication officer was represented by Mr. N. Payne, also of Counsel. I am indebted to all those persons for their assistance to me at the two hearings. The reason for the length of time that has elapsed between the hearings and this decision is due to detailed enquiries that have had to be made in this complicated case and the making by the parties of written submissions, in response to a number of directions that I have made.

The facts were stated in the claimant's notice of appeal to the social security Commissioner as follows:

"The [claimant] graduated from the University of Kent in 1992. Thereafter, the [claimant] became unemployed as he was unable to secure employment despite numerous attempts. The [claimant] was in receipt of income support ... in order to improve the opportunities for the [claimant] to secure employment, he commenced a course of studies at Canterbury College for the academic year 1993-94. The course was "Business Administration" and led to the qualification "NVQ Level 4". The course occupied less than 21 hours study per week and, therefore, did not affect the [claimant's] eligibility for income support. (The [claimant] returned to full-time educational studies in the academic year 1994-5). The course is designed to assist individuals in securing employment within the European Union as well as the United Kingdom. The [claimant] hoped to seek employment opportunities in the European Union, in particular with the institutions of the Community situated in Brussels, Belgium. The Canterbury College has a European Unit from which funds were obtained through the European Commission (the European Social Fund) to finance the [claimant's] placement in Belgium and France [Strasbourg]. The insight of working in the institutions of the Community came from promotional literature from the Department of Employment (DoE publication "Euroaction" 1993). The Department of Employment hopes to increase the representation of UK nationals within the institutions of the EC (where we are under-represented). In "Euroaction", the Robert Schulman scholarship for work in the European Parliament is promoted. The course at Canterbury College provided for a two week 'work experience' placement with the then Member of the European Parliament for Kent. The work placement was from 7 March 1994 to 17 March 1994 in Brussels and Strasbourg. The Canterbury College paid travelling and hotel expenses only as the "work placement" was part of the course of "Business Administration". The [claimant] was dependent on his income support for living and other expenses. The retail prices in Belgium and France are significantly higher than those in the United Kingdom; further the [claimant] had additional expenses as he was not occupying his residential dwelling. The [claimant] continued his search for work in both the United Kingdom and the European Union throughout the period of his unemployment. The Department of Employment refused to pay the income support for the period 7 March to
17 March 1994 ..."

The question that arises therefore in this case is whether the social security appeal tribunal were correct in upholding the adjudication officer's refusal to pay income support to the claimant during the time that he was absent from Great Britain. The basic entitlement to income support is provided for by section 124 of the Social Security Contributions and Benefits Act 1992 which so far as is relevant to the present case, provides as follows:

"124. (1) A person in Great Britain is entitled to income support if-

(a)-(c) ...

(d) except in such circumstances as may be prescribed-

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

(ii) he is not receiving relevant education." (my emphasis.)

However, section 137(2)(b) of the 1992 Act provides that regulations can make provision for "continuing a person's entitlement to benefit during periods of temporary absence from Great Britain." In pursuance of that power, regulation 4 of the Income Support (General) Regulations 1987, SI 1987 No. 1967, (as amended) provides, so far as relevant, as follows:

"Temporary absence from Great Britain

-(1) Where a claimant is entitled to income support for a period immediately preceding a period of temporary absence from Great Britain, his entitlement to income support shall continue only-

(a) in the circumstances specified in paragraph (2), during the first 4 weeks of that period of temporary absence;

(b) ...

(2) The circumstances in which a claimant's entitlement to income support is to continue during the first four weeks of a temporary absence from Great Britain are that-

(a) the period of absence is unlikely to exceed 52 weeks; and

(b) while absent from Great Britain, the claimant continues to satisfy the other conditions of entitlement to income support; and

(c) any one of the following conditions apply-

(i) the claimant is not required to be available for employment under regulation 8(1) and Schedule 1 [other than certain exceptions not relevant to this case] ... (persons not required to be available for employment); or

(ii)-(v) ..."

