[2004] UKSSCSC CIS_1064_2004 (11 May 2004)

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The claimant's appeal to the Commissioner is allowed. The decision of the Derby appeal tribunal dated 28 January 2004 is erroneous in point of law, for the reasons given below, and I set it aside. It is expedient for me to substitute a decision on the claimant's appeal against the decision dated 21 August 2003, having made the necessary findings of fact (Social Security Act 1998, section 14(8)(a)(ii)). My decision is that the appeal is allowed and that the income support to which the claimant is entitled with effect from 12 August 2003 is to be calculated as set out in paragraph 60 below and subject to the condition mentioned there.

2.	This is a rare case where it is plain, from what the chairman (the sole member) of the appeal tribunal said about the hardship imposed on the claimant through no fault of her own and about the administration of her tax credit payments by the Inland Revenue, that he will be only too pleased to have his decision overturned. His remarks were entirely justified in the circumstances.

The decision under appeal
3.	There is some uncertainty about the precise date and nature of the decision under appeal. In the written submission dated 6 December 2004, the Secretary of State said that the original claim documents cannot be located after having been sent away to a storage facility. There is no doubt that the appeal tribunal was concerned with the claim for income support from 12 August 2003 and it seems that a decision awarding income support from that date at the weekly rate of £54.87 was made on 21 August 2003. Computer print-outs that are very hard to interpret suggest that there may have been some changes of circumstances shortly afterwards, but there is no record of the weekly rate having changed. The first page of the Secretary of State's written submission to the appeal tribunal gave the date of the decision under appeal as 8 September 2003 and the decision as being that the claimant was entitled to income support at the weekly rate of £54.87 from 9 September 2003 onwards. However, section 4 of the submission did not mention any decision after that of 21 August 2003. The original letter of appeal had given 15 September 2003 as the date of the letter about the relevant decision, but raised the general issue of deemed income from tax credits, that was a problem from the outset. In the absence any real information about what later decisions might have been made, I regard the appeal as against the decision made on 21 August 2003.

The general background
4.	The history as put before the appeal tribunal was this. The claimant was a single parent with two young children, aged three and just over one at the beginning of August 2003. She had been in receipt of income support down to 18 March 2003, when it stopped because she had begun work. She claimed working tax credit (WTC) and child tax credit (CTC). Awards were made for the year from 6 April 2003 to 5 April 2004. The appeal tribunal was not told what the initial annual amounts were, but appears to have been told (the documents are very confusing) that the amount of WTC awarded down to 2 August 2003 was £835.27 and that the CTC award for the whole year was £4598.37. However, it appears from page 13 of the papers that that figure included £1064.78 for the childcare element, which is in fact an element of WTC and not of CTC. I was told in the much fuller information provided in a submission dated 9 November 2004 on behalf of the Board of Inland Revenue (the Board) that the initial annual awards were of £1918.11 WTC and £8433.76 CTC. That could not possibly have been right, as the amount for CTC was more than twice the maximum annual rate appropriate to the claimant's circumstances. It has now been recognised that those figures wrongly allocated the childcare element to CTC rather than to WTC (I was told that the computer does not allow anything else) and that the initial annual award of WTC proper was £6818.28 and of CTC proper was £3533.59. I shall come back to the detail of the awards of tax credits later.

5.	At some point the claimant stopped working (the appeal tribunal was not told when) and that resulted in a change in the tax credits decisions. The confusing documents suggested that the award of WTC was stopped and that an overpayment of WTC that was said to have arisen was then set off against the amount of CTC that would otherwise have been payable, leaving little net payment. It was set out in this way in the submission to the appeal tribunal:

"While the Child Tax Credit for a baby entitlement was awarded up to June 9th 2003 when this would end from the child's first birthday, the award element for childcare entitlement has ceased from August 2nd 2003 onwards and explains why a high proportion of Child Tax Credit was paid up to the date in question and that the overpayment of Working Tax Credit is being deducted from the limited entitlement to Child Tax Credit. As a result, the last payment recorded of Child Tax Credit is £1.67 on September 15th 2003. For Income Support purposes, the law provides that the maximum amount of Child Tax Credit £65.73 that could be paid is taken into account."

I defy anyone to make head or tail of that.

6.	The rule that the maximum amount of CTC should be taken into account for income support purposes was said to be contained in regulation 7(1) of the Social Security (Working Tax Credit and Child Tax Credit) (Consequential Amendments) Regulations 2003 (the Consequential Amendments Regulations). Regulation 7(1) and (3) provided, as amended with effect from 8 August 2003:

"(1) Subject to paragraph (2) and regulation 31(3) of the Income Support Regulations, in the case of a claimant for income support who makes a claim, or whose partner makes a claim, for a child tax credit, the Secretary of State shall treat the claimant's income as including an amount equivalent to the amount of child tax credit to which he, or his partner, is entitled for the period specified in paragraph (3).

 (3) For the purposes of paragraph (1), the specified period begins on the first day of the first benefit week to commence for that claimant on or after 7th April 2003, or the date the award of child tax credit begins if later, and ends on the day before the first day of the first benefit week to commence for that claimant on or after 6th April 2004."

Regulation 7(2) is not relevant here as it only applies where a claimant or her partner is aged 60 or more. Regulation 1(2) provides as follows:

"(2) Subject to paragraph (5), in a case where a claimant for income support--
 (a)	has a child or young person who is a member of his family for the purposes of his claim for income support, and
 (b)	is awarded, or his partner is awarded, a child tax credit for a period beginning before 6th April 2004,
regulation 7  shall have effect from the first day of the first benefit week to commence for that claimant on or after the day from which that award of child tax credit begins and regulation 2 and Schedule 1 shall have effect from the first day of the first benefit week to commence for that claimant on or after 6th April 2004."

Regulation 1(5) does not affect the present case.

7.	It is convenient to set out here regulation 31(3) of the Income Support (General) Regulations 1987 (the Income Support Regulations), as substituted with effect from 8 August 2003 by regulation 2(2) of the Social Security (Working Tax Credit and Child Tax Credit) (Consequential Amendments) (No 3) Regulations 2003:

"(3) Working tax credit or child tax credit shall be treated as paid--
 (a)	where the award of that tax credit begins on the first day of a benefit week, on that day, or
 (b)	on the first day of the benefit week that follows the date the award begins, or
 (c)	on the first day of the first benefit week that follows the date an award of income support begins, if later,
until the last day of the last benefit week that coincides with or immediately follows the last day for which the award of that tax credit is made."

