Casewell v Secretary of State for the Home Department

A direct payment made under section 57(1) of the Health and Social Care Act 2001 to a person needing care, for paying a spouse or close relative where the regulatory necessity condition is satisfied, remains earnings in the relative’s hands. Family-income aggregation under section 136(1) of the Social Security Contributions and Benefits Act 1992 does not convert it into a disregarded community-care payment. The payment is disregarded when received by the care recipient as income other than earnings, but is counted as the carer’s earnings when assessing the family’s income support. This is not double-counting, because the disregard and the earnings assessment operate at different stages.

The appellant received income support and cared for his severely disabled wife. After the couple moved to Staffordshire, the local authority made a weekly direct payment to the wife under section 57 of the Health and Social Care Act 2001, with arrangements for the appellant to provide approximately 11.5 hours of care and receive the corresponding sum. The Stoke-on-Trent Appeal Tribunal treated the payment as family income rather than earnings. Commissioner Charles Turnbull reversed that decision and held that the payment was the appellant’s earnings and was not disregarded. The central issue was whether family-income aggregation and the statutory disregard prevented the payment from being taken into account for income support.

Disposition. The appeal was dismissed. Sir Robin Auld gave the substantive judgment. Lord Justice Rix and Lord Justice Tuckey agreed with his reasons.

1. Statutory scheme. The court identified three forms of support: services provided directly by a responsible authority, direct payments to a person needing care to secure services, and direct payments to carers. This case concerned the second form, governed by section 57(1) of the Health and Social Care Act 2001 and the 2003 Direct Payments Regulations.
2. Character of the payment. Regulation 6(1) permitted payment to a spouse or close relative only where the authority was satisfied that this was necessary to meet the care need satisfactorily. An authorised payment to such a relative remained earnings in the relative’s hands. In the absence of a statutory definition, earnings and income were given their ordinary and natural meaning as payment by one person to another.
3. Family aggregation and disregard. Section 136(1) of the Social Security Contributions and Benefits Act 1992 aggregated family members’ income and capital for income-support purposes. Regulation 23(1) required the partner’s income to be calculated under the same regulatory provisions, while regulation 40 imported Schedule 9 to the Income Support Regulations 1987. Accordingly, the direct payment was disregarded in the wife’s hands under paragraph 58 of Schedule 9, but the sum paid to the husband was assessable as his earnings.
4. No double-counting. The payment was disregarded at the first stage and counted as earnings at the second. Regulations 6(5)(b) and 9 reinforced that the money was earmarked for care services and subject to information and repayment obligations. If the husband had not provided the care, the money would have been paid to another carer or the authority would have provided the service without increasing family income.
5. Order. The Commissioner’s decision was upheld and the appeal was dismissed.

• Court of Appeal (Civil Division) On 11 March 2008, upheld Commissioner Turnbull’s decision and dismissed the appeal.
• Social Security Commissioners Commissioner Charles Turnbull, on 14 March 2007, set aside the appeal tribunal’s decision and substituted a decision that the payment was earnings to be taken into account.
• Stoke-on-Trent Appeal Tribunal Allowed the appellant’s challenge and treated the payment as community-care money received by the family unit rather than earnings.