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Neutral Citation Number:	2009 23
Reported Number:	R(G)1/09
File Number:	CA 1546 2008
Appellant:	SJ
Respondent:	Secretary of State for Work and Pensions
Judge/Commissioner:	Judge E. A. L. Bano
Date Of Decision:	03/02/2009
Date Added:	12/02/2009
Main Category:	Other current benefits
Main Subcategory:	carer's allowance/invalid care allowance
Secondary Category:
Secondary Subcategory:
Notes:	Carer’s allowance – computation of earnings – whether potential PAYE liability is deductible when deciding whether claimant gainfully employed The claimant was refused carer’s allowance for caring for her son because she was held to have net earnings which exceeded the earnings limit and was thus treated as gainfully employed. In accordance with regulation 10(4) of the Social Security Benefit (Computation of Earnings) Regulations 1996 deductions were made from her gross earnings of 50 per cent of occupational and personal pension contributions but no deductions were made for income tax or national insurance contributions as she had no liability. She appealed, arguing that in a colleague’s case the carer’s allowance was treated as taxable and the resultant tax due was collected through PAYE from her earnings, reducing her net wage to an amount below the earnings limit. She submitted that her entitlement to carer’s allowance should be determined on the same basis, relying on R(IS) 4/05 where it was decided that “amount paid by way of tax” includes tax which the claimant is liable to pay. The tribunal rejected that contention, holding that the claimant could not reduce her earnings by the amount of any tax liability resulting from receipt of carer’s allowance because no tax had in fact been paid. (CG/1054/2005 followed). Held, dismissing the appeal, that: 1. although carer’s allowance is taxable, it does not follow that any tax to which the claimant would be liable in respect of carer’s allowance should be treated as deducted from her earnings under PAYE (paragraphs 8 and 9); 2. in many cases the amount of a person’s PAYE deductions cannot be predicted for a future period with any certainty, and it cannot have been intended that regulation 10(4) of the 1996 regulations should apply to liabilities for tax which could be paid by means of the PAYE system, but in respect of which no deduction has in fact been made (paragraph 9); 3. it would be more consistent with the overall statutory scheme to take into account under regulation 10(4) only PAYE deductions in respect of employment income but there was no need to express a concluded view on that matter in this case (paragraph 10). *It has been decided to report this case in the G series.
Decision(s) to Download:	R(G)_1_09_bv.doc