8.	The main argument made to the appeal tribunal by the claimant's representative, Mr Keith Lacey, a welfare rights officer for Derbyshire County Council, was this. By its express terms, regulation 7(1) of the Consequential Amendments Regulations applied only where a person who was already in receipt of income support made a claim for CTC. It did not apply where, as in the claimant's case, a person who had been awarded CTC made a claim for income support during the running of the award. Mr Lacey supported that submission by reference to the government's policy of reducing child poverty, which he said would not be furthered by the result applied by the Secretary of State. He submitted that the ordinary income support rules should be applied, under which only the amounts of CTC actually received by the claimant could be taken into account as income (R(IS) 4/01 and CIS/5479/1999).

The appeal tribunal's decision
9.	The appeal tribunal dismissed the appeal with regret. In the statement of reasons, the chairman said that it was tempting to agree with Mr Lacey's ingenious submission on the interpretation of regulation 7(1), but concluded that:

"on a true construction of the legislation, ... the sequence in which a person applied for Child Tax Credit and Income Support was irrelevant."

He also held that, as regulation 7(1) used the word "entitled", rather than "paid", the amount of entitlement had to be taken into account, not the amount actually paid. It was said that, because a person who is in receipt of income support is entitled to the maximum award of CTC, it was the amount of that entitlement (£65.73) that was to be taken into account. The chairman relied on section 7(2) of the Tax Credits Act 2002, under which the income test for entitlement to a tax credit does not apply so long as a person is entitled to specified social security benefits, including income support. There is no provision in the legislation for entitlement at less than the maximum rate (defined in annual figures in regulation 7 of the Child Tax Credit Regulations 2002 (the CTC Regulations)) in those circumstances.

The appeal to the Commissioner
10.	The claimant now appeals against that decision with the leave of the appeal tribunal chairman. In giving directions on the appeal, I made the Board a second respondent to the appeal. The appeal was not supported in the Secretary of State's written submission dated 10 May 2004 or in the Board's written submission dated 15 June 2004. In his submission in reply, Mr Lacey requested an oral hearing. I granted that request and also directed that further information be provided by the Board. The hearing took place on 10 November 2004, at the same time as the hearing in a linked appeal. I directed further written submissions from the Secretary of State and from Mr Lacey on the application of the income support rules if regulation 7(1) of the Consequential Amendments Regulations was not applicable. That round of submissions was completed on 10 January 2005, following which I granted Mr Lacey's request for a further oral hearing.

11.	The claimant and Mr Lacey attended the first oral hearing. The Secretary of State for Work and Pensions was represented by Miss Rosemarie Topping of the Office of the Solicitor to the Department for Work and Pensions. The Board was represented by Mr Zaglul Islam of its Solicitor's Office, accompanied by Mr Keith Rogers of Revenue Policy. The attendance at the second oral hearing on 12 April 2005 was the same, except that the claimant did not attend, Mr Lacey was accompanied by a colleague and the Secretary of State was represented by Mr Andrew Sharland of counsel. I am grateful to all present for their assistance, although that did little to diminish the difficulty of the questions to be decided.

Did the appeal tribunal err in law?
(a) The application of regulation 7(1) in the circumstances (did the order of claims matter?)
12.	Mr Lacey's primary submission was that regulation 7(1) of the Consequential Amendments Regulations did not apply where, during the tax year 2003/2004, a person who already had an award of CTC made a claim for income support. He said that its plain words in the ordinary use of the English language indicated a sequence under which a claimant for income support, ie as defined in regulation 1(11) and regulation 2(1) of the Income Support Regulations as a person claiming income support, then made a claim for CTC. Regulation 7(1) could easily have said "who makes a claim, or has made a claim, for a child tax credit", but did not. Mr Lacey submitted that the way in which regulation 1(2) of the Consequential Amendments Regulations brought regulation 7 into effect reinforced his point. He relied on the separation into (a) and (b) of the conditions of having a child or young person as a member of the family for income support purposes and that a person "is awarded" CTC. He said that the reference to the first day of the first benefit week to commence on or after the day from which the award of CTC begins (not "begins or began") indicated a sequence where benefit weeks had already been established under a claim for and an award of income support at the date that a claim for CTC was made.

13.	Those are powerful points. Mr Lacey also relied on the heading to regulation 7 - "Income Support - transitional arrangements". He submitted that the claimant was not in transition from one state to another. There was simply a position in the tax year 2003/2004 in which personal allowances and premiums related to children remained part of the applicable amount for income support purposes and it was also possible for awards of CTC to be made (designed to take over from those premiums and allowances from April 2004). He submitted that regulation 7 should be restricted to cases where a claimant was in transition, although I am not entirely sure how that restriction was said to work. At the first oral hearing, I mentioned the rule of construction that headings or sidenotes are not part of legislation and so give no assistance in interpreting the meaning of legislation. In the meantime, the House of Lords has decided the case of R v Montila [2004] UKHL 50 [2005] 1 All ER 113, in which it was held that that rule was out of keeping with the modern approach to interpretation and that headings and sidenotes could be looked at as part of the contextual scene. So I should look at the heading in this case, but I do not think that it helps the claimant.

14.	Cases where a claimant is in transition from one state of affairs to another constitute only one example of transitional arrangements. Regulation 7 made arrangements, under the powers existing for income-related benefits in the Social Security Contributions and Benefits Act 1992, for the treatment of CTC in the income support scheme in the period prior to 6 April 2004. Those arrangements, for the year before income support personal allowances and premiums for children were abolished for anyone who was awarded CTC (Consequential Amendments Regulations, regulation 1(2) and (3)), can properly be described as transitional. For the year concerned, but not beyond, there was an overlap between the schemes. I understand that the complete transfer of the child elements of income support and income-based jobseeker's allowance to the CTC scheme did not happen by 6 April 2005 as intended (Tax Credits Act 2002 (Commencement No 4, Transitional Provisions and Savings) Order 2003, article 2(5)), and indeed will not now happen until 31 December 2006 (Tax Credits Act 2002 (Commencement No 4, Transitional Provisions and Savings) (Amendment) Order 2005 and Memo DMG JSA/IS 96). But that merely allows income support and JSA claimants to continue to receive personal allowances and premiums for children if they do not claim CTC. It does not affect my conclusion above or the express limitation of the effect of regulation 7(1) to the year ending on 5 April 2004.

