UK Social Security and Child Support Commissioners' Decisions

[2002] UKSSCSC CSG_1131_2001 (26 June 2002)

 


DECISION OF SOCIAL SECURITY COMMISSIONER

Commissioner's Case No: CSG/1131/01

Oral Hearing

1. The claimant's appeal, brought with leave of the Commissioner, is allowed but with limited practical benefit to the claimant. The decision of the Glasgow appeal tribunal (the tribunal) held on 15 May 2001 is in error of law and I set it aside.
2. I consider it expedient under s.14(8)(a)(ii) of the Social Security Act 1998 to make my own decision which is as follows:-

The Secretary of State's decision dated 7 June 1999 is confirmed with the alteration that the overpayment recoverable from the claimant is £3,762.00 in respect of the period 2 December 1996 to 1 November 1998 (both dates included).

The main issue

3. This is the calculation of the claimant's earnings for the purposes of ICA entitlement, in particular what expenses are deductible as a "care charge" under regulation 10(3) of, and Schedule 3(2), of the 1996 computation regulations.

Applicable statutory provisions

4. Entitlement to invalid care allowance (ICA) is central to this appeal. So far as material, the relevant provisions read:-

Social Security Contributions and Benefits Act 1992

"70.(1) A person shall be entitled to an invalid care allowance for any day on which he is engaged in caring for a severely disabled person if –

(a) he is regularly and substantially engaged in caring for that person;

(b) he is not gainfully employed; and

……………

(2) In this section, 'severely disabled person' means a person in respect of whom there is payable either an attendance allowance or a disability living allowance by virtue of entitlement to the care component at the highest or middle rate …..

…………………..

(8) Regulations may prescribe the circumstances in which a person is or is not to be treated for the purposes of this section as engaged, or regularly and substantially engaged, in caring for a severely disabled person, as gainfully employed or …………………."

5. The regulations referred to are the Social Security (Invalid Care Allowance) Regulations 1976 (SI 1976/409) (ICA Regulations). Amongst other matters, the ICA regulations define the circumstances in which persons are or are not to be treated as engaged or regularly and substantially engaged in caring for severely disabled persons and secondly when a person is or is not to be treated as gainfully employed. They do so as follows:-

"4.-(1) ……. a person shall be treated as engaged and as regularly and substantially engaged in caring for a severely disabled person on every day in a week if, and shall not be treated as engaged or regularly and substantially engaged in caring for a severely disabled person on any day in a week unless, as at that week he is, or is likely to be, engaged and regularly engaged for at least 35 hours a week in caring for that severely disabled person.

……………..

(8)-(1) For the purposes of section 70(1)(b) of the Contributions and Benefits Act (condition of a person being entitled to an invalid care allowance for any day that he is not gainfully employed) a person shall not be treated as gainfully employed on any day in a week unless his earnings in the immediately preceding week have exceeded [£50] on the last day of that week and …… shall be treated as gainfully employed on every day in a week if his earnings in the immediately preceding week have exceeded [£50] on the last day of that week."

6. The rules for determining earnings are in the Social Security Benefit (Computation of Earnings) Regulations 1996 (SI 1996/2745) (1996 computation regulations). These came into force on 25 November 1996 and replaced the Social Security Benefit (Computation of Earnings) Regulations 1978 (SI 1978/1698) (1978 computation regulations). So far as material, the 1978 computation regulations read:-

"4. ….. in calculating or estimating for the purposes of any provision of the Act and of any regulations made under the Act which relates to benefit the amount of a person's earnings for any period, there shall be deducted from the earnings which he derives from employment in that period-

……..

(b) expenses reasonably incurred by him without reimbursement in respect of-

(i) travel between his place of residence and his place of work and travel which he undertakes in connection with and for the purposes of that employment;

……………………..

(v) the making of reasonable provision for the care of another member of his household because of his own necessary absence from home to carry out his duties in connection with that employment; and

……………………

(c) any other expenses ……. reasonably incurred by him without reimbursement in connection with and for the purposes of that employment."

7. The scheme is changed substantially by the 1996 computational regulations. So far as relevant, these read:-

"8.-(1) For the purposes of regulation 6 (calculation of earnings of employed earners) ……… where the period in respect of which a payment is made-

(a) does not exceed a week, the weekly amount shall be the amount of that payment;

(b) exceeds a week, the weekly amount shall be determined-

………………

(iii) in a case where that period is a year, by dividing the amount of the payment by 52;

………………………

(3) Where the amount of the claimant's net earnings fluctuates and has changed more than once, ….. the application of the foregoing paragraphs may be modified so that the weekly amount of his earnings is determined by reference to his average weekly earnings-

(a) if there is a recognisable cycle of work, over the period of one complete cycle …..

