[2004] NISSCSC C1_02_03(TC) (30 September 2004)
Decision No: C1/02-03(TC)
SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
WORKING FAMILIES' TAX CREDIT
Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 7 January 2002
DECISION OF THE SOCIAL SECURITY COMMISSIONER
- This is an appeal by the claimant, with the leave of a Commissioner granted on 22 October 2002, against the decision of a Tribunal, consisting of a legal member, disallowing the claimant's appeal from the decision of a decision maker to the effect that the claimant was entitled to working families' tax credit at the weekly rate of £25.12 for 26 weeks from 15 May 2001. In coming to this conclusion the Tribunal concluded that the claimant was not entitled to either disabled child tax credit or child enhanced disability tax credit in respect of his son. These credits are elements of working families' tax credit and are collectively called disability credit. (In an attempt to make this decision more readily understandable, I have set out references, except in quotations, to credits and allowances etc. in bold, with those relating to the Republic of Ireland also in italics).
- At the hearing of this appeal Mr Allamby, Solicitor, of the Law Centre (NI), appeared on behalf of the claimant while Mr Ward, of Counsel (Bar of England and Wales), instructed by Mr Islam, Solicitor, of the Solicitor's Office of the Inland Revenue, appeared on behalf of the Board of the Inland Revenue. I am indebted to the advocates for their submissions, both written and oral, in this difficult case.
- On 22 October 2002 a Commissioner directed, in accordance with regulation 20(3) of the Social Security Commissioners (Procedure) Regulations (Northern Ireland) 1999, that the Board be treated as a respondent in these proceedings. If this had not been done, due to a deficiency in the Procedural Regulations which I hope will be remedied, there would not have been a respondent in the case to make relevant submissions on behalf of the party, the Board, that was affected by the Tribunal's decision.
- The background of the present appeal is set out in paragraphs 5 to 9 herein.
- On 15 May 2001 the Inland Revenue received an application by the claimant for working families' tax credit. The application stated that the claimant was a British citizen who resided in the Republic of Ireland with his wife and child, Martin, who was born on 10 March 1997 and is said to suffer from cystic fibrosis. The application stated that the claimant's wife is an Irish citizen but no specific information was given to the nationality of Martin. According to the application the claimant worked in Northern Ireland as a barman but his wife did not work.
- At the time of the application the claimant's wife was in receipt of two Irish benefits: domiciliary care allowance in the sum of £IR129.40 per month and carers' allowance £IR95.10 weekly. In coming to a decision the decision maker, when calculating the claimant's income, took domiciliary care allowance into account but did not take carers' allowance into account. On 11 June 1996 the claimant was awarded working families' tax credit with effect from 15 May 2001 at the rate of £35.12 per week. No enhanced disability credit or disabled child tax credit were paid. On 28 June 2001 the claimant requested a reconsideration of this decision and in his reconsideration letter he raised the issues of the amount of carers' allowance taken into account and the fact that he was not receiving enhanced disability credit for his child. The matter was looked at again but on 28 August 2001 a decision maker decided that the original decision should not be changed. The claimant then appealed this decision, arguing that he was entitled to an additional sum on account of the disabilities of Martin by way of child enhanced disability tax credit and also that carers' allowance should have been disregarded in the calculation of his income.
- By a decision issued on 7 January 2002, the Appeal Tribunal rejected his appeal and gave the following reasons for the rejection: -
"Invalid Care Allowance is analogous to Carer's Allowance. However the list of sums which can be disregarded when calculating income, rather than earnings, does not include Invalid Care Allowance and because of this, Carers Allowance has to be included as Income when calculating Working Families Tax Credit. (Family Credit (General) Regulations (NI) 1987 Schedule 2.
Claimant is not in receipt of Disability Living Allowance, though he is in receipt of equivalent benefit payable in the Republic of Ireland. There is no provision in Regulation 46 of Family Credit (General) Regulations which permits the allowance received by claimant in Republic of Ireland to be regarded as satisfying the conditions for payment of either Enhanced Disability Credit or Disabled Child Credit."