15.	Finally, Mr Lacey emphasised the unfairness of the application of regulation 7(1) in the claimant's case. He submitted that, if regulation 7(1) was restricted in the way he suggested, the ordinary income support rules about the taking into account of income other than earnings would nevertheless apply to the claimant. The principles mentioned in R(IS) 4/01 would suggest that the payments of CTC actually made to the claimant week by week should be taken into account, rather than any deemed amount. Regulation 40(3) of the Income Support Regulations (where payment of any benefit under the Contributions and Benefits Act subject to deduction by way of recovery, gross amount to be taken into account) could not apply because CTC is not a benefit.

16.	Miss Topping submitted that the problems of interpretation put forward by Mr Lacey disappeared when one took into account the standard drafting practice of the use of the present tense in legislation. It was obvious that the reference to a claimant of income support included a person who had been awarded and was in receipt of income support on a claim. Likewise, the reference in regulation 7(1) to making a claim for CTC should be taken as referring to a present state in which a such a claim has been made, which may or may not have resulted in an award of CTC, and may or may not have been made before the claim for income support. Miss Topping applied the same reasoning to regulation 1(2). Sub-paragraph (a) simply referred to any circumstances in which children or young persons were part of the family for income support purposes. Sub-paragraph (b), bearing in mind that regulation 1 was in force from 1 April 2003, referred to the present state of a claimant having been awarded CTC for a period starting before 6 April 2004, whether the claimant was already receiving income support when CTC was claimed or whether she did not become a "claimant for income support" until after the award of CTC was made.

17.	Miss Topping had obtained instructions as to the purposes behind regulation 7(1). She submitted that there were two main purposes, in relation to neither of which did it make sense to distinguish between cases according to the order in which the relevant claims were made. The first purpose put forward was to provide that any award of CTC should be taken into account as income from the date of the start of the award, even though there might have been some delay between the making of the claim and the date on which the award was made. It was said that the provision was necessary because there was no mechanism for paying income support while the decision on the CTC claim was awaited and then recouping excess income support paid out of the CTC award. The second purpose was to ensure that the maximum rate of CTC was to be taken into account, whether the claimant actually received less or more than that in any particular week. It was part of the CTC scheme that there should be entitlement to the maximum rate for any period during which a claimant was entitled to income support. If for any reason within the CTC scheme a claimant was being paid less than the maximum, it would be wrong to top up the shortfall through income support, as that would deprive the relevant CTC rule of its effect. It would be wrong for a CTC or WTC overpayment in effect to be repaid through income support. That was the policy behind regulation 40(3) of the Income Support Regulations, which could not apply to tax credits, so that specific provision needed to be made.

18.	With some misgivings, I accept the result of Miss Topping's submissions. My misgivings stem from the obvious questions, along the lines of the points raised by Mr Lacey, that would arise in the mind of an ordinary reader of regulation 7(1). The vagueness that leaves matters open to question could easily have been removed by minor differences in drafting. Perhaps some of the problems stem from the attempt to achieve two purposes in one provision. However, on balance, I have been unable to accept Mr Lacey's submissions.

19.	I shall come back later to the second alleged purpose of regulation 7(1) as described in paragraph 17 above, and to the question of whether that purpose was achieved. However, it does seem to me, as it did to the appeal tribunal, that there is no obvious reason or logic in applying the first alleged purpose, and whatever the provision achieves in addition, only to existing income support recipients who made a claim for CTC and not where the order of claims was the other way round.

20.	A need to take an award of CTC into account from the start date of the award might have arisen primarily where an existing income support recipient claimed CTC, when a question might have arisen as to the amount of income support to be paid while waiting for the CTC claim to be decided. I am not at all convinced that the existing mechanism of section 74 of the Social Security Administration Act 1992 would not apply in such circumstances if income support continued to be paid at the full rate without taking account of the potential award of CTC. And regulation 7(1) did not supply a rule that allowed a definitive income support decision to be given week by week while waiting for the CTC decision. That is because it could not be brought into force by regulation 1(2) until an award of CTC had actually been made, although it was then brought into force from the first income support benefit week following the start date of the CTC award. So, in the meantime, income support would normally have been paid in full (unless unusually some payment was suspended) and section 74 would have to have been brought into play to make recoverable the excess revealed by the retrospective deeming of the receipt of income equivalent to the amount of CTC (whatever the proper amount is). However, the need for adjustment could equally have arisen when a claim for income support was made shortly after a claim for CTC and while waiting for the decision on the CTC claim. And during the transitional year 2003/2004, there seems no reason why whatever the proper rule was about the amount to be taken into account for CTC for income support purposes should not be applied in all cases of overlap.

21.	Given that background, I am just persuaded that Miss Topping's submission in paragraph 16 above should be accepted. The drafting of regulations 1(2) and 7(1) of the Consequential Amendments Regulations might be criticised as inept and vague, and indeed as not coherently achieving Miss Topping's first purpose, but is properly to be interpreted in accordance with that submission. Accordingly, the appeal tribunal did not err in law by applying regulation 7(1) in the claimant's case.

(b) What income did regulation 7(1) deem the claimant to have?
22.	This is a question to which the appeal tribunal gave relatively little consideration. It seems to have assumed that, as the Secretary of State had asserted, regulation 7(1) had the effect that, throughout the period covered by the award of CTC, the claimant was to be treated for income support purposes as receiving the maximum rate of CTC to which she could be entitled, ie £65.73 per week, and repeated the Secretary of State's explanation. That figure seems to have been calculated as the weekly equivalent of the maximum annual rate of CTC applicable to a claimant with two children over one. In my view, identifying the effect of applying regulation 7(1) is a matter of considerable difficulty and complexity. I have concluded that in the circumstances the appeal tribunal erred in law by treating the claimant as in receipt of the £65.73 per week from 12 August 2003. I am afraid that the reasons are very convoluted.

23.	I start with the reasons given by Miss Topping, and endorsed by Mr Sharland, for the application of the figure of £65.73. That also requires some detailed investigation of the overall scheme of tax credits adjudication and of the submissions made on behalf of the Board about that.

24.	Regulation 7(1) of the Consequential Amendments Regulations did not expressly say that a claimant was to be treated as receiving (or strictly receiving an amount equivalent to) the maximum rate of CTC to which a person on income support can be entitled. It rather referred to the amount of CTC to which the claimant "is entitled" for the period specified. Miss Topping submitted that the result she argued for could not have been identified in any more direct way than was done in regulation 7(1). I disagree. I see no reason why, if the intention was to produce that result, the amount could not have specified by reference to a weekly equivalent of the amounts prescribed in regulation 7 of the CTC Regulations, as applicable to the particular claimant's circumstances.

