UK Social Security and Child Support Commissioners' Decisions

R(CS) 2/95

Judge K. Machin QC CCS/2/1994

Mr. M. J. Goodman

Mrs. R. F. M. Heggs

30.3.95

Child support scheme - whether compatible with Article 119 of the European Community Treaty - whether regulations ultra vires

The absent parent, the father, appealed against a child support officer's decision that he was liable to pay child support of £71.96 per week for his two children, aged 17 and 13 years, from 7 August 1993. A child support appeal tribunal allowed the appeal but only to the extent that the father's protected income was to be re-calculated as from 16 September 1993 when he separated from his second wife. The father appealed to a child support Commissioner. That appeal raised major issues relating to the validity of the Child Support Act 1991 and the regulations made under that Act and was heard by a tribunal of Commissioners.

Held that:

child support maintenance was not "pay" and so the obligation to pay child support was not covered by Article 119 of the European Economic Community Treaty and Council Directive 75/117/EEC (para. 6);

child support Commissioners have jurisdiction to decide whether any child support regulation is ultra vires (Chief Adjudication Officer v. Foster [1993] AC 754 applied) and that includes the power to determine whether or not a regulation is irrational (CIS/391/1992 applied);

applying the test in Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374 per Lord Diplock at 410, the various regulations made under the child support Act 1991 that had been applied in this case were not invalid on the ground of "irrationality" (paras. 8 and 9);

the regulations were also not invalid by reason of incompatibility with section 2 of the Child Support Act 1991. Section 2 was confined to the exercise by the Secretary of State or a child support officer of discretionary powers in individual cases. It did not apply to the Secretary of State's regulation-making powers under the Act (paras. 10 to 12);

the appeal was dismissed as the child support appeal tribunal's decision was not wrong in law.

DECISION OF A TRIBUNAL OF CHILD SUPPORT COMMISSIONERS

1. We dismiss the appeal of the appellant (the absent parent) from the decision of the child support appeal tribunal dated 19 April 1994 as that decision is not wrong in law: Child Support Act 1991, section 24.

2 . The appeal was the subject of an oral hearing before a tribunal of Commissioners on 7 and 8 March 1995. At that hearing the appellant (the absent parent) was present and was represented by Mr. P. Stone. The child support officer and the Secretary of State were both represented by Mr. M. Shaw. We are indebted to Mr. Stone and to Mr. Shaw for their assistance to us at the hearing. The parent with care did not attend and was not represented.

2. This appeal to the child support Commissioner is by the father of two children, aged 17 years and 13 years at the relevant time, the father being the "absent parent" (Child Support Act 1991, section 3(2)). The two children live with their mother who is therefore the "person with care" (1991 Act, section 3(3)). The appeal is against the unanimous decision of the child support appeal tribunal dated 19 April 1994 which was considering the appeal of the father from the child support officer's decision that the father was liable to pay child support of £71.96 per week for the two children from 7 August 1993. The tribunal allowed the appeal but only to the extent that they required the child support officer to re-calculate the protected income figure as from 16 September 1993, when the appellant separated from his second wife (the two children being the children of his first marriage).
3. Many of the issues that have been raised before the tribunal of Commissioners were not in fact raised before the child support appeal tribunal and are major issues relating to the validity of the child support legislation. That being so, the child support appeal tribunal cannot in our judgment be faulted for not having dealt with issues of that kind which were not raised before them (compare R(SB) 5/81, para. 7). As our conclusion, for the reasons given below, is that the appellant's attack on the validity of the whole or part of the Child Support Act (and regulations thereunder) cannot be sustained, we have therefore affirmed the child support appeal tribunal's decision of 19 April 1994 and dismissed the appellant's appeal.
4. In paragraph 7 of a written submission by the child support officer dated 13 December 1994 that officer contends that the tribunal's decision was wrong in law in that it did not contain sufficient findings of fact as to whether or not the appellant's medical insurance was compulsory in his employment. However, at the hearing before us we were informed that the medical insurance was not compulsory. Therefore that question does not arise and there is no reason to set the tribunal's decision aside on that ground, the particular point having been abandoned at the hearing before us by the appellant.
5. When this appeal commenced Mr. Stone invited us to make a reference to the European Court of Justice in the following terms:

"Whether, in relation to an absent parent who is an employee, national legislation such as the (UK) Child Support Act 1991, taken with the ministerial regulations and orders made thereunder, is compatible with legislation of the European Union prohibiting gender discrimination (in particular, with Article 119 of the EEC Treaty and Council Directives 75/117 and 79/7), it being understood that the overwhelming majority of absent parents against whom maintenance assessments and deduction orders under such legislation are made are in fact male rather than female".

In order to appreciate how this application for a reference arises it is necessary first to consider Article 119 of the EEC Treaty:

"Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.