(b) in any other case, over a period of five weeks or such other period as may, in the particular case, enable the claimant's average weekly earnings to be determined more accurately.

…………………………..

Earnings of employed earners

(9)-(1) Subject to paragraphs (2) and (3), 'earnings', in the case of employment as an employed earner, means any remuneration or profit derived from that employment and includes-

………….

(f) any payment made by the claimant's employer in respect of expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment, including any payment made by the claimant's employer in respect of-

(i) travelling expenses incurred by the claimant between his home and place of employment;

(ii) expenses incurred by the claimant under arrangements made for the care of a member of his family owing to the claimant's absence from home;

………….

(3) 'Earnings' shall not include any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment.

……………

Calculation of net earnings of employed earners

10.-(1) ……………… the earnings of a claimant derived from employment as an employed earner to be taken into account shall, subject to paragraphs (2) and (3), be his net earnings.

(2) Except in a case to which paragraph (3) applies, there shall be disregarded ………….

(3) In the case of entitlement to invalid care allowance under section 70 of the Contributions and Benefits Act there shall be disregarded or deducted as appropriate from a claimant's net earnings-

………………..

(b) any care charges to which Schedule 3 applies up to a maximum deduction, ……

……………..

18.-………..

(2) In the case of a claimant who was entitled to benefit for a benefit week which started on a date prior to 25^th November 1996, then in respect of each day of that benefit week the Social Security Benefit (Computation of Earnings) Regulations 1978 shall have effect in his case ………

…………..

SCHEDULE 3

Regulation 10(3) ….

CARE CHARGES TO BE DEDUCTED IN THE CALCULATION OF

EARNINGS FOR ENTITLEMENT TO INVALID CARE ALLOWANCE

1. This Schedule applies where a claimant is-

(a) entitled to invalid care allowance under section 70 of the Contributions and Benefits Act; and

(b) incurring relevant care charges.

2. In this Schedule-

'close relative' means a parent, son, daughter, brother, sister or partner

'relevant care charges' means the charges paid by the claimant for care which is provided by a person, who is not a close relative of either the severely disabled person or the claimant, for-

(a) the severely disabled person; or

(b) any child aged under 16 on the date on which the benefit week begins in respect of whom the claimant or his partner is entitled to child benefit under section 141 of the Contributions and Benefits Act because the claimant is unable to care for any of those persons because he is carrying out duties in connection with his employment;

'severely disabled person' means the severely disabled person in respect of whom entitlement to invalid care allowance arises."

Background

8. ICA was awarded to the claimant from 4 February 1993 in respect of her care of her mother who is a qualifying "severely disabled person". On her claim form, earnings as a home help of £78.82 per week were declared and expenses amounting to £48.50 per week. These comprised £40, paid to a friend (the second carer) who looked after her mother and young son while the claimant was at work, and £8.50 for bus fares to and from work. These expenses were accepted as deductible under the 1978 computation regulations by the adjudication officer (AO). This brought the claimant's earnings under the then £50 threshold for ICA.
9. Her ICA was throughout paid by order book. This gave instructions headed by the rubric in bold:-

"If any of the changes listed in the following pages occur send your order book back immediately to the ICA unit and tell them what has happened."

At page 3, an order book recipient was advised that:-

"In particular, you must tell us about any of these changes ….

If you have already told us that you are working, you must tell us if your earnings go up or any expenses already claimed change."

