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You are here: BAILII >> Databases >> Northern Ireland - Social Security and Child Support Commissioners' Decisions >> [2006] NISSCSC C1_05_06(TC) (27 October 2006) URL: http://www.bailii.org/nie/cases/NISSCSC/2006/C1_05_06(TC).html Cite as: [2006] NISSCSC C1_5_6(TC), [2006] NISSCSC C1_05_06(TC)

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[2006] NISSCSC C1_05_06(TC) (27 October 2006)

Decision No: C1/05–06 (TC) (T)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998 TAX CREDIT Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 15 February 2005
DECISION OF THE TRIBUNAL OF SOCIAL SECURITY COMMISSIONERS
1. This is an appeal by the claimant, with the leave of the Chief Commissioner against a decision of the appeal tribunal sitting at Craigavon on 15 February 2005 (the "appeal tribunal"). For the reasons which we give, that decision is not erroneous in point of law and accordingly the appeal fails
2. In accordance with the powers conferred upon him by Article 16(7) of the Social Security (Northern Ireland) Order 1998, the Chief Commissioner directed that the appeal be determined by a Tribunal of Commissioners. He further directed that it be determined by way of an oral hearing.
3. The hearing took place before us in Belfast on 7 March 2006. The claimant was present and was represented by Mrs Patricia Carty of the Northern Ireland Law Centre. The respondent is Her Majesty's Revenue and Customs (HMRC") for whom Mr Timothy Ward of the Bar of England and Wales, assisted by Miss Neasa Murnaghan of the Bar of Northern Ireland, appeared. They were instructed by HMRC's Solicitors Office and were assisted at the hearing by Ms Jane Bailey of that Office and Mr Keith Rogers of the HMRC. We are grateful to the advocates for their clear and helpful submissions at the hearing and for the comprehensive skeleton arguments which they lodged beforehand.
4. This appeal is concerned with the childcare element of working tax credit ("WTC"). The claimant is in receipt of WTC. The relevant legislation uses the expressions, or spellings, "childcare", "child-care" and "child care" without consistency. We shall endeavour to be consistent by using "childcare" wherever possible. That is, unless constrained from doing so by the wording of a particular provision.

The issue

5. The claimant is the mother of two children. A son who was born on 28 June 1991, and who is now 15, and a daughter who was born on 15 September 2003. This appeal is concerned with the son. We shall call him Martin. He is severely disabled. There is no dispute about this. He is in receipt of the higher rate of the mobility component and the highest rate of the care component of a disability living allowance. Details of his disability appear at paragraph 7 below. For the moment we wish to record that, while seriously disadvantaged in many respects, Martin is blessed with a devoted and caring mother. Indeed, the care she has expended has had a serious effect upon her. We have been told that in January 2003, she attempted to commit suicide because of the pressures of caring for Martin. She was then advised by a psychiatrist to take up full time employment and share Martin's care with others. The claimant took this advice. On 21 February 2003, the claimant and her partner made a joint claim for tax credits. The two children were included in the claim. Within the overall application a claim was made for childcare costs. What is meant by childcare costs will become apparent. On 26 March 2003, the claimant was awarded £2,444.75, tax credit for the period from 6 April 2003 to 5 April 2004. The award was revised at the beginning of May 2003, and was amended further on 21 July 2003. The latter amendment awarded the claimant tax credits of £5,325.13, for the tax year 6 April 2003 to 5 April 2004. This figure included weekly childcare costs of £124.00 up to 25 June 2003 and £352.75 from 26 June 2003 to 5 April 2004.
6. On the same date (21 July 2003) a letter was sent to the claimant asking her to provide information which would enable HMRC to check that the award had been correctly calculated. Among the details sought was:

"Evidence of childcare costs from both childcare providers."

That letter prompted, first, a telephone call from the claimant and then, on 22 July 2003, a letter which contained the following paragraphs:

"The situation has changed in respect of [Mrs W] in just the last few days as she unexpectedly terminated the contract, but she should be able to supply you with any proof you require of previous payments. [Mrs W was the daughter's child minder but ceased to act in that capacity in the middle of July 2003.]

The situation as regards childcare for Martin, our autistic son, has been ever-changing, and extremely stressful over the last few months. The Ozanan Centre, where he had a 1 to 1 worker with him at all times 'pulled the plug' on the arrangement at Easter time, due to complaints from other parents about Martin's behaviour.

Since then, we've been locked in an on-going battle with the local social services over suitable after-school and school holiday care for him.

This can be verified, if needed, by a wealth of correspondence, newspaper cuttings (we went to the local paper), a letter from David Trimble, (our MP), and legal letters from the Childrens' Law Centre. (We were trying to take the Trust to court to make them provide for Martin.)

...

We have, just in the last week, decided to 'take on' our own childminders for both children, in their own home. At present, and for the forseeable future, that is the way we are going to provide childcare. We have 4 people who we are arranging on an ad hoc basis, and are paying them £6 – per hour. None of them are registered.