For the purposes of this Article "pay" means the ordinary basic or minimum wage or salary and any other consideration whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer."

Council Directive 75/117/EEC of 10 February 1995 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women is designed to "ensure the application of (the principle of equal pay for men and women) by means of appropriate laws, regulations and administrative provisions" and to "reinforce the basic laws by standards aimed at facilitating the practical application of the principle of equality ...".

Article 3 of that Directive provides thus:

"Member States shall abolish all discrimination between men and women arising from laws, regulations or administrative provisions which is contrary to the principle of equal pay. "

Article 4 provides:

"Member States shall take the necessary measures to ensure that provisions appearing in collective agreements, wage scales, wage agreements or individual contracts of employment which are contrary to the principle of equal pay shall be, or may be declared, null and void or may be amended."

It is possible to put Mr. Stones' point relatively shortly. He submits that the statutory obligation to maintain in the Child Support Act 1991 is "pay" and that, while child maintenance and the obligation to pay it is not pay or remuneration it is an aspect or condition or element of the pay. It was described by Mr. Stone as a "negative element". He accepted that there is no authority for the proposition that the deduction of child support payment affects pay. In particular, Mr. Stone stressed the case of an Attachment of Earnings Order issued by the Agency without the intervention of a Court. He similarly contended that the requirement to pay maintenance affects "pay". The absence of authority does not in itself indicate that the point is unsound. In support of his submissions reliance was placed upon Barber v. Guardian Royal Exchange Assurance Group ECJ Reports, 1990/1, page 1913 at page 1951 paragraph 22:

"It must be pointed out in that regard that, in its Judgment of 25 May 1971 in Case 80/70 Defrenne v. Belgium [1971] ECR page 445, paragraph 7 and 8, the Court stated that consideration in the nature of Social Security benefits is not in principle alien to the concept of pay. However the Court pointed out that this concept, as defined in Article 119, cannot encompass social security schemes or benefits, in particular retirement pensions, directly governed by legislation without any element of agreement within the undertaking or the occupation or branch concerned, which are compulsorily applicable to general categories of workers."

Mr. Shaw submitted that that Directive 75/117/EEC did not apply because the appellant was appealing against the assessment of child support. There is no direct or indirect link between the employer/employee relationship and the assessment of child support. He submitted that the provisions were concerned only with pay (whether in cash or kind) payable by the person's employer, and that this link was clearly set out in the definition of "pay" in Article 119 of the EEC Treaty. In support Mr. Shaw relied on Gabrielle Defrenne v. Belgian State [1971] ECR 455, paragraphs 7 and 8:

"Although consideration in the nature of social security benefits is not therefore in principle alien to the concept of pay, there cannot be brought within this concept, as defined in Article 119, social security schemes or benefits, … directly governed by legislation without any elements of agreement within the undertaking or the occupational branch concerned, which are obligatorily applicable to general categories of workers.

These schemes assure for the workers the benefit of a legal scheme, the financing of which workers, employers and possibly the public authorities contribute in a measure determined less by employment relationship between the employer and the worker then by considerations of social policy."

The question that must be answered in applying the definition of pay contained in Article 119 is the calculation of child support within the definition of "pay". Pay arises as a consequence of the relationship of employer and employee. We are satisfied having heard argument on both sides that the obligation to pay child support is not covered by the definition of "pay" as set out in Article 119 either directly or indirectly. In those circumstances we were unable to accede to the application made on behalf of the appellant to make a reference, in the terms proposed or similar terms, of this matter to the European Court of Justice, Luxembourg.

