R(CS) 2/99
Mr. R. J. C. Angus 		 					CCS/2320/1997
3.3.98
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:–
1.	the majority tribunal had failed to make findings of fact as to the nature of the allowance to support their conclusion that the allowance was a perk;
2.	following the House of Lord’s decision in Smith v. Abbott [1994] 1 All ER 673, in order to fall within paragraph 1(2)(a), the expenditure concerned must be incurred in the performance of duty. It was not enough for the expenses concerned to have been incurred in order to put the employee in the position of being able to perform his duties. The historical reason for the allowance was the need for officers to live in areas and in accommodation of a standard neither of which the officers could afford on their basic salaries in order to be available for duty. The allowance was not paid in respect of any expense incurred by them in using their house in the performance of their duty. Accordingly the allowance was to be treated as earnings within the meaning of paragraph 1(1)(d) of Schedule 1.
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
1.	The decision of the Child Support Appeal Tribunal dated 3 February 1997 is erroneous in law. I set that decision aside and, as empowered by section 24(3)(b) of the Child Support Act 1991, I substitute my own decision which is:
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.
2.	The appellant	is the father and absent parent of three children who are qualifying children for the purposes of the Child Support Act 1991. The appeal is made, with the leave of the chairman, against the tribunal’s decision that, inter alia, the housing allowance paid to the appellant, a police constable, by his employers is to be included as part of the appellant’s net income.
3. 	The child support officer is the first respondent to the appeal and the parent with care, the mother of the qualifying children, is the second respondent.
4.	A child support officer assessed the appellant’s liability for child support maintenance in respect of the qualifying children at £91.11 per week with effect from 4 March 1996. A second child support officer refused to review that decision and the appellant appealed the refusal to the tribunal. That appeal was partly supported by the child support officer then concerned but not in respect of the inclusion of the housing allowance in the appellant’s net income. The tribunal upheld the appeal in part in as much as it remitted the case to the Secretary of State with directions for the correction of certain elements of the first child support officer’s calculation of the maintenance assessment which are not in issue in the appeal to the Commissioner but it confirmed the inclusion of the housing allowance in the appellant’s net income.
5.	The appellant’s dispute with the child support officer is about the interpretation of regulation 7 of the Child Support (Maintenance Assessment & Special Cases) Regulations 1992 as read with paragraph 1(1)(d) of Schedule 1 to those regulations. Regulation 7(1) provides that in the calculation of the assessable income of an absent parent for the purposes of the Child Support Act 1991 the net income of the absent parent shall be the aggregate of certain amounts specified as (a) to (e) of which (a) is the amount of any earnings of the absent parent as determined in accordance with Part 1 of Schedule 1. So far as relevant to this appeal Schedule 1 is in the following terms:‑
“ 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; …”. 
6.	In applying those provisions to the matter of the appellant’s housing allowance the tribunal is recorded as having made the following finding in fact:
“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).”.
7.	I deal first with the appellant’s second ground of appeal which is a contention that the tribunal’s majority decision is in breach of the rules of natural justice because in finding the appellant’s housing allowance to be within the scope of paragraph 1(1)(d) the two members constituting the majority had ignored the views of the dissenting member and the three members of each of two other tribunals which had come to the contrary conclusion in similar cases. In other words two members had ignored the considered views of a total of seven other members. I reject that ground of appeal because, as the child support officer now concerned explains in his submission of 6 August 1997, child support appeal tribunals do not make decisions which are binding on other tribunals and each tribunal is obliged to decide upon disputed points of law by reference to the guidance to be found in the judgements of the Commissioners and the Courts.
8.	The appellant’s third argument is that the tribunal had no evidence to support its finding that the payment of the police rent allowance was a “perk”. The child support officer seems to accept that there is some merit in that argument but argues that the finding in question is superfluous as the tribunal had already dealt with the matter of the interpretation of paragraph 1(1)(d) of the Schedule to the regulations and its application to the appellant’s police rent allowance. The lack of evidential justification for the finding does not, therefore, render the tribunal’s decision erroneous in law. I do not agree. The reference to “perk” seems to me to be part and parcel of the tribunal’s conclusion that paragraph 1(1)(d) applies but there are no findings in fact as to the nature of the allowance which would justify that conclusion. The purported finding in fact which I quote in paragraph 6 above is simply the tribunal’s conclusion on the question of law which was in issue before it. That is a breach of the requirements of regulation 13 of The Child Support Appeal Tribunal (Procedure) Regulations 1992 which is an error in law on account of which I have to set the tribunal’s decision aside.
9.	The first and main ground of appeal is that the tribunal wrongly interpreted regulation 7(1) and paragraph 1(1)(d) of Schedule 1. In support of that argument the appellant cites Commissioners’ decisions CCS/318/1995 (starred 27/1996) and CCS/12769/1996 (starred 18/1997). However, notwithstanding the citation of those authorities, I have, for the reasons which I shall give below, to reject that ground of appeal also. 
