THE SOCIAL SECURITY COMMISSIONERS

Commissioner’s Case No: CFC/2963/2001

SOCIAL SECURITY ACTS 1992-1998

APPEAL FROM DECISION OF AN APPEAL TRIBUNAL
 ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

COMMISSIONER:	Mr H Levenson

1. This appeal by the claimant succeeds. In accordance with the provisions of section 14(8)(a) of the Social Security Act 1998 I set aside the decision of the Derby tribunal of 16th November 2000. I substitute my own decision. This is to the effect that entitlement to working families tax credit (WFTC) is to be calculated on the basis that the most accurate way of determining the claimant’s average weekly income is by considering hours worked for the period 7th February 2000 to the appropriate day in the week preceding the date of claim and finding a weekly average. I remit to the Board of Inland Revenue (“the Board”) the precise calculation of any entitlement on this basis. In the event of any difficulty with this or failure of the parties to agree the appropriate calculations, either party may refer the matter back to me for decision on this point.
 
2. The claimant was born on 22nd July 1962. She is a lone parent with a daughter who was born on 10th February 1991. She is employed by the Home Office as a nurse. She had been working full time but changed to part time work with effect from 7th February 2000. Her contract is to work 16 hours a week on a flexible shift basis, usually by working two shifts each week. Sometimes she works fractionally over 16 hours and sometimes under. Her manager states (see page 39) that “the aim is to ensure an average of 16 hours are worked and this is managed and monitored by myself. The only time she doesn’t work 16 hours per week is if she takes annual leave, falls sick or takes time off in lieu ...”. She was on annual leave for the week ending 27th May 2000 and on sick leave from 9th to 23rd July 2000. 

3. On 3rd August 2000 the claimant made a claim for WFTC. The timing of the claim was unfortunate because it was made soon after a period of sick leave. During the 5 weeks preceding the date of claim the average actually worked per week was 6.25 hours. During the 10 weeks preceding the date of claim the average actually worked per week was 10.1 hours. She did no work during the 3 weeks immediately preceding the date of claim. During the 7 weeks before that period the weekly hours worked varied from 12.5 hours to 23 hours.
 
4. On 15th August 2000 the Board considered these 5 week and 10 week figures and decided that there was no entitlement to WFTC because the claimant had not been working for at least 16 hours a week. On 2nd September 2000 the claimant appealed to the tribunal against the decision of the Board. The tribunal considered the matter on 16th November 2000 and confirmed the decision of the Board. It also considered the 5 week and 10 week periods. On 11th April 2001 a District Chairman of the tribunal granted the claimant’s application for leave to appeal to the Social Security Commissioner against the decision of the tribunal. The Board takes the view that there was a technical error in the decision of the tribunal but that I should substitute my own decision to the same effect. It is agreed that the decision of the tribunal was made in error of law, although the parties do not agree what the error was. The Board now argues that the tribunal was not entitled to take account of the 10 week period without explaining why it would give a more accurate result than the 5 week period. The basic facts are not in dispute. Accordingly, it is expedient that I set aside the decision made by the tribunal and substitute my own decision. In so doing I am not bound by the approach adopted by either the Board or the tribunal. 

5. Section 128 of the Social Security Contributions and Benefits Act 1992 provides that, subject to other conditions of entitlement, a person is entitled to WFTC if, at the date of claim, she is “engaged and normally engaged in remunerative work”. Regulation 4 of the Family Credit (General) Regulations 1987 (as amended) deals with the question of who is to be treated as engaged in remunerative work. So far as is relevant it provides as follows:
	
Remunerative work

4(1) For the purposes of … the Act as it applies to [WFTC], and subject to paragraph (3), a person shall be treated as engaged in remunerative work where— 
(a) the work [she] undertakes is for not less than 16 hours per week;
(b) the work is done for payment or in expectation of payment; and
(c) [she] is employed at the date of claim and satisfies the requirements of paragraph (5).

(2) A person who does not satisfy all the requirements of sub-paragraphs (a) to (c) of paragraph (1) shall not be treated as engaged in remunerative work.