...

I think that you will agree that our circumstances are exceptional, and that there has certainly been no intention to mis-lead yourselves. It is only in the last week that we have actually resolved our childcare difficulties and, as I said, we are paying £6 – per hour to non-registered childminders. (8 hours per day during school holidays, then it will be 2 hours per day during school term time.)"

The words "We have 4 people who we are engaging on an ad hoc basis ... None of them are registered" and "we are paying £6 – per hour to non-registered childminders" lie at the heart of this appeal.

7. On 4 September 2003, Martin's social worker wrote to HMRC. Her letter included the following information:

"Martin was referred to the team in 2001. Autism is a complex developmental disability that affects how a person communicates and relates to people and the world around them. Autistic spectrum disorder can vary greatly from person to person, but all have the "triad of impairments" ie social communication and imagination. Martin displays all these characteristics; he has difficulty with social relationships in that he appears aloof and indifferent to people around him, he has difficulty with verbal and non-verbal communication.

Since Martin's mother commenced full time employment various child care arrangements outside the home and which have been approved by Craigavon and Banbridge Trust have been tried, such as a registered child minder and an after school placement. However, these were unsuccessful due to Martin's learning disability and autistic behaviours he did not interact with other children and staff found it difficult to manage his behaviours despite advice being given to them.

Martin's parents were placed in a position that they advertised privately to have Martin looked after in their own home. In his own home Martin is easier managed as he is in a familiar environment and to date this arrangement has been successful.

As the child care arrangement takes place within Martin's home there is no legal requirement upon the trust to approve this form of provision.

I understand from the discussion with [the claimant], Martin's mother that she has contacted you to seek financial assistance through working tax credit towards the cost of Martin's current child care and that you have stated that this needs to be approved by the Trust.

As Martin is looked after in his own home the trust is not in a position to approve this child care arrangement, however, I would like you to seriously consider Martin's situation as an exceptional case as due to his special needs it is currently not possible for him to be looked after successfully in a trust approved facility. This form of child care is expensive for the family and they would benefit from financial assistance."

The words in the last paragraph "As Martin is looked after in his own home the trust is not in a position to approve this child care arrangement" and the request to treat the case as exceptional due to his special needs, are significant. We shall come to the legislation relating to child minders in Northern Ireland shortly. For the moment it is sufficient to note that at the time the social worker wrote that letter, and up to 6 April 2006, the legislation relating to child minding expressly provided that someone who looked after a child in the home of her employer could not be treated as, and therefore registered as, a child minder. See paragraphs (4) and (6) of Article 119 of the Children (Northern Ireland) Order 1995 (1995 No. 755 (N.I.2)).

8. On 30 September 2003, a meeting took place between the claimant and her partner and a Claimant Compliance Officer from HMRC. It was explained to the claimant and her partner that there was no entitlement to childcare costs while the two children were being cared for by persons who were not registered child minders. Following on from that meeting, on 6 October 2003, the decision which forms the basis of this appeal was made. That decision, which replaced the previous decisions, was to award the claimant £829.23, tax credit in respect of the year from 6 April 2003 to 5 April 2004. The figure was calculated on the basis of the joint relevant income of the claimant and her partner and included the sum of £386.33, in respect of childcare costs incurred by the claimant in respect of her daughter for the period from 6 April 2003 to 18 July 2003, the latter date being a few days after Mrs W ceased to act as the daughter's childminder. More significantly, the figure of £829.33, contained nothing in respect of Martin's childcare costs. This was on the basis that the claimant was not incurring relevant childcare costs in connection with Martin. She was, of course, paying unregistered child minders £6 per hour to look after him in his own home. For reasons to which we shall come, the fact that it was in his own home meant that the child minders could not be registered. The claimant appealed against that decision in the following terms:

"My disabled son needs to be looked after at home on a 1:1 basis. He cannot attend dedicated after school facilities and registered childminders are only approved to care for children in their own homes, not other locations. You are already in receipt of a letter from my son's social worker detailing the history and supporting home provision of care in our home as the trust are unable to provide this. Our childcare costs are already high as a result of this, and by disallowing credit you are discriminating against disability. There is no scope within your criteria for circumstances which fall outside your "tick box" system. If you continue to penalise us for having a disabled child, for having to make "abnormal" care arrangements, I will be forced to take legal action under a number of pieces of legislation."