25.	Miss Topping submitted that this chain had to be followed. Section 7(1) of the Tax Credits Act 2002 (the 2002 Act) makes entitlement to any tax credit dependent on an income test, a test of income either not exceeding a prescribed amount or exceeding it only by an amount that does not involve the entire amount of tax credit being removed on a sliding scale. But section 7(2) provides:

"(2) Subsection (1) does not apply in relation to the entitlement of a person or persons to a tax credit for so long as the person, or either of the persons, is entitled to any social security benefit prescribed for the purposes of this subsection in relation to the tax credit."

Regulation 4 of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 prescribes income support (with small exceptions) and income-based jobseeker's allowance for the purposes of section 7(2). Then section 13(1) of the 2002 Act provides:

"(1) Where, in the case of a person or persons entitled to a tax credit, the relevant income does not exceed the income threshold (or his or their entitlement arises by virtue of section 7(2)), the rate at which he is or they are entitled to the tax credit is the maximum rate for his or their case."

Maximum rates are prescribed under section 9 and, in relation to CTC, are set out in regulation 7 of the CTC Regulations. The maximum rate in any particular case is the aggregate of the family element (for 2003/2004, £1090 if there is a child under a year old, otherwise £545) and an individual element for each qualifying child or young person (£1445, with higher amounts where the child or young person is disabled). Those are annual figures.

26.	As already mentioned in paragraph 17 above, Miss Topping submitted that the effect of those provisions is that, for any period for which a CTC claimant is entitled to income support, she is entitled by virtue of sections 7(2) and 13(1) of the 2002 Act to the maximum rate of CTC. As regulation 7(1) of the Consequential Amendments Regulations used the terms of entitlement and not of payability, the reference was to that effect. She recognised a problem that the tax credits scheme did not produce a final determination of entitlement, under section 18 of the 2002 Act, until after the end of the tax year for which an award was made and that until that point there were merely awards of tax credits running to the end of the tax year, under section 14 initially, or under sections 15, 16 or 28(5) after amendment, giving rise to an obligation on the Board to make payment (section 24(1)). She pointed to many references to conditions of entitlement and rates of entitlement in the 2002 Act (in addition to the very precise use in section 13(1)), that would plainly be relevant at the point that an award was made. She also submitted that to take into account the maximum weekly rate of CTC, regardless of the amounts actually being paid to a claimant through the year, could work to a claimant's advantage as well as disadvantage and meant that a predictable amount of income support would be payable through the year without the need for frequent changes. She rejected a suggestion that entitlement for the purposes of regulation 7(1) was to be defined by the latest award of CTC made by the Board.

27.	At the oral hearing on 12 April 2005, Mr Sharland stoutly maintained that position on the meaning of regulation 7(1). He also submitted that the Income Support Regulations could not work in a practical way if the result were otherwise, but I shall leave consideration of that until I explain my substituted decision in the case. In paragraph 5 of my direction for the further oral hearing, I raised, to be dealt with by the Secretary of State, a number of factors relating to the Board's obligations to make payments of tax credits that might be relevant to the interpretation of regulation 7(1) (which in the light of my conclusions below I do not now need to specify). Mr Sharland submitted that none of those points had any impact on the Secretary of State's basic position that, once an award of CTC had been made in 2003/2004, the effect of regulation 7(1) was to treat the claimant as receiving the maximum weekly rate of CTC appropriate to the circumstances.

28.	I cannot accept the Secretary of State's submissions, although the issue is made exceptionally difficult by the inconsistent use of language within the 2002 Act and the failure of regulation 7(1) of the Consequential Amendments Regulations to state plainly the result that I quite accept that policy-makers wished to have in place. I find the key to the proper interpretation to be the interaction between regulation 7(1), regulation 7(3) on the period for which regulation 7(1) has effect, regulation 1(2) on the commencement of the effect of regulation 7 and regulation 31(3) of the Income Support Regulations (all set out in paragraphs 6 and 7 above).

29.	Regulation 7(1) could not be read literally and in isolation if it was to have the effect argued for by the Secretary of State. If it were read in that way, it would appear, first, that, as soon as a claim for CTC was made potentially beginning in tax year 2003/2004, a claimant would be treated as receiving the maximum rate of CTC for income support purposes, even though the claim for CTC turned out to be wholly unsuccessful. That state of affairs is avoided because under regulation 1(2) regulation 7 could not come into effect unless an award of CTC had been made for a period beginning before 6 April 2004. Nor can there be a starting date for the taking into account of income under regulation 31(3) of the Income Support Regulations unless an award of a tax credit has been made. However, as noted in paragraph 20 above, that does seem to deprive regulation 7 of some of its alleged purpose.

30.	Second, regulation 7(1) could not be applied literally when an award of CTC was made and then terminated during 2003/2004. There are many changes of circumstances that might have the effect of bringing an award to an end, which either have to be or can be notified to the Board, for instance, a sole qualifying child ceasing to be a qualifying child. The terms of regulation 7(1) and (3) would seem still to have applied in such circumstances, as a claim for CTC had been made and the period of deeming of income was to run from the first day of the award of CTC to April 2004. And regulation 31(3) of the Income Support Regulations appears to require income to be treated as paid until the end of the period for which the award was made. But it could not possibly have been intended that an income support claimant in such circumstances was to be deemed to be receiving the maximum weekly CTC for weeks that were no longer covered by an award of CTC. That result could perhaps be avoided on the basis that section 13(1) of the 2002 Act restricts the automatic entitlement to the maximum rate where the income test does not apply to cases where the claimant is otherwise entitled to the tax credit in question. Thus, if one of those other conditions of entitlement ceased to be satisfied, there would be no amount of entitlement of CTC to be deemed to be received under regulation 7(1), although the operation of regulation 31(3) of the Income Support Regulations is not then clear. However, this example does show the need to look at the wider context of the tax credits scheme and at whatever was the most recent decision as to an award of CTC, at least where the award was terminated.

31.	Third, section 14(3) of the 2002 Act specifically empowers the Board to award a tax credit at the rate of nil. I am not sure in just what circumstances it would be appropriate to award a CTC of nil (although the operation of section 28(5) - see paragraphs 47 to 51 below - might be a prime example). However, the logic of the Secretary of State's submissions would lead to the conclusion that, as an award had been made, an income support claimant was to be treated as receiving the maximum rate specified in regulation 7(2) of the CTC Regulations until April 2004. Once again, that result cannot possibly have been intended.

