UK Social Security and Child Support Commissioners' Decisions

[2002] UKSSCSC CIS_2211_2002 (20 November 2002)

 


1. The appeal is dismissed.
2. This is an appeal with leave granted by the chairman from the decision of an appeal tribunal dated 20.3.2002.
3. The claimant had been injured and, under a Court Order of 28.9.2000 (7), he was awarded £1.5 million damages, administered by the Court of Protection. The Court authorised payment of £5,000 per month to a joint account held in the names of the solicitor and the claimant's mother, out of which £4,750 is paid by standing order to the Transitional Rehabilitation Unit, which the claimant attends, and £250 to the mother for her ongoing care – see the letter of the Public Trust Office of 3.12.2000 (54).
4. The claimant has been in receipt of income support since 1989, because he was incapable of work through his injury. On 5.7.01, the Secretary of State decided that the income of £5,000 p.m. each month was to be treated as capital for the period of that month, and thus a tariff income of £8 p.w. was to be taken into account – i.e. £2,000 divided by £250. The claimant appealed and the appeal tribunal heard and dismissed his appeal on 20.3.2002.
5. I endeavoured to encapsulate the issues in the direction which I gave on 6.9.2002 which, for the purpose of making this decision comprehensive, I set out such parts which seem to be material:-

"In CIS/929/00 the Commissioner held, as I read the decision, as follows:-

(a) para 44(a) of Schedule 10 of the General Regulations had the effect of disregarding for the purposes of the capital limits, the capital administered by the Court of Protection;

(b) para 22 Schedule 9 had the effect of disregarding the income from that capital for the purposes of the income limits; but

(c) regulation 48(4) nevertheless had the effect of making each monthly payment capital, which thus attracted a tariff income to be accounted for.

"The effect of para 44(a) Schedule 10 to the General Regulations is replicated in para 19, Schedule 4 of the Assessment Regs 1992, para 22 of Schedule 9 is replicated in para 14 of Schedule 3, regulation 48(4) is replicated in regulation 22(4). The comment of the tribunal that [Ryan and another v Liverpool Health Authority (Q.B. 10.9.2001) "Ryan"] was concerned with different legislation is, of course, valid but in substance precisely the same points arose.

CIS/4037/99 is of no assistance in this case as it deals with points (a) and (b) in CIS/929/00, which is accepted.

In Ryan (although decided shortly before CIS/929/00 evidently not cited to the Commissioner) Munby J. did not put into effect what was the purpose of point (c) in CIS/929/00. He said that the lack of reference to para 19 of Schedule 4 of the Assessment Regs in reg 22(1) and para 14(1) of Schedule 3 was fatal to the Health Authority's case – at least that is what I think was the purport of his judgment."

I then asked for further submissions. I rejected the claimant's submissions on Beattie v. Secretary of State R(IS) 10/01, since that was a case to which regulation 41(1) of the General Regulations expressly applied.

6. The point which I have to decide is whether I should follow Munby J. in Ryan or follow Mr Commissioner Howell in CIS/929/00. The question is reduced to the short point, namely whether in the latter case reg 48(4) had the effect which the Commissioner held that it had.
7. Now in Ryan, the relevant provision is reg 22(4) of the National Assistance (Assessment of Resources) Regs 1992 (as amended) ("the Assessment Regs"). Reg 22(4) provides:-

"Except any income derived from capital under para 1, 2, 5, 10 or 16, 19 of Schedule 4 any income of a resident which is derived from capital shall be treated as capital but only from the date on which it is normally due to be paid to him."

That is similar mutatis mutandis to reg 48(4) of the General Regulations. Para 10 referred to in reg 22(4) of the Assessment Regulations is to be construed by reference to para 12 of the 10^th Schedule to the General Regulations which provides that a capital disregard is to apply inter alia:

"Where the funds of a trust are derived from a payment made in consequence of any personal injury to the claimant the value of the trust fund and the value of the right to receive any payment under that trust."

That para is expressly excluded from the regulation 48(4) (and 22(4)).