6. We heard extensive argument on the appellant's contentions that parts of the Child Support Act 1991 and regulations made thereunder, as applied to the appellant in this case, were invalid as being either "irrational" or "ultra vires". In addition Mr. Stone contended that the tribunal had erred in its construction of certain parts of the Child Support Act 1991 relating to (i) the abrogation of pre-existing Court Orders for maintenance and (ii) to the "carer's allowance". Our decision on the issues of (i) "irrationality" or "ultra vires" and (ii) construction of the 1991 Act is as follows.
7. Before examining the individual provisions of the Act and regulations we should set out the grounds on which it is said that certain provisions of that legislation are invalid as being either "ultra vires" or "irrational". In Chief Adjudication Officer v. Foster [1993] AC 754 the House of Lords held that the Social Security Commissioners have a power to determine whether or not any social security regulation is ultra vires. We hold that that ruling in its principle applies equally to the Child Support Commissioners, since the relevant terms of section 23 of the Social Security Administration Act 1992 and Section 24 of the Child Support Act 1991 are virtually identical in terms, appeal lying to the Commissioner where it is shown that the tribunal below has "erred in law" (1992 Act, s. 23(6)) or, which is the same thing, is "wrong in law" (1991 Act, s. 24(2)).
8. In our judgment, a power to hold invalid the whole or part of a regulation as being "irrational" is but a species of a power to hold a regulation ultra vires. Moreover, the recent decision of the Court of Appeal in Chief Adjudication Officer v. Palfrey and others (8 February 1995) has not rejected that part of the decision of the Tribunal of Commissioners in the Palfrey case (CIS/391/1992) which held that the Commissioners have the power to determine whether or not a regulation is "irrational" but only within the strictly limited, meaning of that term in the existing case law. See, for example, Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374 at 410, where he confined "irrationality" to "… a decision which is so outrageous in its defiance of logic ... that no sensible person who had applied his mind to the question to be decided could have arrived at it". Such a definition does not include a situation where a regulation is shown to operate, as, it is thought, harshly or unfairly. Something much more extreme than that is required, such as to show that the provision of a regulation is by its very nature so irrational as to be outside the powers conferred by the parent statute. In our judgment, none of the provisions of the regulations applied to the appellant in this case come anywhere near such a definition of "irrationality". It is not within our jurisdiction to pronounce on the question of whether any of those provisions are or are not unfair or harsh in any given case. That is not a matter for us as a judicial authority. Apart from irrationality, the only other aspect of ultra vires that was asserted on behalf of the appellant relates to the impact of section 2 of the Child Support Act 1991, which we now deal with.
    
   
9. Section 2 of the Child Support Act 1991 provides as follows:

"Welfare of children : The general principle

-Where, in any case which falls to be dealt with under this Act, the Secretary of State or any child support officer is considering the exercise of any discretionary power conferred by this Act, he shall have regard to the welfare of any child likely to be affected by his decision."

10. Mr. Stone's contention on behalf of the appellant was that section 2 operated on the various powers conferred by the 1991 Act on the Secretary of State to make delegated legislation in the form of Statutory Instruments. Mr. Stone therefore wished to argue that the various provisions of the regulations which had been applied to the appellant in this case failed to observe the general principle of the welfare of children (1991 Act, s. 2) and were therefore to that extent ultra vires. In our judgment this contention fails in limine (at the outset), because we hold that section 2 has no application to the making of regulations. In our judgment, the section is confined to the exercise by the Secretary of State or a child support officer of discretionary powers in individual cases, such as the power to make a "deduction from earnings order" under section 31(2) of the 1991 Act. The wording of section 2 is in our view wholly inappropriate to the general power of the Secretary of State to make regulations under for example sections 32 and 42 of the Child Support Act. If Parliament had desired to impose a specific duty on the Secretary of State, when making regulations, to have regard to the welfare of children, then the appropriate place for such a provision would have been either in the individual sections which give the regulation making powers or in section 52 of the Act (general provisions as to the making of regulations etc.). There is no such provision.
11. Moreover, in our judgment, it is obvious from the very wording of section 2 itself that it is wholly inappropriate to the making of regulations. The making of regulations cannot be referred to as a "case which falls to be dealt with under this Act" nor can the making of regulations be described as a "decision" by the Secretary of State. Our attention was drawn by Mr. Shaw to the use of the word "case" in various other parts of the Child Support Act 1991, to show that the word "case" was used for an individual case or a particular fact situation and could have no application to the generality which is envisaged by the making of regulations. We will not enumerate those other provisions because in our view it is quite clear from the wording of section 2 itself that that is the position. It therefore follows that under neither the head of "irrationality" nor of incompatibility with section 2 of the 1991 Act, can it be shown that any of the regulations or any part of them are ultra vires or can otherwise be declared invalid. We reject Mr. Stone's contentions to the contrary.
12. It now remains to deal with the points on the construction of the legislation made by Mr. Stone which relate to (i) the position in regard to (i) Court Maintenance Orders or Maintenance Agreements in force before the Child Support Act 1991 and (ii) the "carer's allowance." We deal with each of those separately.
13. As regards Maintenance Orders or Agreements prior to the Child Support Act 1991, section 10(1 ) and (2) of the Child Support Act 1991 provide as follows:

"Relationship between maintenance assessments and certain court orders and related matters

10 - (1) Where an order of a kind prescribed for the purposes of this subsection is in force with respect to any qualifying child with respect to whom a maintenance assessment is made, the order-

(a) shall, so far as it relates to the making or securing of periodical payments, cease to have effect to such extent as may be determined in accordance with regulations made by the Secretary of State; or

(b) where the regulations so provide, shall, so far as it so relates, have effect subject to such modifications as may be so determined.

(2) Where an agreement of a kind prescribed for the purposes of this subsection is in force with respect to any qualifying child with respect to whom a maintenance assessment is made, the agreement-

(a) shall, so far as it relates to the making or securing of periodical payments, be unenforceable to such extent as may be determined in accordance with regulations made by the Secretary of State or

(b) where the regulations so provide, shall, so far as it so relates, have effect subject to such regulations as may be so determined."

