Commissioner’s case no:  CIS/4255/2002

 DECISION OF THE SOCIAL SECURITY COMMISSIONER
						
1.	This is an appeal by the Claimant, brought with my leave, against a decision of the Ipswich Appeal Tribunal made on 18 April 2002. For the reasons set out below I dismiss the appeal. 

2.	The issues in the appeal concern the calculation of the Claimant’s entitlement to income support. The Claimant’s applicable amount included an amount in respect of mortgage interest payments calculated in accordance with Schedule 3 to the Income Support (General) Regulations 1987 (“the 1987 Regulations”). By Reg. 40(2) of and para. 30(1) of Schedule 9 to the 1987 Regulations there shall be disregarded in calculating the Claimant’s income for income support purposes

“ …….any payment made to the claimant which is intended to be used and is used as a contribution towards – 
(a)	any payment due on a loan if secured on the dwelling occupied as the home which does not qualify under Schedule 3 (housing costs);
(b)	any interest payment or charge which qualifies in accordance with paragraphs 15 to 17 of Schedule 3 to the extent that the payment or charge is not met;
(c)	any payment due on a loan which qualifies under paragraph 15 or 16 of Schedule 3 attributable to the payment of capital;
(d)	any amount due by way of premiums on – 
(i)	any insurance policy taken out to insure against the risks of being unable to make the payments referred to in (a) to (c) above; or
(ii) a policy of insurance taken out to insure against loss or damage to any building or part of a building which is occupied by the claimant as his home;
(e)	his rent in respect of the dwelling occupied by him as his home but only to the extent that it is not met by housing benefit; or his accommodation charge but only to the extent that the actual charge exceeds the amount payable by a local authority in accordance with Part III of the National Assistance Act 1948.”

3.	The Claimant had certain expenses in connection with the mortgage of her home which did not qualify for housing costs under Schedule 3 but fell within heads (b), (c) and (d) of para. 30(1) of Schedule 9 – i.e. excess interest, premiums on an endowment policy and buildings insurance premiums. I shall refer to these as “qualifying expenses”. The Tribunal’s decision was to dismiss the Claimant’s appeal against a decision, made on 2 April 2001, that, in calculating the Claimant’s income for income support purposes, certain sums received by the Claimant and her partner could not be disregarded under para. 30 of Schedule 9 because they were not a “payment intended to be used and .. used as a contribution towards” the qualifying expenses. The  sums in question where received under awards of  incapacity benefit and child benefit made to the Claimant and under an award of invalid care allowance made to her partner. 

4.	The Claimant, who has argued her case in writing with cogency and clarity, relies both on what she contends is the natural construction of the disregard in para. 30 of Schedule 9, but if necessary also on certain provisions of the European Convention on Human Rights, as incorporated into English law under the Human Rights Act 1998. The Claimant has relied essentially on the written submissions which she put before the Tribunal.

5.	As to construction, the issue turns on the meaning and effect of the words “…….any payment made to the claimant which is intended to be used and is used as a contribution towards …”. The doubt which immediately springs to mind on reading those words is: “intended by whom”? Is it sufficient that the claimant has the specified intention? A submission that it is was rejected, in my view cogently, by Mr. Commissioner Rowland in para. 15 of CIS/13059/1996. He made the telling point that, if it is only the claimant’s subjective intention which is relevant, the words “which is intended to be used” would appear to be redundant, because there is in any event the requirement that the payment be actually used to meet a qualifying expense. In para. 16 he went on to say:

“On the other hand, I do not accept Mr. Scoon’s submission that one must consider the specific intention of the payer which would mean that a claimant could expect payments from tenants to be disregarded under paragraph 30 only if the claimant discussed his or her private affairs with the tenants and explained exactly how he or she proposed to use the rent. Mr Cox argued that, if one has to look at the payer’s intention at all, one can infer from a tenancy agreement that the tenant intends the landlord to use the rent, so far as is necessary, to pay the landlord’s own liabilities on the property so that the tenants may continue to occupy it. I broadly accept that argument. It seems to me that “intended” is used in the sense of “designed” or “calculated” and one is entitled and required to look at the general context in which payments are made in order to ascertain the intention of the parties. The effect of this approach is that the nature of the payment is more important than the specific intention of the parties. In my view, that is the approach that is most likely to have been intended by the legislator. It leads to a sensible result and it is relatively easy to operate.”