10. The claimant's wages and expenses changed in the succeeding years but no attempt by the claimant was ever made to contact the ICA unit about such changes. One change about which the claimant did not inform the ICA unit arose in August 1996. Her son then started to attend school so that her payment to the second carer reduced.
11. In 1997 doubts arose about the claimant's ICA entitlement. The claimant was asked to return her ICA order book, which she did, having cashed up to 1 November 1998. As the computational regulations had changed with effect from 25 November 1996, revoking the specific provision that the calculation of earnings excluded reasonable expenses for travel to and from work, the AO decided to consider a period only from that date.
12. It proved difficult to obtain a weekly breakdown of her earnings from her employer but the end of year summary for the tax year 1996-1997 showed total gross earnings of £4,503.69, rising in subsequent years. Although there was some inconsistency about the claimant's expenses from November 1996, the AO accepted that she now paid £20.00 a week to the second carer in respect of care of her mother, plus £2.00 a day if her younger son was on holiday from school, and that these allowable expenses plus any tax and national insurance did not bring her earnings below the threshold of £50.00 from 25 November 1996.
13. On 7 June 1999 an AO reviewed the ICA award from 4 February 1993 and, on revision, held that from and including 25 November 1996 there was no entitlement to ICA. The AO went on to determine an overpayment of ICA from 25 November 1996 to 1 November 1998, amounting to £3,798.60, which was recoverable under s.71 of the Social Security Administration Act 1992 because of failure to disclose changes in circumstances and which led to her earnings in each of the relevant weeks exceeding the £50.00 limit. The claimant appealed on the grounds that she did not know she could not claim for travel expenses to and from work from November 1996, so that she thought those expenses were taken into consideration and brought her earnings below the threshold. These now constituted taxi fares.
14. The taxi expenses arose in this way. Her mother lived with the claimant. While the claimant was at work, her mother was cared for at the second carer's home. The claimant could not leave her son in school before half past eight in the morning and she herself had to be at work by 9 o'clock. Therefore the journey to the second carer's home and then for the claimant alone to work, and in reverse later, had to be by taxi. Her mother paid half of this expense, for the journeys in which she took part. The other half, covering the journeys which the claimant made alone between the second carer's home and her work, were paid by the claimant. The claimant now says that these latter expenses cost her £22.50 a week during the period of the overpayment.
15. It is undisputed that if the taxi fares were allowable deductions, then the claimant's earnings in the relevant period would not disentitle her to ICA. But if such expenses could not be included then her earnings were always above the threshold.

The tribunal decision

16. The claimant has throughout the proceedings been represented by Mr Orr, Welfare Rights Officer at the Glasgow City Council. Various points were made on the claimant's behalf leading to adjourned tribunal hearings. By the hearing of 15 May 2001, the main point was whether the AO should have taken into account the travel expenses. This went to entitlement and whether there was in fact an overpayment. The subsidiary argument was that, even if such expenses were not deductible, there was no recoverable overpayment. The claimant did not know and could not reasonably be expected to know about the change in the regulations; therefore disclosure of alterations to her earnings and expenses was not reasonably to be expected because she thought she was still below the threshold on the basis of the previous rules.
17. The tribunal, in a lengthy and careful decision, confirmed the AO decision under appeal to it.

Appeal to the Commissioner

18. The sole written ground of appeal to the Commissioner was that:-

" …. part of the travel to work expenses could be considered as part of the care costs and thus be allowable.

This is nowhere dealt with in the decision."

19. In a written submission, the Secretary of State supports the appeal on different grounds. Firstly, that the weekly amount of the earnings was said to have been determined under "Regulation 8(1)(iii)", which was presumably a reference to regulation 8(1)(b)(iii) of the 1996 computation regulations. This was erroneous because that provision applies only to an individual payment made in respect of one year, whereas the claimant was paid weekly. Secondly, the first week of the overpayment began not 25 November 1996 but on 2 December 1996. This was by virtue of regulation 18(2) of the 1996 computation regulations. The claimant's earnings in the benefit week commencing 18 November 1996 should have been calculated under the 1978 computation regulations, in which week the claimant's earnings had the benefit of a deduction for work expenses and were therefore below the threshold. It was this figure which was then used to determine whether the claimant was excluded from ICA entitlement for the week commencing 25 November 1996. Consequently, the claimant was not excluded from ICA entitlement until the next week.
20. The Secretary of State suggests that it was reasonable to find that the weekly amount of earnings was equal to 1/52 of the total amount of the claimant's earnings during the tax year 1996/7, so that no factual error arose from using the wrong regulation. However, it was submitted that the Commissioner should substitute a decision that an overpayment of £3,760.00 only was recoverable from the claimant because of a reduced disentitlement period.

Oral hearing

21. The case came before me for an oral hearing on 20 June 2002. As noted, the claimant was represented by Mr C Orr. The Secretary of State was represented by Ms Stirling, Advocate, instructed by Ms Cairns of the Office of the Solicitor to the Advocate General. I am indebted to both for their helpful submissions.

Concession

22. Ms Stirling accepted the points made in the written submission on behalf of the Secretary of State, as do I. This is reflected in my substituted decision.

The arguments

23. Mr Orr said that the tribunal had not addressed whether the taxi expenses amounted to "relevant care charges" under regulation 10(3) of, and schedule 3(2), of the 1996 computation regulations. I do not understand Ms Stirling to dispute this failure and for this reason also its decision must be set aside as erroneous in law. However, the substantial point is whether or not the taxi expenses can be deducted, thereby affecting entitlement. As Commissioner Jacobs at paragraph 4 of CG/4024/01 observed, in a similar ICA overpayment case:-

"While in receipt of invalid care allowance, a claimant is allowed to have earnings up to the threshold. That threshold at the time with which this appeal is concerned was £50.00. So long as the threshold is not breached, the earnings are disregarded. Once it is breached, the claimant loses all entitlement to the allowance. It is all or nothing. There is no phased reduction of the allowance as earnings increase."

