Analysis
On 3 August 2016, the appellant made a claim for income-related Employment and Support Allowance, asking for any award to be backdated to 2 June 2016. The appellant was in receipt of regular monthly payments from discretionary family trusts of £600 per month, rising to £750 per month from July 2016. She also received £750 per month from a lodger from July 2016.
Her application was refused on 10 July 2018 on the basis that her income exceeded the limit under the Employment and Support Allowance Regulations 2008. A mandatory reconsideration confirmed the initial outcome, and the appellant appealed to the First-tier Tribunal on the basis that the family trust payments should be disregarded. The First-tier Tribunal refused the appeal of the decision on the papers. Permission to appeal the First-tier Tribunal’s decision was granted on the grounds that:
- the First-tier Tribunal had erred in law in misinterpreting para 16(2) of Sch 8 of the Employment and Support Allowance Regulations 2008; and
- while it was not appropriate to review a First-tier Tribunal decision, the fact that different decision-makers had reached different conclusions as to how the appellant’s trust income should be considered indicated that guidance from the Upper Tribunal would be helpful.
Held: setting aside the decision of the decision-maker for the respondent dated 10 July 2018
- (1) Since the trustees were not obliged to make payments to the appellant, the payments were voluntary, and their purpose was benevolent, satisfying para 16(3)(b) Employment and Support Allowance Regulations 2008 (para 34).
- (2) The payments came within the category of payments identified within para 16(2) of Sch 8, Employment and Support Allowance Regulations 2008. These words were clear and must be given clear meaning. If it had been intended to exclude income payments from trust property settled by family members then the regulations would surely have said so (para 38).
- (3) The disapplication of para 16(1) provided for in para 16(2) applies only in respect of payments made by a person ‘for the maintenance of any member of that person’s family or of that person’s former partner or of that person’s children’. The appellant was a member of the settlor’s family in the ordinary sense of the word, but not the narrow meaning in Reg 2, Employment and Support Allowance Regulations 2008 (para 39).
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