6.	Mr. Commissioner Rowland held, therefore, that in that case the rent payments were intended to be used to meet qualifying expenses. The Claimant argues that incapacity benefit is an income replacement benefit, and therefore that it must have been contemplated by Parliament that it would be used for the payment by claimants of such expenses in connection with their homes as are not covered by housing costs but which must be paid if a claimant is to remain in his or home. Her incapacity benefit was therefore “intended to be used and is used as a contribution towards” the qualifying expenses.

7.	The Claimant relies also on CIS/3066/1998, also by Mr. Commissioner Rowland, in which, a few days after he had taken out the mortgage, the claimant there took out an income protection policy, under which he was required to pay monthly premiums and became entitled to “sickness benefit” in the event of his inability to follow his occupation. It was held that the sums which the claimant received under that policy were to be disregarded under para. 30 of Schedule 9, to the extent to which they were used to meet qualifying expenses. The Commissioner said (para. 5) that he would infer, from the mere fact that the policy was taken out within a few days of the mortgage, that there was an intention that income from the policy would be used, so far as necessary, for payments due in respect of , and in connection with, the mortgage. In para. 6 he went on to add:

“The purpose of the legislation would be liable to be frustrated if too strict an approach were taken to the question whether payments were “intended to be used” for purposes within sub-paragraphs (a) to (e) [of para. 30(1) of Schedule 9] or if, in a case where a claimant has a number of sources of income, it were not to be assumed, in the absence of clear evidence to the contrary, that payments made for purposes within sub-paragraphs (a) to (e) were made out of income intended to be used for those purposes.”

The Claimant seeks in effect to draw an analogy between the income protection policy in that case and the fact that incapacity benefit is a contributory benefit, intended to protect contributors against loss of income in the same way that the income protection policy was. 

8.	The Secretary of State, who, unsurprisingly in view of the far-reaching implications which its success would have, does not support the Claimant’s contention, has referred me to the decision of Mr. Commissioner Pacey in CIS/3911/1998. He held that payments under a private occupational pension scheme could not be disregarded under para. 30 of Schedule 9. Having referred to the passage from para. 16 of Mr. Commissioner Rowland’s decision in CIS/13059/96 which I set out in para. 5 above, he said:

“I accept that approach which means that the intention of the claimant is not determinative. Indeed, if it were, the occupational pensions received by countless people who use them in whole or in part to pay rent would attract the disregard argued for. That cannot be in accordance with the intention of the legislature. To my mind the “intention” part of paragraph 30(1) has to be considered and interpreted in relation to the “payment made to [not by] the claimant” and, considered in this sense, it is clear and not in dispute that the occupational pension arose and was payable only in respect of the claimant’s employment history and the circumstances in which that employment was terminated.”

9.	The decisions establish clearly, as I think the Claimant accepts, that it is not sufficient that, at the time of receiving the relevant payment, the claimant intends to use all or some part of it to meet qualifying expenses. But beyond that there remains (in my view necessarily) substantial uncertainty as to the precise significance of the word “intended” in para. 30 of Schedule 9. However, where the payment consists of a social security benefit the word “intended”, if it is not referring to the Claimant’s subjective intention, must be referring to the intention of the legislature. Further, it cannot in my judgment be sufficient that Parliament must have contemplated that qualifying expenses would be among the expenses which the benefit would be used to meet. It must in my judgment be at least a necessary (although it may not be a sufficient) condition that (where the payment consists of a social security benefit) that benefit be in some respect more closely referable to the qualifying expenses than to the claimant’s other expenses generally (which the benefit might equally have been used to meet). If it is not, it cannot in my judgment be said that the payment is “intended to be used ………as a contribution towards” qualifying expenses. That is because, if those words do not imply at least that requirement, they would be deprived of any significance because almost every payment received by a claimant would fall within para. 30 if it were in fact used to pay qualifying expenses; it must surely be contemplated by both payer and payee that almost every payment to a claimant may be used by the payee to pay, among other things, mortgage related expenses. Mr. Commissioner Rowland found the necessary connection to exist both in the case of rent paid by a tenant (because the tenant would be more concerned that the landlord should discharge his liabilities in connection with his mortgage than that he should discharge any other expenses which he might have) and in the case of the income protection policy (because it was taken out a few days after the mortgage liability was incurred and so specifically with the need to be able to continue to discharge those liabilities in mind). In Mr. Commissioner Pacey’s case, on the other hand, the occupational pension was no more closely referable to the housing expenses (in that case rent) than to any of the claimant’s other expenses which it was or might have been used to meet. 