32.	What I draw from those examples is the need, if regulation 7(1) is to be confined within the limits that must have been intended, to look at the particular claimant's actual "entitlement" to CTC week by week during the period that is in question for income support purposes. The most natural reading of regulation 7(1) in my view is that it required the identification of what amount of CTC the particular claimant was actually "entitled" to in the particular circumstances. It did not simply deem the claimant to be receiving the maximum amount for the children she was responsible for as specified in regulation 7(2) of the CTC Regulations. For that result to follow, different and far more precise words would have been necessary. But that leaves open just what "is entitled" meant. The amount had to be capable of being identified during the tax year 2003/2004, and so must have referred, in relation to any new period of income support entitlement, to the amount of CTC attributable, in accordance with the most recent award or amended award made by the Board, to the period from the effective date of the award or amended award to the end of the tax year. That is consistent with the overall scheme of decision-making under the 2002 Act as briefly described in paragraph 26 above. A person can only be said to be entitled to any particular amount of CTC, before the final determination after the end of the tax year, by virtue of an award by the Board. Account must then be taken of the possibility of an initial award being amended during the year. I bear in mind both the provision in regulation 12(1) of the Payments by the Board Regulations that a tax credit is to be paid in accordance with the most recent decision by the Board under section 14(1), 15(1) or 16(1) of the 2002 Act. The result is also strongly supported by the terms of regulation 7(3) of the Consequential Amendment Regulations, which, in a case where entitlement to income support began after the start of a period of award of CTC, made the period specified for the deeming under regulation 7(1) begin with the first income support benefit week. That points one to the effect of the CTC award at that date, rather than, where there was an amendment, to the amount of the CTC award for its entire length, including periods before the amendment as well as after it. The result also has the merit of being consistent with the general principle that the income support system is designed to meet financial needs when they arise through a shortfall in resources available at the time in question.

33.	The objections that might be made to that interpretation include the following. First, it means that regulation 7(1) and (3) of the Consequential Amendments Regulations did not achieve very much. However, the provisions did confirm the taking into account of income from CTC from the beginning of the award and dealt with the coordination with income support benefit weeks, so that it would not be deprived of any practical purpose. If it failed to achieve all of what policy-makers wanted, so be it. Second, it is inconsistent with the operation of regulation 31(3) of the Income Support Regulations, to which regulation 7(1) was expressly made subject by the amendment with effect from 8 August 2003. I find that objection not to be made out, but as there are many difficulties in the interpretation of regulation 31(3), I deal with them when giving my substituted decision.

(c) The appeal tribunal's error of law
34.	For the purposes of deciding whether the appeal tribunal erred in law, I do not need to consider whether "entitlement" in regulation 7(1) might be further restricted to what the Board was required to pay week by week (see paragraphs 45 and 46 below on why the point does not arise in substance on the evidence in the present case). The appeal tribunal applied what I find to be a wrong legal interpretation of regulation 7(1). It supported its interpretation by the distinction between "entitled" and "paid", but went wrong in concluding that "entitled" meant what the Secretary of State said it meant. That error was material to its conclusion. The appeal tribunal found on the evidence that from a date within the period that it could consider the overpayment of CTC that had been made to the claimant (or more accurately I think the overpayment of the childcare element and other elements of WTC) had been recouped from her by a revised award being made. There was thus a clear possibility that consideration of the revised or amended award of CTC would yield a nil amount of entitlement to CTC for the period specified under regulation 7(3), or at least an amount significantly below £65.73. Accordingly, I set aside the appeal tribunal's decision as erroneous in point of law.

The Commissioner's decision on the claimant's appeal against the decision of 21 August 2003
35.	It is plainly expedient, as I have received a good deal of new evidence, but there is no fundamental dispute about the facts, that I should substitute a decision on the claimant's appeal against the decision of 21 August 2003 having made the necessary findings of fact.

36.	First, the consequence of the appeal being against the decision of 21 August 2003 (see paragraph 3 above) is that I can only take into account circumstances obtaining as at 12 August 2003, the date of claim, and down to 21 August 2003 (Social Security Act 1998, section 12(8)(b)). That prevents me from looking at some issues that Mr Lacey wanted to raise about later periods, in particular the status and effect of hardship payments made by the Board. However, my decision will take effect from and including 12 August 2003 and it will be for the Secretary of State to consider whether to invoke any powers of supersession in relation to the period after 21 August 2003. If he does, a fresh right of appeal will arise.

(a) Decisions by the Board and payments of CTC and WTC
37.	I am now, thanks to the efforts of Mr David Eland of the Board, as well as to Mr Islam and Mr Rogers, able to make much more detailed findings of fact about the course of the decisions made on the claimant's CTC and WTC in 2003/2004. It is, though, profoundly disappointing that it has taken such a long struggle by able and experienced officers to find out, and then only partially, what was actually done on behalf of the Board in that year. The initial awards were as described at the end of paragraph 4 above, and were made at a date when the claimant was still working. The award of CTC proper was broken down into the period from 6 April 2003 to 9 June 2003, during which the higher family element for a child under one was applicable, and the period from 10 June 2003 to 5 April 2004, when that higher element would no longer be applicable. That was in accordance with the requirement in regulation 8 of the Tax Credits Regulations 2002 to make a separate calculation for each "relevant period" within the period of an award, ie each period during which the maximum rate of CTC to which the claimant might be entitled stays the same and, where there is also entitlement to WTC, the elements of WTC and the circumstances relevant to any childcare element stay the same. The period of an award is defined by regulation 2(1) and section 5 of the 2002 Act as the period from its start date to the end of the tax year, subject to termination under section 16.

38.	When the claimant stopped work, her entitlement to WTC ceased. There was a decision, or at least a recalculation of payments to be made, on 16 July 2003 (version 3 in the attachment to the Board's written submission of 6 April 2005), under which nil was shown for WTC from 12 July 2003. That required a new calculation for CTC on the ending of one relevant period on 11 July 2003 and the beginning of a new one on 12 July 2003. However, the total of the amounts of CTC allocated among what had become three relevant periods remained £3533.59. The overall period of the award of CTC seems to have stayed the same.

39.	When the claimant went back into work from 30 July 2003, a similar process occurred both for WTC and CTC (version 4). The relevant period starting on 12 July 2003 came to an end on 29 July 2003 and a new relevant period running to 5 April 2004 started on 30 July 2003. The WTC award then included awards for that period. For CTC, the total of the amounts allocated among the four relevant periods remained £3533.59.

40.	The crucial recalculation for present purposes occurred on 12 August 2003 (version 5), to take account of information that the claimant had stopped work, it seems from 3 August 2003. The relevant period beginning on 30 July 2003 ended on 2 August 2003 and a new relevant period running to 5 April 2004 started on 3 August 2003. Nil was allocated for WTC in that new relevant period. For CTC, the total of the amounts allocated among the five relevant periods remained £3533.59.

