orthography - Confusion over the general rules governing the use of the hyphen in English

I often get confused by the rules for using hyphens. According to this entry from the Oxford Dictionaries web site, I must always use a hyphen in these cases:

1. Hyphens are used in many compound words to show that the component words have a combined meaning.


2. Hyphens can be used to join a prefix to another word, especially if the prefix ends in a vowel and the other word also begins with one (e.g. pre-eminent or co-own).


3. Hyphens can also be used to divide words that are not usually hyphenated.

Ok, with these three rules in mind, I suppose I should write living-room: after all, these two words have a combined meaning. To support this argument, I may say we write bedroom — one word only — which means we’ve combined bed and room to refer to one thing, the bedroom. So living room should either be hyphenated or written together as only one single word.

Equally, food handling department should be written as food-handling department even though as with living-room, I have never actually seen it written with a hyphen.

I am a bit confused. Isn’t hyphenating these words arguably a grammatical error, or does hyphen usage vary from one country to another? (I mean, for example, that perhaps in England they write living room, in Australia livingroom, and in Canada perhaps living-room.)

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As tchrist pointed out in the comment section, hyphen usage has nothing to do with grammar. It's only a ortographic convention.

The reason I'm asking this question is: I once took an IELTS preparing course and there was a question whose answer was food-handling department but I wrote food handling department. My answer was considered to be wrong - according to the entity behind the course, food-handling department was the only acceptable answer.

Given hypen usage is only convention and not grammar, can we really say I got that question wrong?