10.	That in my judgment provides the answer to the Claimant’s argument in the present case. The Claimant is of course correct in saying that incapacity benefit is a contributory benefit, and is designed to provide income to a claimant who is unable to work. However, housing costs are only one of the expenses which a claimant may have and which Parliament must have contemplated that it might be used to meet. Incapacity benefit is no more closely connected with or referable to housing costs than to a claimant’s expenses generally. It cannot therefore in my judgment be said that the Claimant’s incapacity benefit was “intended to be used ….as a contribution towards” the qualifying expenses. On that ground I must reject the Claimant’s contention with regard to incapacity benefit.

11.	Child benefit is to assist with the expenses of bringing up children, and the Claimant’s housing expenses may be greater than if she did not have a child. But child benefit is no more closely connected with or referable to those expenses than to the other expenses of bringing up a child. 

12.	 As regards the invalid care allowance awarded to the Claimant’s partner, the Claimant argues that this has been paid by her partner to her with a view to it being used by her to meet the qualifying expenses. She argues that it has therefore been paid to her with the intention on the part of both the payer and payee that it should be used to meet the qualifying expenses. However, I must reject that argument because, for this purpose, the Claimant’s partner is the “claimant” referred to in para. 30 of Schedule 9. By s.136(1) of the Social Security Contributions and Benefits Act 1992 the income of the Claimant’s partner is to be treated as that of the Claimant for income support purposes. By Reg. 23(1) of the 1987 Regulations the income of the Claimant’s partner is to be calculated in the same way as that of the Claimant, and for that purpose references to “the claimant” in Part V of the Regulations (which includes Reg. 40, which gives effect to Schedule 9) are to be read as references to the partner. The question as regards invalid care allowance is therefore in the first instance whether it is to be disregarded under para. 30 of Schedule 9 in calculating the income of the Claimant’s partner. It cannot be so disregarded because it was no more closely referable to the housing costs of his family than to any of the other expenses which it might be used to meet, and therefore cannot be said to have been “intended to be used.. as a contribution towards” the qualifying expenses. Once one has concluded that the invalid care allowance is part of the Claimant’s partner’s income, then under s.136(1) it is automatically treated as part of the Claimant’s income, whether or not it is actually paid to her. The Claimant cannot, in order to overcome the effect of s.136(1), argue that para. 30 of Schedule 9 applied at the stage when the money was actually paid to her by her partner. 

13.	The Claimant further relies on para. 28254 of the Decision Makers Guide which states that the disregards in para. 30 of Schedule 9 do not apply in the case of a “liable relative payment” or a child support maintenance payment, and argues that therefore there is nothing to prevent the disregard applying to the benefits which she received in this case. However, the reason for para. 28254 is that paras. 25 and 25A disapply, in the case of liable relative payments and child support maintenance payments respectively, the provisions of the 1987 Regulations (including therefore the whole of Schedule 9) determining how income is calculated, and substitute the provisions in Chapters VII and VIIA respectively. This is not an argument for giving the words “intended to be used ….as a contribution towards” in para. 30 of Schedule 9, when applied to social security payments, some different meaning from its natural meaning. 

14.	I turn, therefore, to the Claimant’s human rights arguments. She relies first on Article 8 of the Convention, contending that the “failure to allow the disregard in respect of my incapacity bnefit, child benefit and invalid care allowance as provided for in Sch. 9 para. 30(1) … clearly has an effect on our family life and home as we either have to live on an income less than what the law considers necessary to live on or we lose our home which would have a detrimental effect on our family life particularly if it involves a stay in bed and breakfast accommodation.” However, this is in effect simply a challenge to the amount of income support which, under the legislation as I have construed it above, the Claimant is entitled to receive. It is established that it is not correct to assert that “the broadly worded principle in Article 8 is apt to a challenge to the level of a social security payment”. See Wilson J. in R (on the application of Reynolds) v. Secretary of State for Work and Pensions [2002] EWHC 426 (Admin)(7 March 2002). On that ground I must reject the Claimant’s contention under Article 8.