(3) …

(4) … in determining for the purposes of sub-paragraph (a) of paragraph (1) whether the work a person undertakes is for not less than 16 hours per week— 

(a)	there shall be included in the calculation any time allowed for meals or refreshment but only where the person is, or expects to be, paid earnings in respect of that time; and

(b)	if [she] is a person to whom regulation 14(5) (normal weekly earnings of employed earners) applies, the hours worked shall be calculated by reference to the average number of hours which [her] employer expects [her] to work in a week; or

(c) where paragraph (b) does not apply and— 
(i) a recognised cycle of working has been established at the date of claim, the hours worked shall be calculated by reference to the average number of hours worked in a week over the period of one complete cycle (including, where the cycle involves periods in which the person does not normally work, those periods, but disregarding any other absences); or
(ii) no recognised cycle of working has been established at the date of claim, the hours worked shall be calculated by reference to— (aa) the average number of hours worked over the five weeks immediately preceding the week of claim, or such other longer time preceding that week as may, in the particular case, enable the person's weekly average hours of work to be determined more accurately; or (bb) …

(5) Subject to paragraph (6), the requirements of this paragraph are that the person— 
(a) worked not less than 16 hours in either— 
(i) the week of claim; or
(ii) either of the two weeks immediately preceding the week of claim; or
(b) is expected by his employer to work … not less than 16 hours in the week next following the week of claim; or
(c) cannot satisfy the requirements of either sub-paragraph (a) or (b) above and at the date of claim [she] is absent from work by reason of a recognised, customary or other holiday but he is expected by [her] employer to work … not less than 16 hours in the week following [her] return to work from that holiday, or …

(6) For the purposes of paragraph (5), 
(a) work which a person does only qualifies if— 
(i) it is the work [she] normally does, and
(ii) it is likely to last for a period of 5 weeks or more beginning with the week of claim.
…

(7) Where a person is treated as engaged in remunerative work in accordance with the above paragraphs, [she] shall also be treated as normally engaged in remunerative work.

6. It is well established that the concept of “work” to which reference is made in regulation 4(1)(a) refers to work actually done, and not the state of being employed, which is a further condition under regulation 4(1)(c). That is why the problem in this case has arisen. It is not disputed that the conditions set out in regulation 4(1)(b) and (c) have been satisfied. The issue is whether that set out in 4(1)(a) has been met.

7. Regulation 14(5) applies to claimants who have recently started or resumed work, or changed their hours of work. It does not apply in the present case and therefore regulation 4(4)(b) does not apply. Therefore regulation 4(4)(c) does apply to determine how the average number of hours of work is to be calculated. 

8. The first question is whether a recognised cycle of work has been established at the date of claim (regulation 4(4)(c)(i)). The Board took the view that no recognised cycle of work had been established. The claimant argued that there was an annual cycle. The tribunal agreed with the Board, on the basis that no regular pattern had emerged. I also take that view. Reference has been made to regulation 4(4A), but that only applies once a recognised annual cycle of work had been established.

9. The next question is whether the weekly average can be determined more accurately by taking the period of 5 weeks before the date of claim or another, longer period (regulation 4(4)(c)(ii)). I see no justification for taking 10 weeks. That is an arbitrary figure which does not seem to be determined by any pattern of events or significant date. However, the 5 week period includes3 weeks when no work was done because of sick leave. Unless there had been a similar pattern of sick leave in previous periods, a longer period is virtually bound to give a more accurate average, in the sense of being a truer reflection of the claimant’s working life. 

10. It seems to me that on the particular facts of this case the only fair way to arrive at an average is to take account of the whole of the period of part time employment from 7th February 2000 to the appropriate day in the week preceding the date of claim. That is the only fair way to take account of the weekly variations in hours worked, in view of the evidence to which I have referred in paragraphs 2 and 3 above. This requires further investigation and that is why I have made the decision in the terms of paragraph 1 above. However, I see no need for this matter to go back to a tribunal. I cannot know (because I do not have the information) whether the new calculation will be to the claimant’s advantage, although I suspect that it will be.

11. It is not disputed that the conditions set out in regulation 4(5) and (6) have been satisfied. Accordingly, for the above reasons this appeal by the claimant succeeds.

H. Levenson
Commissioner

4th March 2002