- The Legally Qualified Member made the following record of the Tribunal's proceedings: -
"Claimant's representative and Presenting Officer were present.
Mr Brady: Claimant lives in Co Monaghan – and works for employer in Northern Ireland Decision of Department not to disregard Carers Allowance is due to an anomaly in the law for which there is no logical explanation, and is totally unfair.
Mr Brady stated that he could not dispute the facts – However this was the first appeal of it kind, and he intended to take the matter further.
Presenting Officer stated that decision was made within the terms of existing legislation, though she did not dispute Mr Brady's argument."
- Leave to appeal to a Commissioner was refused by the Tribunal on 27 August 2002 but, as stated at paragraph 1 herein, leave was granted by a Commissioner on 22 October 2002. The tenor of the appeal makes it clear that it is directly concerned at the second of the Tribunal's two findings, namely, that the appellant was not entitled to disabled child tax credit or child enhanced disability tax credit in respect of his son as he, the appellant, was not in receipt of disability living allowance.
- Mr Ward, in his original written submissions, has set out succinctly the relevant statutory framework and, in the circumstances, I find it helpful to set out the legislation in a similar way.
- Regulation 46 of the Family Credit (General) Regulations (Northern Ireland) 1987 ("the FC Regs") provides, materially:
"(1) Subject to paragraphs (2) to (7) of this regulation, the appropriate maximum working families' tax credit shall be the aggregate of the following credits -
…
(f) in respect of any child or young person for whom the claimant or his partner is treated as responsible by virtue of regulation 7 and who is a member of the claimant's household -
(i) where paragraph (1B) applies, and paragraph (1D) does not apply, to the child of young person, the credit specified in column (2) of the table in Schedule 4 at paragraph 6(a);
(ii) where paragraph (1D) applies to the child or young person, the credit specified in column (2) of that table at paragraph 6(b).
…
(1B) This paragraph applies to a child or young person –
(a) in respect of whom disability living allowance is payable …
…
(1D) This paragraph applies to a person in respect of whom the care component of disability living allowance is, or would be but for either a suspension of benefit in accordance with regulations under section 113(2) of the Contributions and Benefits Act or an abatement as a consequence of hospitalisation, be payable at the highest rate prescribed under section 72(3) of that Act."
- Schedule 4, as amended, provides for the payment of £22.25 in respect of a disabled child or young person to whom regulation 46(1)(f)(i) applies or £41.05 in respect of a severely disabled child or young person to whom regulation 46(1)(f)(ii) applies: Tax Credits Schemes (Miscellaneous Amendments No 2) (Northern Ireland) Regulations 2001, Reg 7 Sch 2. These elements of working families' tax credit are known respectively as disabled child tax credit and child enhanced disability tax credit and can be referred to collectively as disability credit.
- Schedule 2 to the FC Regs provides, materially, for sums to be disregarded in the calculation of income other than earnings:
"4. Any mobility allowance, disability living allowance or disability working allowance.
…
30. Any payment made under the legislation of, or under any scheme operating in, the Republic of Ireland which is analogous to any income to which this Schedule relates."
- Domiciliary care allowance is a benefit from the Republic of Ireland payable under Section 61 of the Health Act 1970 and circular 24/73 issued by the (then) Department of Health and Children. It is payable by Health Boards in the Republic in respect of children from birth to age 16 who have a severe disability requiring continual or continuous care and attention which is substantially in excess of that normally required by a child of the same age. The medical condition or disability must be likely to occur for at least a year. The payment is subject to a means-test of the child but, not the parents. For the purposes of disregarding income in working families' tax credit, domiciliary care allowance is treated as analogous to disability living allowance (care component). There are no rules to allow payments analogous to disability living allowance to be counted as establishing entitlement to either disabled child tax credit or child enhanced disability tax credit.
- The basic submissions made on behalf of the claimant is that the Tribunal erred in law in concluding that the claimant was not entitled to disability credit in respect of his son as: -
(i) the decision was contrary to Article 14 of the European Convention on Human Rights, when read with Article 8; and
(ii) the decision was contrary to Article 7 of Council Regulation 1612/68].