8. But, among the capital disregards is also para 44 of the 10th Schedule to the General Regulations – and so far as the Assessment Regs are concerned there is the equivalent in para 19 of the 4th Schedule which, again is to be construed by reference to the relevant provision in the General Regulations. Para 44 provides as a similar capital disregard for:-

"Any sum or capital administered on behalf of a person by … the Court of Protection where such sum derives from –

(a) an award of damages for a personal injury to that person; or

(b) …"

The payment of the £1.5 million is clearly within that paragraph. But it is also prima facie within paragraph 12. In CIS/929/00, Mr Commissioner Howell held that the provisions of regulation 48(4) had the effect of making the income from the capital sum itself capital: whereas Munby J. in Ryan thought the opposite.

9. Now I appreciate that, as I said in my direction, Commissioners were not strictly bound by a decision of the High Court, although will rarely depart from the same. In this case, if Ryan was decided in the way that I think it was – I am minded to depart from it. Munby J, I think, placed his finger for the reason for the distinction when, in para 36, of his judgment he said:-

"Moreover, and in this I differ perhaps from Stanley Burnton J in Bell at para [43], I have no difficulty in detecting in this reading of the two provisions an entirely rational policy, namely that whilst the general class of personal injury claimants whose funds are for whatever reason held in trust (and they will not necessarily be persons under a disability: see, for example, Allen v. Distillers Co., Bio-Chemicals Ltd) (1974) QB 384) should be required to make their trust income available to meet the cost of their accommodation, those who are under disability (whether disability arising from non-age or disability resulting from mental disorder) and whose funds are accordingly being managed by the Court (whether the High Court or the Court of Protection) should have their trust income wholly disregarded for this purpose …"

That is a rational explanation why the two provisions might be treated differently, but, in my judgment, the legislation does not go so far as to say that those who come within para 44 of Schedule 10 (or para 19 of Schedule 4 of the Assessment Regs) should wholly escape some form of contribution, for want of a better word.

10. The key seems to me to lie in the fact that under para 22 of Schedule 9 of the General Regulations – and regulation 14 of Schedule 3 of the Assessment Regulations -income derived from capital disregarded under para 12 of the General Regulations (or para 10 of the Assessment Regulations) is not to be disregarded, but income under para 44 of the 10th Schedule – para 19 4th Schedule of the Assessment Regulations – is, Reg 48(4) – and para 12 is consistently excluded – then has the effect of turning that income into capital and a tariff income is imposed. That seems to me perfectly logical.
11. The effect, following broadly Munby J's rationale in Ryan, is that those whose assets are administered in Court only have a tariff income to account for, while those of the class in para 12 have to account for the whole of the income. Both classes have the benefit of the capital disregard, but for which they would, or might, be precluded from benefit at all.
12. Moreover this appears to be an entirely literal construction, and I echo what Stanley Burnton J. said in Bell at para 47, but, for the purposes of this decision, it is probably more appropriate to cite para 25 of CIS/929/00:-

"Moreover [the Tribunal Chairman] failed to go on to consider the implications of its having to be treated as capital under regulation 48(4) which is a corollary to its being disregarded from the calculation of the claimant's income under regulation 40(2) as the wording of the list of exceptions in regulation 48(4) paragraph 22 of Schedule 9 is identical. As explained by Burnton J. with those reasoning in paragraphs 46-48 of the judgment in Bell I agree, the effect of it introducing the "smaller class" of capital funds held in the Court of Protection in paragraph 44 of Schedule 10 is to take such cases for this purpose out of the 'larger class' of the generality of personal injury trusts and thus outside paragraph 12, so that the income is not excepted from being treated as capital under regulation 48(4)."

13. Moreover, if Reg 48(4) was not applied in the manner in this case, I am not precisely sure what its purpose might be.
14. My decision is therefore set out in para 1 above. I do not need to refer to the positively Byzantine nature of the drafting of these Regulations, since that has been done so often before and by people better qualified to do so than me.

(Signed) J M Henty

Commissioner

(Date) 20 November 2002