24. Mr Orr argued that "charges" were to be equated with "costs". "Relevant care charges" applied to all costs arising from, or associated with, necessary arrangements made by the claimant with respect to care provided for her mother by another. She paid the second carer to look after her mother while she was at work. Circumstances meant that she was obliged to take her mother to the second carer's and then travel on herself to work quickly. Such taxi expenses were therefore part of having her mother so cared for.
25. "Caring" is not defined in the regulations. It includes companionship. The mother could not travel alone by taxi because of her dementia. When the claimant accompanied her mother in the taxi she was caring for her mother. If the second carer accompanied the claimant's mother in the taxi, this would amount to caring and the claimant would be charged by the second carer accordingly. If the second carer came to the claimant's home to look after the claimant's mother there, the second carer was likely to include her travel expenses, which might be by taxi, in the care charge payable by the claimant. What the second carer so charged the claimant would be a "relevant care charge". It was absurd to treat the claimant's expenses in this case differently and such a result should be avoided.
26. Mr Orr did not accept that the words "because the claimant is unable to care for any of those persons because he is carrying out duties in connection with his employment" in schedule 3 to the 1996 computation regulations applied to any other category than "any child aged under 16". They did not apply to qualify paragraph 2(a) of schedule 3. Even if they did, the claimant had a duty to be at work on time and therefore fulfilled the proviso in fact.
27. Even if the taxi expenses could not be deducted, disclosure was not reasonably to be expected. This was a new argument to the Commissioner. Mr Orr referred to regulation 32 of the Social Security (Claims and Payments) Regulations 1987, with its emphasis on an obligation for a claimant to notify:-

" … of any change of circumstances which he might reasonably be expected to know might affect the right to benefit, or to its receipt, as soon as reasonably practicable after its occurrence…."

28. The claimant was not advised of the change in the regulations so she reasonably continued to think she did not have to advise of travel expenses because they had no relevance. Moreover, the tribunal had not addressed the question of whether disclosure was reasonably to be expected. He urged me to remit the matter to a new tribunal to do so.
29. In response, Ms Stirling submitted that whether the terms "costs" and "charges" were substantially similar was irrelevant. For entitlement to ICA, a claimant had to be regularly and substantially engaged in caring for her mother and also not be gainfully employed. The latter condition was distinct from and narrower than the first. That an activity constituted the provision of care, did not automatically mean that associated costs were deductible as a "care charge".
30. The 1978 computation regulations were much broader than the successor regulations. She pointed in particular to regulation 4(b)(i), (v) and (c). The broad discretionary nature of these provisions encompassed the disputed taxi expenses until the revocation of the 1978 regulations.
31. The 1996 computation regulations are very different. They do not exclude work travel expenses as formerly in calculating earnings and regulation 9(1)(f) and (3) show the statutory intention to restrict any allowance for employment expenses to those wholly exclusively and necessarily incurred in the performance of the duties of the employment. Moreover, such travel to work expenses could not be brought in under Schedule 3 as deductible care charges. Whether one used "costs" or "charges" did not matter. They had to be "paid by the claimant for care which is provided by a person". The taxi fares were paid to the taxi driver for transport. They were not paid to the second carer for care which she was providing for the mother. Even if the claimant was providing care for her mother when in the taxi, the taxi driver was not providing any care and the expenses claimed were in any event only for when the claimant was on her own in the taxi.
32. Ms Stirling cited paragraph 14 to 17 of CG/4024/01 in support of her submission that the present taxi expenses are not deductible:-

"The telephone link

14. The claimant pays a small rental for a careline telephone link. This allows her daughter to press a button on a cord round her neck. This sounds a warning with the monitoring station and establishes a telephone link. The claimant's daughter has epilepsy and a short warning of a seizure. This link allows her to alert the station, which arranges for the claimant to attend to help her daughter. It may also be possible for the operator to talk to someone who is with the claimant's daughter.

15. The claimant argues that this is deductible as a 'care charge' under regulation 10(3) of, and Schedule 3 to, the Regulations. The issue for the tribunal was whether the line rental was a means of providing 'care'. That word is not defined in the Regulations. The claimant's representative has quoted from dictionary definitions, but they do not take account of the context. The tribunal concluded that the telephone link did not amount to care. I agree.