10.	The wording employed in paragraphs 1(1)(d) and (2)(a) of Schedule 1 to the regulations is a well known formula employed in several statutory codes which have as one of their objects the exact ascertainment of the profit derived by an employee from his employment and the exclusion from the calculation of that profit the reimbursement of those expenses, but only those expenses, which the employee is obliged to incur in order to perform the duties of the employment. The child support officer’s decision which the appellant challenged at the appeal tribunal was in accordance with the guidance given in Commissioner’s decision CCS/10/1994 (starred 26/1996). The Commissioner in that case, which also concerned the question of whether the police rent allowance was earnings within the meaning of paragraph 1 (1) (d) of the Schedule, cited the House of Lords decision in Smith v. Abbott [1994] 1 AER 673 ‑ as authority for his view that, despite a policeman being constrained in his choice of dwelling and the possibility that the expenses of his housing are higher than would have been the case if he had not been a police officer, the rent allowance was a payment to which paragraph 1(1)(d) applied and not paragraph 2(a) because the housing expenses of the police officer concerned were incurred not in the performance of his duties but to enable him to perform those duties.
11.	The appellant argues that instead of following the Commissioner who decided CCS/10/1994 I should follow the Commissioner who decided the two decisions which he cites as supporting his case. In CCS/318/1995 the Commissioner held that the overseas allowance paid to protect soldiers posted overseas from the higher cost of living in some overseas postings was an allowance paid in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the soldier’s employment. I do not regard that decision as supporting the appellant’s case. The Commissioner’s reason for his decision was that the soldier’s duty was, inter alia, to be present at his overseas posting 24 hours per day and it was in the performance of that duty of being present in the overseas location that he incurred extra living expenses. I regard that case as having been decided on the basis of the Commissioner’s view of the nature of the military local overseas allowance and distinct from this case.
12.	CCS/12769/1996 does concern the police rent allowance. In that decision the Commissioner disagreed with the author of CCS/10/1994. He did so because the policeman appellant in CCS/12769/1996 submitted a very detailed explanation of the nature of a police officer’s duties and his constitutional position together with an account of the power of chief constables to restrict the individual police officer’s choice of dwelling. That appellant explained to the Commissioner that a police officer’s choice of living accommodation had to be approved by his chief constable as being suitable for the police officer and being in a location which enabled the officer to attend to his duties. Also a police officer was never off duty. Although he had rostered hours outside of which he could generally regard his time as his own, when the exigencies of the service so demanded he could be required by his senior officers to return to work outwith his rostered hours. Apart from such recall to work, if a police officer becomes aware of any circumstance which requires immediate police intervention it is his duty to act even if that means he has to do so outside of his rostered hours. Moreover, even if he is not living in a police house a policeman can in certain circumstances find himself having to use his house or part of it in the course of his duty. The appellant concerned cited several instances when he and his colleagues used the appellant’s house for policing purposes although it was not a police authority house. The Commissioner decided that, although he did not know exactly what evidence was adduced to the author of CCS/10/1994, the evidence as to the duties of a police officer and the constraints on the choice of living accommodation which he had heard justified him in not following CCS/10/1994 and deciding, as he did, that the police rent allowance was not earnings as defined in paragraph 1(1)(d) of the Schedule.
13.	CCS/12769/1996 is not, however, the last Commissioner’s word on the matter. The child support officer now concerned, in an additional submission of 27 October 1997, draws to my attention Commissioner’s decision CCS/12598/1996 (starred 28/1997). The author of that decision remarks on the difference between the evidence given to him and that given to the author of CCS/12769/1996. In CCS/12769/1996 the Commissioner had been satisfied that the additional use imposed on the officer’s house by the public’s recourse there to gave rise to substantial extra expense attributable solely to the performance of the officer’s duties and outside normal domestic expenses. The evidence given to the author of CCS/12598/1996, however, led him to conclude that the police rent allowance is a standard amount added to the pay of officers who are not housed free in police quarters. The allowance is taxable which means that it has not been accepted as passing the “wholly exclusively and necessary” test enacted in section 198 of the Taxes Act 1988 which is a test identical to that specified in paragraph 1(1)(d) and (2)(a). Also the allowance is in the process of being phased out by not being awarded to new entrants to the police force. That Commissioner, therefore, decided that the rent allowance as explained to him constituted earnings within the meaning of paragraph 1(1)(d) of the Schedule and not excluded from aggregation by virtue of sub‑paragraph (2)(a).
14.	The appellant in this case has very helpfully produced copies of a considerable amount of literature which touches on the nature of the police rent allowance which literature was supplied to him by the General Secretary to the Police Federation of England and Wales. Included is a copy of Statutory Instrument 1920, No. 1484. That instrument incorporates The Police Regulations of 20 August 1920 made by the Secretary of State under section 4 of the Police Act 1919. Regulation 65 provides for payment of the rent allowance and is in the following terms:
“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.