The appeal tribunal's decision

9. When the matter came before the appeal tribunal on 15 February 2005, the parties were agreed that there was no entitlement to childcare charges in respect of the daughter after 18 July 2003, because she was not being looked after by a registered childminder. The appeal tribunal recorded this point and then dealt with Martin's position in the following way:

"The situation with regard to Martin is more problematical. Martin has been diagnosed with a severe learning disability, epilepsy and autistic spectrum disorder and I am indebted to Arlinda Benson, the Social Worker who prepared a very helpful report which is included in the papers. It is obvious that normal childcare arrangements would be totally unsuitable for Martin. I note that the Ozanam Centre provided the childcare for Martin for a period. I presume that this establishment fulfils the relevant criteria and if it had been possible for Martin to remain there it is likely that no difficulty would have arisen regarding the appellant's claim for relevant childcare charges. Sadly, due to circumstances beyond the appellant's control, the contract with the Ozanam Centre had to be terminated and with attempts at various childcare arrangements outside the home having proved unsuccessful, Martin's parents had little alternative but to make arrangements to have Martin looked after in their own home. The childcare providers presumably do an excellent job but it is agreed that they are not approved or registered in accordance with legislation. This is in no way a reflection on Martin's parents. It appears to be the case that childminders obtain approval and registration for providing childcare in their (childminders) own homes but the advantage of the approval or registration does not extend to the provision of childcare in the child's own home.

Understandably the appellant has a sense of grievance because of this situation and which is increased by the fact that legislation is imminent in England which provides for approval of individuals providing childcare in the child's home. Unfortunately for the appellant she presently does not have the benefit of this Childcare Approval Scheme in Northern Ireland. The appellant has also indicated the possibility of a challenge to the existing legislation, which denies entitlement to Martin's present childcare costs, under the Disability Discrimination Act. This is a matter for another forum.

I have sympathy with the appellant's plight. However, I am bound and confined in what I can do under the current legislation. The legislation dictates that given the current childcare arrangements for Martin, ie the providers are not approved or registered, it follows that there is no entitlement to the childcare costs.

That would appear to be the effect of the regulations and I have to apply them in the form in which they appear. I have no jurisdiction to disregard them or mitigate their effect."

The decision notice puts it succinctly as follows:

"Childcare costs are not applicable for Martin as the childminders are not approved or registered and current legislation does not permit entitlement to claim in the circumstances."

We turn to that "current legislation".

The legislation

10. Section 1(1) of the Tax Credits Act 2002, begins as follows:

1.(1) This Act makes provision for –

(a) a tax credit to be known as child tax credit, and

(b) a tax credit to be known as working tax credit.

Our decision is concerned with the latter. That is, working tax credit or WTC. We are not concerned with child tax credit. However, and perhaps a little confusingly, we are concerned with what is known as the childcare element of WTC.

11. Provision for the childcare element of WTC is made by section 12 of the Tax Credits Act 2002:

"12(1) The prescribed manner of determination of the maximum rate at which a person or persons may be entitled to working tax credit may involve the inclusion, in prescribed circumstances, of a childcare element.

(2) A childcare element is an element in respect of a prescribed proportion of so much of any relevant childcare charges as does not exceed a prescribed amount.

(3) "Childcare charges" are charges of a prescribed description incurred in respect of childcare by the person, or either or both of the persons, by whom a claim for working tax credit is made.

(4) "Childcare", in relation to a person or persons, means care provided –

(a) for a child of a prescribed description for whom the person is responsible, or for whom either or both of the persons is or are responsible, and

(b) by a person of a prescribed description.

(5) The descriptions of persons prescribed under subsection (4)(b) may include descriptions of persons approved in accordance with a scheme made by an appropriate national authority under this subsection.

(6) "The appropriate national authority" means –

(a) in relation to care provided in England, the Secretary of State,

(b) in relation to care provided in Scotland, the Scottish Ministers,

(c) in relation to care provided in Wales, the National Assembly for Wales; and

(d) in relation to care provided in Northern Ireland, the Department of Health, Social Services and Public Safety.

(7) The provision made by a scheme under subsection (5) must involve the giving of approvals, in accordance with criteria determined by or under the scheme, by such of the following as the scheme specifies –

(a) the appropriate national authority making the scheme;

(b) one or more specified persons or bodies of a specified description;

(c) persons or bodies accredited under the scheme in accordance with criteria determined by or under it.

(8) A scheme under subsection (5) may authorise –

(a) the making of grants or loans to, and

(b) the charging of reasonable fees by, persons and bodies giving approvals."

12. For present purposes, the important provision is subsection (4)(b), which restricts "childcare" to "care provided ... by a person of a prescribed description". To discover who is a person of a prescribed description, one turns to the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (SI 2002/2005) and in particular regulation 14. In relation to Northern Ireland, this provides:

14.(2) "Child care" means care provided for a child in

...

(c) in Northern Ireland:-

(i) by persons registered under Part XI of the Children (Northern Ireland) Order 1995;

(ii) by institutions and establishments exempt from registration under that part by virtue of Article 121 of that Order; or

(iii) in respect of any period ending on or before the day on which he ceases to be a child for the purposes of this regulation where the care is provided out of school hours by a school on school premises or by an Education and Library Board or a Health and Social Services trust;

Perhaps we should also mention regulation 14(3):

"(3) For the purposes of this regulation a person is a child until the last day of the week in which falls 1 September following that child's 15 birthday (or 16 birthday if the child is disabled)."