14. The relevant regulations are the Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992, SI 1992 No. 2645, and in particular regulation 3 thereof. However, they do not bear on the question canvassed before us by Mr. Stone, who contended that, as a matter of construction, section 10 of the 1991 Act could apply only to maintenance orders or agreements entered into after the Child Support Act 1991 received the Royal Assent on 25 July 1991. Section 10 of the 1991 Act did not come into force until 5 April 1993, SI 1991 No. 2644. As in the present case, the court maintenance order made against the father for maintenance of the two children was made in March 1983, Mr. Stone contended that the order was not affected by section 10 of the 1991 Act and remained in force. The corollary, according to Mr. Stone, was that there was therefore no power for the child support officer to make a child support assessment.
15. We have no hesitation in rejecting Mr. Stone's contention. It is quite clear from subsections (1) and (2) of section 10 of the 1991 Act that it applies to all orders and agreements in force prior to the coming into operation of section 10 on 5 April 1993. There is no warrant there, or indeed in the above cited regulations, for restricting that provision to those orders or agreements that were made or entered into only after the Child Support Act received the Royal Assent on 25 July 1991. Mr. Stone put his argument on the ground of the presumption against retrospective legislation and the rule that, where there is retrospective legislation, the retrospection must be confined as narrowly as possible. Mr. Shaw, however, submitted that, correctly analysed, section 10 did not constitute retrospective legislation at all. We agree with Mr. Shaw's contention. Section 10 does not purport to act retrospectively. It merely provides for the position as from its coming into force on 5 April 1993 and abrogates Maintenance Orders and assessments "as from that date" It is therefore referring to the present effect of such orders and agreements and does not purport to act retrospectively in relation to their past operation. It is not unknown for legislation to provide for the future incidents of contracts already made (compare the Rent Restriction Acts and the Law Reform (Frustrated Contracts) Act 1943). That is all that has been done by section 10. There is nothing in the wording of section 10, or the regulations thereunder, to limit its operation to orders and agreements made only after the Royal Assent to the Act on 25 July 1991. We therefore reject Mr. Stone' s contention to the contrary.
16. We now turn to Mr. Stone's contention that, on the facts of the present case, the mother i.e. the parent with care, should not have been "credited" with a carer's allowance when working out her requirements under the statutory formulae. Mr. Stone put this as a question of construction of section 11 of the Child Support Act 1991 ("maintenance assessments") and paragraph 1(3)(b) of Schedule 1 to that Act. That sub-paragraph provides for a "carer's allowance" of "such amount or amounts (if any), with respect to the person with care of the qualifying child or qualifying children as may be prescribed". Mr. Stone contended that the phrase "person with care" should properly be construed as excluding the parent of a child i.e. the mother in the present case, since not to do so was to ignore section 1(1) of the Child Support Act 1991 which under the heading of "The duty to maintain" provides that for "... the purposes of this Act, each parent of a qualifying child is responsible for maintaining him." We reject Mr. Stone's contention since the term "parent with care" is clearly defined by section 3(3) of the 1991 Act in a way which includes the parent of a child. It cannot in our view conceivably be contended that the use of the words "person with care" in paragraph 1(3)(b) of Schedule 1 to the 1991 Act can have any different meaning. As to Mr. Stone's submission that this result was unfair and unrealistic, these are matters with which we cannot deal because of our rejection of his arguments on the ground of ultra vires etc. (see above).
17. Lastly we should refer specifically to the fact that Mr. Stone also took issue with the child support officer's decision to give the appellant credit for only one half of his contributions towards his occupational pension, applying paragraph 1 (3) (b) of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992, SI 1992 No. 1815. We have already indicated above that we do not consider any of the suggested ways in which the regulations are ultra vires or irrational can be sustained and that applies in our view to this particular provision. We should add in this context that paragraph 1(3)(b) has an exact parallel in regulation 36(3)(b) of the Income Support (General) Regulations 1987, SI 1987 No. 1967. In giving affirmative approval to the draft of the Child Support (Maintenance Assessment and Special Cases) Regulations 1992 Parliament must presumably be taken to have been aware of the fact that a limitation to one half of pension contributions had already been used in the Income Support Regulations. As to the absence in the Child Support legislation of a general provision for deduction of pre-existing debts (such as the appellant's repayments of a bank loan) there is in our judgment no way in which the absence of such provision can be impugned on the ground of ultra vires etc. for the reasons we have already given.

Date: 30 March 1995 (signed) Judge K. Machin QC

Chief Commissioner

(signed) Mr. M. J. Goodman

Commissioner

(signed) Mrs. R. F. M. Heggs

Commissioner