Mr. R. J. C. Angus CCS/2320/1997
Maintenance assessment - earnings – whether housing allowance paid to police officer to be treated as payment of expenses wholly exclusively and necessarily incurred in the performance of the duties of the employment
The absent parent, a police officer, was paid a housing allowance. The child support officer included the allowance as earnings in calculating the parent's net income. The absent parent appealed on the ground, amongst others, that the allowance was a payment falling within paragraph 1(2)(a) of Schedule 1 to the Child Support (Maintenance Assessment and Special Cases) Regulations 1992 (payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment) and thus not to be so treated. The tribunal, by a majority, rejected that ground of appeal finding that the allowance was a "perk" and that as such it would be inequitable to disregard it in calculating income. They allowed the appeal on other grounds. The absent parent appealed to the Commissioner.
Held, allowing the appeal, that:–
The Commissioner declined to follow CCS/12769/1996. He remitted the case to the Secretary of State to be dealt with by a child support officer.
DECISION OF THE CHILD SUPPORT COMMISSIONER
The case is remitted to the Secretary of State to be dealt with by a Child Support Officer in accordance with the following directions:
(a) Include the absent parent's housing allowance as part of his net income.
(b) Exclude from the parent with care's net income the voluntary payment from the absent parent shown in the calculation of the assessment as £57.69 per week.
(c) Treat the net income of the absent parent's partner as £308.24.
" 1 - (1) Subject to sub-paragraphs (2) and (3), "earnings" means in the case of employment as an employed earner, any remuneration or profit derived from that employment and includes -
(d) any payment made by the parent's employer in respect of any expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment, including any payment made by the parent's employer in respect of -
(i) travelling expenses incurred by the parent between his home and place of employment; and
(ii) expenses incurred by that parent under arrangements made for the care of a member of his family owing to that parent's absence from home;
(2) Earnings shall not include -
(a) any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment; …".
"The majority of the Tribunal found that this was part of the [appellant's] net income and not wholly exclusively and necessarily incurred in the duties of his employment.".
The relevant part of the tribunal's reasons for its decision is as follows:
"The majority decided that the so called housing allowance was part of the [appellant's] net income under CS(MASC) Regs. 1992 Schedule 1 Part 1 Chapter 1 para. 1(1)(d) as not wholly exclusively and necessarily incurred in the performance of his duties as a police officer. They considered that such "allowance" was not solely related to the performance of his duties and was an additional "perk". It was used by eg building societies in calculating a police officer's income and as such it would be inequitable to disregard the same in calculating income.
The dissenting member believed that the allowance was to compensate a police officer for the ability of the police authority to regulate where such officer lived ie to control domicile under the Police Regulations 1987 regulation 10 and Schedule 2 as produced to the Tribunal. It was thus exclusively in connection with the employer's requirements and the specific nature and identity of the employer's work. It was accepted as such by the Inland Revenue who allowed a compensatory grant to refund the income tax initially suffered on such allowance.
Therefore the allowance fell within Schedule 1 Part 1 Chapter 1 para. 1(2)(a) of CS (MASC) Regs. 1992 and not para. 1(1)(d) and as such was not part of the earnings of the (appellant).".
"65 (i) Every member of a police force shall either be provided with a house or quarters free of rent, rates and taxes, or shall be granted a non-pensionable allowance in lieu.
(ii) Any allowance granted in lieu of house or quarters shall be either -
(a) A "flat-rate allowance" for married and single men of each rank respectively, the amount to be fixed so as to cover a reasonable average rent (with rates and taxes) for members of the rank in question to pay, or
(b) A "maximum limit allowance" equal to the actual amount paid in rent, rates and taxes by the individual members of the force, subject to a maximum limit to be fixed for married and single men of each rank respectively.
Provided that a widower with dependent children living with him may be granted an allowance at the rate provided for a married man.
(iii) For the purpose of this regulation "rates" shall include any poor rate or any general or district rate and any water rate for domestic supply assessed on the rateable value of the house of quarters independently of the quantity of water consumed, and "taxes" shall include inhabited house duty but not property tax.
"Accommodation. Free quarters are provided by the police authority or a rent allowance is granted in lieu. Income tax paid on a rent allowance is reimbursed.".
Paragraph 7 of the Report of the Committee on Police Rent and Supplementary Allowances (produced in 1947) contains the following passage:
"We find that a large proportion - some 250 - of the men who receive allowances own houses which they occupy, nearly all of them in London or provincial borough forces. Since they do not pay rent, the amounts for the allowances are settled by estimating the equivalent rental values of their houses. We are satisfied that rent allowances for owner occupiers continued to be subject to the same "maximum limits" as those of their colleagues who rent furnished accommodation; but the method of assessing the equivalent rental value gives rise to a problem which we have discussed at considerable length.".
"1. Rent allowance was introduced at a time when most police officers were provided with free housing and those who were not, rented rather than owned their accommodation. The statutory provision of free housing goes back at least to the time of Lord Desborough's enquiry into police pay in 1919 and was justified by the need for police officers to live within a short distance of their place of duty and in housing considered by management to be suitable accommodation for a police officer. Where enough free houses were not available and officers had to rent private property, the rent allowance was designed to put them in the same financial position as those provided with free housing."
"2.1 The Official Side believe that the original justification for providing housing - the need to have the vast majority of police offices living close to their place of duty - no longer applies. Nearly four out of five police officers receive rent allowance, and for the most part the main constraint on where they live is the same as for the rest of the population - cost, both of housing and of travel to work. ………….".
"A payment of housing emoluments at various levels dates from a period when police officers were equated with manual and in particular agricultural workers. It also reflects a period when very strict controls were exercised as to where and in what standard of accommodation police officers lived. Some of these controls continue to exist but not all; policies vary. It is rare in England and Wales for police officers to be required to live very close to their place of duty: a number of forces have extended the area within which an officer may live quite considerably in the light of improved transport arrangements. There remain, however, quite substantial controls over the use to which officer's private accommodation can be put and where they live."
Date: 3 March 1998 (signed) Mr. R. J. C. Angus