- Accordingly for the claimant to succeed under the Convention he must show:
(1) that payment of working families' tax credit falls within the ambit of Article 8, (although both parties accepted that this was not an issue in the case);
(2) that discrimination has occurred – in this case indirect discrimination and that such discrimination is covered by Article 14;
(3) that he or his family can be treated as a victim for the purposes of the Convention; and
(4) that there is no objective jurisdiction for the discrimination.
- It is a Commissioner's (and a Tribunal's) responsibility to read the relevant legislation in the case and give effect to it in a way which is compatible with Convention rights – see section 3 of the Human Rights Act 1998. The relevant Articles of the Convention are as follows: -
"Article 8
Right to respect for private and family life
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
Article 14
Prohibition of discrimination
The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
- In light of established authority – Petrovic v Austria (2001) 33 EHRR 307 para 26 to 29 – it is clear that Article 14 (prohibition of discrimination) imposes no positive obligation upon a state to provide financial assistance for the protection of family life. However, once such assistance is provided, it can come within the scope of Article 8 (right to respect for private and family life). Therefore the claimant's submission is that Article 14, which is not "a stand alone provision", can still rely on Article 8 as the issue in dispute falls within the ambit of Article 8. Mr Allamby's submission was that working families' tax credit is clearly aimed at enhancing the income of working families and that it is not a general benefit.
- It was not in issue that discrimination on the grounds of nationality could be discriminatory. The claimant's case was that in the present case there was indirect discrimination based on nationality. Entitlement to disability living allowance is confined to applicants who satisfy Northern Ireland residence and presence test. In effect, the condition for establishing a disability credit is confined to claimants living in Northern Ireland. The test is applied to claimants regardless of national origin. Accordingly the test is not applied in a manner that is directly discriminatory. However, the claimant's submission is that the test disproportionately adversely affects nationals of the Irish Republic who are more likely than UK nationals to live in the Republic of Ireland and travel to Northern Ireland to work.
- However, as Mr Ward has pointed out, there is a substantial difficulty in the claimant's case. Can it even be established that he is a victim, whether direct or indirect, of any form of discrimination on the basis of nationality? According to the original application he is a British citizen (i.e. a citizen of the United Kingdom of Great Britain and Northern Ireland) who resides in the Republic of Ireland. His wife is an Irish citizen (i.e. a citizen of the Irish Republic) but there is no specific information about the son's nationality. However, the claimant cannot be a victim of discrimination on the basis of nationality where he is a British citizen and the allegation of unlawful discrimination is against the United Kingdom. The only potential victim in this case is the claimant's son. However, how can it be argued that he has suffered any breach of Convention rights? He has no entitlement to make any claim for disability credit and he would not have had any entitlement even if he were a UK national. The reason for this is that any claim for disability credit was brought, and rightly brought, by the appellant even though the amount of benefit depends in part upon the status of the son.
- In any event it is clear, from the contents of paragraphs 11 to 14 herein, that there are wide ranging and fundamental differences between disability living allowance and domiciliary care allowance. As Mr Ward has pointed out, to compare the situation of a person in receipt of the former with a person in receipt of the latter is not to compare like with like and, therefore, there can be no discrimination on the basis of difference between the two. The fundamental differences between the schemes include the following: -
Entitlement to disability credit is "passported" by the payability of disability living allowance whilst domiciliary care allowance is administered by the authorities in the Republic of Ireland according to its own statutory criteria;
Disability living allowance is not means tested whilst domiciliary care allowance is subject to a testing of the child's means;
Disability living allowance is payable at five different rates (three for care plus two for mobility) whilst domiciliary care allowance is solely payable for care and is at a single rate.
There is an entirely different payment structure between disability living allowance and domiciliary care allowance.
- The conclusion from this is that, not surprisingly, the social security system in individual countries (in the present case, in Northern Ireland which is a part of the United Kingdom and in the Republic of Ireland) are geared to deal with the needs and conditions in the relevant individual countries and cannot be readily translated from one jurisdiction to another.