15.	In paragraphs 63 and 64 of the report of the Desborough Committee of 1919 the committee remarks on a wide variation in the practices of police forces throughout the country in providing for the accommodation of police officers. It recommends that in all police forces the policy of building, buying or renting houses by the police authority should be extended, that those officers provided with police accommodation should live rent free and that those officers who find their own houses or lodgings should receive a pensionable allowance in lieu. That allowance should either cover the rent paid by the individual constable, not exceeding a maximum limit to be fixed for the single and married men of each rank respectively for the police area as a whole, or should be a flat rate allowance for the single and married men of each rank respectively applying throughout the police area and fixed on the basis of an average reasonable rent for a policeman to pay according to his rank and the locality in question.
16.	Appendix “W” to the Report of the Committee of the Police Council on Local Conditions of Service for the Police describes the conditions of service of policemen. Condition 6 is:
“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.”.
17.	The official side’s submission to the Arbitration Tribunal on Rent Allowance in 1984 includes the following:‑
“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. ………….”.
18.	What seems to be the most recent comment on the matter is in the Report on the Inquiry into Police Responsibilities and Rewards of June 1993. Paragraph 9.28 of Volume 1 states:‑
“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.”
19.	The appellant has submitted that his circumstances are similar to those of the appellant in CIS/12769/1996 in that as a uniformed officer recognisable to the public as a policeman he has had to deal with incidents from his house. The circumstances are different from those of the appellant in CCS/12598/1996 who is a drug squad officer whose house is not used for dealing with incidents.
20.	In the circumstances of the conflicting Commissioners’ decisions with which he is faced that is a perfectly logical argument for the appellant to put forward. Unfortunately for him I cannot accept it. To do so I would have to accept that the appellant in CCS/12769/1996 had a correct understanding of the nature of the allowance. In my view he did not. His understanding of the reasons for the payment of the allowance is contradicted by the material which I have quoted in paragraphs 14 to 18 above. My conclusion is that the allowance is paid to those officers who do not have the benefit of free police accommodation in order to put them in the same financial position as those who do. Although those reports which I have quoted note the various constraints which are placed on police officers in their personal conduct, both on and off duty, and in their use of their accommodation even when it is owner occupied and although even the officer who is an owner occupier of his accommodation can find himself having to use it occasionally for police purposes, none of those reports suggest that those considerations have any bearing on the, until recent years, universal police authority practice of providing officers with rent free accommodation of an appropriate standard and in an appropriate location or a rent allowance in lieu. It is clear from the papers produced that the underlying reason for the introduction of the practice of providing free accommodation or an allowance in lieu was the need for officers to live in areas and in accommodation of a standard neither of which the officers could afford on their basic salaries in order to be available for duty. Therefore I find in fact that, although officers may use their houses in the performance of their duties on occasion, it is not in respect of any expense incurred by them in doing so that the rent allowance is paid.
21.	The deciding question in this appeal is whether as a matter of law the rent allowance paid to the appellant is a payment in respect of any expenses “wholly, exclusively and necessarily incurred in the performance of the duties of the [appellant’s] employment” within the meaning of sub‑paragraphs (1)(d) and (2)(a) of paragraph 1 of Schedule 1. To satisfy that test the allowance has to meet several criteria enunciated in well established judicial interpretations of those words. The basic criterion is that the expenses must be incurred in the performance of the duties. The House of Lords decision in Smith v. Abbott referred to above and in CCS/10/1994 establishes that to meet that criterion it is not enough for the expenses concerned to have been incurred in order to put the employee into the position of being able to perform his duties. The expenditure must be incurred in the performance of duty. As I have concluded that in fact the rent allowance is not paid in respect of the latter type of expenditure it is a payment which comes within the scope of either of (1)(d) .
22.	I accept that the appellant does sometimes have to use his living accommodation in the performance of his duty. It is, therefore, arguable that part of his expenditure on his accommodation is incurred in the performance of his duty but the evidence which he has produced establishes that it is not in respect of that part that the rent allowance is paid. In so far as he incurs expenditure by using his house in the performance of his duty he is not reimbursed by the rent allowance. The appellant in CCS/12769/1996 argued that “The housing allowance is a payment of part of a Constable’s housing expenses ‑ that part incurred whilst performing his duty and not in order to perform his duty.”. That, according to the evidence on which I have relied, is a misunderstanding of the purpose of the rent allowance.
23.	As the expenses in respect of which the rent allowance is paid to the appellant are not incurred in the performance of the duties of his employment the rent allowance is “earnings” within the meaning of sub‑paragraph (1)(d) of paragraph 1 of the Schedule and not excluded from earnings by virtue of sub‑paragraph (2)(a) of that paragraph.
24.	For the foregoing reasons the appeal to me succeeds to the extent that the tribunal’s decision is set aside but I have substituted my own decision which is to the same effect.

Date: 3 March 1998                                                           (signed) Mr.  R. J. C. Angus
                                                                                                                 Commissioner