13. Part XI of the Children (NI) Order 1995 –

Part XI 118. (1) Every authority shall keep a register of –

(a) persons who act as child minders on domestic premises within the authority's area; and

(b) persons (other than the authority) who provide day care for children under the age of twelve on premises (other than domestic premises) within that area.

(2) In this Part –

"domestic premises" means any premises which are wholly or mainly used as a private dwelling;

"premises" includes a vehicle.

(3) Any register kept under this Article –

(a) shall be open to inspection by members of the public at all reasonable times; and

(b) may be kept by means of a computer.

Article 119, then goes on to provide:

(1) For the purposes of this Part as person acts as a child minder if –

(a) he looks after one or more children under the age of twelve for reward; and

(b) the period, or the total of the periods which he spends so looking after children in any day exceeds two hours.

(2) A person who –

(a) is the parent, or the relative, of a child;

(b) has parental responsibility for a child; or

(c) is a foster parent of a child,

does not act as a child minder for the purposes of this part in relation to that child when looking after him.

(3) For the purposes of this Article, a person fosters a child if –

(a) he is an authority foster parent in relation to that child;

(b) he is a foster parent with whom the child has been placed by a voluntary organisation; or

(c) he fosters the child privately.

(4) A person who is employed as a nanny for a child does not act as a child minder when looking after that child wholly or mainly in the home of the person who employs the nanny.

(5) A person who is so employed by two different employers does not act as a child minder when looking after any of the children concerned wholly or mainly in the home of either of the employers.

(6) For the purposes of this Part a person acts as a nanny for a child when employed to look after the child by –

(a) a parent of the child;

(b) a person who is not a parent of the child but who has parental responsibility for him; or

(c) a person who is a relative of the child and who has assumed responsibility for his care.

14. The provision at the core of this appeal is Article 119(4) when read in conjunction with the definition of "a nanny for a child" in Article 119(6). As we understand that provision a person, whether registered or not, cannot act as a child minder for the purposes of the legislation during such periods as the activity of child minding takes place "wholly or mainly in the home of the person who employs" him or her. That does not necessarily affect matters between the employer and the person employed to look after a child. It does, however, mean that the childcare element of WTC cannot be paid for any child minding that took place. In our view Article 119(4) is an anti-abuse provision designed to prevent perfectly normal informal arrangements, where a child is looked after by a close member of the child's family, a neighbour or a friend being unnecessarily elevated into formal child minding arrangements in order that benefits can be claimed. Whether such an anti-abuse provision is required is not a matter for us. It is a matter for Parliament. We have been informed that by the Credits (Approval of Home Care Providers) Scheme (Northern Ireland) 2006, this provision was repealed with effect from April 2006. We, however, are concerned with the law as it stood at the relevant time.

Human Rights legislation

15. The claimant accepts that she cannot succeed under domestic – that is, Northern Ireland – legislation. She relies on sections 3 and 6 of the Human Rights Act 1998, and article 14 of the European Convention on Human Rights ("the Convention") when read in conjunction with article 8 of the Convention and article 1 of the first protocol to it. The claimant submits that section 6(1) of the 1998 Act provides that it is unlawful for a public authority to act in a way that is incompatible with a Convention right. Section 3(1) requires that primary and subordinate legislation must be read and given effect to in a way that is compatible with Convention rights. It follows that we must determine whether the relevant domestic legislation is in fact incompatible with the Convention. Sections 3, 4 and 6 of the 1998 Act are in the following terms:

3. Interpretation of legislation

(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way that is compatible with the Convention rights.

(2) This section –

(a) applies to primary legislation and subordinate legislation whenever enacted;

(b) does not affect the validity, continuing operation or enforcement of any incompatible primary legislation; and

(c) does not affect the validity, continuing operation or enforcement of any incompatible subordinate legislation if (disregarding any possibility of revocation) primary legislation prevents removal of the incompatibility.

4. Declaration of incompatibility.

(1) Subsection 2 applies in any proceedings in which a court determines whether a provision of primary legislation is compatible with a Convention right.

(2) If the court is satisfied that the provision is incompatible with a Convention right, it may make a declaration of that incompatibility.

(3) Subsection (4) applies in any proceedings in which a court determines whether a provision of subordinate legislation, made in exercise of a power conferred by primary legislation, is compatible with a Convention right.

(4) If a court is satisfied –

(a) that the provision is incompatible with a Convention right, and

(b) that (disregarding any possibility of revocation) the primary legislation concerned prevents removal of the incompatibility,

it may make a declaration of that incompatibility.

(5) In this section 'court' means [there then follows a list of courts down to and including the High Court and therefore not including the Commissioners].

(6) A declaration under this section ('a declaration of incompatibility') –

(a) does not affect the validity, continuing operation or enforcement of the provision in respect of which it is given; and

(b) is not binding on the parties to the proceedings in which it is made.