- An interesting argument has been proffered to me in written submissions since the original and oral hearing – namely that even if a claimant has suffered discrimination and that discrimination is indirect, it can still fall within the ambit of Article 14. In support of the proposition Mr Allamby relies on the decision in Great Britain of Mr Commissioner Jacobs in CH/5125/2002 etc paragraphs 36 to 55. (This decision was affirmed on appeal by the English Court of Appeal in Campbell& Ors v South Northamptonshire District Council and the Secretary of State for the Department for Work and Pensions [2004] EWCA Civ 409 but the Court of Appeal apparently did not find that it was necessary to deal with the issue). Mr Commissioner Howell QC in Great Britain CIS/1870/03 (a decision which post-dated the oral hearing of this appeal) has come to a similar conclusion to that of Mr Commissioner Jacobs, namely, that Article 14 covers indirect as well as direct discrimination.
- However, as I have come to the conclusion that there is no victim of discrimination in this case, that decision does not assist the claimant in this case.
- Mr Allamby also developed an argument under European law. Equality of treatment is the foundation stone of the European Community treatment and prohibition of discrimination is specifically dealt with in the relevant part of Article 12 of the Treaty which states: -
"Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. …"
Article 39, in so far as it is specifically relevant, states as follows: -
"1. Freedom of movement for workers shall be secured within the Community.
2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.
3. …"
Council Regulation (EEC) No. 1408/71 of the Council on the application of Social Security Schemes to employ persons and their families moving within the Community, at Article 3 (Equality of Treatment) states: -
"1. Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the national of that State.
2. …"
Article 4(h) of Regulation 1408/71 makes it clear that family benefits are relevant benefits for the purposes of Article 3. In addition the decision in Hughes v Chief Adjudication Officer C78/91 – a decision of the European Court of Justice – has made it clear that family credit was a family benefit for the purposes of Article 4. Article 2(1) also makes it clear that the Regulations cover not only those in work but also members of their families.
- In the present case the claimant is a United Kingdom national and has apparently worked both in the United Kingdom and the Republic of Ireland. However, his wife, the mother of the relevant child, has apparently worked in the Republic of Ireland only. Mr Allamby has submitted that the effect of Regulation 1408/71, and in particular Articles 2, 3 and 4, means that the confinement of disability credit to those entitled to disability living allowance is indirectly discriminatory and contrary to Article 3 of Regulation 1408/71. In addition Mr Allamby submitted that there was no objective basis for the indirect discrimination.
- Mr Ward submitted that Mr Allamby's argument on this point must fail, as the claimant cannot claim discrimination on the ground of nationality. The claimant's wife is not the claimant in this case. In any event she has not exercised any right of free movement.
- I conclude that the claimant cannot rely on these provisions of European Law as the reason that disability credit has not been paid is not because the claimant's son resides in the Republic of Ireland but because the key criterion for eligibility has not been met – namely payability of disability living allowance – which is a matter for the social security authorities in Northern Ireland. Even if the residence requirement contained in section 71 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 were to be disregarded, as Mr Ward pointed out, payability of disability living allowance cannot simply be "read across" from the payment of domiciliary care allowance.
- During the case Mr Allamby also sought to rely on Article 7(1) of Regulation (EEC) No. 1612/68 and in particular Article 7 (Employment and Equality of Treatment) in so far as it is relevant to this case, states: -
"1. A worker who is national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work …
2. He shall enjoy the same social and tax advantages as national workers.
3. …"
- However, as the claimant is a national of the United Kingdom who is complaining of treatment in the territory of the United Kingdom, he cannot be classified as "a national of a Member State, in the territory of another Member State". Therefore, as Mr Ward has submitted, Regulation 1612/68 does not assist the claimant in this case.
- In my view paragraphs 14 to 30 herein deal with the relevant issues in this appeal although it would be remiss of me not to thank the advocates for their extensive submissions on matters that are no longer germane.
- In the circumstances I am satisfied that the decision of the Tribunal is not erroneous in point of law. Accordingly I dismiss this appeal.
J A H Martin QC
Chief Commissioner
30 September 2004