Regulation 8(1) of the 1987 Regulations provides that a person to whom any paragraph of Schedule 1 applies in any week "shall not be required to be available for employment in that week". The relevant provision of Schedule 1 to the 1987 Regulations is paragraph 11 which refers to "A person who is in receipt of a training allowance." "Training allowance" is defined by regulation 2(1) of the 1987 Regulations as follows:

"2. (1) 'Training allowance' means an allowance (whether by way of periodical grants or otherwise) payable-

(a) out of public funds by a Government department or by or on behalf of the Secretary of State for Employment ...;

(b) to a person for his maintenance or in respect of a member of his family; and

(c) for the period, or part of the period, which he is following a course of training or instruction provided by, or in pursuance of arrangements made with, that Department or approved by that Department in relation to him or so provided or approved by or on behalf of the Secretary of State for Employment ... ,

but it does not include an allowance paid by any Government department to or in respect of a person by reason of the fact that he is following a course of full-time education, other than under arrangements made under section 2 of the Employment and Training Act 1973, or is training as a teacher;"

In a direction dated 17 February 1997 I asked for submissions from the parties "as to whether at the relevant time the claimant can be said to have been receiving a 'training allowance'". I have now received detailed written submissions from the adjudication officer now concerned, dated 10 April 1997. A copy of those submissions has been sent to the claimant's solicitor, who has notified the Office of Social Security Commissioners that he does not wish to make a detailed reply to those submissions. It is however part of the claimant's case that he was in fact in receipt of a "training allowance" whilst out of Great Britain.

The careful and detailed submission of the adjudication officer dated
10 April 1997 starts by submitting that the claimant was not in receipt of a training allowance but the succeeding parts of that submission do pose alternatives which could in fact mean that the claimant was in receipt of a training allowance. Having considered this matter carefully, I have come to the conclusion that the claimant can properly be stated to have received a training allowance during the period when he was out of Great Britain. There were payments for his maintenance which originated from the European Social Fund, which was administered in the United Kingdom at the relevant time by the Secretary of State for Employment.

Taking the various elements of the definition in turn, the adjudication officer submits, having regard to dictionary definitions, that the payments for the claimant's maintenance from the European Social Fund could be said to constitute "an allowance (whether by way of periodical grants or otherwise)". I accept that that payment or those payments did constitute "an allowance". Moreover, the payment was "to a person for his maintenance" (regulation 2(1)(b)), since it included payments for the claimant's hotel and travel expenses.

It is however submitted by the adjudication officer that the European Social Fund does not constitute "public funds". He cites paragraphs 5 and 6 of R(P) 13/56 where the Commissioner held, in a different context, that "public funds" meant "funds controlled by the Government of the country". However, he also points out that that decision was given before the accession of the United Kingdom to the European Community and that consequently the sources of public funds could now be said to be broader. Nevertheless, the adjudication officer submits that such funds must be under the "control" of the UK Government. In a Northern Irish case (C13/90 (IS)), cited by the adjudication officer, a training course in question was partly funded by Derry City Council and partly by the European Social Fund. The learned Commissioner there said "I am satisfied that 'public funds' means funds other than private funds" though he did not advert specifically to that part of the money that came from the European Social Fund (cf. CSIS/4/1994, para. 8). I am nevertheless satisfied that the European Social Fund does constitute "public funds".

The next question is whether the allowance thus being paid out of public funds was so paid "by or on behalf of the Secretary of State for Employment". This point is extremely complicated and is the subject of a detailed submission by the adjudication officer at paragraphs 11 to 17 of his submission of 10 April 1997. He points out that the sums are in a sense only transmitted from the European Social Fund via the Secretary of State for Employment (compare CSIS/4/1994, subsequently reviewed on factual grounds by an adjudication officer). See also C13/90 (IS) where the Commissioner referred to the fact that changes in administration of the European Social Fund might bring the payments within this definition. The adjudication officer goes on to submit "that European Social Fund expenditure is administered by Member States in partnership with the European Community. Therefore it is arguable that allowances are paid by or on behalf of the Secretary of State for Employment. At this state of evolution of the European Community, arguably it is irrelevant that funding derives from money collected by the EC from EC Member States." However, the adjudication officer concludes that as "... ultimate responsibility for the control of European Social Fund expenditure still rests with the [EC] Commission" the payments are not "by or on behalf of the Secretary of State for Employment." However, having regard to the spirit of the European Social Fund monies and their uses (see paras. 4 and 14) and to the broad definition of "training allowance" I am prepared to hold that these payments were made "by or on behalf of the Secretary of State for Employment", in the wider sense.

Lastly, the question arises in this context whether during the period in question the claimant was "following a course of training or instruction provided by, or in pursuance of arrangements made with, that Department or approved by that Department in relation to him or so provided or approved by or on behalf of the Secretary of State for Employment ...". In paragraph 20 of his submission of
10 April 1997, the adjudication officer submits:

"... that the course was not provided by or on behalf of the Secretary of State for Employment but the question arises as to whether the course was supplied by the European Social Fund Unit and, if it was, does this mean that the course was approved by the Secretary of State for Employment?"