6. Acts of public authorities

(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

(2) Subsection (1) does not apply to an act if –

(a) as a result of one or more provisions of primary legislation, the authority could not have acted differently; or

(b) in the case of one or more provisions of, or made under, primary legislation which cannot be read or given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions.

(3) In this section 'public authority' includes –

(a) a court or tribunal, and

(b) any person certain of whose functions are functions of a public nature,

but does not include either House of Parliament or a person exercising functions in connection with proceedings in Parliament.

(4) In subsection (3) 'Parliament' does not include the House of Lords in its judicial capacity.

(5) In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private.

(6) 'An act' includes a failure to act but does not include a failure to –

(a) introduce in, or lay before, Parliament a proposal for legislation; or

(b) make any primary legislation or remedial order.

16. The relevant provisions of the Convention provide as follows:

"Article 8 Right to respect for private and family life

1. Everyone has the right to respect for his private 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."

Protocol No.1, Article 1:

"Article 1 Protection of property

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

Discrimination

17. The claimant accepts that under domestic legislation, and without the aid of the Convention, her appeal cannot succeed. She has asserted that regulation 14(2)(c) of the WTC (Entitlement and Maximum Rate) Regulations 2002, is incompatible with the Convention. See, for example, paragraph 4.1 of her skeleton. However, to put the matter thus obscures her real grievance. Regulation 14(2)(c) merely provides that, in Northern Ireland, "child care" means care provided for a child by persons registered under Part XI of the Children (NI) Order 1995, by certain exempt institutions and establishments, by schools in certain circumstances, by education and library boards or by health and social security trusts. It is the first of these – persons registered under Part XI of the 1995 Order - that this case is about. Further, it is not the general provisions about registration to which exception is taken. It is the specific provision that a person does not act as a child minder for the purposes of the legislation during such time as he or she spends looking after the child wholly or mainly in the home of the person who employs him or her. This is the point on which we intend to focus.
18. The claimant, in support of her arguments, relies on the decision of Mr Commissioner Williams, a Commissioner in Great Britain, in two appeals numbered CTC/1272/2002 and CTC/2326/2002, which he heard and determined together. That decision is not, technically, binding on us but is of persuasive value. It merits the careful consideration which, we hope, we have given it. However, in our judgment this decision does not assist the claimant. We shall deal with the general arguments which were addressed to us before explaining why we are of the view that what the learned Commissioner says does not affect what we have to decide.
19. On that basis the claimant's case is that article 119(4) is not compatible with article 14 of the Convention when read with article 8 and article 1 of the first protocol. (which, for convenience, we shall refer to by the abbreviation of "P1/1").
20. What we are considering is an anti-abuse provision which applies to everyone and not just those who seek the child care element of WTC. We do not see how such a provision itself can be incompatible with article 14. Parliament has provided a benefit but it has also imposed restrictions on its enjoyment in order to protect the public purse and to ensure the appropriate allocation of scarce resources. This is something that Parliament is entitled to do. Mrs Carty cited the well known case of Petrovic –v- Austria (2001) 33 EHRR 307. It is a good starting point. There the complaint was that, at the relevant time, Austrian women who had recently given birth to a child were entitled to a benefit known as a parental leave allowance. This, as the European Court of Human Rights ("ECHR") stressed, was not intended to protect the mother. In other words, it was not gender specific. It did not become payable until eight weeks after the birth and until the right to receive maternity benefit had been exhausted. Fathers were not, however, entitled. Mr Petrovic applied for a parental leave allowance and, when he was refused it, he brought proceedings which ultimately came before the ECHR. His appeal was referred to the ECHR by the Commission on the basis of an alleged violation of article 8 taken in conjunction with article 14. The ECHR decided, by seven votes to two, that there had been no violation because the extension of benefits such as the Austrian parental leave allowance, to fathers was a recent and, across Europe, an incomplete process. By the time the ECHR heard the matter Austria itself had extended the benefit to fathers but few other states had done so – as opposed to parental leave itself. In those circumstances it appeared "difficult to criticise the Austrian legislature for having introduced [the allowance] in a gradual manner ... The Austrian authorities refusal to grant a parental allowance [had] not, therefore, exceeded the margin of appreciation allowed to them".
21. The decision was dependent on the ECHR's holding that there had been no breach of article 8. In a well known passage the ECHR said this.

"In this connection the Court, like the Commission, considers that the refusal to grant Mr Petrovic a parental leave allowance cannot amount to a failure to respect family life, since Article 8 does not impose any positive obligation on States to provide the financial assistance in question."

However, the ECHR then went on to say:

"Nevertheless, this allowance paid by the State is intended to promote family life and necessarily affects the way in which the latter is organised as, in conjunction with parental leave, it enables one of the parents to stay at home to look after the children.

The Court has said on many occasions that Article 14 comes into play whenever "the subject-matter of the disadvantage ... constitutes one of the modalities of the exercise of a right guaranteed", or the measures complained of are "linked to the exercise of a right guaranteed.