41.	It might appear from the above that, despite the frequent changes to the award of WTC, throughout the process the award of CTC to the claimant for the tax year as a whole was not amended from its initial annual rate. In particular it might seem that the most recent award of CTC prior to 12 August 2003 was of an amount producing a weekly amount of £65.73 (if the weekly rate is calculated in accordance with the maximum rates applicable from 10 June 2003 onwards). However, it is necessary to look at the evidence of the payments made to the claimant and the submissions made by Mr Islam about the nature of the decision that was made on 12 August 2003.

42.	The record of payments (see the revised schedule, breaking down the payments as between WTC (but excluding the childcare element) and CTC (including the childcare element) attached to the Board's submission of 6 April 2005) is very difficult to unravel. Mr Islam and Mr Rogers were at a loss to explain many of the payments recorded. Briefly, the position as at 18 July 2003, just about when the first significant change occurred, was that the claimant had been paid a total of £5127.58 (WTC of £1449.69 and CTC of £3677.89, remembering that the CTC figure includes an unknown amount for the childcare element that was properly WTC). Given that the total initial annual award was £10351.87, she had been paid more than half of that amount in the first three and a bit months of the tax year. As the chairman of the appeal tribunal so clearly accepted, the claimant through no fault of her own was overpaid by a considerable amount in that period and, despite querying the payments several times, was repeatedly told that everything was in order. The degree of the overpayment cannot be explained simply by fact of an annual award of WTC having initially been made on the assumption that the claimant would continue in work for the whole tax year.

43.	Payments labelled CTC were made on 22 July 2003 (£40.24), 29 July 2003 (£39.10), 31 July 2003 (£97.27), 5 August 2003 (£95.65), 12 August 2003 (£95.65) and 13 August 2003 (£16.65). Payments labelled WTC were made on 31 July 2003 and 12 August 2003. Since the amounts of the CTC payments went up after 29 July 2003, I suspect that the first two payments were not intended to include any childcare element, but that the later CTC payments did, except for the 13 August 2003 payment of £16.65. By that date the cumulative total of all payments was £5673.77. Further payments of CTC were made on 19 August 2003 (£16.24), 26 August 2003 (£18.40), 2 September 2003 (£16.17), 9 September 2003 (£16.17) and 11 September 2003 (£1.67). From that point, nothing was paid until hardship payments began on 1 December 2003.

44.	Mr Islam accepted, as must be accepted from the plain words and structure of the tax credit legislation, that WTC and CTC are separate tax credits and that separate awards of each tax credit have to be made. One result is that changes in an award of WTC or overpayments of WTC, whether by administrative error or as a result of delays in implementing the effect of change of circumstances, cannot affect the amount of an award of CTC or the amounts properly payable in the absence of some specific legislative authority. If the amount of the annual award of CTC as recorded in the attachment to the Board's submission of 6 April 2005 and summarised in paragraphs 37 to 40 above had been paid to the claimant in a way that produced similar payments at regular intervals throughout the year, in accordance with regulation 12(2) of the Payments by the Board Regulations, one would have expected the claimant to be paid about £65.73 each week in the period from 10 June 2003 to 5 April 2004. I asked Mr Islam what the Board's authority was for paying the claimant less than that amount in the period after 12 August 2003. The answer was that the only provision that could have authorised that effect was section 28(5) of the 2002 Act and that there must have been a decision given under that provision in relation to the period from 3 August 2003.

45.	Before turning to section 28(5), I must mention regulation 12(3) of the Payments by the Board Regulations:

"(3) Where an award of tax credit is amended, the total amount paid prior to the award being amended shall be taken into account by the Board in determining the amount of any further payments for the remainder of the period of the award."

That would not seem to have authorised any reduced payment on the basis only of the series of recalculations set out in paragraphs 36 to 39 above. That is because, as shown, the annual amount of the CTC award remained constant throughout, so that those recalculations would not have led to an amendment of the award of CTC, which is a condition for triggering the operation of regulation 12(3). Maybe a similar principle would operate if, by administrative error, too much CTC had been paid to the claimant before 2 August 2003. The duty on the Board to make payment in section 24(1) of the 2002 Act is limited to the amount awarded. If the obligation in regulation 12(2) of the Payments by the Board Regulations, to make payment "so far as possible in such amounts as will result in the person ... receiving regular payments of similar amounts over the entire period of the award", has not been fulfilled and a disproportionate amount has been paid in the first part of the year, the same principle could be applied to what is left of the annual amount in relation to the rest of the year. Payment could be said to be essentially a matter of administration, despite regulation 12(3) having been thought necessary. But the difficulty in the present case is that, because of the Board's inability to separate out payments of the childcare element and of CTC proper in the payments labelled CTC, it is quite impossible to conclude that the claimant had received a disproportionately large amount of CTC proper in the period down to 2 August 2003. The excess could have been entirely made up of overpayments of the childcare element. Thus, the reduced payments of CTC cannot be explained as merely a matter of adjustment in the amount of CTC that the Board was required to pay.

46.	However, regulation 12(3) could well have been relevant in relation to the crucial recalculation set out in paragraph 40 above. That was carried out on 12 August 2003, but took effect from 3 August 2003. I conclude below that a decision amending the claimant's award of CTC was made. Thus, if payments of CTC at the (higher) unamended rate had been made to her in the period from 3 August 2003 to 12 August 2003, those payments would have to be taken into account in calculating the amounts to be paid to her from 13 August 2003 under the (lower) amended award.

47.	Section 28(5) of the 2002 Act provides:

"(5) Where it appears to the Board that there is likely to be an overpayment of a tax credit for a tax year under an award made to a person or persons, the Board may, with a view to reducing or eliminating the overpayment, amend the award or any other award of any tax credit made to the person or persons; but this subsection does not apply once a decision is taken in relation to the person or persons for the tax year under section 18(1)."

