CTC/3442/2002

1.	This appeal is brought by the claimant with the leave of a chairman from the decision of the Leeds appeal tribunal given on 24 April 2002 confirming the decision of the secretary of state issued on 10 September 2001 that the claimant was not entitled to working families’ tax credit on the date of the claim, 5 September 2001, because neither the claimant nor the claimant’s partner satisfied the requirement of being employed at the date of the claim and having worked not less than 16 hours in the week of claim or during one of the two weeks immediately before the week of claim or being expected by his employer to work 16 hours in the week following the week of claim.

2.	In dismissing the appeal the tribunal found that there was a gap in the law which had caused considerable injustice in this particular case.

3.	In this case, the claimant’s partner had been employed by the Ministry of Defence to work 37 hours a week.  However, together with a large number of others, he had been suspended on full pay earlier in 2001 for an indefinite period.  He thus continued to receive pay, from which tax and national insurance contributions were deducted, but did no work, although he was required to be available for work during normal working hours.

4.	Under s.128(1) of the Social Security Contributions and Benefits Act 1992, it is a condition of entitlement to working families’ tax credit that the claimant or the claimant’s partner is “engaged and normally engaged in remunerative work”.  Regulation 4 of the Family Credit (General) Regulations 1987 defines when a person is to be treated as engaged in remunerative work.  Under regulation 4(1) the claimant’s partner in the present case would be treated as engaged in remunerative work if he was employed at the date of the claim and satisfied the requirements of paragraph (5) of that regulation.

5.	Paragraph (5) of regulation 4 provides that 

“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 the claim; or
(ii)	either of the two weeks immediately preceding the week of the claim; or
(b)	is expected by his employer to work, or, where he is a self-employed earner he expects to work, not less than 16 hours in the week next following the week of the claim; or
(c)	cannot satisfy the requirements of either sub-paragraph (a) or (b) above and at the date of claim he is absent from work by reason of a recognised customary or other holiday but he is expected by his employer to work, or where he is a self-employed earner he expects to work, not less than 16 hours in the week following his return to work from that holiday, or
(d)	[this relates to absence due to jury service], or 
(e)	[this relates to absence on maternity leave]
…….”

6.	Paragraph (6) provides that for the purposes of paragraph (5) –

“(a) work which a person does only qualifies if –
(i)	it is the work he normally does, and
(ii)	it is likely to last for a period of 5 weeks or more beginning with the week of the claim;  and 
(b)	a person shall be treated as not on a recognised customary, or other holiday on any day on which the person is on maternity leave or or is absent from work because he is ill.

7.	The same point was decided by Mr. Commissioner Levenson in CFC/588/1995 when he was a deputy commissioner.  In that case the claimant was suspended on full pay from her employment as a traffic warden.  She was obliged to remain available for work during the period of suspension, and during the period of suspension she remained under the direction and control of her employer, and liable to recall to duties at any time.  At paragraphs 4-6 of his decision, after setting out the relevant provisions of regulation 4 of the Family Credit (General) Regulations 1987, the then deputy commissioner stated -

“It should be noted that the regulation treats work and employment as separate concepts.  To be entitled to family credit a person must both be employed and perform the work referred to… Her normal employment was as a traffic warden.  She was not able to carry out any work duties while suspended from employment….

In my opinion, staying at home from work, albeit on full pay and subject to the direction and control of the employer, cannot be said to be working, in circumstances where work is of the type that cannot be done at home.  The whole point about being suspended is that one is suspended from work, one is not suspended in order to work.

On behalf of the claimant, the trade union complained of the unfairness of this situation.  However, depending on her overall financial position, it would have been open to her to apply for income support during the period of suspension.  If she was not working for the purposes of family credit, then neither was she working for the purposes of income support.  It would also have been possible for her to claim family credit again on her return from suspension.”

8.	With some reluctance, I am driven to the conclusion that that decision is correct.  The regulation requires not just that the claimant must be employed but that, with limited exceptions which do not apply here, he must actually be working.  The very presence of the exceptions for such matters as holidays, jury duty and maternity leave shows that in other cases of absence from work the claimant or the partner is not to be treated as engaged in remunerative work.  

9.	This does appear to me to work unfairly to the disadvantage of somebody who has been suspended on full pay in this way.  Even if such a person is aware that he or she is entitled to apply for income support, that will not necessarily put him that person in the same financial position, and as is demonstrated by this case, those who are employed are likely to fail to appreciate the niceties of the regulations in this respect.  

10.	I agree with the tribunal, and with the chairman granting leave to appeal that the operation of the regulations have caused hardship in this case, but I must also agree with the tribunal that the law is unambiguous.  I am unclear whether there was any rational basis for the way in which the regulations operate in this type of case, or whether the failure to provide for suspension was an oversight.  Unless and until the regulations are changed, however, it is important that employees should have it clearly drawn to their attention that their right to family tax credits will be affected if they are suspended and that they may in some cases be entitled to income support in its place provided they apply for it.

11.	For the reasons given I am compelled to dismiss this appeal.

(signed)	Michael Mark
		Deputy Commissioner

		15 January 2003