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Neutral Citation Number:
Reported Number: R(IS)7/08
File Number: CIS 1068 2006
Appellant: Casewell v Secretary of State for Work and Pensions [2008] EWCA Civ 524
Judge/Commissioner: Judge C. Turnbull
Date Of Decision: 11/03/2008
Date Added: 17/09/2008
Main Category: Earnings and other income
Main Subcategory: Other income and payments
Secondary Category:
Secondary Subcategory:
Notes: Income - whether sums paid to a claimant by his spouse as a reward for care services provided by him are to be taken into account as household income for benefit purposes The claimant cared for his wife, who was severely disabled and in receipt of a local authority direct payment under section 57(1) of the Health and Social Care Act 2001, disregarded as income under paragraph 58 of Schedule 9 to the Income Support (General) Regulations 1987 (the 1987 Regulations). The direct payments were made to the claimant’s wife on the footing that she would use them to purchase care services to be provided by the claimant. The decision-maker decided that the payments made by the wife to the claimant fell to be taken into account as income for income support purposes. The claimant appealed and the tribunal reversed the decision on the ground that the claimant could not be regarded as an employee of his wife and therefore could not be treated as being in receipt of “earnings”. On the Secretary of State’s appeal, the claimant’s representative argued that, because section 136(1) of the Social Security Contributions and Benefits Act 1992 provides for the aggregation of the resources of husband and wife, the (disregarded) direct payments paid by the local authority to the wife must be treated as having been paid to the claimant and there was therefore no possibility of treating him as having received them for a second time in the form of earnings. The Commissioner set aside the tribunal’s decision and reinstated the decision-maker’s decision on the grounds that the only possible inference on the facts was that the claimant was engaged by his wife to provide care services for reward; section 136(1) did not prevent those earnings from being included in his income because regulation 23(1) of the 1987 Regulations meant that, because the direct payments were required to be disregarded in computing his wife’s income, they were not treated as his income by section 136. The claimant appealed to the Court of Appeal, arguing that a transfer of funds within the family should not be treated as earnings of the recipient. Held, dismissing the appeal, that: 1. in the absence of statutory definitions of “income” or “earnings” those terms were to be given their ordinary and natural meaning as payment by one to another, and the making by a claimant, where authorised by the responsible authority, of a community care direct payment to a spouse or other close relative to secure care services does not render it any the less earnings in the relative’s hands so as to bring it within the notion of the family income for the purpose of the section 57 regime or that of section 136(1) of the 1992 Act (paragraph 25); 2. it was consistent with the scheme and policy of the income support legislation that the direct payment made to the wife was disregarded as family income for assessing the claimant’s income support but that in his hands it became earnings which must be taken into account under section 136(1) (paragraphs 26 to 30).
Decision(s) to Download: R(IS) 7-08 bv.doc R(IS) 7-08 bv.doc