By granting a parental leave allowance States are able to demonstrate their respect for family life within the meaning of Article 8 of the Convention; the allowance therefore comes within the scope of that provision. It follows that Article 14 – taken together with Article 8 – is applicable."

22. The next case to which we wish to refer is the recent case of Stec –v United Kingdom (application numbers 65731/01 and 65900/01). The question for the ECHR was a narrow one. The Court's case law had already established that the protection given by P1/1 to property rights could extend to contributory benefits. Prior to the Stec case it was unclear whether a non-contributory benefit enjoyed the same protection. In Stec the ECHR decided that it could. See paragraph 53 of the judgement, where the ECHR said that "if any distinction can still be said to exist in the case-law between contributory and non-contributory benefits for the purposes of the applicability of Article 1 of Protocol No. 1, there is no ground to justify the continued drawing of such a distinction." However, for present purposes we consider that the following passages from paragraphs 51, 54 and 55 are relevant. The italics are our own where they relate to substantive propositions.

"51. in the modern, democratic State, many individuals are, for all or part of their lives, completely dependent for survival on social security and welfare benefits. Many domestic legal systems recognise that such individuals require a degree of certainty and security, and provide for benefits to be paid – subject to the fulfilment of the conditions of eligibility – as of right. Where an individual has an assertable right under domestic law to a welfare benefit, the importance of that interest should also be reflected by holding Article 1 of Protocol No. 1 to be applicable.

...

54. It must, nonetheless, be emphasised that the principles, most recently summarised in Kopecky –v- Slovakia [GC] no. 44912/98, [at] 35, ECHR 2004-IX, which apply generally in cases under Article 1 of Protocol No. 1, are equally relevant when it comes to welfare benefits. In particular, the Article does not create a right to acquire property. It places no restriction on the Contracting State's freedom to decide to have in place any form of social security scheme (see, mutatis mutandis, Kopecky [GC] [at] 35(d)). If, however, a Contracting State has in force legislation providing for the payment as of right of a welfare benefit – whether conditional or not on the prior payment of contributions – that legislation must be regarded as generating a proprietary interest falling within the ambit of Article 1 of Protocol 1 for persons satisfying its requirement (ibid).

55. In cases such as the present, concerning a complaint under Article 14 in conjunction with Article 1 of Protocol No. 1 that the applicant has been denied all or part of a particular benefit on a discriminatory ground covered by Article 14, the relevant test is whether, but for the condition of entitlement about which the applicant complains, he or she would have had a right, enforceable under domestic law, to receive the benefit in question (see Gaygusuz, and Willis, also cited above [at] 34. Although Protocol No. 1 does not include the right to receive a social security payment of any kind, if a state does decided to create a benefits scheme, it must do so in a manner which is compatible with Article 14."

23. Finally, we wish to refer to refer to certain passages in Thlimmenos –v- Greece (judgement given on 6 April 2000, application number 34369/97). While undergoing compulsory military service Mr Thlimmenos had been convicted, and imprisoned, for refusing to wear military uniform. A committed Jehovah's witness, his refusal was in consequence of his religious beliefs. Subsequently, the Greek authorities refused to appoint him to a post as chartered accountant. It was that refusal, and not the earlier events, which led to his complaint and the hearing before the ECHR. The case, which was basically concerned with freedom of religion (article 9 of the Convention), was argued on a number of grounds, one being article 14. In relation to that ground, and among other matters, the ECHR said this. (again, our italics):

"44. The Court has so far considered that the right under Article 14 not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is violated when States treat differently persons in analogous situations without providing an objective and reasonable justification (see the Inze judgment cited above, p. 18 [at] 41). However, the Court considers that this is not the only facet of prohibition of discrimination in Article 14. The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when States without an objective and reasonable justification fail to treat differently persons whose situations are different."

24. The claimant does not allege actual breaches of articles 8 and P1/1. She says, however, that the facts fall within the ambit of those two articles. Mr Ward, for HMRC, concedes that this is so. See paragraphs 15 and 21 of his skeleton argument. We proceed on that basis, although in relation to article 8 at least, and probably in relation to both articles, we wonder whether the concession was correctly made in the light of Sedley LJ's analysis of the position of anti-abuse provisions, contained within a benefit scheme, in Langley –v- Bradford Metropolitan District Council, reported as R(H)6/05 at paragraphs 71 to 78. However, that case was not cited to us, the analysis may contain difficulties and is concerned with housing benefit rather than WTC or childcare.
25. Having said that, in relation to this appeal we derive the following propositions from the European authorities which we have quoted from.

(1) The Convention does not impose any positive obligation on the state to provide a particular benefit.

(2) It follows that, subject to our next proposition, the structure of any particular benefit and the level and extent of the benefits provided must be matters for the state. If the state chooses to structure a benefit in a particular way or chooses to set it at a particular level, those are matters within its discretion. Likewise the conditions that must be satisfied to establish entitlement.

