KT v HMRC [2013] UKUT 151 (AAC)

UKUT-AAC
KT v HMRC
[2013] UKUT 151 (AAC) · 2013-03-15
[1]This is an appeal by the Claimant, brought with my permission, against a decision of a First-tier Tribunal made on 9 June 2001. For the reasons set out below I dismiss the appeal.[2]The Claimant is a single Polish man now aged 27 who has been self-employed in the UK, paying national insurance contributions, since coming here in about April 2008. On 22 April 2010 he made a claim for child benefit in respect of two children, a boy and a girl now aged 7 and 10 respectively. He stated on the claim form and subsequent documents that the children live with their mother, who is a single parent, in Poland, and that he sends their mother an average of £40 per week to help with the costs of bringing up the children. The children have never lived with the Claimant. It is asserted in HMRC’s submission to the First-tier Tribunal that the children are the Claimant’s nephew and niece. That may well be so, but I have been unable to find anything in the information provided by the Claimant which says that that is so, although the First-tier Tribunal’s finding that they are nephew and niece had not been disputed. For the reasons explained below it makes no difference whether they are his nephew and niece or whether they are wholly unrelated to him.[3]On 11 April 2011 the child benefit claim was refused, on the ground that the children were not, and could not be treated as being, in Great Britain.[4]The First-tier Tribunal dismissed the Claimant’s appeal, after a hearing on the papers.[5]The Tribunal held, first, that under domestic law the claim to child benefit could not succeed because by s.146(1) of the Social Security Contributions and Benefits Act 1992 no child benefit shall be payable in respect of a child for a week unless he is in Great Britain in that week. That is clearly correct.[6]The Tribunal then referred to the fact that for the purposes of Council Regulation (EEC) no. 1408/71 child benefit is a “family benefit”, and that Article 73 provides as follows:
“An employed or self-employed person subject to the legislation of a Member State shall be entitled, in respect of members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI.”
[7]The Tribunal’s reasoning continued as follows:
“8. The main question was whether the children were members of the appellant’s family. Under Reg 1408/71 Article 1(F)(i) a member of the family means any person defined or recognised as a member of a family or designated as a member of the household under United Kingdom legislation. There is a proviso (not applicable in this case) that the legislation regards as a member of the family a person living under the same roof as in this case the appellant and where the child is mainly dependant on the worker. 9. The term “family” is not defined in Child Benefit Regulations and the Tribunal therefore accepts the submission of [HMRC] that it should be given its normal everyday usage, i.e. a married or unmarried couple and any children who normally live with them. 11. Under EC Regulations the following persons shall be treated as family members of another person:- (a) his spouse or civil partner (b) direct descendants of his or his spouse who are under 21 or are dependants (c) Dependant direct relatives in his ascending line or that of his spouse; (d) A person who is an extended family member but has been issued with an EEA family permit registration certificate or resident’s card. 12. The Tribunal finds that the children …… cannot be regarded as being members of the claimant’s family. The appellant is not a parent of [the children]. The Tribunal would also agree with [HMRC] that the children are not mainly dependent on him, but that is a secondary point. The main point found by the Tribunal is that the children are not in the appellant’s family for the purposes of the legislation and, therefore, Child Benefit does not fall to be paid in respect of them.”
[8]I gave permission to appeal on the ground that Regulation (EC) No 883/2004 had replaced Reg. 1408/71 with effect from 1 May 2010, and that the material provisions of the two Regulations were not the same. I further stated, however, that it did not appear to me that the outcome would be any different under Reg. 883/2004, and therefore that it appeared that the First-tier Tribunal had reached the right result, although not for precisely the right reasons.[9]Mr Best of HMRC has made a very helpful submission in this appeal. He submits that the general position under domestic law is that the legislation in force at the date of a claim is the legislation used to determine that claim, notwithstanding that the legislation had changed by the time the actual decision on the claim was made. Generally, there would be transitional provisions dealing with such matters. Mr Best has referred me to Decision No H1 of 12 June 2009 by the Administrative Commission for the co-ordination of social security systems. The Decision is described in the title as “concerning the framework for the transition from [1408/71 to 883/2004]”. Decision H1 states in recital (2) as follows:
“…….in principle claims submitted before the date of entry into force of [883/2004] shall continue to be governed by the law which was applicable to them at the time they were submitted and the provisions of [883/2004] shall apply only to claims opened after their entry into force.”
[10]I therefore accept that this case, where the claim was of course made on 22 April 2010, falls to be decided under the terms of 1408/71. However, as the Claimant could of course have made a fresh claim at any time after 1 May 2010, and indeed could now make a fresh claim, I propose also to consider what the position would be under 883/2004, as Mr Best has helpfully done in the submission on behalf of HMRC. The position under 1408/71[11]Under Art 73 of 1408/71 the question turns on whether the children are within the words “members of his family”.[12]Art 1(f)(i) of 1408/71 provides, with [additions] for ease of reading:
“ member of the family means – [limb 1] any person defined or recognised as a member of the family or designated as a member of the household by the legislation under which benefits are provided ……; [limb 2] where, however, the said legislations regard as a member of the family only a person living under the same roof as the employed or self-employed person, this condition shall be satisfied if the person in question is mainly dependent on that person.” [limb 3] where the legislation of a Member State does not enable members of the family to be distinguished from other persons to whom it applies, the term “member of the family” shall have the meaning given in Annex 1.”