15.	The Claimant next relies Article 1 of Protocol 1. In her original submissions to the Tribunal she contended (p.25) that “by failing to allow the disregard in respect of my benefit income you are threatening to deprive me of my possessions namely my house by forcing me to choose between paying the additional housing costs or living on substantially less than the law considers I need to live on.” However, again the Claimant is simply in effect attempting to use the Convention to say that the legislation ought to provide her with a greater amount by way of income support than it in fact does. Suppose for a moment that the Claimant did not have any entitlement to incapacity benefit, child benefit etc. She would still face the problem that part of her housing costs (i.e. what I have in this decision called “the qualifying costs”) would not be met by income support, and she would have to attempt to pay those costs out of her income support entitlement, or run the risk of losing her home. The fact that the Claimant might in those circumstances be faced with losing her home does not, however, mean that the state is “depriving” her of that possession by not providing for greater social security payments than it actually does. What would deprive her of and interfere with her peaceful enjoyment of her home (were that unhappy event to occur) would be the fact that she acquired it with the assistance of a mortgage and became unable to meet the necessary payments, not the fact that social security payments are not higher than they are. If that would be the correct analysis if the Claimant had no entitlement to incapacity benefit etc, I do not see how her argument under Article 1 of Protocol 1 can be any stronger where she does have such entitlement, but it is not disregarded in calculating her income support entitlement.

16.	In her submissions in reply the Claimant submitted (p.74) that she is being deprived of incapacity benefit, as it is “not made available to me to pay housing costs.” However, the incapacity benefit is paid to the Claimant in full. Her complaint is that no part of it is disregarded in computing her entitlement to income support. That, however, does not seem to me to be capable of amounting to an interference with her enjoyment of incapacity benefit (which, being a contributory benefit, is a “possession” for the purposes of Article 1 of Protocol 1), or to a deprivation of it. Again, at the end of the day the Claimant’s complaint is that her social security benefits ought to be greater than they are. But she is not being deprived of any benefit, and certainly not of incapacity benefit. 

17.	As regards Article 14, in her original submissions (p.25) the Claimant argued:

“Your failure to apply this disregard discriminates against me as a disabled person as I am not and it is unlikely that I ever will be in a position to work so as to earn sufficient money to maintain my mortgage unlike those not in receipt of these benefits.”

In her submissions in reply (p.74) she argued:

“… income support is only payable to those who are not in a position to seek employment unlike those in receipt of jobseeker’s allowance. Those who receive jobseeker’s allowance are usually only in receipt of this benefit for a short time until they can find employment. Thus they can postpone payment of housing costs until such time as they are able to make these out of their earnings. As previously mentioned most mortgagees are happy to come to some arrangement with their borrowers facing temporary difficulties but only for about a year. People in receipt of long-term incapacity benefit are not in this position and therefore are discriminated against in that they have to live on less than the legal minimum or lose their home. I would argue therefore that the payment of incapacity benefit, child benefit or invalid care allowance (benefits often paid to those on income support and unable to work) should be treated as paid to cover these additional housing costs and should be disregarded to this extent.”

However, in order to establish a breach of Article 14 the Claimant would have to show that she had been discriminated against in respect of the enjoyment of a Convention right. Her complaint is in substance about the amount of income support to which she is entitled, but income support, not being a contributory benefit, is not a “possession” within Article 1 of Protocol 1. I am unable to see any Convention right which could be said to be “engaged” for the purposes of Article 14. Further, in order to succeed under Article 14 the Claimant would in my judgment have to be able to point to some person in an equivalent position to that of the Claimant but who is treated more favourably by the legislation. The Claimant refers to persons who are not incapacitated and who are in receipt of jobseeker’s allowance. However, the fact that they may be able to find work is not a consequence of their being treated more favourably by the legislation, but is simply a consequence of the fact that they do not suffer the incapacity. It seems to me that the Claimant’s argument is in effect not that the legislation discriminates against her by reason of her incapacity, but that it should compensate for her incapacity to a greater extent than it does. That, however, does not amount to discrimination in connection with the enjoyment of a Convention right for the purposes of Article 14.  

18.	Although I think that the Tribunal’s reasons were unsatisfactorily brief, I do not think, for the reasons set out above, that its actual decision was erroneous in law, and my decision is therefore to dismiss this appeal.

                    (Signed)                                           Charles Turnbull
                                                                             (Commissioner)

                    (Date)                                              28 January 2003