(3) However, if a state does decide to provide a particular benefit, it must not, in doing so, treat differently persons in analogous situations or fail to treat differently persons whose situations are different. However, this is subject to the qualification that the state can take such action if it provides an objective and reasonable justification for the difference in treatment.

(4) Finally, non-contributory benefits are now, or rather can be, proprietary interests protected by P1/1. However, the ECHR in Stec stressed that this was only so where such a person satisfied the conditions of fulfilment or demonstrated that his or her failure to do so amounted to discrimination.

We have already said that Mr Ward concedes that the facts fall within the ambit of article 8 and P1/1, we therefore turn to see whether those facts amount to discrimination.

26. We consider that the childminding scheme is precisely that. It is a scheme designed to provide a certain level of care and supervision for children. A child minder will normally provide the level of care which will be of the usual kind provided by a parent to a child of the relevant age during the relevant period of the day. This will involve a number of things, such as ensuring that the child is safe, that he or she is clean, warm and dry and is fed at appropriate times. No doubt it involves making sure that the child is occupied in some way for most of the relevant period by playing with other children, watching television, playing games or, maybe, being read to. It may involve the uncomplicated administration of medicines at appropriate times. It does not, however, involve the provision of either education or nursing. We have no doubt that some child minders are prepared to undertake more responsibility than others, particularly with children with whose needs they are familiar or with whom they have formed a particular relationship. Some may have specialist training, such as in nursing. However, we consider that the scheme is concerned with what is usual or what can be expected in the majority of cases. If that is the right way of looking at the matter then it is inevitable that there will be many children who will be unable to access the scheme because they require a much higher level of care than the scheme is designed to provide. This category will include children who suffer serious physical difficulties and those whose mental or other behavioural problems require special care or high levels of supervision. Putting it another way, we consider that there will inevitably be children who will be unable to make use of the scheme because of the severity or the nature of their disabilities.
27. We consider that Martin falls into such a category. His behaviour is such that it not only requires an unusually high level of supervision but he has to be segregated from other children and is particularly difficult to care for outside the familiarity of his own home. The care which he requires is beyond what is normal and above the level of care which the scheme is intended for. That would be obviously so if Martin needed, say, care from highly trained nursing staff. The fact that his problems are mental rather than physical does not affect the matter.
28. In saying this we remind ourselves that the definition of child in regulation 14(3) of the Working Tax Credit (Entitlement and Maximum Rate) regulations 202, the text of which appears at paragraph 12 above, is extended by a year in the case of disabled children. However, we do not think that this extended definition undermines our conclusions. The expression "disabled" inevitably covers a wide range of disabilities ranging from the relatively minor to the extremely severe. Furthermore, there are children who suffer from serious, and even life threatening, conditions but who, if they receive proper treatment, are able to lead normal lives (an example being children with insulin dependent diabetes). There will, therefore, be a great many disabled children who will be able to take advantage of the scheme as we see it. That does not detract from the conclusion that there will be some who cannot.
29. If that is not the right way of looking at the matter then there appear to us to be objective and justifiable reasons for any differences in treatment. The first, which is simply what has already been said but from a different perspective, is that Martin is, unfortunately, not a normal child and his particular abnormalities render it impossible for childcare, as it is commonly provided, to be provided to him. The second reason is that there are obvious and very understandable reasons why the provision of childcare should be both subject to supervision by the state and, if it is to attract public money through WTC or other benefit, subject to provisions to prevent financial abuse. There is enormous concern, which we share and endorse, that those who come into contact with children should be properly vetted and supervised. Hence the need for a registration scheme. The fact that some of the provisions of a scheme may be objected to by some people may be part of the price which has to be paid for the very necessary protection afforded by the scheme. Further, a child minder will have limited control, if any, over a child's home environment. It is therefore not entirely surprising that such an environment was excluded.
30. Since public money is involved it is both necessary and appropriate that the scheme contains provisions designed to counter obvious potential abuses. It appears to us that article 119(4) is just such a provision. It does not require much thought to see how it excludes a variety of perfectly normal family activities, such as regular visits from a grandparent or family friend, from being turned into a means of obtaining benefit. At the relevant time the state endeavoured to check some of these abuses by providing that care in a child's own home would not amount to registered childminding. It has now changed its mind and brought into effect the Tax Credits (Approval of Home Care Providers) Scheme (Northern Ireland) 2006. That is a matter for the relevant authorities. The fact that it has now done so does not mean that the original provision was irrational or indefensible. By the time Mr Petrovic's case came to be heard Austrian law had been amended and fathers in his position had become entitled to a parental leave allowance. However, the change in the law did not avail Mr Petrovic.
31. Finally, we consider that the provision of measures, not in themselves irrational, which are designed to prevent the benefit being abused, are within the measure of appreciation which the ECHR in Strasbourg affords to individual states. All the more so when a scheme involves children, and especially young children, who require to be protected. Such matters are matters for national authorities who are in a position to carry out appropriate research and evaluation exercises and who are able to consult widely before making changes, changes which will include such safeguards as are considered necessary. Courts, Commissioners and tribunals are concerned with individual cases and are not in a position to evaluate the likely effects of changes or to say what safeguards are needed. All the more so where, as in the present case, reforms were under active consideration.
32. Mr Ward took a point on the words "other status" in article 14. It is well established that article 14 does not prohibit all kinds of discrimination but only those 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". The words "other status" are important and are to be construed with the specific examples of discrimination which proceed it. The ECHR has interpreted "other status" as meaning a personal characteristic; see KJELDSEN and other –v- KINGDOM OF DENMARK (1976) 1 EHRR 711. Mr Ward accepted that disability comes within the words "other status" but he pointed out, correctly in our view, that while Martin was undoubtedly, and seriously, disabled his mother was not. She, of course, is the person claiming benefit. He contested the suggestion that she had the status of the mother, or carer, of a disabled person. She was, of course, both Martin's mother and his carer, However, he submitted, these merely constituted a relationship and did not amount to a status – at least for the purposes of article 14. We cannot altogether accept these submissions. It is unnecessary that we reach a concluded view of the matter but it appears to us that while being the mother of a disabled child is, of course, a matter of relationship it is possible that, in appropriate circumstances and particularly in relation to claims for benefit involving a carer element, it can also be a status. Mr Ward relied for support on the observations of Lord Steyn in R(S –v- Chief Constable of South Yorks [2004] 1 WLR 2196 at paragraph 48. We entirely accept what is said there but we do not consider that it supports Mr Ward's particular argument. We have reached this view without the benefit of FRANCIS –v- SECRETARY OF STATE FOR WORK AND PENSIONS [2005] EWCA Civ 1303, which was not cited to us. Nevertheless, it would appear that there is no inconsistency between our doubts as to the correctness of Mr Ward's argument and the reasoning of the Court of Appeal in England and Wales in that case. However, although we are doubtful of the correctness of Mr Ward's submissions on this point we do not decide the case on that basis as we consider that there has been no discrimination for the reasons which we have given.
33. We have also had our attention drawn to other forms of care to which Martin may, or should be, entitled. This is a highly contentious area between the parties. On the one hand Mr Ward submits that there is a good deal of care of which Martin's family could avail for him. The claimant, on the other hand, submits that the provision of such care has already been found wanting and that the deficiencies in the scheme which Martin has encountered have resulted in her appealing the refusal of the childcare element in her WTC. If we had to choose between the rival contentions we should probably come down on the claimant's side. After all, she has practical experience of the operation of such provision. Her account of the deficiencies does not seem unreasonable to us. However, for the reasons we have given, we do not consider that it is necessary for us to come down on one side or the other.
34. At paragraph 19 above we referred to the reliance placed by the claimant on the decision of Mr Commissioner Williams in CTC/1272/2002 and CTC/2326/2002. This intensively reasoned decision merits careful consideration. We have, however, already explained that in relation to this appeal and when considering the matter as one of principle, we arrive at different conclusions. With considerable respect and reluctance we have to state that we consider the reasoning to be fatally flawed.
35. Section 3(1) of the Human Rights Act 1998, imposes a duty on, among others, courts and tribunals:

(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.

The House of Lords has repeatedly drawn attention to the distinction between reading and giving effect to legislation and amending that legislation in a manner which amounts to the judicial enactment of new legislation. The latter is to go beyond what is permissible under the 1998 Act. Further, the reading and giving effect to a provision cannot result in an interpretation which is inconsistent with a fundamental feature of the relevant legislation. If authority for these propositions is needed it will be found in the speeches of the house of Lords in GHAIDAN –v- GODIN-MENDOZA [2004] UKHL 30. See paragraphs 33 (Lord Nicholls), 49 (Lord Steyn), 62 – 64 (Lord Millett) and 110 – 115 (Lord Rodger). In the present case we are concerned with what we consider to be an anti-abuse provision. In substance what we are being asked to do is to ignore that provision or to declare it to be without legal validity.

36. It is clear from paragraphs 85 to 87 of his decision that the learned Commissioner was acutely conscious of the distinction. In our respectful view the solution which he adopted in the second half of paragraph 87, crossed the line between what is, and what is not, permissible notwithstanding his assertion that this is precisely what he was trying to avoid. Further, we read his decision as being conscious of the distinction from the outset. If we are right as to that, then it explains why much of his reasoning takes the form which it does and why he framed the questions which he had to address in the way in which he did. These are matters which in our respectful view detract from the cogency of his reasoning.
37. For the reasons which we have given, we consider that the appeal tribunal reached the correct decision. We therefore dismiss the appeal.

(signed):

John A H Martin QC

Chief Commissioner

(signed):

Moya F Brown

Commissioner

(signed):

J P Powell

Deputy Commissioner

27 October 2006