The adjudication officer then goes on to consider these matters in detail, submitting that the claimant was following a course of "training or instruction" but pointing out the difficulty that that course had to be "provided by, or in pursuance of arrangements made with or on behalf of the Secretary of State for Employment." That is speculative in some ways but it would appear from the totality of the evidence before me that it could well be said that in relation to the claimant on whose behalf the payments were made, the course or that part of it that consisted of going abroad was approved by or on behalf of the Secretary of State for Employment. Clearly the Secretary of State, being the transmitting agent, would have to satisfy himself that the course or its contents, including the provision for job placements abroad, was within the ambit of the European Social Fund. Although the matter is not free from difficulty, I again conclude this matter in favour of the claimant. I think it legitimate to look at the definition of "training allowance" in the light of the position at the relevant time (1994) of the United Kingdom's relationship to the European Community and in particular the purposes of the European Social Fund as to which the adjudication officer now concerned has supplied me with detailed documentary materials. I note from those materials that relate to the European Social Fund that it is administered in Great Britain through the European Social Fund Unit of the Department of Employment. Moreover, it is stated that "all schemes must fall within the broad areas of vocational training, retraining, or job creation (including self-employment opportunities) or vocational guidance and counselling." Clearly, the placement of the claimant abroad in this case came within that statement of intent (see para. 4 above).

As I have allowed the appeal in the claimant's favour on the ground that under United Kingdom law he is able to take advantage of regulation 4 of the Income Support (General) Regulations 1987, I need not deal in detail with the contentions which he has made through his Counsel as to the application of the law of the European Community to this problem. I will however say at this point that one reason I have set the original tribunal's decision aside is that, despite the fact that the claimant adduced arguments based on European Law to the tribunal, they did not in their record of decision deal with those arguments at all. I have also set their decision aside on the ground that they did not construe regulation 4 of the 1987 Regulations in favour of the claimant but they could hardly be blamed for this, as the point about "training allowance" has only really been raised at the stage of appeal to the Commissioner.

The appeal papers in this case contained voluminous submissions from both parties on the subject of European Law. Through his Counsel the claimant has raised wide-ranging issues e.g. as to the vires of regulation 4 of the 1987 Regulations in their present form. He has also referred to the provisions of European law relating to freedom of movement for workers and facilities for vocational training. I, nevertheless, accept the adjudication officer's submissions that these do not confer any direct right to income support on the claimant.

The only point that I need deal with in any detail is the claimant's contention that he comes within the provisions as to social security benefits contained in Council Regulation (EEC) No. 1408/71, as amended by Council Regulation (EEC) No. 1247/92. He is undoubtedly within the personal scope of that regulation as having at one time worked and paid national insurance contributions. He also had title in 1990 to invalidity benefit. However, income support has been declared by the UK to be a "special non-contributory benefit" within the meaning of Article 10(a) of regulation 1408/71 (inserted by regulation 1247/92 as from 1 June 1992). Article 10(a)(1) provides as follows,

"10. (a) Special non-contributory benefits

Notwithstanding the provisions of Article 10 and Title III, persons to whom this Regulation applies shall be granted the special non-contributory cash benefits referred to in Article 4(2a) exclusively in the territory of the Member State in which they reside, in accordance with the legislation of that State, provided that such benefits are listed in Annex IIa [as income support is]. Such benefits shall be granted by and at the expense of the institution of the place of residence." (my emphasis)

Article 1(h) of Regulation 1408/71 defines "residence" as "habitual residence". As the adjudication officer submits in paragraph 21 of her submission dated 12 April 1995, "[the claimant's] absence in Brussels and Strasbourg was clearly only a temporary absence of a few days." He remained "habitually resident" in the UK. Moreover, the word "legislation" in the phrase "in accordance with the legislation of the Member State" in Article l0a of Regulation 1408/71 is defined in Article 1(j) of the 1971 Regulation as meaning "in respect of each Member State statutes, regulations and other provisions, and all other implementing measures, present or future, relating to the branches and schemes of social security covered by Article 4(1) and (2) or those special non-contributory benefits covered by Article 4(2a)". Income support is undoubtedly a special non-contributory benefit covered by Article 4(2a) and the Income Support (General) Regulations 1987 constitute "legislation".

It therefore follows that, while the claimant was absent from Great Britain in Brussels and Strasbourg, his entitlement to income support had to be determined by the legislation of the United Kingdom, which would of course include the provisions of regulation 4 of the 1987 Regulations. That regulation is in my view not ultra vires as the claimant asserts nor do I consider it to be in conflict with any fundamental principle of European Community Law. In my view so far as European Law is concerned the question in this case is acte claire. I decline, as the claimant has asked me to do, to refer this case to the European Court.

Date: 18 June 1997 (signed) Mr. M. J. Goodman

Commissioner