16. It is not necessary for me to define the word 'care'. It is sufficient to say that in the context it is not appropriate to cover the link. The natural interpretation of the arrangement is that the monitoring arrangement exists to allow someone to be called who can care for the claimant's daughter. It does not itself provide that care. Nor does the person who monitors alarms at the station.

17. The tribunal came to the correct conclusion and the only one that was open to it as a reasonable tribunal familiar with the use of language. I direct the tribunal at the rehearing that the cost of the line rental is not deductible."

33. So far as the recoverability of the overpayment was concerned, the tribunal's reasons had to be read in the context of their whole decision and the issue of whether or not it was reasonable to expect disclosure had been adequately addressed.

My conclusion and reasons

Relevant care charges

34. In CIS/1081/01 I held that:-

"The nub of caring for a disabled person is perhaps whether the carer performs those duties with which the disabled person needs assistance because of their disability or exercises that oversight which arises for a similar reason. Domestic tasks are therefore included but not walking to and from the disabled person's home, as this is too indirectly related to the assistance required".

35. The claimant is not providing care for her mother when she is alone in the taxi going to work. Nor is the claimant's taxi fare a charge paid by her for care which is provided by another to her mother. It is a charge paid by her for transport.
36. I agree that "cost" or "charge" can be interchangeable when each relates to the price for goods or services. Cost is traditionally such a price from the perspective of the payer and charge when it is viewed from the perspective of the payee. What matters is that the price is paid "for care which is provided by a person". It is insufficient that it is an expense that is related to or arising from or associated with the claimant's care arrangements. It must be the price of care which is so provided. In no sense is the taxi fare the price of care provided by anyone, whether the taxi driver or the second carer or the claimant.
37. That in some circumstances the second carer might include her own taxi expenses as part of what she charges the claimant for care provided for the claimant's mother, so that by a circuitous route such expenses are deductible, is irrelevant. Nor would such a conclusion be absurd. But the taxi fares paid by the claimant herself, and whether or not she has the mother in the taxi, are not charges or costs paid by the claimant to the taxi driver as a price for care.
38. On this construction it is unnecessary to decide whether the concluding words defining "relevant care charges" apply only where child-minding charges are in issue. However, the use of the words "persons" rather than "children" suggests otherwise.
39. Unlike the tribunal in CG/4024/01, this tribunal erred in failing to consider whether or not the taxi expenses amounted to a relevant care charge. However, no reasonable tribunal could have held that they did. Therefore, had the tribunal addressed the matter, the only conclusion open to them was that the taxi expense was not deductible. The case does not therefore require remitting for that reason.

Disclosure by the person was reasonably to be expected

40. I agree with Ms Stirling that the tribunal adequately addressed this question. The decision has to be read as a whole. The tribunal made findings about the order book instructions, that the claimant had at no stage since the initial claim advised of changes in expenses or earnings and made specific reference to:-

"… the appeal officer's full submission contained within the papers, which states more fully the applicable law."

41. That submission emphasised that the claimant's order book told her to tell the ICA unit if her earnings went up or if any expenses already claimed changed. It then pointed out that these notes were sufficient to alert the claimant so that it was reasonable to expect her to make such disclosure and she failed to do so. Had she informed the unit in August 1996 about her reduced child care costs, then she would have been told about the change in the way earnings were calculated which was soon to come into effect, and warned that if her earnings went up her allowable expenses may not bring her below the earnings threshold. This would have prevented the overpayment.
42. By incorporating the AO written submission in this way and by its own findings on the order book notes, the tribunal sufficiently addressed the issue of whether the claimant unreasonably failed to disclose. Moreover, the tribunal was entitled to conclude that a reasonable person would have disclosed in similar circumstances and that, consequently, failure to disclose was established.
43. The claimant did not know that she could no longer deduct travel expenses but a reasonable person in her position would appreciate that rules might change, for example the earnings threshold. Even if she thought she could work matters out for herself, so far as juggling her allowable expenses against her earnings was concerned, the instructions in the order book were quite specific. Order book instructions are there to be followed and are a highly relevant factor to whether disclosure was reasonably to be expected in the light of them. Given such explicit instructions, it was entirely reasonable for the tribunal to endorse the AO's original conclusion, as justified in the written submission to them, that disclosure of the various changes in expenses and earnings was reasonably to be expected and that consequently failure to disclose had been established.

Summary

44. I therefore reject both of the arguments put by the claimant at the hearing. The appeal fails, except to the limited extent set out in the Secretary of State's written submission to the Commissioner, the effect of which is incorporated in my substituted decision set out at paragraph 2 above.

(signed)

L T PARKER

Commissioner

Date: 26June 2002