48.	The Board mentioned its power under section 28(5) in its written submission of 15 June 2004. Then, in my directions for the second oral hearing I specifically asked the Board whether it had used that power in its decision of 12 August 2003 (what became version 5 in the attachment to the submission of 6 April 2005). Mr Islam's answer was that he was instructed that section 28(5) had been used then to amend the award of CTC to reduce or eliminate the potential overpayment of tax credit, which he accepted was probably a potential overpayment of WTC. He was instructed that regulation 12(3) of the Payments by the Board Regulations had not been used. Mr Islam said that there was no documentary record of section 28(5) having been used, but that no physical records of any decisions made or notifications issued would now exist. There would only be the computer record of the changing situation as reported in the submission of 6 April 2005. On being pressed for the Board's definitive position on this crucial issue, Mr Islam, after some reconsideration, maintained that there must have been an exercise of the power under section 28(5) with a resulting amendment of the award of CTC to the claimant. I add that that is consistent with the letter of explanation about the status of hardship payments that Mr Rogers wrote on 22 November 2004. Mr Rogers stated, after discussion with the solicitors' office, that hardship payments are payments of tax credit, not extra-statutory payments as had been suggested at the first oral hearing. They were "in effect a revision of a decision as to the rate of recovery of overpaid tax credits", which seems to recognise that a process of recovery following a formal decision was in operation.

49.	I can only proceed on the basis that the Board made a decision under section 28(5) of the 2002 Act on 12 August 2003. Thus, although the figures for the underlying annual amount of entitlement to CTC remained the same, at £3533.39, there had in fact been an amendment to the award with effect from 3 August 2003. But I think that there must also, on the basis stated in paragraph 46 above, have been an additional use of the duty under regulation 12(3) of the Payments by the Board Regulations to adjust the amount of payment.

50.	I take that into account as follows in working out as best I can what the amount of the amended award from 3 August 2003 to 5 April 2004 was. I conclude, by inference from the figures set out in paragraphs 42 and 43 above, that the amended award of CTC from 3 August 2003 to 5 April 2004 included an amount equal to the total (£85.30) of the payments recorded as made on 13 August 2003, 19 August 2003, 26 August 2003, 2 September 2003, 9 September 2003 and 11 September 2003, which I am satisfied represented CTC proper. The final payment on 11 September 2003 must have exhausted the amended award. In addition, the amount of so much of the payments recorded as made on 5 August 2003 and 12 August 2003 as represented CTC proper form part of the award. That is because the amount paid on later dates would, under regulation 12(3) of the Payments by the Board Regulations, have been adjusted to take account of those payments made before the award was amended. All of them must be looked at in working out the amount of the award. The difficulty is in saying what part of the payments of 5 August 2003 and 12 August 2003 represented CTC proper. The claimant should not be disadvantaged by the failure of the Board to keep accurate records of the amounts paid by way of the separate tax credits, so I certainly do not assume that those payments included the £65.73 that would have been paid if the award had been spread evenly over the tax year. That also looks very unlikely from the pattern of actual payments. My best estimate is that each payment contained the amount of £39.10 CTC proper, the amount that was paid immediately before the increase that seems to have been caused by the addition of the childcare element. Thus an amount of £78.20 is to be added to the £85.30 to give the amount of the amended award of CTC for the period from 3 August 2003 to 5 April 2004, giving a total of £163.50  It is consistent with section 12(8)(b) of the Social Security Act 1998 to use the evidence of the payments recorded as made after 21 August 2003, the date of the decision under appeal, as it is evidence of the content of the amended CTC award made before that date.

(b) The application of regulation 7(1) of the Consequential Amendments Regulations
51.	On that basis, the questions arising on the application of regulation 7(1) and (3) of the Consequential Amendments Regulations are much simplified. I do not have to decide how those provisions applied in a case where the award of CTC was not amended, but by some administrative action there was simply an adjustment of the amounts paid without an amendment of the award (see paragraph 45 above). On the interpretation of regulation 7(1) and (3) adopted in paragraph 32 above, as from 12 August 2003 when the income support claim was made, the claimant must be treated as receiving an amount of income equivalent to the amount of CTC to which she was entitled under the amended award of £163.50 identified in the previous paragraph. How then can one identify the amount of the claimant's entitlement for the period from 12 August 2003 as specified in regulation 7(3) when the amended award of CTC began on 3 August 2003? In my judgment that is taken care of by regulation 31(3) of the Income Support Regulations.

(c) The application of regulation 31(3) of the Income Support Regulations
52.	Regulation 31(3) defines how the amount of income consisting of CTC and WTC is to be taken into account. The form of regulation 31(3) in force from 8 August 2003 did not have a merely transitional application, but is the enduring provision for the taking into account of CTC and WTC for income support purposes (though to all intents CTC is disregarded as income from 6 April 2004 onwards under paragraph 5B of Schedule 9 to the Income Support Regulations). The new form replaced a similar, but much simpler, provision that had been in force from 6 April 2003, which had in turn replaced a similar provision that had applied to working families' tax credit and disabled person's tax credit. It applies to "real" awards of CTC and WTC, as is clear from the definitions in regulation 2(1). The deeming rule in regulation 7(1) of the Consequential Amendments Regulations was peculiar. A claimant was to be treated as having income of an amount equivalent to the amount of entitlement to CTC. That deemed amount of income was not strictly itself CTC, but I hold that regulation 31(3) must be interpreted as applying to such a deemed amount as well as to "real" CTC and WTC. That must follow from the amendment making regulation 7(1) expressly subject to regulation 31(3). Miss Topping's submission was to that effect and Mr Lacey did not really challenge the result. I also accept the agreed position that, if the deemed amount of income is to be taken into account, actual payments of CTC must be disregarded, to avoid double counting.

53.	Regulation 31(3) seems to me to be out of line with the ordinary structure of the income support provisions on the taking into account of income other than earnings. The ordinary structure is one that applies to payments of income and strictly to each payment of income as it is made. Regulation 31(1) identifies the date on which the payment is to be treated as paid. Regulation 29 identifies the period over which the payment is to be taken into account. Regulation 32 identifies the weekly amount of income that is to be taken into account over that period. However, regulation 31(3) does not in terms apply to a payment. It simply applies to WTC or CTC. That cannot be because it could only apply to a deemed amount equal to the maximum rate of CTC on the Secretary of State's view of regulation 7(1) of the Consequential Amendments Regulations, since it applies to WTC as well as to CTC and on an enduring basis, not just for the transitional year of 2003/2004. Nor does it in terms do what it was submitted on behalf of the Secretary of State that it does, provide that the first weekly amount of income to be taken into account is to be treated as paid on the first day of the benefit week identified under subparagraphs (a) to (c) and that each succeeding weekly amount is to be treated as paid on the first day of each succeeding benefit week. It simply identifies the benefit week in which CTC or WTC is to be treated as paid and says it is to be treated as paid until the end of the benefit week in which the last day of the tax credit award falls (which is what I think that the final part of the provision means despite the apparent absurdity of asking whether a week coincides with a day).