[13]I accept HMRC’s submission (as did the First-tier Tribunal) that the words “legislation under which benefits are provided” in limb 1 of Art 1(f)(i), and incorporated also into limbs 2 and 3, means in this case the domestic legislation relating to child benefit.[14]Under s.141 of the 1992 Act a person is entitled to child benefit in respect of a child if he is “responsible for” that child. By s.143 a person shall be treated as responsible for a child in any week if(a) he has the child living with him in that week or(b) he is contributing to the cost of providing for the child at a weekly rate which is not less than the rate of child benefit payable in respect of the child. There are provisions in Schedule 10 to the 1992 Act which determine the priority of entitlement in the event that two or more persons would otherwise be entitled to child benefit.[15]With reference to limb 1 of the definition of “member of the family”, therefore, the basic entitlement provisions of the child benefit legislation do provide for entitlement in the event of a child living with the claimant, and it may be that such a person is “designated as a member of the household” within the meaning of limb 1. However, the entitlement provisions do not require it to be determined whether the child is a member of the family of the claimant. Limb 2 is clearly not applicable. It therefore seems to me that, save possibly in respect of people living with the claimant, the situation is within limb 3 in that the child benefit legislation does not enable members of the family to be distinguished from other persons to whom it applies. The submission of HMRC in this appeal is to that effect.[16]Annex 1 provides, in relation to the United Kingdom, that “for the purpose of determining entitlement to benefits in kind the term “member of the family” means ……” As child benefit is not a benefit in kind, it seems to me, again in agreement with HMRC’s submission, that the definition in Annex 1 can have no application. It cannot, I think, have been intended that that definition can, by virtue of limb 3, be applicable even in respect of cash benefits.[17]HMRC’ submission to the First-tier Tribunal relied upon the definition in reg. 7(1)(3) of the Immigration (European Economic Area) Regulations 2006, as did the First-tier Tribunal in para. 11 of its Statement of Reasons. However, that definition by its terms has effect “for the purposes of these Regulations”, and I do not think that it can be directly applied for present purposes.[18]In my view, therefore, one is thrown back simply to construing the words “members of his family” in Article 73 without the assistance of the definition in 1(f)(i) or any other legislative definition. Even assuming that the Claimant is the uncle of the children and is contributing to the cost of their care, I do not think that they are members of his “family”, within any ordinary meaning of those words. The children live with their mother in a different country and the Claimant is not in any way acting in loco parentis.[19]I have considered whether, in the light of the fact that there would otherwise be no applicable definition of the words “members of his family” in Article 73, it is possible to construe limb 1 of Article 1(f)(i) as including any person to whom child benefit is payable under the domestic legislation, on the footing that such a person is in effect recognised as a member of the family or designated a member of the household. However, I do not think that that can be the intention of limb 1. The purpose of Article 1(f) is to distinguish members of the family from other persons who can be entitled to benefit under the domestic legislation.[20]My conclusions in relation to Article 1408/71 are therefore that the definition in Article 1(f)(i) does not in this case assist in relation to the definition of “members of his family”, and that nephews and nieces living abroad with their mother, and to whose care the claimant is contributing financially, cannot be said to be members of his family, within the ordinary meaning of those words. The Claimant’s appeal must therefore fail. Regulation 883/04[21]Article 67 of Regulation 883/2004 provides: “A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his family members residing in another Member State, as if they were residing in the former Member State ………” 20. Under Article 1(i) “member of the family” is defined (so far as directly material) as follows: “(1)(i) any person defined or recognised as a member of the family or designated as a member of the household by the legislation under which benefits are provided;(ii) ……… [not directly material] (2) If the legislation of a Member State which is applicable under subparagraph (1) does not make a distinction between the members of the family and other persons to whom it is applicable, the spouse, minor children, and dependent children who have reached the age of majority shall be considered members of the family.” 21. In my judgment, for the reasons which I gave in relation to the definition in Article 1 of Regulation 1408/71, Article 1(i)(1)(i) of Regulation 883/2004 does not apply. However, Article 1(i)(2) does apply, and under that definition it is clear that only the claimant’s spouse and children satisfy the definition. The Claimant in the present case would therefore be no better off by making a further claim to child benefit, to which Regulation 883/2004 would apply.[22]The end result is therefore in my judgment that the First-tier Tribunal reached the right result, although not quite for the right reasons. I do not think it necessary to set aside its decision. Charles Turnbull Judge of the Upper Tribunal 15 March 2013

Cited in 2 later judgments