CJSA/2402/2003

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the Claimant, brought with my leave, against a decision of the Taunton Appeal Tribunal made on 25 March 2003. For the reasons set out below I dismiss the appeal. 

2.	The questions before the Tribunal were whether, in calculating the Claimant’s earnings for the purpose of calculating his entitlement to income-based jobseeker’s allowance, sums paid by the Claimant (a) of £66 by way of subscription to his Union (the Transport and General Workers Union) and (b) of £70 by way of examination fees should have been deducted. The Tribunal held that neither of those items was deductible. 

3.	It should be explained that the Claimant’s earnings were derived from part-time employment as a van driver. He was also attending a part-time course in cabinet making at a College, and it was in connection with that course that the examination fees were paid. 

4.	Reg. 99(1) of the Jobseekers Allowance Regulations 1996 provides that for the purpose of reg. 94 (calculation of earnings of employed earners) the earnings of a claimant derived from employment shall, subject to paragraph (2), be his net earnings. Reg. 99(2) provides that there shall be disregarded from a claimant’s net earnings any sum, where applicable, specified in paragaphs 1 to 16 and 19 of Schedule 6. (Those provisions of Schedule 6 do not make any provision for deduction of union subscriptions or examination fees). Reg. 99(4) provides that for the purposes of reg. 99(1) net earnings shall be calculated by taking into account the gross earnings of the claimant from that employment less (a) any amount deducted from those earnings by way of (i) income tax and (ii) primary class 1 national insurance contributions; and (b) one-half of any sum paid by the claimant by way of a contribution towards an occupational or personal pension scheme. 

5.	By Reg. 98(1) “earnings” means, in the case of employment as an employed earner, any remuneration or profit derived from that employment. By reg. 98(2) “earnings” does not include certain specified items, including “(d) any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment.”

6.	It is clear that Reg. 98(2) cannot be directly applicable in the present case, because we are not dealing with a situation where the Claimant’s employer made payments in respect of certain expenses. However, it was held in R(IS) 16/93 that, although there is no express general provision in the regulations for the deduction of expenses paid out by the employee, the use of the word “earnings” in regulation 99 brings into play the principle laid down by the Court of Appeal in Parsons v. Hogg (appendix to R(FIS) 4/85). This means that, in determining a claimant’s earnings, there must be deducted expenses “wholly, exclusively and necessarily incurred [by the claimant] in the performance of the duties of the employment.” 

The Union subscription
7.	In my judgment the Tribunal was correct to hold that this subscription, being voluntary (it was not a condition of his employment that he be a member of this or any trade union) was not incurred by the Claimant “wholly, exclusively and necessarily in the performance of the duties of his employment.” In his grounds of appeal the Claimant submits that it does not matter that membership of the Union, and therefore the subscription, was voluntary. He submits that part of the benefit of being a member is that if he has an accident or falls sick the Union will provide him with a “pension” until he is fit to return to work. He argues, as I understand it, that as his employer would not provide him with statutory sick pay, he would (but for this pension) be entitled to income support, and therefore the subscription is not merely in his own interest but also in the interests of the state. However, in my judgment the availability of this sickness payment from the Union does not enable it to be said that the subscription is “necessarily” incurred; moreover it cannot be said that the subscription is incurred “in the performance of the duties” of the employment. The subscription provides the Claimant with certain benefits (including, I am prepared to assume, certain payments in the event of sickness), but it is not necessary for the Claimant to have these benefits available to him in order to carry out his duties. The Secretary of State, in his submission in opposition to this appeal, has helpfully referred me to the decision of Mr. Commissioner Mesher in CCS/3882/1997, in para. 35 of which he stated that in his view, in determining under the Parsons v. Hogg  principle the amount of “earnings” for the purposes of the child support legislation, expenses made deductible for income tax purposes by a specific provision of the income tax legislation should be deducted, but not sums deductible only under an extra-statutory concession. As far as I am aware there is no specific provision of the income tax legislation under which the union subscription would be deductible in computing the amount of income for income tax purposes.

8.	The Claimant further argues that an additional reason why it does not matter that the subscription is voluntary is that there are instances in the regulations of deductible expenses which are voluntary. He refers to payments in respect of pension premiums, and to paragraph 15 of Schedule 7 to the 1996 Regulations. However, the fact that regulation 99(4) of the 1996 Regulations specifically permits deduction of half the amount of pension premiums, and that those are voluntary, does not enable the claimant to argue that there is a general rule that voluntary payments connected with the employment can be deducted. The general principle in Parsons v. Hogg is much narrower. As for para. 15 of Schedule 7, this is, with respect, irrelevant: it provides that (in calculating the amount of a claimant’s income other than earnings) certain charitable and voluntary payments made to (and not by) the claimant shall not be included. 

9.	The Claimant further argues that the Tribunal’s decision infringes Article 11 of the European Convention on Human Rights, which provides that everyone has the right to join trade unions for the protection of his interests. However, the fact that the subscription is not allowed as a deduction in calculating his income for jobseeker’s allowance purposes cannot in my judgment be argued to prevent or substantially inhibit the claimant’s right to join a union. 

The examination fees
10.	The Claimant argues that, if he were in receipt of a student grant and what was being determined was the amount of his “grant income” for jobseeker’s allowance purposes, reg. 131(2)(a) would specifically provide that the amount of that grant “intended to meet tuition fees or examination fees” would be disregarded. That is correct. However, he goes on to argue that it is discriminatory and contrary to Article 14 of the Convention for the legislation to permit such a deduction in the case of a person whose income consists of a grant but not in the case of a person whose income consists of earnings from employment. Parliament should either deny everyone the right to claim examination fees as an expense, or, if it allows it to some people, must allow it to everyone. 

11.	That argument is in my judgment fallacious, for two main reasons. First, Article 14 only prohibits discrimination in the enjoyment of Convention rights. A claimant relying on Article 14 must therefore show that some other provision of the Convention is “engaged”, although he need not show that that other provision is actually breached. The Claimant cannot, however, point to any other provision of the Convention which is engaged by the issue whether he can deduct examination fees in calculating his earnings for jobseeker’s allowance purposes. In particular, he cannot show that Article 1 of the First Protocol (protection of property) is engaged, because it is clear that income based jobseekers allowance is not a “possession” within the meaning of that provision: see R (Carson) v. Secretary of State [2003] 3 All ER, especially at para 49. 

12.	Secondly, the positions of the Claimant and a person in receipt of grant income are in my judgment plainly not analogous for the purposes of Article 14: there are obvious reasons why a person in receipt of grant income part of which is intended to meet examination fees should be entitled to deduct the fees in determining his income, but those reasons do not apply to a person whose income is derived from elsewhere. 

13.	For the above reasons the Tribunal’s decision was in my judgment not erroneous in law. 

	(Signed)	Charles Turnbull
		Commissioner

		10 February 2004