54.	For most of the course of this appeal, I thought that regulation 31(3) stands outside the ordinary structure of the Income Support Regulations and provides a complete rule for the taking into account of income arising from awards of CTC and WTC. But I now consider that that is not so. It does not supply a complete rule, as it does not say how a weekly amount of income is to be derived from an amount of CTC or WTC awarded for a tax year or some lesser period running to the end of the tax year. Regulation 31(3) has the effect that individual payments in respect of those credits are not to be taken into account as such when they are made, as under the ordinary structure. I find compelling the clear contrast between the language of regulation 31(3) and of regulation 31(1) and the definition in regulation 31(3) of the period to be taken into account, which is not related to any period to which an individual payment might be attributed. There is then no need to investigate the vagaries of the actual pattern of payments made by the Board, which on the evidence of the present case may be a very considerable advantage. Contrary to the submissions for the Secretary of State, the provisions in regulations 29 and 32 do not apply directly. They must be modified in their application to take account of the nature of the income to be taken into account under regulation 31(3) (as I think already has to be done to give effect to regulation 31(2) on certain social security benefits).

55.	The jigsaw fits together in this way. The general rule that income to be taken into account for income support purposes is to be calculated on a weekly basis (regulation 28(1) of the Income Support Regulations) maintains its force. Regulation 31(3) defines the day of deemed payment of CTC or WTC by reference to the first day of the award (subparagraphs (a) and (b)) or, where later, the first day of the first benefit week following the first day an income support award begins (subparagraph (c)). In accordance with my approach to regulation 7(1) of the Consequential Amendments Regulations, I think that subparagraphs (a) and (b) are re-triggered each time an award of CTC or WTC is amended during the tax year. Then regulation 29 cannot be applied to define the period over which the income is to be taken into account, as that has already been done by regulation 31(3). That seems comparable to what must be done to the operation of regulation 29 in cases falling under regulation 31(2), which in effect defines the daily rate of the benefits specified as paid on the day to each day of payability. Finally, regulation 32, although it expressly applies only for the purposes of regulation 29(1), is to be used to calculate the weekly rate to be taken into account, substituting for "payment" the amount of the award or amended award of CTC or WTC. It does not matter whether that application is directly, with that substitution being made as a matter of interpreting "payment", or by a process of analogy to flesh out regulation 31(3).

56.	Regulation 32(1) provides that:

"where the period in respect of which a payment is made--
 (a)	does not exceed a week, the weekly amount shall be the amount of that payment;
 (b)	exceeds a week, the weekly amount shall be determined--
	[by the appropriate method for periods of one month, three months, a year, or some other period]."

In the case of CTC and WTC, the period of the most recent award or amended award must be considered, as the equivalent of "the period in respect of which a payment is made". I conclude that, in a case where there has been an amendment to an initial award during the tax year, the relevant period should not be the entire period of the award, but only the period after the effective date of the most recent amendment. That is most in accord with the general principle mentioned at the end of paragraph 32 above and the way in which regulation 31(3) defines the beginning of any period for taking the income into account.

57.	The weekly amount so calculated must then be taken into account, but only from the first day of the benefit week identified under regulation 31(3). That day may or may not coincide with the first day of the award or amended award. I consider that there must be an attribution of the amount at a weekly rate to all the benefit weeks in the period specified, running to the end of the tax year, regardless of the way in which payments of tax credit are actually being made. If things later change during the tax year, so that an award of tax credit is terminated or amended, then in the first case there will no longer be any amount to be taken into account and in the second case there must be a fresh application of regulation 31(3)(b) or (c).

(d) Conclusions
58.	Applying that approach in the present case produces this result. According to the Secretary of State's written submission of 6 December 2004, the claimant's income support benefit week started on Tuesday 12 August 2003 and income support was awarded from that date. The circumstances therefore fell within regulation 31(3)(b), as the amended CTC award took effect from 3 August 2003, but also within regulation 31(3)(c). As regulation 31(3)(c) (the first day of the first benefit following the date an award of income support begins) supplies a later date (19 August 2003), the CTC under the award beginning on 3 August 2003 is to be treated as paid on 19 August 2003. The submission of 6 December 2004 accepted that regulation 31(3)(c) worked in that way when an income support award started on the first day of a benefit week. The last day for which the amended award of CTC was made was 5 April 2004, a Monday. The CTC under award is therefore to be taken into account until the end of the income support benefit week starting on 30 March 2004 and ending on 5 April 2004. But the weekly amount under regulation 32 is to be calculated by reference to the period over the most recent amended award. I make that a total of 247 days from 3 August 2003 to 5 April 2004 inclusive. The weekly amount calculated from the award of £163.50 is £4.63. That amount is to be taken into account as income from the benefit week starting on 19 August 2003. No amount of CTC is to be taken into account in the benefit week starting on 12 August 2003. The operation of regulation 31(3) thus defines how much the amount under the amended award of CTC was to be taken into account for the period specified in regulation 7(1) and (3) of the Consequential Amendments Regulations and answers the question at the end of paragraph 51 above.

59.	Payments of WTC, including the childcare element that probably formed part of some payments labelled CTC, were made on the dates mentioned in paragraph 43 above. The Secretary of State's submission of 6 December 2004 suggested that they should be taken into account as actual payments within the ordinary income support structure in the way that I have already rejected for CTC. The result of applying my interpretation of regulation 31(3) is that there are no amounts of WTC to be taken into account from 12 August 2003 onwards. As at that date the most recent decision of the Board on WTC was either to terminate the award with effect from 3 August 2003 or, more likely, that the award was amended to nil from that date to 5 April 2004. For WTC there was no special deeming provision like regulation 7(1) of the Consequential Amendments Regulations, but in accordance with my conclusions of law in paragraphs 55 and 56 above, only the amount under the most recent award of WTC can be taken into account for income support purposes from 12 August 2003. There is therefore nothing to be taken into account for WTC.

60.	My substituted decision on the claimant's appeal against the decision of 21 August 2003 is accordingly that the appeal is allowed and that for the benefit week starting on 12 August 2003 her income support is to be calculated on the basis that she has no income derived from WTC and CTC and that from and including 19 August 2003 her income support is to be calculated on the basis that she has no income derived from WTC and income of £4.63 per week related to CTC under regulation 7(1) of the Consequential Amendments Regulations. If there is any dispute as to the arithmetic of the calculations above, the case may be returned to me (or if necessary to another Commissioner) for further decision. It will now be for the Secretary of State to consider whether to make any further decisions relating to the period after 21 August 2003. If any such further decisions are made, the claimant will have a fresh right of appeal if dissatisfied with the outcome.

(Signed)      J Mesher
Commissioner

Date:    11 May 2005